University of the East, Caloocan CBA REVIEW 1)This refers to a professional who acts as discussion leader or lecturer in a convention or seminar or similar gathering: Resource speaker c

Question

University of the East, Caloocan

CBA REVIEW

1)This refers to a professional who acts as discussion leader or lecturer in a convention or seminar or similar gathering:

Resource speaker c. CPE provider
Peer reviewer d. Panelist/reactor

The following are the more significant powers and functions of the Board of Accountancy select the exception)
1. To prescribe and adopt the rules and regulations necessary for carrying out the provisions of RA 9298.
2. To supervise the registration, licensure and practice of professions in the Philippines
3. To administer oaths in connection with the administration of RA 9298
4. To revoke of licenses of violators of RA 9298

Which of the following best describes the most important stage of an auditor’s statistical analysis of significant ratios and trends?
1. Computation of significant ratios and trends
2. Interpretation of significant variations and unusual relationships
3. Reconciliation of statistical data to the client’s accounting records
4. Comparison of statistical data to prior year statistics and to similar data published by governmental and private sources.

The probability that an auditor will give an inappropriate opinion on financial statements is:
1. Audit risk c. Control risk
2. Inherent risk d. Detection risk

One of the factors affecting the control environment is management philosophy and operating style. This factor most likely would have a significant influence on an entity’s control environment when:
1. Management is dominated by one individual
2. Accurate management job descriptions delineate specific duties
3. The audit committee actively oversees the financial reporting process
4. The internal auditor reports directly to management

Which of the following would be of least interest to the auditors on considering internal control?
1. Procedures that are concerned with the decisio9n processes leading to management’s authorization of transactions
2. Procedures restricting access to assets

1. Procedures related to recording transactions
2. Policies concerning the reconciliation of accounting records to existing assets

As used in Annex C of the implementing Rules and Regulations to RA 9298, this refers to a guarantee degree in accountancy, business, or related field from a recognized school, college or university.
1. Masteral degree c. BSA
2. Doctoral degree d. MSA

This refers to the ownership of intellectual property which includes technical or professional books, instructional materials and the like
1. Authorship c. Patent
2. Copyright d. Professional journalism

Ten credit hours as participant of a Continuing Professional Education (CPE) program, activity or source shall be equivalent

/to:

1. 10 credit units c. 3 credit units
2. 5 credit units d. 1 credit units

Which of the following is an advantage of describing internal control through the use of a standardized questionnaire?
1. Questionnaires highlight weakness in the system
2. Questionnaires are more flexible than other methods of describing internal control
3. Questionnaires usually identify situations in which internal control weaknesses are compensated for by other strengths in the system
4. Questionnaires provide a clearer, more specific portrayal of a client’s system than other methods of describing internal control

An auditor generally obtains evidence regarding the segregation of duties related to inventory by:
1. Test counts and cur-off procedures
2. Analytical procedures and invoice recomputation
3. Document inspection and reconciliation
4. Personal inquiry and observation

A well designed system of internal control that is functioning effectively is most likely to detect an irregularity arising from:
1. The fraudulent action of several employees
2. The fraudulent action of an individual employee
3. Information deviations from the official organization chart
4. Management fraud

The most6 important aspect of any system of controls is:
1. Proper authorization procedures
2. Competent, trustworthy personnel
3. Separation of duties
4. Regular review by top management

Obtaining an understanding of an entity’s internal control, an auditor is required to obtain knowledge about the:
1. b. c.

d.

Operating effectiveness of controls	Yes	No
Yes No
Design and operation of controls	Yes	Yes
No No

In a small Company that employs inadequate number of employees to permit proper division of responsibilities, effective internal control can best be strengthen by:
1. Delegation of full clear cut responsibility to each employee for the functions assigned to each
2. Employment of temporary personnel to aid in the separation of duties
3. Direct participation by the owner of the business in the record keeping activities of the business
4. Affirm in writing management’s approval of limitation on the scope of the audit

The following statements relates to RA 9298. Which statement is correct?
1. The Professional Regulation Commission has the authority to remove after due process, any member of the Board of

Accountancy for negligence, incompetence or any other just cause

1. The functions of the Board of Accountancy include the preparation of the content of the CPA licensure examination but not the rating of examination papers
2. After two years, subject to certain conditions, the Board of Accountancy must order the reinstatement of a CPA whose certificate of registration has been revoked.
3. Insanity is ground for issuing a certificate of registration to a successful CPA candidate

The principal purpose in conducting a study and evaluation of existing internal control system is
1. For independent auditor to maintain a statement of independence in mental attitude in all matters relating the audit
2. To assure compliance with GAAP
3. To enable independent auditor to assess and be assured of management’s efficiency and effectivity
4. To develop an audit plan and determine the nature, timing and extent of audit work required

Procedures directed toward obtaining evidential matter concerning the effectiveness of the deign or operation of an internal control structure policy or procedures are referred to as:
1. Compliance tests
2. Substantive tests
3. Tests of controls
4. Test of internal control structure elements

S1 The basic components operations and the primary subject matter of internal accounting control are transactions S2Narratives, flowcharts, and internal control questionnaires are three commonly used methods for documenting the auditor’s understanding of the internal control structure.

Which of the above statements is correct?

1. S1 only c. Both S1 and S2
2. S2 only d. Neither are correct

Which of the following parts of the audit is described by this statement? “the auditor examines and evaluates processes that produce the numbers and disclosures in the financial statements.”
1. Planning
2. Studying and testing internal control
3. Performing substantial tests
4. Issuing the audit report

Financial statement assertions are established for:
1. b. c.

d.

Account balances No Yes Yes Yes

Classes of transactions	Yes	Yes	Yes
No
Disclosures	Yes	No	Yes
No

Which of the following should be the focus of analytical procedures in the context of planning an audit engagement?
1. Enhancing the auditor’s understanding of the entity and its environment
2. Providing assurance that potential material misstatements will be identified
3. Reducing the scope of tests of controls and substantive tests
4. Assessing the sufficiency and appropriateness of audit evidence

There are three categories of financial statement assertions: Assertions pertaining to account balances at period end, assertions pertaining to classes of transactions and events during the period, and assertions pertaining to presentation and disclosure. Which of the following is a financial statement assertion that is common to all three categories?
1. Existence c. Completeness
2. Classifications d. Occurrence

What type of analytical procedure would an auditor most likely use in developing relationships among balance sheet accounts when reviewing the financial statements of a non public entity?

1. Trend analysis c. Ratio analysis
2. Regression analysis d. Risk analysis

Analytical procedures are required in which phases of the audit engagement?
1. b. c. d.

Planning No Yes Yes Yes

Substantive testing Yes Yes Yes No

Audit completion Yes No Yes Yes

In auditing accounts receivable and accounts payable, the auditor’s procedures most likely would focus primarily on which of the following assertions?
1. Completeness (AR) and existence (AP)
2. Existence (AR) and completeness (AP)
3. Cut-off and occurrence (AR and AP)
4. Existence and occurrence (AR and AP)

Philippine Auditing Practice Statements (PAPSs):
1. Are intended to replace Philippine Standards on Auditing (PSAs)
2. Are intended to have the same authority as the PSAs
3. Are issued to provide practical assistance to auditors in implementing PSAs.
4. Are interpretations of PSAs as issued by the Auditing and Assurance Standards Council

The following statements relate to RA 9298 and its IRR. Which statement is incorrect?
1. A person shall be considered to be in the professional practice of accounting if, as an officer of a private enterprise, he makes decisions requiring professional accounting knowledge
2. When a CPA represents his/her client before government agencies o tax and other matters related to accounting, the CPA is engaged in public accountancy
3. A registered professional shall be permanently exempted from CPE requirements upon reaching the age of 65 years old

1. The total CPE credit units required for CPAs shall be sixty (60) units for three years, provided that a maximum of fifteen (15) credit units shall be earned in each year

Which of the following is not an underlying condition that creates a demand by users for reliable information?
1. Transactions that are numerous and complex
2. Decisions are not time sensitive
3. Financial decisions that are important to investors and users
4. Users separated from accounting records by distance and time

During the performance of risk assessment procedures, Andoy, CPA, noted a change in accounting principle has been effected by the client. In this case, Andoy should plan to evaluate the change to satisfy himself that:
1. The newly adopted principle is a generally accepted accounting principle
2. The method of accounting for the effects of the change is in conformity with generally accepted accounting principles
3. Management’s justification for the change is reasonable
4. All of the answers

In a review engagement the public accountant provides negative assurance in the report which is issued. This can best be described by the phrase:
1. Nothing has come to my attention
2. The financial statements present fairly
3. We are unable to express an opinion
4. Except for the issues explained above

Gina Dizon, CPA, is performing pre-engagement activities. Which of the following must Gina obtain from her predecessor, prior to the acceptance of the engagement?
1. Analysis of income statement accounts
2. Analysis of balance sheet accounts
3. Facts that might bear on the integrity of management
4. All matters of continuing accounting significance

Which of the following best describes due care?

1. Tact in avoiding legal liability c. Reasonable infallibility
2. Requisite skill and diligence d. Freedom from undue influence

The audit risk model consists of: AR = IR X CR X DR

The detection risk is the dependent variable. What is the acceptable level of detection risk if the assessed level of Inherent Risk is High and the Control risk is Low?

1. Highest b. Lower c. Medium d. Higher

This refers to the audit procedures deemed necessary in the circumstances to achieve the objective of the review
1. Scope of an audit c. Audit program
2. Scope of a review d. Scope limitation

A certificate under seal, issued by the Commission upon the recommendation by the Board of Accountancy pursuant to the revised IRR, attesting that individual CPAs (including the staff members thereof), firms (including the sole proprietors and the staff members thereof) and partnerships of CPAs (including the partners and the staff members thereof) are duly accredited to practice public accountancy in the Philippines
1. Certificate of registration c. Certificate of Identification
2. Certificate of accreditation d. Certificate of Quality Review

If the auditor concludes that there is reasonable justification to change the engagement and if the audit work performed complies with the PSAs applicable to the changed engagement, the report issued would b e that appropriate for:
1. The original engagement, without reference to the original engagement
2. The revised terms of engagement, without reference to the original engagement
3. The revised terms of engagement, with reference to the original engagement

1. The original engagement, with reference to the original engagement

Which of the following services provides the highest level of assurance to third parties about a company’s financial statements?
1. Audits b. Reviews c. Compilation d. Write-up work