1.

Statement 1: The law regulating the practice of accountancy in the Philippines is RA 9289 of the
Philippine Accountancy Act of 2004.
Statement 2: A corporation can be registered for the purpose of practicing public accounting
profession in the Philippines.
Statement 3: Continuing Professional Education is required for both renewal of CPA license and
accreditation to practice of accountancy profession.
A. True, True, False
B. False, False, True
C. True, False, False
D. False, False, False
E. True, False, True
2. Statement 1: Independent external auditors perform attest function.
Statement 2: If a CPA wants to practice public accountancy, one must obtain first certificate of
recognition from the board of accountancy.
a. True, False
b. False, True
c. False, False
d. True, True
3. Statement 1: PFRS sets out recognition, measurement, presentation and disclosure requirements
for a specific account or transaction.
Statement 2: Interpretations are authoritative guidelines set by FRSC.
a. Only 1 is true.
b. Only II is true.
c. Both 1 and II are true
d. Both 1 and II are false
4. Which of the above statements is incorrect?
Statement 1: PRFSs apply to all profit-oriented entities whether owned by private individuals or
the government.
Statement 2: Standards approved by FRSC include paragraphs in bold type and plain type, the
former having greater authority than the latter since it indicate the main principles.
a. Statement 1 only
b. Statement 2 only
c. Both statements
d. None from the statements.
5. PFRS does not apply to which of the following?
I. Financial statements prepared by a non-profit organization.
II. Special purpose reports prepared by a profit-oriented entity.
III. General purpose reports prepared by a GOCC, profit-oriented.
a. I and II
b. II and III
c. I and III
d. I,II and III
e. Answer not given
6. Arrange in proper order the due process for projects of FRSC.
I. Issuing for comment an exposure draft approved by a majority of the FRSC members,
comment period will be at least 60 days, unless a shorter period (not less than 30 days)
is considered appropriate by the FRSC.
II. Consideration of pronouncements of the IASB.
III. Formation of a task force, when deemed necessary, to give advice to FRSC.
IV. Approval of a standard or an interpretation by a majority of the FRSC members.
V. Consideration of all comments received within the comment period and when
appropriate, preparing a comment letter to the IASB.
a. I, II, III, IV and V
b. III, II, I, V and IV
c. II, III, I, V and IV
d. II, III, V, I and IV
7. Statement 1: FRSC members are appointed by PRC with a term of 3 years renewable for another
3 years.
Statement 2: PIC members are appointed by PRC.
Statement 3: All sectors of the accountancy profession are represented in FRSC but majority of
which came from Public Practice.
Statement 4. FRSC members render services on a part-time basis and receive financial support
from the Bangko Sentral ng Pilipinas.
A. True, False, False, False
B. True, True, False, False
C. True, False, False, True
D. True, True, True, True
8. Which of the following statement(s) is (are) incorrect about the Financial Reporting Standards
Council (FRSC).
I. FRSC is responsible for establishing generally accepted accounting principles in the
Philippines.
II. FRSC members should be CPAs.
III. The Chairman of FRSC will establish a task force when deems it appropriate to assist in
identifying problems and issues with respect to a project on the Council’s agenda.
IV. The Chairman and members of the FRSC shall have a term of 2 years renewable for
another term.
A. I and III only
B. II and IV only
C. I, II, and III only
D. I, II, and IV only
9. Regarding FRSC and its members, determine which of the statements below is TRUE:
a. All FRSC members should be CPAs.
b. FRSC members works on a full time basis with a salary coming from the national
government.
c. The chairman should be a senior practitioner in public practice.
d. All accountancy sectors are equally represented in FRSC by representatives coming from
PICPA
 e. None of the above
10. The process of establishing financial accounting standards
a. Is a democratic process in that majority of practicing accountants must agree with a
standard before it becomes implemented.
b. Is a legislative process based on rules promulgated by government agencies.
c. Is based solely on economic analysis of the effects each standard will have if implemented.
d. Is a social process which it incorporates political actions of various interested user groups as
well as professional research and logic.