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Audiing Quiz No Professional Regulaions and Quality ControlMULTIPLE CHOICE QUESTIONS The Board shall exercise the following speciic powers, funcions and responsibiliies: A B C D I. To supervise the registraion, licensure and pracice of accountancy. Yes Yes Yes Yes II. To issue, suspend, revoke or re...

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Auditing Quiz No.3 Professional Regulations and Quality Control

MULTIPLE CHOICE QUESTIONS 1. The Board shall exercise the following specific powers, functions and responsibilities: A B I. To supervise the registration, licensure and practice of accountancy. II. To issue, suspend, revoke or reinstate the Certificate of Registration for the practice of the accountancy profession. III. To monitor the conditions affecting the practice of accountancy. IV. To conduct an oversight into the quality of audits of financial statements. V. To issue a cease or desist order to any person, association, partnership or corporation engaged I violation of any provision of the Philippine Accountancy Act.

C

D

Yes

Yes

Yes Yes

Yes Yes

No Yes

Yes Yes No Yes

Yes

No

Yes

Yes

Yes

No Yes

No

2. Which of the following is a function of the Board of Accountancy? a. To issue, suspend, revoke or reinstate the Certificate of Registration for the practice of the accountancy profession. b. To prescribe and adopt the rules and regulations necessary for carrying out the provisions of the Philippine Accountancy Act of 2004. c. To supervise the regulations, licensure, and practice of accountancy in the Philippines. d. All of the above. 3. The Board of Accountancy has the power to conduct an oversight into the quality of audits if financial statements through a review of the quality control measures instituted by auditors in order to ensure compliance with the accounting and auditing standard and practices. This power of the BOA is called a. Appraisal b. Peer review c. Quality control d. Quality review 4. Which of the following is the least function of the Board of Accountancy? a. Determination of the minimum requirements leading to admission of candidates to the CPA examinations. b. Preparation of the contents of the CPA licensure examinations and rating of the examination papers. c. Regulation of the practice of accountancy. d. Supervision over the accredited professional organization of CPAs. 5. Which of the following is not a qualification of an applicant for the CPA licensure examination? a. He/she is of good moral character. b. He/she is at least 21 years of age. c. He/she is a holder of the degree of Bachelor of Science in Accountancy. d. He/she is a Filipino citizen. 6. Which of the following is not a requisite in applying for the CPA licensure examinations? a. Good moral character. b. Has not been convicted of any criminal offense involving moral turpitude.

c. Holder of the degree of Bachelor of Science in Accountancy. d. Natural-born citizen of the Philippines. 7. Republic Act 9298 is known as the a. Code of Ethics for Professional Accountants. b. Philippine Accountancy Act of 2004. c. Philippine Accountancy Law of 2004. d. Revised Accountancy Law. 8. Which of the following is not an objective of the following Philippine Accountancy Act 2004? a. The development and improvement of accounting standards that will be generally accepted in the Philippines. b. The examination for registration of certified public accountants. c. That standardization and regularization of accounting education. d. The supervision, control, and regulation of the practice of accountancy in the Philippines. 9. The objective of the Philippine Accountancy Act of 2004 are the following, except: a. Supervision, control and regulation of the practice of accountancy. b. Standardization and regulation of accounting education. c. Integration of accountancy profession. d. Examination for registration of certified public accountants. 10. Which of the following is not one of the specified objectives of the Accountancy Act of 2004? a. Supervision, control, and regulation of accounting practice. b. Standardization and regulation of accounting education. c. Promulgation of accounting and auditing standards. d. Examination of registration of CPAs. 11. The following statements relate to RA 9298. Which is incorrect? a. A person shall be considered to be in the professional practice of accountancy if, as an officer in a private enterprise, he makes decisions requiring professional accounting knowledge. b. After two years, subject to a certain condition, the Board of Accountancy may order the reinstatement of a CPA whose certificate of registration has been revoked. c. Insanity is a ground for proceeding against a CPA. d. The Professional Regulation Commission has the authority to remove any member of the Board of Accountancy for negligence, incompetence, or any just cause. 12. The members of the Professional Regulatory Board of Accountancy shall be appointed by the a. Professional Regulation Commission (PRC). b. President of the Philippines. c. Philippine Institute of CPAs (PICPA). d. Association of CPA in Public Practice (ACPAPP). 13. The following statements relate to the submission of nominations to the Board of Accountancy. Which is correct? a. There should be adequate documentation to show the qualifications and primary field of professional activity of each nominee. b. The APO shall submit its nominations to the PRC not later than thirty (30) days prior to the expiry of the term of the incumbent chairman or member.

c. The Accredited National Professional Organization of CPAs (APO) shall submit its nominations to the president of the Philippines not later than sixty (60) days prior to the expiry of the terms of an incumbent chairman or member. d. If APO fails to submit its nominee(s) to the PRC within the required period, the PRC in consultation with the Board of Accountancy shall submit to the president of the Philippines a list of five (5) nominees for each position. 14. The APO shall submit its nominations with complete documentation to the Commission not later than ________ prior to the expiry of the term of an incumbent chairman or member. a. 120 days. b. 30 days. c. 60 days. d. 90 days. 15. Which of the following is not a qualification of a member of the Board of Accountancy? a. He/she must be a duly registered CPA with at least ten (10) years of work experience in the practice of public accounting. b. He/she must be a natural-born citizen and a resident of the Philippines. c. He/she must be of good moral character and must not have been convicted of crimes involving moral turpitude. d. He/she must not be a director of officer of the APO at the time of his/her appointment. 16. The following statements relate to the term of office of the chairman and members of the Board of Accountancy (BOA). Which is false? a. The chairman and members of the BOA shall hold office for a term of three (3) years. b. No person who has served two successive complete terms as chairman or member shall be eligible for reappointment until the lapse of two (2) years. c. Appointment to fill up an unexpired term is not to be considered as a complete term. d. Any vacancy occurring within the term of a member shall be filled up for the unexpired portion of the term only. 17. The Professional Regulatory Board of Accountancy shall elect a vice chairman from among its members for a term of a. Two (2) years. b. Three (3) years. c. One (1) year. d. Five (5) year. 18. Which statement is incorrect regarding the term of office of the chairman and the members of the Board of Accountancy? a. A member of the BOA ma continuously serves office for more than nine years. b. A person may serve the BOA for not more than twelve years. c. No person who has served two (2) successive complete terms shall be eligible for reappointment until the lapse of one (1) year. d. The chairman and members of the Board shall hold office for a term of three years. 19. No person shall serve the Professional Regulatory Board of Accountancy for more than a. 12 years. b. 3 years. c. 6 years. d. 9 years.

20. The Board, subject to the approval of the Commission, may revise or exclude any of the subjects and their syllabi, and add new ones as the need arises. Provided that the challenge shall not be more often than every a. 5 years. b. 4 years. c. 3 years. d. 2 years 21. To pass the CPA licensure examination, a candidate must obtain a a. General average of sixty-five percent (65%). b. General average of sixty-five percent (65%), with no grades lower than seventy-five percent (75%) in any given subject. c. General average of seventy-five percent (75%). d. General average of seventy-five percent (75%), with no grades lower than sixty-five percent (65%) in any given subject. 22. A candidate who obtains the rating of seventy-five percent (75%) and above in at least a majority of the subjects shall receive a conditional credit for the subjects passed. He/she shall take an examination in the remaining subjects within a. Five (5) years from the preceding examination. b. One (1) year from the preceding examination. c. Three (3) year from the preceding examination. d. Two (2) year from the preceding examination. 23. The following statements relate to CPA examination ratings. Which of the following is incorrect? a. Candidates who failed in four complete examinations shall no longer be allowed to take the examinations the fifth time. b. Candidates who obtain a rating of 75% and above in at least four subjects shall receive a conditional credit for the subject passed. c. Conditional candidates shall take an examination in the remaining subjects within two years from the preceding of examination. d. To pass the examination, candidates should obtain a general weighted average of 75% and above, with no rating in any subject less than 65%. 24. The following are represented both to the Financial Reporting Standards Council and Auditing and Assurance Standards Council, except a. Bangko Sentral ng Pilipinas. b. Board of Accountancy. c. Bureau of Internal Revenue. d. Securities and Exchange Commission. 25. The Auditing and Assurance Standard Council (AASC) a. Assists the PRC is the establishment and promulgation of auditing standards in the Philippines. b. Have seventeen (17) regular members. c. Replace the Auditing Standard and Practice Council (ASPC) which was established by the Board of Accountancy (BOA), upon the recommendation of the Philippine Institute of Certified Public Accountants (PICPA). d. Was created by the Professional Regulation Commission (PRC) upon the recommendation of the BOA.

26. Under PSQC 1, the firm should communicate the results of the monitoring of its quality control system to engagement partners and other appropriate individual within the firm at least a. Annually. b. Monthly. c. Quarterly. d. Weekly. 27. As defined in PSQC 1, it is a process designed to provide an objective evaluation, before the report is issued, of the significant judgements the engagement team made and the conclusions they reached in formulating the report. a. Continuing professional education. b. Engagement performance. c. Engagement quality control. d. Monitoring. 28. A firm systems of quality control should ordinarily provide for the maintenance of a. Update personal file. b. Documentation to provide evidence of the operation of each elements of its system of quality control. c. Documentation to demonstrate compliance with regulatory requirements. d. A file of minutes of staff meetings. 29. Which of the following is not one of the penalties that can be imposed by the Board of Accountancy? a. Suspension of CPA certificate. b. Revocation of CPA certificate. c. Reprimand. d. Fine or imprisonment. 30. The chairman and the members of the AASC shall have term of a. 2 years. b. 3 years. c. 5 years. d. 7 years. 31. Are the following CPAs required to comply with the requirements on continuing professional education?

CPAs in Public Accountancy CPAs in Commerce and Industry CPAs in Education/Academe CPAs in Government

A Yes No No No

B Yes Yes Yes No

C Yes No Yes Yes

D Yes Yes Yes Yes

32. How many CPE credit units must be accumulated by a registered accounting professional within the 3-year period? a. 120 credit units. b. 150 credit units. c. 60 credit units. d. 90 credit units.

33. The following statements relate to the requirement to complete 12 units of relevant education subjects for the accreditation of accounting teachers. Which is incorrect? a. CPAs who have passed the Teachers Board Exams and are licensed Professional Teachers should earn 12 units through in-service or in-house trainings. b. For purposes of compliance, the units may be earned from the undergraduate education program or from a graduate degree program of any Higher Education Institutions (HEI) duly recognized by CHED. c. The 12 units may be a combination of in-service training and units earned in an undergraduate or graduate education program. d. The 12 units may be earned from in-service or in-house trainings on relevant education subjects offered by schools or training centers. 34. The certificate of Accreditation issued by the PRC to an accounting teacher shall a. Be valid for 2 years and renewable every 2 years. b. Be valid for 3 years and renewable every 3 years. c. Be valid for 3 years and renewable annually. d. Remain in full force and effect unless revoked, cancelled or withdrawn. 35. What is the effectivity date of the BOA Resolution No. 88 (Series 2008) prescribing the rules and regulations for the accreditation of accounting teachers? a. December 31, 2008. b. June 30, 2008. c. June 20, 2008. d. June 4, 2008. 36. It is the communication to the public of facts about a professional accountant which are not designed for the deliberate promotion of that professional accountant. a. Solicitation. b. Publicity. c. Indirect promotion. d. Advertising. 37. Advertising, as define in the Code of Ethics for the Professional Accountants, means a. The communication to the public on information as to the services or skills provided by professional accountants in public practice with a view to procuring professional business. b. The communication to the public of facts about a professional accountant which are not designed for the deliberate promotion of that professional accountant. c. The approach to a potential client for the purpose of offering professional services. d. Any of the given choices. 38. Which of the following is not allowed by the Code of Ethics for the Professional Accountants? a. The use of the name of an international accounting firm affiliation/correspondence is generally allowed. b. Booklets and other documents bearing the name of a professional accountant and giving technical information for the assistance of staff or clients may be issued to such persons, other professional accountants or other interested parties. c. A professional accountant in public practice may issue to client or, in response to an unsolicited request, to a non-client a factual and objectively worded of the service provided. d. A firm or CPA practitioner can continue to use the term “accredited” or any similar words or phrase calculated to convey the same meaning if the claimed accreditation has not expired.

39. How frequent can a professional accountants have press and other media releases commemorating their anniversaries in public practice by informing the public of their achievements in contributing toward national building or enhancing the image or standards of the accounting profession. a. 6 years. b. 5 years. c. 3 years. d. 2 years. 40. Which of the following is not allowed to be included in a website of a firm of professional accountants? a. Names of parties/principals with their educational attainment. b. Membership in any professional body. c. Listing of the firm’s client. d. Awards received. 41. In the marketing and promotion of themselves and their work, professional accountants should a. Not denigrate the work of other accountants. b. Not make exaggerated claims for the services they are able to offer, the qualifications they possess, or experience they have gained. c. Not use means which brings the profession into disrepute. d. All of the above. 42. The Philippine Standard on Quality Control (PSQC) are to applied to a. Assurance engagements only. b. Compilation and review engagements only. c. Review engagement only. d. All services that fall under the AASC’s engagement standards. 43. One of a CPA form’s basic objective is to provide professional services that comply with professional standards and regulatory and legal requirements. Reasonable assurance of achieving this basic objective is provided through a. Continuing Professional Education. b. Compliance with the fundamental principles of the Philippine Code of Ethics. c. Compliance with generally accepted reporting standards. d. A system of quality control. 44. Quality control policies and procedures should provide the firm with reasonable assurance that the policies and procedures relating to other elements of quality control are being effectively applied. This statement defines the quality control element of a. Monitoring. b. Leadership responsibilities. c. Ethical Requirements. d. Acceptance and continuance of client relationships and specific engagements.

45. According to PSQC 1, a firm should establish policies and procedures to provide it with reasonable assurance that the policies and procedures relating to the system of quality control are relevant, adequate, operating effectively and complied with in practice. Such policies and procedures should include an ongoing consideration and evaluation of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements. The inspection of a selection of completed engagements is ordinarily performed on a cyclical basis. Engagements selected for inspection include a. At least one engagement for each engagement partner over an inspection cycle, which ordinarily spans no more than two years. b. At least one engagement for each engagement partner over an inspection cycle, which ordinarily spans no more than one year. c. At least one engagement for each engagement partner over an inspection cycle, which ordinarily spans no more than three years. d. At least one engagement for each engagement partner over an inspection cycle, which ordinarily spans no more than five years. 46. The creation of FRSC and AASC is intended to assist the Board of Accountancy in carrying out its function to a. To supervise the registration, licensure and practice of accountancy in the Philippines. b. To prescribe and adopt the rules and regulations necessary for carrying out the provisions of RA No. 9298. c. To prepare, adopt, issue or amend the syllabi of the subjects for examinations. d. To monitor the conditions affecting the practice of accountancy and adopt such measures, rules and regulations and best practices as may be deemed proper for the standards. 47. Statement of financial accounting standards constituting GAAP in the Philippines are issued by the a. Securities and Exchange Commission. b. Philippine Institute of CPAs. c. Financial Reporting Standard Council. d. Auditing and Assurance Standard Council. 48. Which of the following mostly describes the function of AASC? a. To assist the Board of Accountancy in conducting administrative proceedings on erring CPAs in audit practice. b. To monitor full compliance by auditors to PSAs. c. To promulgate auditing standards, practices and procedures that shall be generally accepted by the accounting profession in the Philippines. d. To undertake continuing research on both auditing and financial accounting in order to make them responsive to the needs of the public. 49. Which statement is correct regarding AASC? a. The chairman should have been or presently a senior practitioner in public accountancy. b. The chairman and members of the AASC shall have a non-renewable term of 3 years. c. The chairman and members of the AASC shall be appointed by the President of the Philippines upon the recommendation of PRC. d. The AASC shall be composed of 15 members plus a Chairman.

50. The following sectors represented by the PICPA to the membership of AASC have one representative, except a. Public practice. b. Government. c. Commerce and industry. d. Academe.

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