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}\viewkind1\viewscale100\margl0\margr0\margt0\margb0\deftab80\dntblnsbdb\expshrt
n\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart Pg1}{\bkmkend Pg1}\par\pard
\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\sb0\sl-230\slmult0 \par\par
d\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\c
f1\f2\fs20 Page 1 of 8 \par\pard\ql \li2850\sb196\sl-368\slmult0 \up0 \expndtw0\
charscalex97 \ul0\nosupersub\cf3\f4\fs32 CPA REVIEW SCHOOL OF THE PHILIPPINES \p
ar\pard\ql \li5830\sb6\sl-230\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosuper
sub\cf4\f5\fs20 M a n i l a \par\pard\ql \li5242\sb111\sl-253\slmult0 \up0 \expn
dtw-3\charscalex100 \ul0\nosupersub\cf6\f7\fs22 AUDITING THEORY \par\pard\ql \li
5254\sb187\sl-253\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\f
s22 Overview of Auditing \par\pard\ql \li1440\sb247\sl-253\slmult0 \up0 \expndtw
-3\charscalex100 \ul0\nosupersub\cf9\f10\fs22 Related PSAs : \ul0\nosupersub\cf8
\f9\fs22 PSA 100, 120, 200 and 610 \par\pard\li1440\sb195\sl-253\slmult0\fi0\tx1
979 \up0 \expndtw-2\charscalex100 1.\tab \up0 \expndtw-1\charscalex100 Certain
fundamental beliefs called "postulates" underlie auditing theory.
Whic
h of the\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\charscalex10
0 following is not a postulate of auditing?\par\pard\qj \li1979\ri980\sb0\sl-260
\slmult0\tx2339 \up0 \expndtw0\charscalex102 a. No long-term conflict exists be
tween the auditor and the management of the enterprise \line\tab \up0 \expndtw0\
charscalex102 under audit. \par\pard\ql \li1979\sb1\sl-236\slmult0 \up0 \expndtw
-3\charscalex100 b. Economic assertions can be verified. \par\pard\ql \li1980\s
b4\sl-237\slmult0 \up0 \expndtw-4\charscalex100 c. The auditor acts exclusivel
y as an auditor. \par\pard\ql \li1980\sb10\sl-253\slmult0 \up0 \expndtw-3\charsc
alex100 \ul0\nosupersub\cf11\f12\fs22 d. An audit has a benefit only to the own
ers. \par\pard\li1440\sb190\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex
100 \ul0\nosupersub\cf8\f9\fs22 2.\tab \up0 \expndtw-3\charscalex100 In all case
s, audit reports must\par\pard\ql \li1979\sb1\sl-233\slmult0 \up0 \expndtw-2\cha
rscalex100 a. Be signed by the individual who performed the audit procedures. \
par\pard\ql \li1979\sb11\sl-253\slmult0 \up0 \expndtw-1\charscalex100 b. Certif

y the accuracy of the quantitative information which was audited. \par\pard\ql \

li1979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 c. Communicate the aud
itor\u8217?s finding to the general public. \par\pard\qj \li1979\ri982\sb0\sl-26
0\slmult0\tx2339 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d.
Inform readers of the degree of correspondence between the quantifiable informa
tion and \line\tab \up0 \expndtw-1\charscalex100 the established criteria. \par\
pard\li1440\sb173\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\n
osupersub\cf8\f9\fs22 3.\tab \up0 \expndtw-2\charscalex100 The auditor communica
tes the results of his or her work through the medium of the\par\pard\li1440\sb0
\sl-253\slmult0\fi539\tx5760 \up0 \expndtw-3\charscalex100 a. Engagement letter
\tab \up0 \expndtw-3\charscalex100 c. Management letter.\par\pard\li1440\sb0\s
l-253\slmult0\fi540\tx5760 \up0 \expndtw-3\charscalex100 b. \ul0\nosupersub\cf11
\f12\fs22 Audit report\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9
\fs22 d. Financial statements.\par\pard\li1440\sb184\sl-253\slmult0\fi0\tx1979
\up0 \expndtw-3\charscalex100 4.\tab \up0 \expndtw-2\charscalex100 As used in a
uditing, which of the following statements best describes "assertions"?\par\pard
\qj \li1979\ri980\sb10\sl-240\slmult0\tx2339 \up0 \expndtw0\charscalex100 a. As
sertions are the representations of management as to the reliability of the info
rmation \line\tab \up0 \expndtw0\charscalex100 system. \par\pard\ql \li1979\sb10
\sl-253\slmult0 \up0 \expndtw-1\charscalex100 b. Assertions are the auditor's f
indings to be communicated in the audit report. \par\pard\qj \li1979\ri857\sb18\
sl-240\slmult0\tx2339 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs2
2 c. Assertions are the representations of management as to the fairn
ess of the financial \line\tab \up0 \expndtw-4\charscalex100 statements. \par
\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupers
ub\cf8\f9\fs22 d. Assertions are found only in the footnotes to the financial s
tatements. \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\char
scalex100 5. \tab \up0 \expndtw-3\charscalex100 The expertise that distinguishes
auditors from accountants is in the \par\pard\ql \li1979\sb1\sl-237\slmult0 \up
0 \expndtw-2\charscalex100 a. Ability to interpret generally accepted accountin
g principles. \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-2\charscale
x100 b. Requirement to possess education beyond the Bachelor\u8217?s degree. \p
ar\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosuper
sub\cf11\f12\fs22 c. Accumulation and interpretation of evidence. \par\pard\ql
\li1979\sb1\sl-237\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9
\fs22 d. Ability to interpret ASC Statements. \par\pard\li1440\sb201\sl-253\slm
ult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 6.\tab \up0 \expndtw-1\charscalex1
00 The framework for auditing and related services as addressed by PSA excludes\
par\pard\li1440\sb0\sl-253\slmult0\fi539\tx6480 \up0 \expndtw-2\charscalex100 a.
Review\tab \up0 \expndtw-2\charscalex100 c.
Compilation\par\pard\li1440\sb0
\sl-253\slmult0\fi540\tx6480 \up0 \expndtw-2\charscalex100 b. \ul0\nosupersub\cf
11\f12\fs22 Tax services\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\
f9\fs22 d.
Agreed upon procedure\par\pard\li1440\sb184\sl-253\slmult0\fi0\tx1
979 \up0 \expndtw-2\charscalex100 7.\tab \up0 \expndtw-1\charscalex100 It refers
to the level of auditor\u8217?s satisfaction as to the reliability of an assert
ion being made by\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\chars
calex100 one party for use by another party.\par\pard\li1440\sb1\sl-253\slmult0\
fi539\tx6480 \up0 \expndtw-2\charscalex100 a. Confidence level\tab \up0 \expndt
w-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 c.
Assurance level\par\pard\l
i1440\sb0\sl-253\slmult0\fi540\tx6480 \up0 \expndtw-2\charscalex100 \ul0\nosuper
sub\cf8\f9\fs22 b. Reasonableness level\tab \up0 \expndtw-2\charscalex100 d.
Tolerable level\par\pard\li1440\sb184\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-2
\charscalex100 8.\tab \up0 \expndtw-1\charscalex100 Indicate the level of assura
nce provided by audit and related services.\par\pard\li1440\sb0\sl-253\slmult0\f
i4348\tx7048\tx8314\tx9568 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f1
2\fs22 a\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b\tab \up
0 \expndtw-1\charscalex100 c\tab \up0 \expndtw-1\charscalex100 d\par\pard\li1440
\sb14\sl-253\slmult0\fi540\tx5623\tx6883\tx7935\tx9201 \dn3 \expndtw-1\charscale
x100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Audit\t
ab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 High\tab \up0 \ex

pndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 High\tab \up0 \expndtw-1\chars

calex100 Negative\tab \up0 \expndtw-1\charscalex100 Absolute\par\pard\li1440\sb1
6\sl-253\slmult0\fi540\tx5385\tx6847\tx7905\tx9403 \dn2 \expndtw-1\charscalex100
\ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Review\tab
\up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Moderate\tab \up0 \e
xpndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 None\tab \up0 \expndtw-1\char
scalex100 Moderate\tab \up0 \expndtw-1\charscalex100 High\par\pard\li1440\sb15\s
l-253\slmult0\fi540\tx5587\tx6847\tx8107\tx9274 \dn2 \expndtw-1\charscalex100 \u
l0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Agreed-upon pr
ocedures\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 None\ta
b \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 None\tab \up0 \expnd
tw-1\charscalex100 None\tab \up0 \expndtw-1\charscalex100 Limited\par\pard\li144
0\sb14\sl-253\slmult0\fi540\tx5587\tx6847\tx8107\tx9367 \up0 \expndtw-1\charscal
ex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Compil
ation\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 None\tab \
up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 None\tab \up0 \expndtw1\charscalex100 None\tab \up0 \expndtw-1\charscalex100 None\par\pard\li1440\sb18
3\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-1\charscalex100 9.\tab \up0 \expndtw0\
charscalex100 Which of the following is true of the report based on agreed-uponprocedures?\par\pard\qj \li1979\ri981\sb7\sl-240\slmult0\tx2339 \up0 \expndtw-1\
charscalex100 \ul0\nosupersub\cf11\f12\fs22 a. The report is restricted to
those parties who have agreed to the procedures to be \line\tab \up0 \
expndtw-1\charscalex100 performed. \par\pard\qj \li1979\ri978\sb4\sl-260\slmult0
\tx2340 \up0 \expndtw0\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. The CPA pro
vides the recipients of the report limited assurance as to reasonableness of \li
ne\tab \up0 \expndtw0\charscalex100 the assertion(s) presented in the financial
information. \par\pard\qj \li1980\ri979\sb0\sl-260\slmult0\tx2340 \up0 \expndtw0
\charscalex102 c. The report states that the auditor has not recognized any ba
sis that requires revision of \line\tab \up0 \expndtw0\charscalex102 financial s
tatements. \par\pard\qj \li1980\ri977\sb0\sl-240\slmult0\tx2340 \up0 \expndtw-1\
charscalex100 d. The report should state that the procedures performed are limi
ted to analytical procedures \line\tab \up0 \expndtw-2\charscalex100 and inquiry
. \par\pard\ql \li9687\sb174\sl-414\slmult0 \up0 \expndtw0\charscalex97 \ul0\nos
upersub\cf2\f3\fs36 AT-5901
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\sp{\sn pVerticies}{\sv 8;4;(0,20);(2018,20);(2018,0);(0,0)}}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
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p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}
{\shp {\*\shpinst\shpleft5788\shptop13867\shpright5911\shpbottom13882\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz667\shplid1
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 123}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(123,15);(123,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 255}}{
\sp{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{
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{\shp {\*\shpinst\shpleft7048\shptop13867\shpright7171\shpbottom13882\shpfhdr0\s

hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz693\shplid2
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 123}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(123,15);(123,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}
{\shp {\*\shpinst\shpleft8314\shptop13867\shpright8425\shpbottom13882\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz715\shplid3
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 111}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(111,15);(111,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
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{\shp {\*\shpinst\shpleft9568\shptop13867\shpright9691\shpbottom13882\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz737\shplid4
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 123}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(123,15);(123,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}\par\pard\sect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart P
g2}{\bkmkend Pg2}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\s
b0\sl-230\slmult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\chars
calex100 \ul0\nosupersub\cf1\f2\fs20 Page 2 of 8 \par\pard\ql \li1440\sb0\sl-253
\slmult0 \par\pard\ql\li1440\sb118\sl-253\slmult0\tx1979 \up0 \expndtw-3\charsca
lex100 \ul0\nosupersub\cf8\f9\fs22 10. \tab \up0 \expndtw-3\charscalex100 Which
of the following is an objective of a review engagement? \par\pard\qj \li1979\ri
982\sb2\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 a. Expressing a posi
tive opinion that the financial information is presented in conformity with \lin
e\tab \up0 \expndtw-1\charscalex100 generally accepted accounting principles. \p
ar\pard\qj \li1979\ri982\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex102
b. Expressing a limited assurance to users who have agreed as to procedures tha
t will be \line\tab \up0 \expndtw0\charscalex102 performed by the CPA. \par\pard
\qj \li1979\ri979\sb0\sl-240\slmult0\tx2339 \up0 \expndtw0\charscalex100 \ul0\no
supersub\cf11\f12\fs22 c. Reporting whether material modifications should be m
ade to such financial statements to \line\tab \up0 \expndtw-1\charscalex100 make
them conform with generally accepted accounting principles. \par\pard\qj \li197
9\ri981\sb1\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 \ul0\nosupersub\c
f8\f9\fs22 d. Reporting that the financial statements, in all materials
respects, fairly present the \line\tab \up0 \expndtw0\charscalex100 financia
l position and operating results of the client. \par\pard\li1440\sb186\sl-253\sl
mult0\fi0\tx1979 \up0 \expndtw-1\charscalex100 11.\tab \up0 \expndtw0\charscalex
100 According to Philippine Standard on Auditing, the procedures employed in doi
ng compilation\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-1\charscal
ex100 are:\par\pard\ql \li1979\sb1\sl-245\slmult0 \up0 \expndtw-2\charscalex100
a. Designed to enable the accountant to express a limited assurance. \par\pard\
ql \li1979\sb1\sl-238\slmult0 \up0 \expndtw-2\charscalex100 b. Designed to enab

le the accountant to express a negative assurance. \par\pard\ql \li1979\sb10\sl253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 c. Not
designed to enable the accountant to express any form of assurance. \par\pard\q
l \li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f
9\fs22 d. Less extensive than review procedures but more extensive than agreedupon procedures. \par\pard\li1440\sb189\sl-253\slmult0\fi0\tx1979 \up0 \expndtw2\charscalex100 12.\tab \up0 \expndtw-1\charscalex100 Any services in which the
CPA firm issues a written communication that express a conclusion\par\pard\li144
0\sb0\sl-253\slmult0\fi539 \up0 \expndtw-1\charscalex100 with respect to the rel
iability of a written assertion that is the responsibility of another party is\p
ar\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\charscalex100 a (n)\par\
pard\li1440\sb0\sl-253\slmult0\fi539\tx7919 \up0 \expndtw-2\charscalex100 \ul0\n
osupersub\cf11\f12\fs22 a. \ul0\nosupersub\cf8\f9\fs22 Accounting and bookkeepi
ng service\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 c.\ul
0\nosupersub\cf8\f9\fs22
\ul0\nosupersub\cf11\f12\fs22 Attestation service\p
ar\pard\li1440\sb0\sl-253\slmult0\fi539\tx7919 \up0 \expndtw-2\charscalex100 \ul
0\nosupersub\cf8\f9\fs22 b. Management advisory service\tab \up0 \expndtw-2\cha
rscalex100 d.
Tax service\par\pard\li1440\sb185\sl-253\slmult0\fi0\tx1979 \up
0 \expndtw-2\charscalex100 13.\tab \up0 \expndtw-2\charscalex100 The three types
of attestation services are:\par\pard\ql \li1979\sb0\sl-248\slmult0 \up0 \expnd
tw-1\charscalex100 a. Audits, review, and compilations \par\pard\ql \li1979\sb0
\sl-239\slmult0 \up0 \expndtw-2\charscalex100 b. Audits, compilations, and othe
r attestation services \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-2\
charscalex100 c. Reviews, compilations, and other attestation services \par\pa
rd\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\c
f11\f12\fs22 d. Audits, reviews, and other attestation services \par\pard\ql \l
i1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\
cf8\f9\fs22 14. \tab \up0 \expndtw-3\charscalex100 Which of the following is not
primary category of attestation report? \par\pard\ql \li1979\sb1\sl-237\slmult0
\up0 \expndtw0\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a. Compilation repo
rt \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw0\charscalex100 \ul0\no
supersub\cf8\f9\fs22 b. Review report \par\pard\ql \li1979\sb1\sl-237\slmult0 \
up0 \expndtw-2\charscalex100 c. Audit report \par\pard\qj \li1979\ri981\sb4\sl
-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 d. Special audit report bas
ed on a basis of accounting other than generally accepted \line\tab \up
0 \expndtw-1\charscalex100 accounting principles. \par\pard\li1440\sb187\sl-253\
slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 15.\tab \up0 \expndtw-2\charsca
lex100 The primary goal of the CPA in performing the attest function is to\par\p
ard\li1440\sb1\sl-253\slmult0\fi539 \up0 \expndtw-2\charscalex100 a. Detect fra
ud\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-1\charscalex100 b. Ex
amine individual transactions so that the auditor may certify as to their validi
ty\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\charscalex100 \ul0\n
osupersub\cf11\f12\fs22 c. Determine whether the client's assertions are fairl
y stated\par\pard\li1440\sb0\sl-252\slmult0\fi539 \up0 \expndtw-2\charscalex100
\ul0\nosupersub\cf8\f9\fs22 d. Assure the consistent application of correct acc
ounting procedures\par\pard\li1440\sb186\sl-253\slmult0\fi0\tx1979 \up0 \expndtw
-2\charscalex100 16.\tab \up0 \expndtw-1\charscalex100 Which of the following cr
iteria is unique to the independent auditor\u8217?s attest function?\par\pard\li
1440\sb0\sl-252\slmult0\fi539 \up0 \expndtw-2\charscalex100 a. General competen
ce\par\pard\ql \li1979\sb1\sl-233\slmult0 \up0 \expndtw-2\charscalex100 b. Fami
liarity with the particular industry of each client \par\pard\ql \li1979\sb11\sl
-253\slmult0 \up0 \expndtw-2\charscalex100 c. Due professional care \par\pard\
ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw0\charscalex100 \ul0\nosupersub\cf11\
f12\fs22 d. Independence \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0
\expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 17. \tab \up0 \expndtw-3\ch
arscalex100 Assurance engagement \par\pard\ql \li1979\ri980\sb0\sl-250\slmult0\t
x2339\tx2339 \up0 \expndtw0\charscalex104 a. Is an engagement in which a practi
tioner is engaged to issue, or does issue, a written \line\tab \up0 \expndtw-1\c
harscalex100 communication that expresses a conclusion about the reliability of
a written assertion that \line \tab \up0 \expndtw-2\charscalex100 is the respons

ibility of another party. \par\pard\ql \li1979\ri980\sb0\sl-253\slmult0\tx2339\t

x2339\tx2339 \up0 \expndtw0\charscalex100 b. Is a systematic process of ob
jectively obtaining and evaluating evidence regarding \line\tab \up0 \expnd
tw-1\charscalex100 assertions about economic actions and events to ascertain the
degree of correspondence \line \tab \up0 \expndtw-1\charscalex100 between thos
e assertions and established criteria and communicating the results to
\line \tab \up0 \expndtw-2\charscalex100 interested users. \par\pard\qj \li1979\
ri980\sb16\sl-240\slmult0\tx2339 \up0 \expndtw0\charscalex102 c. Is an engagem
ent in which the auditor provides a moderate level of assurance that the \line\t
ab \up0 \expndtw0\charscalex102 information subject to the engagement is free of
material misstatement. \par\pard\ql \li1979\ri952\sb10\sl-253\slmult0\tx2339\tx
2339\tx2339 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. Is
an engagement intended to enhance the credibility of information about
a subject \line\tab \up0 \expndtw0\charscalex104 matter by evaluating whether
the subject matter conforms in all material respects with \line \tab \up0 \expnd
tw0\charscalex100 suitable criteria, thereby improving the likelihood that the i
nformation will meet the needs \line \tab \up0 \expndtw-1\charscalex100 of an in
tended user. \par\pard\li1440\sb192\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\ch
arscalex100 \ul0\nosupersub\cf8\f9\fs22 18.\tab \up0 \expndtw-2\charscalex100 Th
e single feature that most clearly distinguishes auditing, attestation, and assu
rance is\par\pard\li1440\sb1\sl-253\slmult0\fi539\tx7199 \up0 \expndtw-3\charsca
lex100 a. Type of service.\tab \up0 \expndtw-3\charscalex100 c. \ul0\nosupers
ub\cf11\f12\fs22 Scope of services.\par\pard\li1440\sb0\sl-252\slmult0\fi539\tx
7199 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. Training requ
ired to perform the service\tab \up0 \expndtw-3\charscalex100 d.
CPA\u8217?s
approach to the service\par\pard\ql \li9687\sb104\sl-414\slmult0 \up0 \expndtw0\
charscalex97 \ul0\nosupersub\cf2\f3\fs36 AT-5901 \par\pard\sect\sectd\fs24\paper
w12240\paperh18720\pard\sb0\sl-240{\bkmkstart Pg3}{\bkmkend Pg3}\par\pard\ql \li
10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\sb0\sl-230\slmult0 \par\pard\ql\li
10064\sb30\sl-230\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf1\f2\f
s20 Page 3 of 8 \par\pard\li1440\sb0\sl-253\slmult0\par\pard\li1440\sb137\sl-253
\slmult0\fi0\tx1979 \up0 \expndtw0\charscalex101 \ul0\nosupersub\cf8\f9\fs22 19.
\tab \up0 \expndtw0\charscalex102 Identify the following as financial audit (FA
), compliance audit (CA), and operational audit\par\pard\li1440\sb0\sl-253\slmu
lt0\fi539 \up0 \expndtw0\charscalex101 (OA).\par\pard\ql \li2159\sb15\sl-253\slm
ult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nos
upersub\cf8\f9\fs22
A supervisor is not carrying out his assigned responsibil
ities. \par\pard\ql \li2159\sb27\sl-253\slmult0 \up0 \expndtw0\charscalex100 \ul
0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
A company\u8217
?s tax return does not conform to income tax laws and regulations. \par\pard\qj
\li2159\ri978\sb5\sl-280\slmult0\tx2519 \up0 \expndtw0\charscalex102 \ul0\nosupe
rsub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
A municipality\u8217?
s financial statements correctly show actual cash receipts and \lin
e\tab \up0 \expndtw0\charscalex102 disbursements. \par\pard\ql \li2159\sb23\sl-2
53\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\u
l0\nosupersub\cf8\f9\fs22
A company\u8217?s receiving department is inefficie
nt. \par\pard\li1979\sb13\sl-253\slmult0\fi0\tx6479 \up0 \expndtw-6\charscalex10
0 a.
CA, CA, FA, OA\tab \up0 \expndtw-6\charscalex100 \ul0\nosupersub\cf11\f1
2\fs22 c.
OA, CA, FA, OA\par\pard\li1979\sb3\sl-270\slmult0\fi0\tx6480 \up0 \
expndtw-7\charscalex100 \ul0\nosupersub\cf13\f14\fs24 b.
OA, CA, CA, OA\tab \
up0 \expndtw-7\charscalex100 d.
CA, CA, FA, CA\par\pard\ql \li1440\sb169\sl
-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 20
. \tab \up0 \expndtw-2\charscalex100 The criteria for evaluating quantitative in
formation vary. For example, in the audit of historical \par\pard\ql \li1979\s
b7\sl-253\slmult0 \up0 \expndtw-3\charscalex100 financial statements by CPA firm
s, the criteria are usually \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndt
w-1\charscalex100 a. Generally accepted auditing standards. \par\pard\ql \li197
9\sb1\sl-237\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22
b. Generally accepted accounting principles. \par\pard\ql \li1979\sb10\sl-253\
slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Regulatio

ns of the Internal Revenue Service. \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0

\expndtw-2\charscalex100 d. Regulations of the Securities and Exchange Commiss
ion. \par\pard\li1440\sb187\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-4\charscalex
100 21.\tab \up0 \expndtw-3\charscalex100 Which of the following types of audit
uses as its criteria laws and regulations?\par\pard\li1440\sb0\sl-253\slmult0\fi
539\tx6480 \up0 \expndtw-4\charscalex100 a.
Operational audit\tab \up0 \expnd
tw-4\charscalex100 c.
Financial statement audit\par\pard\li1440\sb1\sl-253\sl
mult0\fi540\tx6480 \up0 \expndtw-4\charscalex100 \ul0\nosupersub\cf11\f12\fs22 b
.
Compliance audit\tab \up0 \expndtw-4\charscalex100 \ul0\nosupersub\cf8\f9\f
s22 d.
Financial audit\par\pard\li1440\sb183\sl-253\slmult0\fi0\tx1979 \up0 \
expndtw-4\charscalex100 22.\tab \up0 \expndtw-4\charscalex100 An operational aud
it is designed to\par\pard\ql \li1979\sb1\sl-233\slmult0 \up0 \expndtw-1\charsca
lex100 \ul0\nosupersub\cf11\f12\fs22 a. Assess the efficiency and effectiveness
of management\u8217?s operating procedures \par\pard\qj \li1979\ri978\sb5\sl-26
0\slmult0\tx2339 \up0 \expndtw0\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. As
sess the presentation of management\u8217?s financial statements in acco
rdance with \line\tab \up0 \expndtw0\charscalex100 generally accepted accountin
g principles \par\pard\ql \li1979\sb1\sl-235\slmult0 \up0 \expndtw-2\charscalex1
00 c. Determine whether management has complied with applicable laws and regul
ations \par\pard\qj \li1979\ri978\sb5\sl-260\slmult0\tx2339 \up0 \expndtw0\chars
calex100 d. Determine whether the audit committee of the board of directors is
effectively discharging \line\tab \up0 \expndtw-1\charscalex100 its responsibili
ty to oversee management\u8217?s operations \par\pard\ql \li1440\sb166\sl-253\sl
mult0\tx1979 \up0 \expndtw-3\charscalex100 23. \tab \up0 \expndtw-1\charscalex10
0 A review of any part of an organization\u8217?s procedures and metho
ds for the purpose of \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw3\charscalex100 evaluating efficiency and effectiveness is classified as a (n) \
par\pard\li1440\sb11\sl-253\slmult0\fi539\tx6480 \up0 \expndtw-3\charscalex100 \
ul0\nosupersub\cf11\f12\fs22 a. \ul0\nosupersub\cf8\f9\fs22 Audit of financial
statements\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 c.
Operational audit\par\pard\li1440\sb0\sl-253\slmult0\fi539\tx6480 \up0 \expndtw
-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. Compliance audit\tab \up0 \expn
dtw-3\charscalex100 d.
Production audit\par\pard\li1440\sb183\sl-253\slmult0\
fi0\tx1979 \up0 \expndtw-3\charscalex100 24.\tab \up0 \expndtw-3\charscalex100 W
hich one of the following is more difficult to evaluate objectively?\par\pard\ql
\li1979\sb1\sl-245\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f
12\fs22 a. Efficiency and effectiveness of operations. \par\pard\ql \li1979\s
b9\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b.
Compliance with government regulations. \par\pard\qj \li1979\ri979\sb0\sl-260\sl
mult0\tx2339 \up0 \expndtw0\charscalex102 c. Presentation of financial stateme
nts in accordance with generally accepted accounting \line\tab \up0 \expndtw0\ch
arscalex102 principles. \par\pard\ql \li1979\sb1\sl-213\slmult0 \up0 \expndtw-1\
charscalex100 d. All three of the above are equally difficult.. \par\pard\li144
0\sb210\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 25.\tab \up0 \ex
pndtw-2\charscalex100 Independent auditing can best be described as a\par\pard\l
i1440\sb0\sl-252\slmult0\fi539 \up0 \expndtw-2\charscalex100 a. Branch of accou
nting\par\pard\ql \li1979\sb1\sl-251\slmult0 \up0 \expndtw-1\charscalex100 \ul0\
nosupersub\cf11\f12\fs22 b. Discipline that attests to the results of accountin
g and other operations and data \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \ex
pndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Professional activity tha
t measures and communicates financial and business data \par\pard\ql \li1979\sb1
0\sl-253\slmult0 \up0 \expndtw-1\charscalex100 d. Regulatory function that prev
ents the issuance of improper financial information \par\pard\ql \li1440\sb187\s
l-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 26. \tab \up0 \expndtw-3\char
scalex100 A financial statement audit: \par\pard\ql \li1979\sb1\sl-237\slmult0 \
up0 \expndtw-2\charscalex100 a. Confirms that financial statement assertion are
accurate. \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex10
0 \ul0\nosupersub\cf11\f12\fs22 b. Lends credibility to the financial statement
s. \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\no
supersub\cf8\f9\fs22 c. Guarantees that financial statements are presented fai

rly. \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-1\charscalex100 d. A

ssures that fraud had been detected. \par\pard\ql \li1440\sb190\sl-253\slmult0\t
x1979 \up0 \expndtw-3\charscalex100 27. \tab \up0 \expndtw-2\charscalex100 Which
of the following best describes the objective of an audit of financial statemen
ts? \par\pard\qj \li1979\ri982\sb18\sl-240\slmult0\tx2339 \up0 \expndtw0\charsca
lex100 a. To express an opinion whether the financial statements are prepared i
n accordance with \line\tab \up0 \expndtw0\charscalex100 prescribed criteria. \p
ar\pard\qj \li1979\ri982\sb4\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100
b. To express an assurance as to the future viability of the entity whose finan
cial statements \line\tab \up0 \expndtw-1\charscalex100 are being audited. \par\
pard\qj \li1979\ri978\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex103 c.
To express an assurance about the management\u8217?s efficiency or ef
fectiveness in \line\tab \up0 \expndtw0\charscalex103 conducting the operations
of entity. \par\pard\qj \li1979\ri943\sb0\sl-240\slmult0\tx2339 \up0 \expndtw-2
\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. To express an opinion wheth
er the financial statements are prepared, in all material \line\tab \up0
\expndtw-2\charscalex100 respect, in accordance with an identified financial re
porting framework. \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndt
w-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 28. \tab \up0 \expndtw-2\charscale
x100 Because an external auditor is paid a fee by a client company, he or she \p
ar\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 a. Is absol
utely independent and may conduct an audit \par\pard\ql \li9687\sb274\sl-414\slm
ult0 \up0 \expndtw0\charscalex97 \ul0\nosupersub\cf2\f3\fs36 AT-5901 \par\pard\s
ect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart Pg4}{\bkmkend
Pg4}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\sb0\sl-230\slm
ult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\charscalex100 \ul0
\nosupersub\cf1\f2\fs20 Page 4 of 8 \par\pard\ql \li1980\sb191\sl-253\slmult0 \u
p0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 b. May be sufficientl
y independent to conduct an audit \par\pard\ql \li1980\sb7\sl-253\slmult0 \up0 \
expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Is never considered to
be independent \par\pard\qj \li1980\ri979\sb18\sl-240\slmult0\tx2339 \up0 \expnd
tw0\charscalex100 d. Must receive approval of the Securities and Exchange Commi
ssion before conducting an \line\tab \up0 \expndtw-1\charscalex100 audit \par\pa
rd\li1440\sb202\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 29.\tab
\up0 \expndtw-2\charscalex100 Which of the following is responsible for an entit
y\u8217?s financial statements?\par\pard\li1440\sb0\sl-252\slmult0\fi539\tx6480
\up0 \expndtw-3\charscalex100 a. \ul0\nosupersub\cf11\f12\fs22 The entity\u8217
?s management\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c.
The entity\u8217?s audit committee\par\pard\li1440\sb1\sl-253\slmult0\fi539\tx
6480 \up0 \expndtw-3\charscalex100 b. The entity\u8217?s internal auditors\tab
\up0 \expndtw-3\charscalex100 d.
The entity\u8217?s board of directors\par\pa
rd\li1440\sb184\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 30.\tab
\up0 \expndtw-2\charscalex100 The best statement of the responsibility of
the auditor with respect to audited financial\par\pard\li1440\sb0\sl-253\
slmult0\fi539 \up0 \expndtw-3\charscalex100 statement is:\par\pard\ql \li1979\sb
0\sl-253\slmult0 \up0 \expndtw-1\charscalex100 a. The audit of the financial st
atements relieves management of its responsibilities \par\pard\qj \li1979\ri980\
sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex105 \ul0\nosupersub\cf11\f12\
fs22 b. The auditor\u8217?s responsibility is confined to his expression of opi
nion about the audited \line\tab \up0 \expndtw-3\charscalex100 financial stateme
nts. \par\pard\qj \li1979\ri980\sb0\sl-260\slmult0\tx2339 \up0 \expndtw-2\charsc
alex100 \ul0\nosupersub\cf8\f9\fs22 c. The responsibility over the financi
al statements rests with the management and the \line\tab \up0 \expndtw-2
\charscalex100 auditor assumes responsibility with respect to the notes of finan
cial statements. \par\pard\qj \li1979\ri981\sb0\sl-240\slmult0\tx2339 \up0 \expn
dtw0\charscalex105 d. The auditor is responsible only to his unqualified opinio
n but not for any other type of \line\tab \up0 \expndtw-3\charscalex100 opinion.
\par\pard\ql \li1440\sb169\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100
31. \tab \up0 \expndtw-2\charscalex100 Which of the following least likely limit
s the auditors ability to detect material misstatement? \par\pard\ql \li1979\sb7

\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a.

Most audit evidences are conclusive rather than being persuasive. \par\pard\ql \
li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\f
s22 b. The inherent limitations of any accounting and internal control system.
\par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-2\charscalex100 c. Audit
is based on testing \par\pard\qj \li1979\ri981\sb4\sl-260\slmult0\tx2339 \up0 \
expndtw0\charscalex100 d. Audit procedures that are effective in detecting ordi
nary misstatements are ineffective in \line\tab \up0 \expndtw0\charscalex100 det
ecting intentional misstatements. \par\pard\ql \li1440\sb166\sl-253\slmult0\tx19
79 \up0 \expndtw-3\charscalex100 32. \tab \up0 \expndtw0\charscalex100 Because
an examination in accordance with generally accepted auditing standards
is \par\pard\qj \li1979\ri980\sb2\sl-260\slmult0 \up0 \expndtw0\charscalex103 i
nfluenced by the possibility of material errors, the auditor should conduct the
examination \up0 \expndtw0\charscalex103 with an attitude of \par\pard\li1440\sb
2\sl-253\slmult0\fi539\tx7200 \up0 \expndtw-2\charscalex100 a. Professional res
ponsiveness\tab \up0 \expndtw-2\charscalex100 c.
Objective judgment\par\pard\
li1440\sb0\sl-252\slmult0\fi540\tx7200 \up0 \expndtw-2\charscalex100 b. Conserv
ative advocacy\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d
.
Professional skepticism\par\pard\li1440\sb186\sl-253\slmult0\fi0\tx1979 \up
0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 33.\tab \up0 \expndtw-1\c
harscalex100 Which of the following best describes why an independent a
uditor reports on financial\par\pard\li1440\sb0\sl-252\slmult0\fi539 \up0 \ex
pndtw-2\charscalex100 statements?\par\pard\ql \li1979\sb0\sl-241\slmult0 \up0 \e
xpndtw-2\charscalex100 a. Independent auditors are likely to detect fraud \par\
pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersu
b\cf11\f12\fs22 b. Competing interests may exist between management and the use
rs of the statements \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-2\cha
rscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Misstated account balances are gener
ally corrected by an independent audit. \par\pard\ql \li1979\sb10\sl-253\slmult0
\up0 \expndtw-1\charscalex100 d. Ineffective internal controls may exist. \par
\pard\li1440\sb195\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 34.\t
ab \up0 \expndtw-3\charscalex100 An audit can have a significant effect on\par\p
ard\li1440\sb0\sl-253\slmult0\fi539\tx7200 \up0 \expndtw-3\charscalex100 a. \ul0
\nosupersub\cf11\f12\fs22 Information Risk\tab \up0 \expndtw-3\charscalex100 \u
l0\nosupersub\cf8\f9\fs22 c.
Business Risk\par\pard\li1440\sb0\sl-252\slmult0
\fi539\tx7200 \up0 \expndtw-3\charscalex100 b. The risk-free interest rate\tab
\up0 \expndtw-3\charscalex100 d.
All of these\par\pard\li1440\sb186\sl-253\sl
mult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 35.\tab \up0 \expndtw-3\charscale
x100 The main way(s) to reduce information risk is to have\par\pard\ql \li1979\s
b0\sl-249\slmult0 \up0 \expndtw-1\charscalex100 a. The user verify the informat
ion \par\pard\ql \li1979\sb0\sl-239\slmult0 \up0 \expndtw-2\charscalex100 b. Th
e user share the information risk with management \par\pard\ql \li1979\sb10\sl-2
53\slmult0 \up0 \expndtw-2\charscalex100 c. Audited financial statements provi
ded \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw0\charscalex100 \ul0\no
supersub\cf11\f12\fs22 d. All of the above \par\pard\li1440\sb187\sl-253\slmult
0\fi0\tx1979 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 36.\tab \
up0 \expndtw-1\charscalex100 Which of the following is an appraisal activity est
ablished within an entity as a service to the\par\pard\li1440\sb0\sl-253\slmult0
\fi539 \up0 \expndtw-2\charscalex100 entity?\par\pard\li1440\sb0\sl-253\slmult0\
fi539\tx7200 \up0 \expndtw-2\charscalex100 a. External auditing\tab \up0 \exp
ndtw-2\charscalex100 c.
Financial auditing\par\pard\li1440\sb0\sl-252\slmult0
\fi540\tx7200 \up0 \expndtw-2\charscalex100 b. \ul0\nosupersub\cf11\f12\fs22 In
ternal auditing\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 d.
Compliance auditing\par\pard\ql \li1440\sb170\sl-253\slmult0\tx1979 \up0 \ex
pndtw-3\charscalex100 37. \tab \up0 \expndtw-2\charscalex100 The scope and ob
jectives of internal auditing vary widely and depend on the size and
\par\pard\qj \li1979\ri979\sb2\sl-260\slmult0 \up0 \expndtw0\charscalex100 struc
ture of the entity and the requirements of its management. Ordinarily, interna
l auditing \up0 \expndtw-1\charscalex100 activities include one or more of the f
ollowing: \par\pard\li7475\sb0\sl-253\slmult0\fi0\tx8510\tx9552\tx10580 \up0 \ex

pndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a\tab \up0 \expndtw-3\charsc

alex100 \ul0\nosupersub\cf8\f9\fs22 b\tab \up0 \expndtw-3\charscalex100 c\tab \u
p0 \expndtw-3\charscalex100 d\par\pard\ql \li1980\sb13\sl-253\slmult0 \up0 \expn
dtw-2\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\
fs22
Review of the accounting and internal control \par\pard\li2340\sb2\sl-25
3\slmult0\fi0\tx7347\tx8382\tx9417\tx10451 \up0 \expndtw-3\charscalex100 systems
\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Yes\tab \up0 \e
xpndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 Yes\tab \up0 \expndtw-3\chars
calex100 Yes\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\ql \li1980\sb12\sl-2
53\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\u
l0\nosupersub\cf8\f9\fs22
Examination of financial and operating \par\pard\li
2340\sb3\sl-253\slmult0\fi0\tx7347\tx8382\tx9417\tx10501 \up0 \expndtw-3\charsca
lex100 information\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs
22 Yes\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 Yes\tab \up
0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw-3\charscalex100 No\par\pard\ql
\li1980\sb11\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf12\f
13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Review of the economy, efficiency
and \par\pard\li2340\sb4\sl-253\slmult0\fi0\tx7347\tx8382\tx9466\tx10501 \up0 \e
xpndtw-3\charscalex100 effectiveness of operations\tab \up0 \expndtw-3\charscale
x100 \ul0\nosupersub\cf11\f12\fs22 Yes\tab \up0 \expndtw-3\charscalex100 \ul0\no
supersub\cf8\f9\fs22 Yes\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw3\charscalex100 No\par\pard\ql \li1980\sb10\sl-253\slmult0 \up0 \expndtw-2\chars
calex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
Rev
iew of compliance with laws, regulations \par\pard\li2340\sb5\sl-253\slmult0\fi0
\tx7347\tx8431\tx9466\tx10501 \up0 \expndtw-3\charscalex100 and other external r
equirements\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Yes\
tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 No\tab \up0 \expnd
tw-3\charscalex100 No\tab \up0 \expndtw-3\charscalex100 No\par\pard\ql \li9687\s
b296\sl-414\slmult0 \up0 \expndtw0\charscalex97 \ul0\nosupersub\cf2\f3\fs36 AT-5
901
{\shp {\*\shpinst\shpleft7476\shptop15177\shpright7598\shpbottom15193\shpfhdr0\s
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\sp{\sn pVerticies}{\sv 8;4;(0,16);(122,16);(122,0);(0,0)}}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 255}}{
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{\shp {\*\shpinst\shpleft8510\shptop15177\shpright8632\shpbottom15193\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz784\shplid1
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 122}}{\sp{\sn geoBottom}{\sv 16}}
{\sp{\sn pVerticies}{\sv 8;4;(0,16);(122,16);(122,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
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{\shp {\*\shpinst\shpleft9552\shptop15177\shpright9662\shpbottom15193\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz806\shplid2
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\shp {\*\shpinst\shpleft10580\shptop15177\shpright10702\shpbottom15193\shpfhdr0
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}\par\pard\sect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart P
g5}{\bkmkend Pg5}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\s
b0\sl-230\slmult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\chars
calex100 \ul0\nosupersub\cf1\f2\fs20 Page 5 of 8 \par\pard\ql \li1440\sb0\sl-253
\slmult0 \par\pard\ql\li1440\sb118\sl-253\slmult0\tx1979 \up0 \expndtw-3\charsca
lex100 \ul0\nosupersub\cf8\f9\fs22 38. \tab \up0 \expndtw-3\charscalex100 To ope
rate effectively, an internal auditor must be independent of \par\pard\ql \li197
9\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22
a. The line functions of the organizations \par\pard\ql \li1979\sb7\sl-253\slm
ult0 \up0 \expndtw0\charscalex101 \ul0\nosupersub\cf8\f9\fs22 b. The entity \pa
r\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-2\charscalex100 c. The empl
oyer-employee relationship which exists for other employees in the organization
\par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw0\charscalex100 d. All of
the above \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\char
scalex100 39. \tab \up0 \expndtw-3\charscalex100 Internal auditors cannot be ind
ependent \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100 a
. Since they do not possess the CPA license. \par\pard\ql \li1979\sb1\sl-237\sl
mult0 \up0 \expndtw-2\charscalex100 b. Because they don\u8217?t audit financial
statements. \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-2\charscalex
100 c. Unless their immediate supervisor is a CPA. \par\pard\ql \li1979\sb7\sl
-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. As
long as an employer-employee relationship exists. \par\pard\li1440\sb184\sl-253\
slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 40.
\tab \up0 \expndtw-3\charscalex100 To provide for the greatest degree of indepen
dence in performing internal auditing functions,\par\pard\li1440\sb0\sl-253\slmu
lt0\fi539 \up0 \expndtw-3\charscalex100 an internal auditor most likely should r
eport to\par\pard\li1440\sb0\sl-253\slmult0\fi539\tx7200 \up0 \expndtw-3\charsca
lex100 \ul0\nosupersub\cf11\f12\fs22 a.
Board of Directors.\tab \up0 \expndtw
-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c.
Corporate Controller.\par\par
d\li1440\sb1\sl-253\slmult0\fi539\tx7200 \up0 \expndtw-3\charscalex100 b.
Vic
e-President for Finance.\tab \up0 \expndtw-3\charscalex100 d.
Corporate Stock
holders.\par\pard\li1440\sb183\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charsca
lex100 41.\tab \up0 \expndtw-3\charscalex100 Which statement is correct rega
rding the relationship between internal auditing and the\par\pard\li1440\
sb1\sl-253\slmult0\fi539 \up0 \expndtw-3\charscalex100 external auditor?\par\par
d\qj \li1979\ri980\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 a. So
me judgments relating to the audit of the financial statements are those of the
internal \line\tab \up0 \expndtw0\charscalex100 auditor. \par\pard\ql \li1979\sb
1\sl-229\slmult0 \up0 \expndtw-1\charscalex100 b. The external audit function's
objectives vary according to management's requirements. \par\pard\qj \li1979\ri
981\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex102 \ul0\nosupersub\cf11\
f12\fs22 c. Certain aspects of internal auditing may be useful in determining
the nature, timing and \line\tab \up0 \expndtw0\charscalex102 extent of external

audit procedures. \par\pard\qj \li1979\ri980\sb3\sl-240\slmult0\tx2339 \up0 \ex

pndtw0\charscalex102 \ul0\nosupersub\cf8\f9\fs22 d. The external auditor is
responsible for the audit opinion expressed, however that \line\tab \up0
\expndtw0\charscalex102 responsibility may be reduced by any use made of intern
al auditing. \par\pard\li1440\sb203\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-4\ch
arscalex100 42.\tab \up0 \expndtw-3\charscalex100 Which of the following sta
tements is not a distinction between independent auditing and\par\pard\l
i1440\sb1\sl-253\slmult0\fi539 \up0 \expndtw-4\charscalex100 internal auditing?\
par\pard\qj \li1979\ri982\sb11\sl-240\slmult0\tx2339 \up0 \expndtw0\charscalex10
2 a. Independent auditors represent third party users external to the auditee e
ntity, whereas \line\tab \up0 \expndtw0\charscalex102 internal auditors report d
irectly to management. \par\pard\qj \li1979\ri981\sb20\sl-240\slmult0\tx2339 \up
0 \expndtw0\charscalex100 \ul0\nosupersub\cf11\f12\fs22 b. Although independent
auditors strive for both validity and relevance of evidence, internal \line\tab
\up0 \expndtw0\charscalex100 auditors are concerned almost exclusively with val
idity. \par\pard\qj \li1979\ri980\sb4\sl-260\slmult0\tx2339 \up0 \expndtw0\chars
calex100 \ul0\nosupersub\cf8\f9\fs22 c. Internal auditors are employees of
the auditee, whereas independent auditors are \line\tab \up0 \expndtw0\ch
arscalex100 independent contractors. \par\pard\qj \li1979\ri982\sb0\sl-260\slmul
t0\tx2339 \up0 \expndtw0\charscalex105 d. The internal auditor's span of covera
ge goes beyond financial auditing to encompass \line\tab \up0 \expndtw-3\charsca
lex100 operational and performance auditing. \par\pard\li1440\sb174\sl-253\slmul
t0\fi0\tx1979 \up0 \expndtw-1\charscalex100 43.\tab \up0 \expndtw0\charscalex100
Which of the following is a correct qualification of the Chairman and Two Commi
ssioners of\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-1\charscalex1
00 the Commission on Audit?\par\pard\ql \li1979\sb1\sl-236\slmult0 \up0 \expndtw
-1\charscalex100 a. A citizen of the Philippines. \par\pard\ql \li1979\sb10\sl253\slmult0 \up0 \expndtw-1\charscalex100 b. At least 40 years of age upon appo
intment. \par\pard\qj \li1979\ri981\sb18\sl-240\slmult0\tx2339 \up0 \expndtw-1\c
harscalex100 c. CPA\u8217?s with no less than 5 years of auditing experience o
r members of Philippine bar who \line\tab \up0 \expndtw-1\charscalex100 have bee
n engaged in law practice for at least 5 years. \par\pard\ql \li1979\sb10\sl-253
\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. Must no
t have been candidates for any elective position preceding appointment. \par\par
d\li1440\sb190\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 \ul0\nosu
persub\cf8\f9\fs22 44.\tab \up0 \expndtw-1\charscalex100 The 1986 Constitution p
rovides that the Chairman and Commissioners of the Commission on\par\pard\li1440
\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\charscalex100 Audit shall be\par\pard\
ql \li1979\sb1\sl-242\slmult0 \up0 \expndtw-1\charscalex100 a. All Certified Pu
blic Accountants \par\pard\ql \li1979\sb9\sl-253\slmult0 \up0 \expndtw0\charscal
ex101 b. All lawyers \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-4\ch
arscalex100 \ul0\nosupersub\cf11\f12\fs22 c.
One or two lawyers and one or t
wo CPAs for a total of three \par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expn
dtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 d. Two lawyers and one CPA \par
\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 45. \
tab \up0 \expndtw-2\charscalex100 Which of the following is not one of the dutie
s of the Commission on Audit \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expnd
tw-1\charscalex100 a. Define the scope of its audit and examination \par\pard\q
l \li1979\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11
\f12\fs22 b. Assume fiscal responsibility for the government and its instrument
alities \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \u
l0\nosupersub\cf8\f9\fs22 c. Keep the general accounts of the government \par\
pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expndtw-1\charscalex100 d. Promulgate
accounting rules and regulations \par\pard\ql \li1440\sb190\sl-253\slmult0\tx197
9 \up0 \expndtw-3\charscalex100 46. \tab \up0 \expndtw0\charscalex103 A governme
ntal audit may extend beyond an examination leading to the expression of an \par
\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-3\charscalex100 opinion on the
fairness of financial presentation to include \par\pard\li1980\sb6\sl-253\slmul
t0\fi179\tx4319\tx6480 \up0 \expndtw-3\charscalex100 Program results\tab \up0 \e
xpndtw-3\charscalex100 Compliance\tab \up0 \expndtw-3\charscalex100 Economy and

efficiency\par\pard\li1980\sb0\sl-253\slmult0\fi0\tx2879\tx4748\tx7200 \up0 \exp

ndtw-3\charscalex100 a.\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw3\charscalex100 Yes\tab \up0 \expndtw-3\charscalex100 No\par\pard\li1980\sb0\sl253\slmult0\fi0\tx2880\tx4749\tx7200 \up0 \expndtw-3\charscalex100 \ul0\nosupers
ub\cf11\f12\fs22 b.\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw-3\ch
arscalex100 Yes\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\li1980\sb1\sl-253
\slmult0\fi0\tx2880\tx4749\tx7200 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\
cf8\f9\fs22 c.\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\charscal
ex100 Yes\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\li1980\sb0\sl-252\slmul
t0\fi0\tx2880\tx4749\tx7200 \up0 \expndtw-3\charscalex100 d.\tab \up0 \expndtw-3
\charscalex100 No\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\chars
calex100 Yes\par\pard\ql \li9687\sb104\sl-414\slmult0 \up0 \expndtw0\charscalex9
7 \ul0\nosupersub\cf2\f3\fs36 AT-5901
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}}\par\pard\sect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart P
g6}{\bkmkend Pg6}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\s
b0\sl-230\slmult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\chars
calex100 \ul0\nosupersub\cf1\f2\fs20 Page 6 of 8 \par\pard\qj \li1440\sb0\sl-260
\slmult0 \par\pard\qj\li1440\ri979\sb106\sl-260\slmult0\tx1979 \up0 \expndtw0\ch
arscalex100 \ul0\nosupersub\cf8\f9\fs22 47. An audit designed to determine
the extent to which the desired results of an activity \line\tab \up0
\expndtw0\charscalex100 established by the legislative or other authorizing bod
y are being achieved is a (an) \par\pard\li1440\sb11\sl-253\slmult0\fi539\tx7200
\up0 \expndtw-3\charscalex100 a.
Economy audit\tab \up0 \expndtw-3\charscale
x100 \ul0\nosupersub\cf11\f12\fs22 c.
Program audit\par\pard\li1440\sb1\sl-25
3\slmult0\fi540\tx7200 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22

b.
Efficiency audit\tab \up0 \expndtw-3\charscalex100 d.
Financial relate
d audit\par\pard\li1440\sb183\sl-253\slmult0\fi0 \up0 \expndtw-2\charscalex100 4
8. A government auditor evaluates a disbursement to determine if it is necessa
ry, excessive or\par\pard\li1440\sb1\sl-253\slmult0\fi539 \up0 \expndtw-2\charsc
alex100 extravagant in accordance with existing rules and regulations.
What kind of audit is he\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \ex
pndtw-3\charscalex100 conducting?\par\pard\li1440\sb0\sl-252\slmult0\fi719\tx504
0 \up0 \expndtw-3\charscalex100 Compliance audit\tab \up0 \expndtw-3\charscalex1
00 Economy audit\par\pard\li1440\sb1\sl-253\slmult0\fi539\tx2879\tx5760 \up0 \ex
pndtw-3\charscalex100 a.\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw
-3\charscalex100 No\par\pard\li1440\sb0\sl-253\slmult0\fi540\tx2880\tx5760 \up0
\expndtw-3\charscalex100 b.\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expnd
tw-3\charscalex100 Yes\par\pard\li1440\sb0\sl-253\slmult0\fi540\tx2880\tx5760 \u
p0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 c.\tab \up0 \expndtw-3
\charscalex100 Yes\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\li1440\sb1\sl253\slmult0\fi540\tx2880\tx5760 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf
8\f9\fs22 d.\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\charscalex
100 No\par\pard\ql \li1440\sb240\sl-253\slmult0 \up0 \expndtw-3\charscalex100 QU
IZZERS \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscal
ex100 1. \tab \up0 \expndtw-3\charscalex100 Which of the following is an incorre
ct phrase? \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\charscalex100
a. Auditing is a systematic process. \par\pard\ql \li1979\sb1\sl-237\slmult0 \
up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 b. Auditing subjecti
vely obtains and evaluates evidence. \par\pard\ql \li1979\sb10\sl-253\slmult0 \u
p0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Auditing evaluates
evidence regarding assertions. \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \exp
ndtw-2\charscalex100 d. Auditing communicates results to interested users. \par
\pard\ql \li1440\sb167\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 2. \t
ab \up0 \expndtw-2\charscalex100 Which of the following is a correct statement r
elating to the theoretical framework of auditing? \par\pard\ql \li1979\sb7\sl-25
3\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a. The fi
nancial data to be audited can be verified. \par\pard\qj \li1979\ri981\sb18\sl-2
40\slmult0\tx2339 \up0 \expndtw0\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. S
hort-term conflicts do not exist between managers who prepare data and auditors
who \line\tab \up0 \expndtw0\charscalex100 examine data. \par\pard\ql \li1979\sb
10\sl-253\slmult0 \up0 \expndtw-2\charscalex100 c. Auditors do not necessarily
need independence. \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-1\char
scalex100 d. An audit has a benefit only to the owners. \par\pard\li1440\sb187\
sl-253\slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 3.\tab \up0 \expndtw-2\c
harscalex100 The essence of the attest function is to\par\pard\li1440\sb0\sl-253
\slmult0\fi539 \up0 \expndtw-2\charscalex100 a. Detect fraud\par\pard\ql \li197
9\sb1\sl-245\slmult0 \up0 \expndtw-1\charscalex100 b. Examine individual transa
ctions so that the auditor can certify as to their validity \par\pard\ql \li1979
\sb1\sl-238\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22
c. Determine whether the client\u8217?s financial statements are fairly stated
\par\pard\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nos
upersub\cf8\f9\fs22 d. Ensure the consistent application of correct accounting
procedures \par\pard\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\char
scalex100 4. \tab \up0 \expndtw-3\charscalex100 In \u8220?auditing\u8221? accoun
ting data, the concern is with \par\pard\qj \li1979\ri1486\sb18\sl-240\slmult0\t
x2339 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a. Determinin
g whether recorded information properly reflects the economic events that \line\
tab \up0 \expndtw-2\charscalex100 occurred during the accounting period. \par\pa
rd\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\
cf8\f9\fs22 b. Determining if fraud has occurred. \par\pard\ql \li1979\sb7\sl-2
53\slmult0 \up0 \expndtw-2\charscalex100 c. Determining if taxable income has
been calculated correctly. \par\pard\qj \li1979\ri2147\sb0\sl-260\slmult0\tx2339
\up0 \expndtw-1\charscalex100 d. Analyzing the financial information to be sur
e that it complies with government \line\tab \up0 \expndtw-2\charscalex100 requi
rements. \par\pard\ql \li1440\sb168\sl-253\slmult0\tx1979 \up0 \expndtw-3\charsc

alex100 5. \tab \up0 \expndtw-3\charscalex100 Users of financial statements dema

nd independent audit because \par\pard\ql \li1979\sb1\sl-237\slmult0 \up0 \expnd
tw-2\charscalex100 a. Users demand assurance that fraud does not exist \par\par
d\ql \li1979\sb10\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\c
f11\f12\fs22 b. Management may not be objective in reporting. \par\pard\ql \li1
979\sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22
c. Users expect auditors to correct management errors. \par\pard\ql \li1979\s
b1\sl-237\slmult0 \up0 \expndtw-2\charscalex100 d. Management relies on the aud
itor to improve internal control. \par\pard\li1440\sb203\sl-253\slmult0\fi0\tx19
79 \up0 \expndtw-2\charscalex100 6.\tab \up0 \expndtw-1\charscalex100 Which of t
he following types of audits is performed to determine whether an entity\u8217?s
financial\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-1\charscalex10
0 statements are fairly stated in conformity with generally accepted accounting
principles?\par\pard\li1440\sb0\sl-252\slmult0\fi539\tx6480 \up0 \expndtw-2\char
scalex100 a. Operational audit\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersu
b\cf11\f12\fs22 c.
Financial statement audit\par\pard\li1440\sb1\sl-253\slmul
t0\fi539\tx6480 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. Co
mpliance audit\tab \up0 \expndtw-2\charscalex100 d.
Performance audit\par\par
d\li1440\sb184\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 7.\tab \u
p0 \expndtw-1\charscalex100 Which of the following types of auditing is
performed most commonly by CPAs on a\par\pard\li1440\sb0\sl-253\slmult0\fi
539 \up0 \expndtw-2\charscalex100 contractual basis?\par\pard\li1440\sb0\sl-253\
slmult0\fi539\tx6480 \up0 \expndtw-2\charscalex100 a. Internal auditing\tab \up
0 \expndtw-2\charscalex100 c.
Government auditing\par\pard\li1440\sb0\sl-253\
slmult0\fi539\tx6480 \up0 \expndtw-2\charscalex100 b. BIR auditing\tab \up0 \ex
pndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d.
External auditing\par\
pard\li1440\sb253\sl-253\slmult0\fi0 \up0 \expndtw-2\charscalex100 \ul0\nosupers
ub\cf8\f9\fs22 PSA 100 - Assurance engagements\par\pard\li1440\sb115\sl-253\slmu
lt0\fi0\tx1979 \up0 \expndtw-2\charscalex100 8.\tab \up0 \expndtw-1\charscalex10
0 Which of the following is incorrect regarding the Philippine Standard
s on Assurance\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-2\charsc
alex100 Engagements (PSAE)?\par\pard\qj \li1979\ri1093\sb0\sl-260\slmult0\tx2339
\up0 \expndtw-1\charscalex100 a. It provides an overall framework for assuranc
e engagements intended to provide either a \line\tab \up0 \expndtw-2\charscalex1
00 high or moderate level of assurance. \par\pard\ql \li9687\sb0\sl-414\slmult0
\par\pard\ql\li9687\sb67\sl-414\slmult0 \up0 \expndtw0\charscalex97 \ul0\nosuper
sub\cf2\f3\fs36 AT-5901
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bxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz141\shplid0
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 1455}}{\sp{\sn geoBottom}{\sv 20}}
{\sp{\sn pVerticies}{\sv 8;4;(0,20);(1455,20);(1455,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\shp {\*\shpinst\shpleft1440\shptop15936\shpright4986\shpbottom15956\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz824\shplid3
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 3546}}{\sp{\sn geoBottom}{\sv 20}}
{\sp{\sn pVerticies}{\sv 8;4;(0,20);(3546,20);(3546,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}\par\pard\sect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart P
g7}{\bkmkend Pg7}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\s
b0\sl-230\slmult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\chars
calex100 \ul0\nosupersub\cf1\f2\fs20 Page 7 of 8 \par\pard\qj \li1980\ri982\sb18
6\sl-260\slmult0\tx2339 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\f
s22 b. It provides basic principles and essential procedures for engagements in
tended to provide \line\tab \up0 \expndtw-2\charscalex100 a moderate level of as
surance. \par\pard\qj \li1980\ri1398\sb17\sl-240\slmult0\tx2339 \up0 \expndtw-2\
charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. When a professional accountant is
engaged to perform an assurance engagement for \line\tab \up0 \expndtw-3\charsc
alex100 which specific standards exist, those standards apply. \par\pard\ql \li1
980\sb10\sl-253\slmult0 \up0 \expndtw-1\charscalex100 d. If no specific standar
ds exist for an assurance engagement, PSAE apply. \par\pard\li1440\sb191\sl-253\
slmult0\fi0\tx1979 \up0 \expndtw-2\charscalex100 9.\tab \up0 \expndtw-2\charscal
ex100 An assurance engagement should exhibit the following elements except\par\p
ard\li1440\sb0\sl-253\slmult0\fi539\tx6480 \up0 \expndtw-2\charscalex100 a. A t
hree party relationship\tab \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f
12\fs22 c.
Appropriate professional fee\par\pard\li1440\sb0\sl-253\slmult0\fi
539\tx6480 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. A concl
usion\tab \up0 \expndtw-2\charscalex100 d.
A subject matter\par\pard\li1440\s
b184\sl-253\slmult0\fi0\tx1979\tx7344 \up0 \expndtw-2\charscalex100 10.\tab \up0
\expndtw-2\charscalex100 Which of the following is incorrect regarding t
he\tab \up0 \expndtw-2\charscalex100 \u8220?three-party relationship\u8221? el
ement of\par\pard\ql \li1979\sb0\sl-253\slmult0 \up0 \expndtw-3\charscalex100 a
ssurance engagements? \par\pard\qj \li1979\ri980\sb0\sl-260\slmult0\tx2339 \up0
\expndtw0\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a. Professional accountan
ts as those persons who are members of an IFAC member body, \line\tab \up0 \expn
dtw0\charscalex100 which should be in public practice. \par\pard\qj \li1979\ri98
3\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 \ul0\nosupersub\cf8\f9\
fs22 b. The responsible party and the intended user will often be from separate
organizations but \line\tab \up0 \expndtw-1\charscalex100 need not be. \par\par
d\qj \li1979\ri978\sb0\sl-240\slmult0\tx2339 \up0 \expndtw-1\charscalex100 c.
The responsible party is the person or persons, either as individuals or represe
ntatives of \line\tab \up0 \expndtw-2\charscalex100 an entity, responsible for t
he subject matter. \par\pard\qj \li1979\ri979\sb0\sl-260\slmult0\tx2339 \up0 \ex
pndtw-1\charscalex100 d. The intended user is the person or class of persons fo

r whom the professional accountant \line\tab \up0 \expndtw-2\charscalex100 prepa

res the report for a specific use or purpose. \par\pard\li1440\sb171\sl-253\slmu
lt0\fi0\tx1979 \up0 \expndtw-3\charscalex100 11.\tab \up0 \expndtw-3\charscalex1
00 The following are assurance engagements except\par\pard\li1440\sb0\sl-252\slm
ult0\fi539\tx6480 \up0 \expndtw-3\charscalex100 a. Financial statements audit\t
ab \up0 \expndtw-3\charscalex100 c.
Review of financial statements\par\pard\l
i1440\sb1\sl-253\slmult0\fi539\tx6479 \up0 \expndtw-3\charscalex100 b. Informat
ion system reliability services\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersu
b\cf11\f12\fs22 d.
Tax consulting\par\pard\li1440\sb183\sl-253\slmult0\fi0\tx
1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 12.\tab \up0 \exp
ndtw-2\charscalex100 Engagements frequently performed by professional accou
ntants that are not assurance\par\pard\li1440\sb1\sl-253\slmult0\fi539 \up0
\expndtw-3\charscalex100 engagements include the following except\par\pard\li144
0\sb0\sl-253\slmult0\fi539\tx6480 \up0 \expndtw-3\charscalex100 a. Agreed-upon
procedures.\tab \up0 \expndtw-3\charscalex100 c.
Compilation\par\pard\li1440\
sb0\sl-253\slmult0\fi539\tx6480 \up0 \expndtw-3\charscalex100 b. \ul0\nosupersub
\cf11\f12\fs22 Compliance audit\tab \up0 \expndtw-3\charscalex100 \ul0\nosupers
ub\cf8\f9\fs22 d.
Management consulting.\par\pard\li1440\sb184\sl-253\slmult0
\fi0\tx1979 \up0 \expndtw-3\charscalex100 13.\tab \up0 \expndtw-2\charscalex100
The subject matter of an assurance engagement may take many forms, including\par
\pard\li1440\sb0\sl-253\slmult0\fi539\tx3599\tx7200\tx9360 \up0 \expndtw-3\chars
calex100 a.
Data\tab \up0 \expndtw-3\charscalex100 b.
Systems and processe
s\tab \up0 \expndtw-3\charscalex100 c.
Behavior\tab \up0 \expndtw-3\charscale
x100 \ul0\nosupersub\cf11\f12\fs22 d.
All of these\par\pard\ql \li1440\sb174\
sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22
14. \tab \up0 \expndtw0\charscalex100 The decision as to whether the criteria ar
e suitable involves considering whether the subject \par\pard\qj \li1979\ri956\s
b10\sl-250\slmult0 \up0 \expndtw0\charscalex103 matter is capable of reasonably
consistent evaluation against or measurement using such \line \up0 \expndtw-2\ch
arscalex100 criteria. The characteristics for determining whether criteria are
suitable include the following, \line \up0 \expndtw-3\charscalex100 except \par
\pard\li1440\sb10\sl-253\slmult0\fi539\tx4320\tx6480\tx9360 \up0 \expndtw-3\char
scalex100 a.
Relevance\tab \up0 \expndtw-3\charscalex100 b.
Reliability:\t
ab \up0 \expndtw-3\charscalex100 c.
Understandability:\tab \up0 \expndtw-3\ch
arscalex100 \ul0\nosupersub\cf11\f12\fs22 d.
Sufficiency\par\pard\li1440\sb18
3\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9
\fs22 15.\tab \up0 \expndtw-2\charscalex100 When the professional accountant has
obtained sufficient appropriate evidence to conclude\par\pard\li1440\sb0\sl-253
\slmult0\fi539 \up0 \expndtw-2\charscalex100 that the subject matter conforms in
all material respects with identified suitable criteria, he or\par\pard\li1440\
sb1\sl-253\slmult0\fi539 \up0 \expndtw-3\charscalex100 she can provide what leve
l of assurance?\par\pard\li1440\sb0\sl-253\slmult0\fi539\tx4320\tx6480\tx9360 \u
p0 \expndtw-3\charscalex100 a.
None\tab \up0 \expndtw-3\charscalex100 \ul0\no
supersub\cf11\f12\fs22 b.
High\tab \up0 \expndtw-3\charscalex100 \ul0\nosuper
sub\cf8\f9\fs22 c.
Moderate\tab \up0 \expndtw-3\charscalex100 d.
Absolute\
par\pard\li1440\sb184\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charscalex100 16
.\tab \up0 \expndtw-2\charscalex100 Absolute assurance is generally not attainab
le as a result of such factors as:\par\pard\li1980\sb0\sl-253\slmult0\fi5495\tx8
510\tx9552\tx10580 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a
\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b\tab \up0 \expnd
tw-1\charscalex100 c\tab \up0 \expndtw-1\charscalex100 d\par\pard\li1980\sb16\sl
-253\slmult0\fi0\tx7347\tx8382\tx9417\tx10501 \up0 \expndtw-1\charscalex100 \ul0
\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
the use of selec
tive testing,\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Ye
s\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 Yes\tab \up0 \ex
pndtw-1\charscalex100 Yes\tab \up0 \expndtw-1\charscalex100 No\par\pard\li1980\s
b14\sl-253\slmult0\fi0\tx7347\tx8382\tx9417\tx10451 \dn2 \expndtw-1\charscalex10
0 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
the inhere
nt limitations of control systems\tab \up0 \expndtw-1\charscalex100 \ul0\nosuper
sub\cf11\f12\fs22 Yes\tab \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\f

s22 Yes\tab \up0 \expndtw-1\charscalex100 Yes\tab \up0 \expndtw-1\charscalex100

Yes\par\pard\qj \li1980\ri5248\sb0\sl-260\slmult0\tx2339 \up0 \expndtw-2\charsca
lex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\cf8\f9\fs22
the f
act that much of the evidence available to \line\tab \up0 \expndtw-4\charscalex1
00 the professional accountant is persuasive \par\pard\li2340\sb1\sl-253\slmult0
\fi0\tx7347\tx8382\tx9466\tx10452 \up0 \expndtw-3\charscalex100 rather than conc
lusive\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Yes\tab \
up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 Yes\tab \up0 \expndtw-3
\charscalex100 No\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\ql \li1980\sb10
\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u82
26?\ul0\nosupersub\cf8\f9\fs22
the use of judgment in gathering evidence and
\par\pard\li2340\sb5\sl-253\slmult0\fi0\tx7347\tx8431\tx9466\tx10501 \up0 \expnd
tw-3\charscalex100 drawing conclusions based on that evidence\tab \up0 \expndtw3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Yes\tab \up0 \expndtw-3\charscalex
100 \ul0\nosupersub\cf8\f9\fs22 No\tab \up0 \expndtw-3\charscalex100 No\tab \up0
\expndtw-3\charscalex100 No\par\pard\ql \li1440\sb249\sl-253\slmult0 \up0 \expn
dtw-3\charscalex100 PSA 120 - Framework of PSA \par\pard\ql \li1440\sb107\sl-253
\slmult0 \up0 \expndtw-3\charscalex100 17. The Framework of PSA applies to \pa
r\pard\li1979\sb12\sl-253\slmult0\fi0\tx4320\tx6480\tx9360 \up0 \expndtw-6\chars
calex100 a.
Taxation\tab \up0 \expndtw-6\charscalex100 b.
Consultancy\tab
\up0 \expndtw-6\charscalex100 c.
Accounting advice\tab \up0 \expndtw-6\charsc
alex100 \ul0\nosupersub\cf11\f12\fs22 d.
Compilation\par\pard\ql \li1440\sb18
2\sl-253\slmult0 \up0 \expndtw-4\charscalex100 \ul0\nosupersub\cf8\f9\fs22 18.
Agreed-upon procedures provides what level of assurance? \par\pard\li1979\sb2\s
l-253\slmult0\fi0\tx4320\tx6480\tx9360 \up0 \expndtw-8\charscalex100 \ul0\nosupe
rsub\cf11\f12\fs22 a.
None\tab \up0 \expndtw-8\charscalex100 \ul0\nosupersub\
cf8\f9\fs22 b.
High\tab \up0 \expndtw-8\charscalex100 c.
Moderate\tab \up0
\expndtw-8\charscalex100 d.
Absolute\par\pard\qj \li1440\ri981\sb167\sl-260\
slmult0\tx1979 \up0 \expndtw-2\charscalex100 19. Which of the following proced
ures ordinarily performed during an audit are also performed in \line\tab \up0 \
expndtw-3\charscalex100 review? \par\pard\ql \li1979\sb1\sl-235\slmult0 \up0 \ex
pndtw-4\charscalex100 a. Assessment of accounting and internal control systems
\par\pard\ql \li1979\sb11\sl-253\slmult0 \up0 \expndtw-2\charscalex100 b. Test
of controls \par\pard\ql \li1979\sb7\sl-253\slmult0 \up0 \expndtw-4\charscalex10
0 c. Tests of records and of responses to inquiries \par\pard\ql \li9687\sb254
\sl-414\slmult0 \up0 \expndtw0\charscalex97 \ul0\nosupersub\cf2\f3\fs36 AT-5901
{\shp {\*\shpinst\shpleft7476\shptop12211\shpright7598\shpbottom12226\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz615\shplid0
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 122}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(122,15);(122,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
}
{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 255}}{
\sp{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{
\sp{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}
{\shp {\*\shpinst\shpleft8510\shptop12211\shpright8632\shpbottom12226\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz641\shplid1
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 122}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(122,15);(122,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
}
{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}

{\shp {\*\shpinst\shpleft9552\shptop12211\shpright9662\shpbottom12226\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz663\shplid2
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 110}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(110,15);(110,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
}
{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}
{\shp {\*\shpinst\shpleft10580\shptop12211\shpright10702\shpbottom12226\shpfhdr0
\shpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz685\shplid3
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 122}}{\sp{\sn geoBottom}{\sv 15}}
{\sp{\sn pVerticies}{\sv 8;4;(0,15);(122,15);(122,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
}
{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}
{\shp {\*\shpinst\shpleft1440\shptop14546\shpright4399\shpbottom14566\shpfhdr0\s
hpbxpage\shpbypage\shpwr3\shpwrk0\shpfblwtxt1\shpz1144\shplid4
{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 2959}}{\sp{\sn geoBottom}{\sv 20}}
{\sp{\sn pVerticies}{\sv 8;4;(0,20);(2959,20);(2959,0);(0,0)}}
{\sp{\sn pSegmentInfo}{\sv 2;10;16384;45824;1;45824;1;45824;1;45824;24577;32768}
}
{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}\par\pard\sect\sectd\fs24\paperw12240\paperh18720\pard\sb0\sl-240{\bkmkstart P
g8}{\bkmkend Pg8}\par\pard\ql \li10064\sb0\sl-230\slmult0 \par\pard\ql\li10064\s
b0\sl-230\slmult0 \par\pard\ql\li10064\sb30\sl-230\slmult0 \up0 \expndtw-3\chars
calex100 \ul0\nosupersub\cf1\f2\fs20 Page 8 of 8 \par\pard\ql \li1980\sb191\sl-2
53\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. Inqui
ry and analytical procedures \par\pard\ql \li1440\sb0\sl-253\slmult0 \par\pard\q
l\li1440\sb114\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\
f9\fs22 20. The objective of a review of financial statements \par\pard\ql \li
1979\ri888\sb10\sl-250\slmult0\tx2339\tx2339 \up0 \expndtw-1\charscalex100 a. I
s to enable the auditor to express an opinion whether the financial
statements are \line\tab \up0 \expndtw-3\charscalex100 prepared, in all mate
rial respects, in accordance with an identified financial reporting \lin
e \tab \up0 \expndtw-4\charscalex100 framework. \par\pard\ql \li1979\ri979\sb8\s
l-253\slmult0\tx2339\tx2339\tx2339 \up0 \expndtw0\charscalex100 \ul0\nosupersub\
cf11\f12\fs22 b. Is to enable an auditor to state whether, on the basis of proc
edures which do not provide \line\tab \up0 \expndtw0\charscalex103 all the evide
nce that would be required in an audit, anything has come to the auditor\u8217?s
\line \tab \up0 \expndtw-1\charscalex100 attention that causes the auditor to b
elieve that the financial statements are not prepared, \line \tab \up0 \expndtw1\charscalex100 in all material respects, in accordance with an identified finan
cial reporting framework. \par\pard\qj \li1979\ri980\sb18\sl-240\slmult0\tx2339
\up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c. Is to carry out t
hose procedures of an audit nature to which the auditor and the entity and \line
\tab \up0 \expndtw-1\charscalex100 any appropriate third parties have agreed and
to report on factual findings. \par\pard\qj \li1979\ri979\sb20\sl-240\slmult0\t

x2339 \up0 \expndtw0\charscalex104 d. Is to use accounting expertise as opposed

to auditing expertise to collect, classify and \line\tab \up0 \expndtw-3\charsc
alex100 summarize financial information. \par\pard\ql \li1440\sb190\sl-253\slmul
t0 \up0 \expndtw-2\charscalex100 21. An auditor is associated with financial i
nformation when \par\pard\li7475\sb16\sl-253\slmult0\fi0\tx8510\tx9552\tx10580 \
up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a\tab \up0 \expndtw-3
\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b\tab \up0 \expndtw-3\charscalex100 c
\tab \up0 \expndtw-3\charscalex100 d\par\pard\ql \li1980\sb0\sl-251\slmult0 \up0
\expndtw-2\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\ul0\nosupersub\c
f8\f9\fs22
the auditor attaches a report to that \par\pard\li2340\sb18\sl-253
\slmult0\fi0\tx7347\tx8431\tx9417\tx10501 \dn3 \expndtw-3\charscalex100 informat
ion\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf11\f12\fs22 Yes\tab \up0
\expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 No\tab \up0 \expndtw-3\cha
rscalex100 Yes\tab \up0 \expndtw-3\charscalex100 No\par\pard\ql \li1980\sb0\sl-2
50\slmult0 \up0 \expndtw-1\charscalex100 \ul0\nosupersub\cf12\f13\fs22 \u8226?\u
l0\nosupersub\cf8\f9\fs22
consents to the use of the auditor\u8217?s name in
a \par\pard\li2340\sb18\sl-253\slmult0\fi0\tx7347\tx8382\tx9466\tx10501 \dn3 \ex
pndtw-3\charscalex100 professional connection\tab \up0 \expndtw-3\charscalex100
\ul0\nosupersub\cf11\f12\fs22 Yes\tab \up0 \expndtw-3\charscalex100 \ul0\nosuper
sub\cf8\f9\fs22 Yes\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\cha
rscalex100 No\par\pard\ql \li1440\sb237\sl-253\slmult0 \up0 \expndtw-2\charscale
x100 PSA 200 - Objective and general principles governing an audit of FS \par\pa
rd\ql \li1440\sb187\sl-253\slmult0\tx1979 \up0 \expndtw-3\charscalex100 22. \tab
\up0 \expndtw-3\charscalex100 The auditor\u8217?s opinion \par\pard\ql \li1979\
sb7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf11\f12\fs22 a
. Enhances the credibility of the financial statements. \par\pard\ql \li1979\sb
7\sl-253\slmult0 \up0 \expndtw-2\charscalex100 \ul0\nosupersub\cf8\f9\fs22 b. I
s an assurance as to the future viability of the entity. \par\pard\qj \li1979\ri
979\sb0\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex100 c. Is an assurance
as to the efficiency with which management has conducted the affairs of \line\ta
b \up0 \expndtw-1\charscalex100 the entity, but not effectiveness. \par\pard\ql
\li1979\sb1\sl-213\slmult0 \up0 \expndtw-2\charscalex100 d. Certifies the corre
ctness of the financial statements. \par\pard\ql \li1440\sb194\sl-253\slmult0\tx
1979 \up0 \expndtw-3\charscalex100 23. \tab \up0 \expndtw-2\charscalex100 Which
of the following is incorrect regarding the general principles of an audit? \par
\pard\qj \li1979\ri979\sb2\sl-260\slmult0\tx2339 \up0 \expndtw0\charscalex103 a.
The auditor should comply with the \u8220?Code of Ethics for Professional Ethi
cs for Certified \line\tab \up0 \expndtw0\charscalex103 Public Accountants\u8221
? promulgated by the Philippine Professional Regulation Commission. \par\pard\ql
\li1979\sb1\sl-235\slmult0 \up0 \expndtw-2\charscalex100 b. The auditor should
conduct an audit in accordance with PSAs. \par\pard\ql \li1979\ri978\sb13\sl-25
0\slmult0\tx2339\tx2339 \up0 \expndtw0\charscalex100 c. The auditor should pla
n and perform an audit with an attitude of professional skepticism \line\tab \up
0 \expndtw-1\charscalex100 recognizing that circumstances may exist that c
ause the financial statements to be \line \tab \up0 \expndtw-2\charscalex10
0 materially misstated. \par\pard\qj \li1979\ri980\sb2\sl-260\slmult0\tx2339 \up
0 \expndtw0\charscalex100 \ul0\nosupersub\cf11\f12\fs22 d. The auditor woul
d ordinarily expect to find evidence to support management \line
\tab \up0 \expndtw-1\charscalex100 representations and assume they are necessari
ly correct. \par\pard\li1440\sb182\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\cha
rscalex100 \ul0\nosupersub\cf8\f9\fs22 24.\tab \up0 \expndtw-2\charscalex100 It
refers to the audit procedures deemed necessary in the circumstances
to achieve the\par\pard\li1440\sb0\sl-253\slmult0\fi539 \up0 \expndtw-3\charsc
alex100 objective of the audit.\par\pard\li1440\sb1\sl-253\slmult0\fi539\tx7200
\up0 \expndtw-3\charscalex100 a. \ul0\nosupersub\cf11\f12\fs22 Scope of an audi
t\tab \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf8\f9\fs22 c.
Objective
of an audit\par\pard\li1440\sb0\sl-252\slmult0\fi540\tx7200 \up0 \expndtw-3\char
scalex100 b. Audit program\tab \up0 \expndtw-3\charscalex100 d.
Reasonable a
ssurance\par\pard\li1440\sb231\sl-253\slmult0\fi0\tx1979 \up0 \expndtw-3\charsca
lex100 25.\tab \up0 \expndtw-2\charscalex100 Which of the following are sources

of procedures to be considered by the auditor to conduct\par\pard\li1440\sb0\sl253\slmult0\fi539 \up0 \expndtw-3\charscalex100 an audit in accordance with PSAs
?\par\pard\li1440\sb115\sl-253\slmult0\fi1129\tx3793\tx5289\tx8456 \up0 \expndtw
-3\charscalex100 PSA\tab \up0 \expndtw-3\charscalex100 Legislation\tab \up0 \exp
ndtw-3\charscalex100 Terms of Audit Engagement\tab \up0 \expndtw-3\charscalex100
Type of Opinion\par\pard\li1440\sb0\sl-253\slmult0\fi648\tx2639\tx4179\tx6519\t
x9093 \up0 \expndtw-3\charscalex100 a.\tab \up0 \expndtw-3\charscalex100 Yes\tab
\up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\charscalex100 No\tab \up0
\expndtw-3\charscalex100 No\par\pard\li1440\sb0\sl-253\slmult0\fi648\tx2639\tx41
79\tx6470\tx9044 \up0 \expndtw-3\charscalex100 b.\tab \up0 \expndtw-3\charscalex
100 No\tab \up0 \expndtw-3\charscalex100 No\tab \up0 \expndtw-3\charscalex100 Ye
s\tab \up0 \expndtw-3\charscalex100 Yes\par\pard\li1440\sb0\sl-253\slmult0\fi648
\tx2627\tx4130\tx6470\tx9093 \up0 \expndtw-3\charscalex100 c.\tab \up0 \expndtw3\charscalex100 No\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw-3\cha
rscalex100 Yes\tab \up0 \expndtw-3\charscalex100 No\par\pard\li1440\sb0\sl-253\s
lmult0\fi648\tx2639\tx4130\tx6470\tx9093 \up0 \expndtw-3\charscalex100 \ul0\nosu
persub\cf11\f12\fs22 d.\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw3\charscalex100 Yes\tab \up0 \expndtw-3\charscalex100 Yes\tab \up0 \expndtw-3\ch
arscalex100 No\par\pard\ql \li5341\sb0\sl-253\slmult0 \par\pard\ql\li5341\sb203\
sl-253\slmult0 \up0 \expndtw-3\charscalex100 \ul0\nosupersub\cf6\f7\fs22 - end o
f AT-5901 -\par\pard\ql \li9687\sb0\sl-414\slmult0 \par\pard\ql\li9687\sb0\sl-41
4\slmult0 \par\pard\ql\li9687\sb0\sl-414\slmult0 \par\pard\ql\li9687\sb0\sl-414\
slmult0 \par\pard\ql\li9687\sb0\sl-414\slmult0 \par\pard\ql\li9687\sb284\sl-414\
slmult0 \up0 \expndtw0\charscalex97 \ul0\nosupersub\cf2\f3\fs36 AT-5901
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\sp{\sn pVerticies}{\sv 8;4;(0,16);(122,16);(122,0);(0,0)}}
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}}
{\shp {\*\shpinst\shpleft8510\shptop5471\shpright8632\shpbottom5487\shpfhdr0\shp
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
\sn geoRight}{\sv 122}}{\sp{\sn geoBottom}{\sv 16}}
{\sp{\sn pVerticies}{\sv 8;4;(0,16);(122,16);(122,0);(0,0)}}
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{\sp{\sn shapeType}{\sv 0}}{\sp{\sn fFlipH}{\sv 0}}{\sp{\sn fFlipV}{\sv 0}}{\sp{
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{\sp{\sn pVerticies}{\sv 8;4;(0,16);(110,16);(110,0);(0,0)}}
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{\sp{\sn fFillOK}{\sv 1}}{\sp{\sn fFilled}{\sv 1}}{\sp{\sn fillColor}{\sv 0}}{\s
p{\sn fLine}{\sv 0}}{\sp{\sn lineType}{\sv 0}}{\sp{\sn fArrowheadsOK}{\sv 1}}{\s
p{\sn fBehindDocument}{\sv 1}}{\sp{\sn lineColor}{\sv 0}}
}}

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