Auditing_Theory___Sirug.pdf

AUDITING THEORY d. Appropriateness PRELIM REVIEWER (875 Multiple Choice Questions) 7. Which of the following best describes due care?...

AUDITING THEORY d. Appropriateness PRELIM REVIEWER (875 Multiple Choice Questions) 7. Which of the following best describes due care? a. Reasonable infallibility b. Tact in avoiding legal liability SET 1 c. Requisite skill and diligence d. Freedom from undue influence 1. Which of the following engagements is covered by the Framework for Assurance Engagements? 8. Users of financial statements demand independent audit a. Consulting engagements because b. Preparation of tax returns a. Users demand assurance that fraud does not exist. c. Independent financial statements audit b. Management may not be objective in reporting. d. Agreed-upon procedures c. Users expect auditors to correct management errors. d. Management relies on the auditor to improve internal 2. Independent auditing can best be described as a control. a. Subset or branch of accounting. b. Professional activity that measures and communicates 9. An audit of financial statements is conducted to determine financial accounting data. if the c. A discipline or professional activity that attests to a. Organization is operating efficiently and effectively the fair presentation of financial statements. b. Client's internal control is functioning as intended. d. Regulatory activity that prevents the issuance of c. Auditee is following specific procedures or rules set improper financial information. down by some higher authority d. Overall financial statements are stated in 3. An auditor should not render a report on: accordance with an identified financial reporting a. Client internal control. framework. b. Management performance. c. The achievability of forecasts. 10. An audit designed to determine the extent to which the desired d. Quarterly financial information. results of an activity established by the legislative or other authorizing body are being achieved. 4. The assumption underlying an audit of financial statements a. Economy audit is that they will be used by b. Efficiency audit a. Different groups for different purposes. c. Program results audit b. The general public in making investment decisions. d. Financial-related audit c. The board of directors as basis of declaring cash dividends. 11. Which of the following methods is most commonly used to d. The regulatory agencies to verify information that is reduce information risk? relevant to their supervisory functions. a. Allow users to verify information. b. Allow all users to prepare the statements. 5. On every audit engagement, the CPA should comply with c. Users share information risk with management. applicable PSAs d. Have the financial statements audited. a. Without exception. b. Except in examinations that result in a qualified report. 12. Which of the following best describes the primary purpose of c. Except in examinations of interim financial statements. audit procedures? d. Except in circumstances where the CPA is associated a. To detect errors or fraud with unaudited financial statements. b. To comply with generally accounting principles c. To gather sufficient, appropriate evidence 6. It refers to the attribute or quality of audit evidence. d. To verify the accuracy of account balances a. Sufficiency b. Relevance 13. It is essential that users regard CPA firms as: c. Reliability a. Competent. AT – Prelim Rev (875 MCQs) Red Sirug Page 1 of 85  b. Unbiased. 19. When the CPA is not independent, the CPA is precluded from c. Technically proficient. issuing a d. All of the above a. Review report. b. Compilation report. 14. Which of the following is least likely an application of c. Tax planning report. maintaining an attitude of professional skepticism? d. Management advisory report. a. The auditor is alert to audit evidence that contradicts or brings into question the reliability of documents or 20. The risk that the auditor will fail to uncover a material management representations. misstatement is eliminated b. In planning and performing an audit, the auditor a. If client has effective internal control. assumes that management is dishonest. b. If client follows PFRS. c. The auditor makes a critical assessment, with a c. When the auditor has complied with PSA. questioning mind, of the validity of audit evidence d. Under no circumstances. obtained. d. The auditor does not consider representations from 21. No matter how competent a CPA may be, his opinion on management as substitute for obtaining sufficient financial statements will be of little value to those who rely on appropriate audit evidence to be able to draw reasonable him unless he conclusions on which to base the audit opinion. a. Issues an unqualified opinion b. Maintains his independence. 15. Which of the following is not one of the concepts in the c. Maintains a program of continuing education framework of auditing theory? d. Serves his clients with professional concern of their best a. Evidence interests. b. Ethical conduct c. Fair presentation 22. An audit can have a significant effect on d. Conflict of interest a. Business risk. b. Information risk. 16. To raise the standards of the profession, the Philippine c. The risk-free interest rate. Accountancy Act of 2004 requires that the CPA profession be d. All of these. integrated under the rules to be established by a. The PICPA. 23. In government auditing, the three elements of expanded b. The Board of Accountancy. scope auditing are c. The Professional Regulation Commission. a. Goal analysis, audits of operations, audit of systems. d. The Government Association of CPAs. b. Financial and compliance, economy and efficiency, program results. 17. Management assertions are c. Pre-audit, post-audit, internal audit. a. Stated in the footnotes to the financial statements. d. National government audit, local government audit, b. Provided to the auditor in the assertions letter, but are not corporation audit. disclosed in the financial statements of the entity. c. Implied or express representations about the 24. Which of the following types of audits are most similar? accounts in the financial statements. a. Operational audits and compliance audit. d. Explicitly expressed representations about the financial b. Internal audits and independent financial statement audits. statements. c. Independent financial statement audits and operational audits. 18. In performing a financial statement audit, which of the d. Compliance audits and independent financial following would an auditor least likely consider? statement audits. a. Internal control. b. Compliance with GAAP. 25. If it is probable that the judgment of a reasonable person c. Fairness of the financial statement amounts. would have been changed or influenced by the omission or d. Quality of management’s business decisions. misstatement of information, then the information is a. Relevant. AT – Prelim Rev (875 MCQs) Red Sirug Page 2 of 85  b. Pervasive. 32. Which of the following is not an assurance that the auditors c. Material. give to the parties who rely on the financial statements? d. Significant. a. Auditors give assurance that the financial statements are accurate. 26. Which of the following is not among the factors that result to b. Auditors know how the amounts and disclosures in the limitations of audit? financial statements were produced. a. Use of testing c. Auditors gathered enough evidence to provide a b. Human error reasonable basis for forming an opinion. c. Going concern problem of the assurance client d. If the evidence allows the auditors to do so, auditors give d. Evidence is basically persuasive rather than conclusive assurance in the form of opinion, as to whether the financial statements taken as a whole are fairly presented 27. Which of the following services is not within the area of public in conformity with GAAP. accounting? a. Attest function 33. Auditing standards differ from auditing procedures in that b. Taxation service procedures relate to c. Write-up work for one client a. Audit judgments. d. Management advisory services b. Audit principles. c. Acts to be performed. 28. An audit committee must be comprised of outside directors. d. Measures of performance. Which of the following is considered an outside director? a. A consultant to the company. 34. Choose one of the following which would describe best the b. A member of company management. phrase "generally accepted auditing standards": c. The company's independent auditor. a. They identify the policies and procedures for the conduct d. A retired executive from another company. of the audit. b. They define the nature and extent of the auditor's 29. "The auditor would ordinarily expect to find evidence to responsibilities. support management representations and not assume that c. They provide guidance to the auditor with respect to they are necessarily correct". This is an example of: planning the audit and writing the audit report. a. Due diligence. d. They set forth a measure a measure of the quality of b. Unprofessional behavior. the performance of audit procedures. c. An attitude of professional skepticism. d. A rule in the code of Professional Conduct. 35. Auditing includes both a(an) a. Evaluation process and a reporting process. 30. The audit process is b. Investigative process and a reporting process. a. Regulated by the PICPA c. Documentation process and an evaluation process. b. Performed only by CPAs d. Documentation process and a reporting process. c. The only service a CPA is allowed to perform by law d. A special application of the scientific method of 36. The audit committee of the board of directors of a company inquiry is responsible for a. Hiring the auditor 31. In determining the scope and nature of services to be b. The audit workpapers performed in public practice, a CPA firm should c. Preparing the financial statements a. Have in place internal control procedures d. Independence and obtaining evidence b. Only perform accounting related services c. Require independence for all services performed 37. Which of the following types of audits would be intended to d. Determine that the performance of all services is determine whether a governmental entity is following sound consistent with the firm's members' role as procurement practices? professionals. a. Program audit b. Operational audit c. Compliance audit AT – Prelim Rev (875 MCQs) Red Sirug Page 3 of 85  d. Financial statement audit c. Inquiry and analytical procedures d. Analytical procedures and substantive tests of details of 38. Which of the following is the authoritative body designated to transactions and account balances promulgate auditing standards? a. BOA 44. The BOA vice-chairman shall be b. PICPA a. Appointed by the PRC c. FRSC b. Elected by BOA members d. AASC c. Appointed by the President of the Philippines d. Appointed by the PRC upon recommendation by the 39. Which of the following statements is true? PICPA a. An independent auditor must be a CPA. b. Compliance audits are conducted to determine 45. The term of BOA vice-chairman is adherence to rules and regulations set by the auditor. a. One year. c. An audit, if properly conducted, ensures that fraud is b. Three years subject to renewal. prevented. c. At the discretion of BOA members. d. After conducting an audit and release of the auditor’s d. Same with the term of BOA chairman. report, the primary responsibility on the fairness of the financial statements is shifted to the auditor. 46. An audit designed to evaluate the efficiency and effectiveness of an organization or some or part thereof would not come 40. The Philippine Standards on Assurance Engagements under the title of (PSAEs) are to be applied in a. Performance audit. a. The audit or review of historical financial information. b. Compliance audit. b. Assurance engagements dealing with historical financial c. Management audit. information. d. Operational audit. c. Compilation engagements and agreements to apply agreed-upon procedures to information. d. Assurance engagements dealing with subject matters 47. In financial statement audits, the audit should be conducted other than historical financial information. in accordance with a. PAS / PFRS 41. The Philippine Standards on Quality Control (PSQCs) are to b. Generally accepted auditing standards be applied to c. Philippine Standards on Auditing a. Assurance engagements only. d. Code of Ethics for CPAs in the Philippines b. Review engagements only. c. Compilation and review engagements only. 48. Which of the following statements does not properly describe d. All services that fall under the AASC's engagement an element of the theoretical framework of auditing? standards. a. Remoteness of users. b. An audit benefits the public. 42. These statements are issued by the AASC to provide c. The data to be audited are verifiable. interpretive guidance and practical assistance to auditors in d. Auditor should maintain independence with respect to the implementation of PSAs and to promote good practice. the audit client. a. PREPSs b. PAEPs 49. The statement that the reviewer "is not aware of any material c. PAPSs modification that should be made to the financial statements in d. PRSPSs order for them to be in conformity with GAAP" is known as: a. Positive assurance. 43. For the purpose of expressing negative assurance in the b. Reasonable assurance. review report, the practitioner should obtain sufficient c. Negative assurance. appropriate evidence primarily through d. Negligent performance. a. Inquiry and confirmation b. Confirmation and tests of controls 50. An independent audit aids in the communication of economic data because the audit AT – Prelim Rev (875 MCQs) Red Sirug Page 4 of 85  a. Lends credibility to the financial statements. judge it necessary to depart from a PSA, even though b. Confirms the accuracy of management's financial such a departure may result to more effective representation. achievement of the objective of an audit. c. Guarantees that financial data are fairly presented. d. Assures the readers of financial statements that any 56. In the case of an audit of financial statements, which of fraudulent activity has been corrected. the following would not be a valid criterion in ascertaining the degree of correspondence between assertions and 51. The purpose of an audit of financial statements is to established criteria? a. Obtain an absolute level of assurance that the financial a. International Accounting Standards statements as a whole are free from material b. Philippine Accounting Standards misstatement. c. Philippine Standards on Auditing b. Relieve management or those charged with governance d. Philippine Financial Reporting Standards of the responsibility for the preparation and presentation of the financial statements in accordance with the 57. Which of the following statements about independent applicable financial reporting framework. financial statement audit is correct? c. Enhance the degree of confidence of intended users in a. The audit of financial statements relieves management the financial statements. of its responsibilities for die financial statements. d. Assure the future viability of the entity by expressing an b. An audit is designed to provide limited assurance that opinion on the entity's financial statements. the financial statements taken as a whole are free from material misstatement. 52. Inherent limitations in an audit stem from the following factors c. The auditor's opinion is not an assurance as to except the future viability of the entity as well as the a. Use of testing. effectiveness and efficiency with which b. Incompetence of the auditor. management has conducted the affairs of the entity. c. Internal control limitation. d. The procedures required to conduct an audit in accordance with PSAs should be determined by the d. Most audit evidence is persuasive rather than conclusive. client who engaged the services of the auditor. 53. Auditing services may include which of the following? 58. The reason an independent auditor gathers evidence is to a. Attesting to financial statements a. Detect fraud b. Evaluation of a division’s performance for management b. Evaluate management c. Examination of the economy and efficiency of c. Evaluate internal controls governmental operations d. Form an opinion on the financial statements d. All of the above 59. The auditor communicates the results of his or her work 54. The review of unaudited financial statements consists of: through the medium of the a. Inquiry of management and analytical procedures. a. Engagement letter. b. Inquiry of management and documentation of internal b. Audit report. controls. c. Management letter. c. Analytical procedures and compliance with laws and d. Audited financial statements. regulations. d. Internal control evaluation and management 60. The expertise that distinguishes auditors from accountants is representation. in the a. Ability to interpret PAS/PFRS. 55. The Philippine Standards on Auditing issued by AASC: b. Accumulation and interpretation of evidence. a. Apply to independent examination of financial c. Ability to interpret generally accepted accounting statements of any entity when such an examination is principles. conducted for the purpose of expressing an opinion. d. Requirement to possess education beyond the b. Need to be applied on all audit related. bachelor's degree. c. Must not apply to other related activities of auditors. d. Require that in no circumstances would an auditor may AT – Prelim Rev (875 MCQs) Red Sirug Page 5 of 85 61. The market for auditing services is driven by a. Mastery of a particular intellectual skill, acquired by a. The regulatory authority of the Securities and Exchange training and education. Commission. b. Adherence by its members to a common code of values b. A demand by external users of financial statements. and conduct established by its administrating body, c. Pronouncements issued by the Auditing and Assurance including maintaining an outlook which is essentially Standards Council. objective. d. Congress. c. Acceptance of a duty to society as a whole. d. All of these. 62. An independent audit is important to readers of financial statements because it 67. Professional judgment: a. Provides a measure of management's stewardship a. Is not used in making decisions about materiality and function audit risk. b. Objectively examines and reports on management's b. Is necessary in the evaluation of management's financial statements judgments in applying the entity's applicable c. Reports on the accuracy of information in the financial financial reporting framework. statements c. Should be exercised in planning and performing an audit d. Measures and communicates the financial data included of financial statements but need not be documented. in financial statements d. Can be used as the justification for the decisions made by the auditor that are not supported by the facts and 63. Independent auditing can best be described as circumstances of the engagement. a. A branch of accounting. b. A regulatory function that prevents the issuance of 68. The auditor's judgment concerning the overall fairness of improper financial information. presentation of financial position, results of operation, and c. A professional activity that measures and communi- changes in cash flow is applied within the framework of cates financial and business data. a. Generally accepted auditing standards which include d. A discipline which attests to the results of the concept of materiality accounting and other functional operations and data. b. Generally accepted accounting principles. c. Philippine Financial Reporting Standards 64. The primary purpose of an independent financial statement d. Quality control audit is to a. Provide a basis for assessing management's 69. One of the conditions that give rise to a demand for an performance external audit of financial statements is expertise. Which b. Comply with government regulatory requirements of the following best describes the meaning of expertise as c. Assure management that the financial statements are used in this context? unbiased and free from material error a. Auditors usually rely on the work of an expert as d. Provide users with an unbiased opinion about a basis for evaluating some assertions embodied in the fairness of information reported in the financial the financial statements. statements b. Users usually lack the necessary expertise to verify the reliability of the financial information. 65. The criteria for evaluating quantitative information vary. For c. As experts, auditors are expected to detect all material example, in the case of an independent audit of misstatements in the financial statements. financial statements by CPA firms, the criteria are d. The readers of the financial statements must possess usually the: the necessary expertise to be able to understand the a. Philippine Standards on Auditing financial statements. b. Philippine Financial Reporting Standards c. National Internal Revenue Code 70. Regulation of the accounting profession include: d. Securities and Exchange Commission Regulations a. Public Regulation as provided for in the Philippine Accountancy Act of 2004. 66. A profession is distinguished by certain characteristics b. Regulation within the profession, through the including: implementation of the Code of Ethics. AT – Prelim Rev (875 MCQs) Red Sirug Page 6 of 85  c. Regulation within the firm, through the implementation of partnership name for a period of not more than ___ years after a system of quality control. becoming a sole proprietor. d. All of these. a. 1 b. 2 71. This body is created to assist the BOA in the attainment of the c. 3 objective to continually upgrade accounting education in the d. 4 Philippines, thus making Filipino CPAs globally competitive. a. PICPA CPE Council 78. The death, or disability of an individual CPA and/or the b. Education Technical Council dissolution and liquidation of a firm or partnership of CPAs c. Accounting Teachers' Conference shall be reported to the BOA not later than ___ days from the d. Association of CPAs in Education date of such death, dissolution or liquidation. a. 15 72. Which of the following is not a requirement for a person b. 30 applying for the CPA Board Examinations? c. 60 a. Good moral character d. 90 b. Degree of BS Accountancy c. Natural-born Filipino citizen 79. It refers to the inculcation, assimilation and acquisition of d. No conviction of any criminal offense involving moral knowledge, skills, proficiency and ethical and moral values, turpitude. after the.initial registration of a professional that raise and enhance the professional's technical skills and competence. 73. Its function is to conduct a quality review on applicants for a. Professional Development registration to practice public accountancy and render a report b. Continuing Professional Education which shall be attached to the application for registration. c. Continuing Professional Development a. Quality Review Board d. Professional Growth and Development b. Quality Review Group c. Board of Quality Reviewers 80. The following statements relate to CPE credit units. Which is d. Quality Review Committee incorrect? a. One credit hour of CPE program, activity or source shall 74. Which of the following is the accredited national professional be equivalent to one (1) credit unit. organization of CPAs? b. Any excess credit units in one year may be carried over a. IFAC to the succeeding years within the three-year period. b. ASC c. The total CPE credit units for registered accounting c. AASB professionals shall be sixty (60) credit units for three (3) d. PICPA years, provided that a minimum of fifteen (15) credit units shall be earned in each year. 75. The ETC shall be composed of d. Excess credit units earned may be carried over to the a. 7 members. next three-year period including credit units earned b. 8 members. for doctoral and master's degrees. c. 15 members d. 14 members 81. The following statements relate to the exemption from CPE requirements. Which is false? 76. Which of the following does not have representations in the a. A registered professional shall be permanently exempted FRSC? from CPE requirements upon reaching the age of 65 a. PICPA years old. b. BIR b. A registered professional shall be permanently c. BOI exempted from CPE requirements upon reaching the d. BOA age of 60 years old. c. A registered professional who is working or practicing 77. A partner surviving the death or withdrawal of all the other his/her profession abroad shall be temporarily exempted partners in a partnership may continue to practice under the from compliance with CPE requirements during the AT – Prelim Rev (875 MCQs) Red Sirug Page 7 of 85  period of his/her stay abroad provided that he/she has a. Negligence in the performance of duties, or lack of been out of the country for at least two years professional competence. immediately prior to the date of renewal. b. Intolerance of violations of the Philippine d. A registered professional who is furthering his/her studies Accountancy Act. abroad shall be temporarily exempted from compliance c. Final judgment of crimes involving moral turpitude. with CPE requirements during the period of his/her stay d. Rigging of the CPA licensure examination results. abroad provided that he/she has been out of the country for at least two years immediately prior to the date of 87. The Professional Regulatory Board of Accountancy consists of: renewal. a. 1 Chairman and 4 members. b. 1 Chairman and 5 members. 82. Which of the following statements concerning a CPA's c. 1 Chairman and 6 members. disclosure of confidential client information is ordinarily correct? d. 1 Chairman and 7 members. a. Disclosure should not be made even if such disclosure will protect the CPA's professional interests in legal 88. The Chairman and the members of the BOA shall be proceedings. appointed by the: b. Disclosure should be made only if there is a legal, or a. Commissioner of the SEC. professional duty to make the disclosure. b. President of the PICPA. c. Disclosure may be made to any party on consent of c. President of the Republic of the Philippines. the client. d. Retiring chairman of the Board of Accountancy. d. Disclosure may be made to any government agency without subpoena.. 89. Members of the Professional Regulatory Board of Accountancy shall serve for: 83. This refers to those persons who hold a valid certificate issued a. Three years, subject to renewal. by the Board of Accountancy. b. Seven years, not subject to renewal. a. Senior accounting practitioner. c. Three years, subject to reappointment. b. Professional accountant. d. Three years, not subject to reappointment. c. Professional accountant in public practice. d. Audit associate. 90. Which of the following is not mentioned as a power of the Board? 84. The principle of professional behavior requires a CPA to a. To monitor the conditions affecting the practice of a. Be straightforward and honest in performing professional accountancy. services. b. To supervise the registration, licensure and practice of b. Perform professional services with due care, competence accountancy. and diligence. c. To sentence to imprisonment CPAs who have been c. Be fair and should not allow prejudice or bias, conflict of found guilty of violations of the Accountancy Act. interest or influence of others to override objectivity. d. To issue, suspend, revoke, or reinstate the Certificate of d. Act in a manner consistent with the good reputation Registration for the practice of the accountancy of the profession and refrain from any conduct which profession. might bring discredit to the profession. 91. Which of the following is the sectoral organization for CPAs in 85. This fundamental principle requires a CPA not to use or Public Practice? disclose information acquired during the course of performing a. ACPACI professional services without proper and specific authority. b. ACPAPP a. Objectivity. c. ACPAE b. Professional Behavior. d. GACPA c. Professional Competence and Due care. d. Confidentiality. 92. This is the standard-setting body that replaces the Accounting Standards Council (ASC) and is tasked to develop and issue 86. Which of the following is not a ground for suspension or standards which will represent generally accepted accounting removal of members of BOA? principles in the Philippines: AT – Prelim Rev (875 MCQs) Red Sirug Page 8 of 85  a. Accounting Standards Board. expiry date, due for periodic renewal, duly signed by the b. Financial Reporting Standards Committee. Chairperson of the PRC and issued by the PRC to a c. Financial Reporting Standards Council. registered CPA upon payment of the registration fees: d. Auditing and Assurance Standards Council. a. Certificate of registration b. Certificate of accreditation 93. This standard-setting body replaces the Auditing Standards c. Professional identification card and Practices Council (ASPC) and is tasked to develop and d. Professional tax receipt issue Philippine Standards on Auditing and related Interpretations: 99. A professional identification card has a validity of: a. Accounting Standards Board. a. Six years b. Financial Reporting Standards Committee. b. Five years c. Financial Reporting Standards Council. c. Four years d. Auditing and Assurance Standards Council. d. Three years 94. The Chairpersons of the FRSC and the AASC shall be 100. Foreign CPAs appointed by: a. Are allowed to practice accountancy in the Philippines a. The Philippine Institute of Certified Public Accountants. without restriction. b. The President of the Republic of the Philippines. b. Are never allowed to practice accountancy in the c. The Professional Regulatory Board of Accountancy. Philippines. d. The Professional Regulation Commission. c. May be allowed to practice accountancy in the Philippines, but only in areas outside public practice. 95. A candidate successfully passes the Board exams if he/she d. May be allowed to practice accountancy in the obtains Philippines, subject to the rules and regulations on a. A general average of sixty-five percent (65%). reciprocity. b. A general average of seventy-five percent (75%). c. A general average of seventy-five percent (75%) in at SET 2 least a majority of the subjects given in the Board exams. d. A general average of seventy-five percent (75%), with 1. These are independent professional services that improve the no grades lower than sixty-five percent (65%) in any quality of information for decision-making. given subject. a. Audit services b. Assurance services 96. In the event a candidate obtains the rating of seventy-five c. Attestation services percent (75%) and above in at least a majority of subjects as d. Management consultancy provided for in RA9298, and one subject has a rating of 64%, he shall be considered as: 2. Which of the following types of audits is performed most a. A failed candidate. frequently by CPAs on a fee basis and for more than one b. A conditioned candidate. client? c. A successful passer of the CPA Board exams. a. Government audits d. Cannot be determined without additional information b. Compliance audits c. Internal audits 97. A certificate under seal, bearing a registration number, issued d. Financial statement audits to an individual, by the PRC, upon recommendation by the BOA, signifying that the individual has complied with all the 3. The independent auditor lends credibility to client legal and procedural requirements for such issuance: financial statements by a. Certificate of accreditation a. Stating in the auditor’s management letter that the b. Certificate of registration examination was made in accordance with PSAs c. Certificate of quality review b. Attaching an auditor’s opinion to the client’s d. Certificate of identification financial statements. c. Testifying under oath about client financial statements. 98. This bears the registration number, date of issuance with an d. Maintaining clear-cut distinctions between AT – Prelim Rev (875 MCQs) Red Sirug Page 9 of 85  management representations and auditor’s 10. The practitioner makes a critical assessment of validity of representations. audit evidence, with a questioning mind and being alert to conditions which may indicate possible misstatement due to 4. Internal auditing relates to an error or fraud. a. Audit which is performed by a practitioner as an a. Objectivity and integrity independent contractor. b. Professional skepticism b. Audit which is incidentally concerned with the c. Independence is mental attitude detection and prevention of fraud. d. Sufficient appropriate evidence c. Audit which serves the needs of management d. Audit wherein the auditor should be independent of 11. In the auditing environment, failure to meet the PSAs is management both in fact and in mental attitude often a. An accepted practice. 5. Independent auditors cannot be totally independent b. A suggestion of negligence. a. Because they don’t audit financial statements c. Conclusive evidence of negligence. b. Since they do not possess the CPA license d. Tantamount to criminal behavior. c. As long as employer-employee relationship exists d. Unless their immediate supervisor is a CPA 12. The following phrases relate to the definition of auditing. Which one is incorrect? 6. The Philippine Standards on Auditing issued by the Auditing a. Systematic process and Assurance Standards Council (AASC) b. Objectively obtaining and obtaining evidence a. Must be followed in all situations. c. Assertions about economic actions and events b. Are interpretations of generally accepted auditing d. Degree of correspondence between assertions standards and GAAS c. Are optional guidelines which an auditor may choose to follow or not follow when conducting an audit. 13. Non-assurance engagements include all of the following d. Are the equivalent of laws for audit practitioners. except a. Compliance audit. 7. The auditor's best defense when material misstatements in b. Management consulting. the financial statements are not uncovered in the audit is that c. Agreed-upon procedures. a. The financial statements are client's responsibility. d. Preparation of tax returns where no conclusion is b. The audit was conducted in accordance with PSAs expressed. c. Client is guilty of contributory negligence. d. The audit was conducted in accordance with generally 14. The subject matter of an assurance engagement can take the accepted accounting principles. following forms except a. The entity’s internal control. 8. The auditor considers materiality from: b. Historical or prospective financial statements. a. AASC perspective c. Evaluation of a capital investment proposal. b. Client perspective d. Performance of an entity that could indicate efficiency c. Independence perspective and effectiveness. d. Reasonable user perspective 15. In performing an assurance engagement, a professional 9. Which of the following is more difficult to evaluate accountant typically objectively? a. Provides management consulting advice. a. Compliance with government regulations b. Supplies litigation support services. b. Efficiency and effectiveness of operations c. Assesses control risk at a low level. c. All of the above are equally difficult d. Expresses a conclusion about an assertion. d. Presentation of financial statements in accordance with the PFRS 16. Which of the following is not an assurance engagement? a. Risk Assessment Service b. Information System Reliability Service AT – Prelim Rev (875 MCQs) Red Sirug Page 10 of 85  c. Business Performance Measurement d. Inform any known third party users of the inappropriate d. Management Consulting Service use of his/her name in connection with the information. 17. The three commonly-sought types of assurance services are 23. A CPA should not submit unaudited financial statements of a a. Audits, reviews, and compilations. non-public entity to a client or others unless, as a minimum, b. Audits, reviews, and other assurance services. the CPA complies with the provisions applicable to c. Audits, compilations, and other assurance services. a. Audit engagements. d. Reviews, compilations, and other assurance services. b. Review engagements. c. Assurance engagements. 18. Which of the following statements is true? d. Compilation engagements. a. Assurance engagements do not require independence. b. The term “auditor” is broader in scope compared to the 24. You own Dude, Inc., which manufactures wooden tables. You term “practitioner.” need to hire some accountants to prepare your monthly c. Assurance engagements performed by professional financial statements. The preparation of your financial accountants are intended to enhance the credibility statements is referred to as a(n) of information. a. Audit. d. The degree or level of assurance that may be provided by b. Review. the practitioner is inversely related to the scope of c. Compilation. procedures performed and their results. d. Special report. 19. Which of the following forms may be the subject matter of 25. Distribution of a report is always restricted when assurance engagements? a. Negative assurance is given. a. Behavior b. A review has been performed. b. Historical financial information c. There is a positive expression of opinion. c. Systems and processes d. Agreed-upon procedures have been performed. d. All of the above 26. Which of the following methods is most commonly used to 20. Engagement risk is influenced by the risks associated with the reduce information risk? following except a. Allow all users to prepare the statements. a. Nature and form of the subject matter. b. Allow users to verify information. b. Nature and form of the criteria applied to the subject c. Have the financial statements audited. matter. d. Users share information risk with management. c. Unreasonably low professional fee. d. Nature and extent of the process used to collect and 27. The phrase in our opinion in the auditor’s report is intended to evaluate evidence. inform users that auditors a. Guarantee fair presentation of the financial statements. 21. Absolute assurance is not attainable as a result of such b. Act as insurers of the accuracy of the financial statements. factors as: c. Certify the material presented in the statements by a. The use of judgment. management. b. The use of selective testing. d. Based their conclusions about the statements on c. The inherent limitations of control systems. professional judgment. d. All of the above 28. The need for assurance services arises because: 22. If the auditor learns that an entity is inappropriately using the a. There is a potential bias in providing information. auditor’s name in association with financial information, he/she b. Economic transactions are less complex than they were a should: decade ago. a. Remain silent. c. There is a consonance of interests of the preparer and b. Seek legal advice if necessary. the user of the financial statements. c. Require management to cease doing so. d. Most users today have access to the system that generates the financial statements they use. AT – Prelim Rev (875 MCQs) Red Sirug Page 11 of 85  a. Reprimand 29. This tax service includes the determination of the tax b. Fine or imprisonment consequences of planned or potential transactions, followed c. Revocation of CPA certificate by making suggestions on the most desirable course of action d. Suspension of CPA certificate such as to legally minimize the tax liability while achieving the client’s objectives. 36. Which of the following is an incorrect statement relating to the a. Tax shelter theoretical framework of auditing? b. Tax evasion a. Effective internal control structure reduces the probability c. Tax planning of fraud or irregularities in an organization. d. Tax compliance b. Application of generally accepted accounting principles results in a fair presentation of financial statements. 30. Which of the following characteristics is not considered c. When examining financial data for the purpose of necessary in determining whether the criteria are suitable? expressing an independent opinion thereon, the auditor a. Reliability acts exclusively in the capacity of an auditor. b. Relevance d. In collecting evidence, auditors should maintain an c. Neutrality attitude of trust about their clients' assertions. d. Sufficiency 37. The market for auditing services is driven by 31. In an assurance engagement, this refers to the information a. Congress at the state level obtained by the practitioner in arriving at the conclusions on b. A demand by external users of financial statements which the conclusion is based. c. The regulatory authority of the Securities and Exchange a. Criteria Commission b. Assertions d. Pronouncements issued by the Auditing Standards and c. Evidence Practices Council d. Generally accepted auditing standards 38. Which of the following statements reflects an auditor's 32. Compilation is an example of which one of the following types responsibility for detecting fraud and error? of services? a. An auditor is responsible for detecting employee errors a. Auditing and simple fraud, but not for discovering fraud involving b. Review employee collusion or management override. c. Consulting b. An auditor should design the audit to provide d. Accounting reasonable assurance of detecting errors and fraud that are material to the financial statements. 33. The Framework of Philippine Standards on Auditing c. An auditor should plan the audit to detect errors and fraud distinguishes audits from related services. Related services that are caused by departures from the applicable FRF. include all of the following, except d. An auditor is not responsible for detecting errors and a. Reviews. fraud unless the application of PSAs and PAPs would b. Compilations. result in such detection. c. Agreed-upon procedures. d. Management consulting. 39. The adequacy of disclosures in the financial statements and footnotes is the primary responsibility of the: 34. Assurance services involve which of the following? a. Client a. Relevance as well as reliability. b. Auditor in charge of field work b. Nonfinancial information as well as traditional financial c. Partner assigned to engagement statements. d. Staff member who drafted the statements c. Electronic databases as well as printed reports. d. All of the above. 40. Generally accepted auditing standards do not require auditors of financial statements to 35. Which of the following is not one of the penalties that can be a. Assess the risk of occurrence of errors and fraud imposed by the BOA? AT – Prelim Rev (875 MCQs) Red Sirug Page 12 of 85  b. Design audits to provide reasonable assurance of c. Must be of good moral character and must not have been detecting errors and frauds convicted of crimes involving moral turpitude. c. Report all the findings of errors and fraud to police d. Must be a duly registered CPA with more than ten (10) authorities years of work experience in any scope of practice of d. Understand the nature or errors and fraud accountancy. 41. The risk that the auditor's own work will lead to the decision 46. Which statement is incorrect regarding the term of office of the that material misstatements do not exist in the financial chairman and the members of the Board of Accountancy statements, when in fact such misstatements do exist, is (BOA)? a. Control risk a. The Chairman and members of the Board shall hold b. Detection risk office for a term of three years. c. Inherent risk b. A person may serve the BOA for not more than twelve d. Audit risk years. c. A member of the BOA may continuously serve office 42. With respect to the concept of materiality, which one of the for more than nine years. following statements is correct? d. No person who has served two (2) successive complete a. Materiality is a matter of professional judgment. terms shall be eligible for reappointment until the lapse of b. Materiality is determined by reference to AASC's one (1) year. guidelines. c. Materiality depends on the nature of a transaction rather 47. The BOA shall submit to the PRC the ratings obtained by each than the peso amount of the transaction. candidate within how many calendar days after the d. Materiality depends only on the peso amount of an item examination? relative to other items in the financial statements. a. 5 days b. 10 days 43. The following statements relate to the Board of Accountancy. c. 15 days Which statement is correct? d. 30 days a. The Board consists of a Chairman and six members. b. The chairman and members are appointed by the 48. Which of the following is not one of the grounds for President of the Philippines upon recommendation of proceedings against a CPA? PICPA. a. Insanity. c. Majority of the board members shall as much as possible b. Immoral or dishonorable conduct. be in public practice. c. Gross negligence or incompetence in the practice of his d. The Professional Regulation Commission may remove profession. from the Board any member whose certificate to practice d. Engaging in public practice while being employed in has been removed or suspended. a private enterprise. 44. The APO shall submit its nominations with complete 49. The primary duty to enforce the provisions of RA 9298 and its documentation to the Commission not later than ______ prior IRR rests with to the expiry of the term of an incumbent chairman or member. a. The PRC a. 30 days b. The BOA b. 60 days c. The AASC c. 90 days d. The PRC and BOA d. 120 days 50. The PICPA shall renew its Certificate of Accreditation once 45. A member of the BOA shall, at the time of his/her appointment, every how many years after the date of the Resolution possess the following qualifications, except granting the petition for re-accreditation and the issuance of a. Must be a natural-born citizen and resident of the the said certificate upon submission of the requirements? Philippines. a. 2 years b. Must not be a director or officer of the APO at the time of b. 3 years his/her appointment. c. 4 years AT – Prelim Rev (875 MCQs) Red Sirug Page 13 of 85  d. 6 years 56. In conducting an appraisal of the economy and efficiency with 51. The practice of accountancy includes the following except: which company resources are used, an internal auditor's a. Serving as audit examiner for the Commission on Audit. responsibility is to: b. Working as a Dean of a College that grants a degree of a. Verify the accuracy of asset valuation. BS Accountancy. b. Verify the existence of assets. c. Being appointed as the marketing manager of a c. Determine whether operating standards have been business enterprise. established. d. Provision of assurance services to more than one client d. Review the reliability of operating information. and on a fee basis. 57. Because an external auditor is paid a fee by a client 52. Which of the following is one of the functions of Quality company, he Review Committee: a. Is absolutely independent and may conduct an audit. a. To promulgate accounting and auditing standards that will b. May be sufficiently independent to conduct an audit. be generally accepted in the Philippines. c. Is never considered to be independent. b. To conduct a review on applicants for registration to d. Must receive approval of the Securities and Exchange practice public accountancy and render a report Commission before conducting an audit. which shall be attached to the application for registration. 58. Which of the following is a conceptual difference between the c. To adopt a Code of Ethics for the practice of accountancy. attestation standards and generally accepted auditing d. To evaluate periodically the performance of educational standards? institutions offering accountancy education. a. The attestation standards do not permit an attest engagement to be part of a business acquisition study or 53. No matter competent a CPA may be, his opinion on a feasibility study. financial statements will be of little value to those who rely b. The attestation standards provide a framework for upon him unless he: the attest function beyond historical financial a. Maintains his independence. statements. b. Maintains professional competence. c. The requirement that the practitioner be independent in c. Maintains a program of continuing education. mental attitude is omitted from the attestation standard. d. Serves his clients with professional concern. d. None of the standards of fieldwork in generally accepted auditing standards are included in the attestation 54. Which of the following statements about independent financial standards. statement audit is incorrect? a. The term "scope of the audit" refers to audit procedures 59. The exercise of due professional care requires that an auditor deemed necessary in the circumstances to achieve the a. Uses error-free judgment. objective of the audit. b. Considers internal control, including tests of controls. b. The auditor's opinion enhances the credibility of the c. Be responsible for fulfilling his or her duties financial statements. diligently and carefully. c. The phrase used to express the auditor's opinion is d. Examines all corroborating evidence available. "present fairly, in all material respects". d. The risk that the auditor will fail to uncover material 60. The objectives of the Philippine accountancy Act of 2004 are misstatement is eliminated when the auditor the following except: conducts the audit in accordance with PSAs. a. The standardization and regulation of accounting education. 55. For what reason does an independent auditor gather b. The examination for registration of certified public evidence? accountants. a. To assess management performance c. The integration of the accounting profession. b. To detect fraud d. The supervision, control, and regulation of the practice of c. To detect misstatements accountancy in the Philippines. d. To form an opinion on the financial statements AT – Prelim Rev (875 MCQs) Red Sirug Page 14 of 85 61. A CPA is in public accounting practice when he/she practitioners. a. Holds, or is appointed to, in an accounting professional c. Issued an unqualified opinion on the 2010 financial group in government or in a government-owned and/or statements when fees for the 2009 audit were unpaid. controlled corporation where decision making requires d. Purchased a bookkeeping firm's practice of monthly write- professional knowledge in the science of accounting. ups for a percentage of fees received over a three-year b. Represents his/her employer before government period. agencies on tax and other matters related to accounting. c. Represents his/her clients before government 66. The confidential relationship applies to agencies on tax and other matters related to a. All services provided by CPAs. accounting. b. Only audit and attestation services. d. Teaches accounting, auditing, management advisory c. Audit and tax services, but no MAS services. services, accounting aspect of finance, business law, d. Audit and MAS services, but not tax services. taxation, and other technically related subjects. 67. A CPA’s retention of records as a means of enforcing 62. The underlying reason for a code of professional conduct for payment of an overdue audit fee is an act that is: any profession is a. A violation of generally accepted auditing standards. a. That it is required by Congress. b. Considered acceptable by the Code of Ethics. b. That it provides a safeguard to keep unscrupulous people c. Ill advised since it would impair the CPA’s out. independence with respect to the client. c. The need for public confidence in the quality of d. Considered discreditable to the profession. service of the profession. d. That it allows Professional Regulation Commission to 68. Which of the following acts of the CPA would be most have a yardstick to measure deficient performance. likely a violation of the Code of Ethics? a. Assisting a client in preparing a financial forecast. 63. If a firm, or a network firm, has a direct financial interest in an b. Acting as auditor of a non-charitable organization with audit client of the firm, the self-interest threat created would be audit client serving as president. so significant no safeguard could reduce the threat to an c. Accepting a fee in a tax matter that is contingent upon acceptable level. The action appropriate to permit the firm to the result of an administrative proceeding. perform the engagement would be to d. Having an immaterial loan to the president of an a. Dispose of the financial interest. audit. b. Dispose of a sufficient amount of it so that the remaining interest is no longer material. 69. CPAs should not be liable to any party if they perform their c. Either a or b services with: d. Neither a nor b a. Ordinary negligence. b. Regulatory providence. 64. Which of the following statements is incorrect? c. Due professional care. a. CPAs lose their independence if they acquire any direct d. Good faith. financial interest in a client. b. CPAs lose their independence if they acquire any 70. Under the Code of Ethics, a CPA may not: indirect financial interest in a client. a. Perform bookkeeping services for an audit client. c. CPAs lose their independence if they acquire a material b. Perform advisory services for an audit client. indirect financial interest in a client. c. Have any direct financial interest in a client during d. CPAs lose their independence if they have a material the period covered by the financial statements. direct financial interest in a client. d. Having any joint, closely held investments with a principal stockholder of an audit client during the 65. A violation of the ethical standards would most likely have period of audit engagement which is not material in occurred when a CPA relation to his net worth. a. Made arrangement with a bank to collect notes issued by a client in payment of fees due. 71. The Code of Ethics would be violated if a CPA accepted a b. Joined an accounting firm made up of three non-CPA fee for services and the fee was: AT – Prelim Rev (875 MCQs) Red Sirug Page 15 of 85  a. Fixed by a public authority. because: b. Based on a price quotation submitted in competitive a. This practice establishes fees which are bidding. commensurate with the value of the services. c. Based on the results of judicial proceedings in a tax b. Attorneys in tax practice customarily set contingent matter. fees. d. Payable after a specified finding was attained in a c. Determination by taxing authorities are a matter of review of financial statements. judicial proceedings which do not involve third parties. d. The consequences are based upon findings of 72. The CPA shall not concurrently engage in any business or judicial proceedings or the findings of tax occupation which impairs his objectivity in rendering authorities. professional services or which is inconsistent with his practice or employment. This provision of the code of 77. Ethically, the auditor could: ethics is applicable to: a. Advertise only as to his expertise in preparing income a. Only to CPAs engaged in public accountancy. tax returns. b. CPAs engaged in public accountancy or employed in b. Base his audit fee on a percentage of the proceeds of a private enterprise. his client’s stock issue. c. CPAs engaged in public accountancy or employed in c. Perform an examination for a financially a private enterprise or government agency. distressed client at less than his customary fees. d. All CPAs engaged in public accountancy, or d. Own preferred stock in a corporation which is an audit employed in a private enterprise, a government client. agency or an educational institution. 78. The Code of Ethics contains both general ethical 73. Ultimately, the decision as to whether the CPA is principles that are aspirational in character and also a: independent or not, will be made by the: a. List of violations that would cause the automatic a. Audit Committee suspension of the CPA’s license. b. Client b. Description of the CPA’s procedures for responding to c. Public an inquiry from trial board. d. Auditor c. Set of specific, mandatory rules describing levels of conduct the CPA must observe. 74. In which of the following instances would the d. List of specific crimes that would be considered as independence of the CPA not be considered to be acts discreditable to the profession. impaired? The CPA has been retained as the auditor of a brokerage firm 79. According to the Code of Ethics, the characteristics a. Which owes the CPA audit fees for more than one distinguishing the accountancy profession include the year. following except: b. In which the CPA has a large active margin account. a. To meet public interest requirement. c. In which the CPA’s brother is the controller. b. Adherence by its members to a common code of values d. Which owes the CPA audit fees for the current and conduct established by its administering body. year services and just filed a petition for c. Acceptance of a duty to society as a whole. bankruptcy. d. Mastery of a particular intellectual skill, acquired by training and education. 75. A CPA, while performing an audit, strives to achieve independence in appearance in order to: 80. A practicing CPA is allowed by the CPA Code of Ethics to a. Reduce risk and liability. do the following except: b. Become independent in fact. a. Announce the change in office location in a c. Comply with GAAS. newspaper. d. Maintain public confidence in the profession. b. List his firm name in the building lobby directory in good taste and modest size. 76. Contingent fees charged by CPAs engaged in tax practice c. Include his tax account number and membership in are permitted under the rules of professional conduct PICPA on his stationary. AT – Prelim Rev (875 MCQs) Red Sirug Page 16 of 85  d. List his office telephones in the PLDT directory to b. Firm-wide safeguards box or bold type. c. Engagement specific safeguards d. Safeguards created by the client. 81. Without the consent of the client, a CPA should not disclose confidential information contained in working 87. A CPA firm would be reasonable assured of meeting its papers to a: responsibility to provide professional services that conform a. Voluntary quality control review board. with professional standards by: b. CPA firm that has purchased the CPA’s a. Adherence to GAAS accounting practice. b. Maintaining an attitude of independence in its c. National court that has issued a valid subpoena. engagements. d. Disciplinary body created under statute. c. Having an appropriate a system of quality control. d. Joining professional societies that enforce ethical 82. A CPA who is engaged to prepare an income tax return standards. has a duty to prepare it in such a manner that the tax is: a. The legal minimum. 88. The Philippine Code of Ethics requires that lead engagement b. Computed in conformity with generally accepted partners of listed entities be rotated at least once every: accounting principles. a. 2 years c. Supported by the client’s audited financial statements. b. 3 years d. Not subject to change upon audit. c. 5 years d. 7 years 83. The principle of Professional behavior requires a CPA to: a. Perform professional services with due care, 89. The following are represented both to the Financial Reporting competence and diligence. Standards Council (FRSC) and Auditing and Assurance b. Be straightforward and honest in performing Standards Council (AASC), except: professional services. a. Bangko Sentral ng Pilipinas c. Act in a manner consistent with the good reputation b. Securities and Exchange Commission of the profession and refrain from any conduct c. Bureau of Internal Revenue which might bring discredit to the profession. d. Board of Accountancy d. Be fair and should not allow prejudice or bias, conflict of interest or influence of others to override objectivity or 90. Which of the following auditor concerns most likely could be affect his professional or business judgments. so serious that the auditor concludes that a financial statement audit cannot be conducted? 84. The communication to the public of facts about a CPA which a. The entity has no formal written code of conduct are not designed for the deliberate promotion of that CPA. b. The integrity of the entity’s management is suspect a. Advertising c. Procedures requiring segregation of duties are subject to b. Solicitation management override c. Indirect promotion d. Management fails to modify prescribed controls for d. Publicity changes in conditions 85. Which of the following does not belong to the group: 91. Which of the following is a violation of the code of professional a. Independence of mind ethics for certified public accountants? b. Independence of fact a. A CPA permits his/her name to be used in a client's c. Independence in mental attitude advertising as having verified financial data and/or d. Independence in appearance statistical facts with respect to the client's products. b. Based on information obtained in an audit, a CPA 86. Safeguards that may eliminate or reduce threats to reports an illegal act of his client to government independence to an acceptable level fall in the following authorities. categories except: c. Three years after a partner has retired, the remaining a. Safeguards created by the profession, legislation or partners continue to practice under a firm name that regulation includes the name of the retired partner. The retired AT – Prelim Rev (875 MCQs) Red Sirug Page 17 of 85  partner has severed all connections with the CPA firm. 96. Which of the following does not constitute a practice of d. A CPA running for public office uses the professional accountancy? designation "CPA" after his name on posters employed in a. A person holding out himself as one skilled in the connection with his election campaign. knowledge, science and practice of accounting and as a qualified person to render professional services as a CPA 92. A CPA in public accounting is prohibited from performing to more than one client. which of the following actions? b. A person representing his/her employer before a. Permit the publication of his being the author of a book. government agencies on tax arid other accounting related b. Be a party to a stratagem which permits a non-CPA to matters. practice accountancy. c. A person in educational institution teaching accounting, c. Allow his wife to acquire shares in a corporation's capital auditing, business law, taxation or other technically stock. related subjects. d. Act as a stock and transfer agent. d. A person is appointed as a marketing director of a government owned and controlled corporation. 93. A CPA who has been retained by a client that operates in an industry totally new to him 97. The criteria for evaluating quantitative information vary. For a. May not accept such an engagement. example, in the audit of historical financial statements by CPA b. May accept the engagement only if the accounting firm firms, the criteria are usually: specializes in the audit of commercial banks. a. Generally accepted auditing standards. c. May accept the engagement after attaining a suitable b. Acceptable financial reporting framework level of understanding of the transactions and c. Regulations of the Securities and Exchange Commission accounting practices unique to commercial banking. d. Regulations of the Bureau of Internal Revenue d. May accept the engagement because training as a CPA transcends unique industry characteristics. 98. The firm is to be staffed by personnel who have attained and maintained the technical standards and professional 94. Which of the following is not an objective of requiring competence required to enable them to fulfill their registration of individual CPAs and Firms of partnership of responsibilities with due care is the objective of what quality CPAs engaged in public accounting practice? control policy? a. The required registration will give equal opportunities a. Ethical requirements to CPAs in the practice of their profession. b. Leadership responsibilities b. It will enable the Board of Accountancy to formulate and c. Assignment implement rules and regulations more effectively for the d. Monitoring enhancement and maintenance of high professional, ethical, and technical standards of the accounting 99. In pursuing a CPA firm's quality control objectives, a CPA firm profession. may maintain records indicating which partners or employees c. To protect the public against fraud, deception, unethical of the CPA firm were previously employed by the CPA firm's practices and from the consequences of ignorance, clients. Which quality control element would this be most incompetence and incapacity in the practice of public likely to satisfy? accounting. a. Monitoring. d. It will help PRC and BOA to identify and impose b. Human resources. corresponding sanctions and penalties on individual c. Ethical requirements. CPAs. d. Engagement performance. 95. As used in Republic Act No. 9298, this term refers to the 100. An engagement quality control review is required to be area of practice of accountancy performed: a. Section a. Immediately after the re-assessment of control risk. b. Sector b. At engagement completion after the report is issued. c. Segment c. For all audits of financial statements of listed entities. d. Line d. For all types of audits, regardless of the subject matter of the engagement. AT – Prelim Rev (875 MCQs) Red Sirug Page 18 of 85  requires specialized skills and knowledge beyond those ordinarily possessed by the practitioner. SET 3 c. A responsible party is the person who is responsible for the subject matter or the subject matter 1. The degree of certainty that the practitioner has attained and information. wishes to convey is: