Professional Documents
Culture Documents
Auditing Quizzes
Auditing Quizzes
QUIZ #1
Professional authority
Regulations Code
Community sanction
A Culture
Which of the following refers to the core competencies to sustain advantage for a
CPA?*
Communication skills
Demographic shift
Value proposition
Market permission
One of the five different areas that the professional accountant’s mindset needs
to embrace is:*
Community sanction
Integrity
Systematic Theory
Leadership skill
Regulation code
Professional authority
A culture
Community sanction
These are the essentials and enduring beliefs of the CPA profession which it
upholds over time.*
Core objectivity
Core values
Core competencies
Core integrity
Which of the following is not included among the core competencies of a CPA?*
The bank statement reported the actual cash balance of the business
The construction engineer reported the actual cost of the building constructed
The Accounting Profession requires CPAs to possess core values in order to*
Maintain the unique character and value in adopting changes in global economies
Core values
Core objectivity
Core competencies
Core proposition
Demographic Shifts
Worldwide Profession
Objectivity
One of several factors that create a demand for an independent external audit is*
A free-market economy can exist and further strengthened thru sharing of:*
Which of the following is not included among the core values of a CPA?*
Continually pursue new and broad skills and knowledge
Competence
Leadership skills
Regulation code
Systematic theory
A culture
Community sanction
Off-the-job training
Practice in commerce
Practice in education/academe
Which of the following refers to the core values to retain advantage of CPA in the
global economy?*
Commitment to excellence
QUIZ #2
Which of the following standards are to be applied in the audit of subject matters
other than historical information?
Which of the following is broader in scope and concept than the others?
Auditing services
Assurance services
Attestation services
Representations by management
Compilation
Review
Audit
Attestation
Policies and procedures about the preparation and presentation of financial data
Conclusion that conveys the assurance obtained about a subject matter information
IT Assurance Services
Persons for whom the practitioner prepares the report for specific purpose
Assurance to users that web site owners met established criteria on business practices, and
information processes
Practitioner
Intended User
Responsible Party
Subject Matter
Evidence
Subject Matter
Criteria
Assurance Report
A report on the factual findings is the type of report that the practitioner submits
when performing—
Attestation
Review
Agreed-upon engagement
Assurance engagement
What does and auditor provide with regard to management assertion made in an
Assurance engagement?
Subject Matter
Responsible party
Intended User
Practitioner
formulate and evaluate proposed action needed for the business operation
Includes relevant factors that may affect the conclusions of an engagement situation
Assurance engagements dealing with subject matters other than historical financial
information
Assurance engagements dealing with historical information
Assurance report
Evidence
Criteria
Responsible party
Moderate
High
Low
None
Agreed-upon procedures
Review
Compilation
Tax services
Evidence
Practitioner
Responsible Party
Subject matter
Practitioner
Assurance report
Evidence
Responsible Party
Subject matter
Which one of the following is not a part of the attestation process?
Assurance engagement
Assurance report
Assurance
Assurance services
Which example below can best illustrate the assurance engagement element of
“Subject Matter”?
Manufacturing Process
PSA
Ordinary Stockholder
Branch Accountant
A practitioner may accept and engagement to perform agreed-upon procedures
on the specific subject matter of specified elements, or items of a financial
statement if—
The financial statements are prepared in accordance with special purpose framework
Accounting skills
Independence
Evidence
Responsible party
Criteria
Subject matter
Review
Compilation
Agreed-upon procedures
Which of the following forms may the subject matter of an assurance engagement
take?
Subject matter
Criteria
Evidence
Intended User
The statement that “In our opinion, the accompanying financial statements
present fairly the financial position of ……..” expresses which of the following?
In the audit opinion formulation process, which flow of processes below would be the
most logical sequence to be applied in the audit engagement?
Reporting → Risk Assessment → Risk Response
Risk Assessment → Reporting → Risk Response
Risk Assessment → Risk Response
Risk Response → Risk Assessment → Reporting
An independent audit aids in the communication of economic data because the audit—
Assure the readers of financial statements that fraudulent activities were uncovered
Guarantees that financial data are fairly presented
Lends credibility to the financial statements
Confirms the accuracy of management’s financial representations
Following items are advantages and practical benefits of an independent audit to Client
or Management, except--
Financial statements become more credible and reliable
Minimizes commission of fraud by management and employees
Client benefits from constructive suggestions in improving entity’s operations
Provides legal community an independent basis in administering estates and trust
Which following statements is not true about the general principles regarding
independent audit?
Compliance with relevant professional ethics is voluntary
Attitude of professional skepticism should be applied by the auditor
An auditor should exercise professional judgment in planning an audit
The audit engagement should be conducted in accordance with the PSA
The following items are the possible causes of remoteness of information users from
information providers, except—
Improvement in capturing financial data due to development in technology
Dispersals of business among numerous geographic locations
Complex corporate structure
Separation of owners from management
A management assertion which states: All transactions and events have been properly
authorized.
Authorization
Classification
Completeness
Existence
Independent auditors of financial statements perform audits that reduce and control—
Complexity of financial statements
Timelines of financial statements
Information risks faced by investors
Business risk faced by investors
An element in the definition of auditing that refers to the closeness that an assertion can
be identified with established criteria.
Competent, independent person
Degree of correspondence
Communicating the results
Systematic process
A management assertion which states: Transactions and events that have been
recorded or disclosed have occurred, and such transactions pertain to the entity.
Rights and Obligation
Accuracy
Occurrence
Classification
Which of the following is a responsibility of the management regarding financial
statements?
provide all records to the auditor necessary in evidence gathering
Preparation of the audit report
Examine the acceptability of the audit report
form an opinion on the financial statements
An element in the definition of auditing that identifies the standards against which the
assertion or representations are judged.
Competent, independent person
Assertions about economic actions and events
Established criteria
Degree of correspondence
Correct answer
Internal Auditor work under permanent status, while external auditors are on contractual basis
What is the proper organizational role of internal auditing?
To serve as investigative arm of those charged with governance
To serve as an independent, objective assurance that adds value to operations
To assist external auditor in order to reduce external audit fee
To perform studies to assist in the attainment of more efficient operations
Under PSA 260 and the SEC Code of Corporate Governance, Corporate Board of
Directors will be referred as—
Those Charged with Bank Audits
Those Charged with Collection of Receivables
Those Charged with the Province Governance
Those Charged with Governance
An activity or set of activities that will accomplish a specific organizational goal and have
maximum impact on the success of an organization.
Resource management
Client’s strategy
Core business process
Key processes
Risk-based Audit approach requires that risky areas of a business must be identified by
the auditors for the following reasons, except—
to determine which account balances are more prone to material misstatements
competition for clients among audit firms is high
how the misstatements might occur
how a client might be able to cover them up
Auditors must focus on the risks to the entity’s operation and ensure controls are in
place—
To use the audit risk model as guide.
To perform the audit on the average output
To focus on the complexities of inherent risk
To mitigate or compensate for those risks
What are the fundamental concepts vital in the planning and development of an audit
approach?
Materiality and Risk
Resource Management
Business Risk and Audit Risk
Fraud and Error
Which among the causes of misstatements is difficult for the management to comply?
Misapplication of accounting policies
Non-compliance to laws and regulations
Incorrect accounting estimates
Clerical errors
The risk caused by financial loss because management is not honest and prevents the
continuity of the audit process.
Business risk
Financial reporting risk
Audit risk
Engagement risk
Of the four component of risks, what types of risk are applicable to the auditor?
Business risk and Financial Reporting risk
Audit risk and business risk
Engagement risk and audit risk
Financial reporting risk and Engagement risk
When the auditor declared: We conducted our audits in accordance with the PSA, it
means that the auditor--
made partial compliance to all the standards
performed the audit on the average output
Made selective compliance to all the standards
performed full compliance to all the standards
The phrase free of material misstatements is intended to inform the users that—
Some transactions as more susceptible to errors due to their complexities
Audit risk is judgmentally determined
Significant misstatements may be identified at any stage in the audit process
The auditor’s responsibility is limited to material financial information
The audit strategy should involve identifying the objective and scope of the audit thru:
Coordination of woks of experts
Location of the components of the entity
Proper review and monitoring of team’s activities
Analytical procedures
The audit process is divided into three phases which can be performed by the auditor in
this particular order--
Audit Planning → Issuance of Audit report → Pre-engagement activities
Issuance of audit report → study of internal control → completing the audit
Post-Audit responsibilities → Test of Control → Pre-engagement activities
Substantive Testing → Audit Planning → Post-Audit responsibilities
The process of using a company's resources in the most efficient way possible is called
—
Routine transactions
Risk management
Resource management
Effective management
In verifying client’s strategy, the presence of this item assures investors that the
business will operate continuously or for indefinite periods.
Long-range plan
Fewer material misstatement
Internal control system
Specific goals and objectives
Which of the following act is not considered as non-compliance with laws and
regulations--
All of these choices are considered non-compliance of laws and regulations
Act of omission
Act of commission
Unintentional act
The responsibility for the prevention and detection of non-compliance of laws and
regulation rests with--
The auditor
The client’s lawyer
Management
The auditor’s lawyer
These activities deliver results that are directed towards specific and measurable goals
which ensure business organization to remain competitive.
Medium-range plans
Key processes, objectives, and inputs
Process control failures
Core business processes
What audit documentation below is included in risk assessment?
Work performed
Changes in materiality
Update of overall strategy conclusion on audit
Assessment of risk of material misstatement at assertion level