• An Audit can have significant on

- INFORMATON RISK
• Government auditing often extends beyond examinations leading to the expression of
opinion on the fairness of financial presentation and includes audits of efficiency ,
effectiveness and______.
- COMPLIANCE
• A primary purpose of an operational audit is to provide
- A MEASURE OF MANAGEMENT PERFORMANCE IN MEETING ORGANIZATIONAL GOALS
• Which of the following methods is most commonly used to reduce information risk?
- HAVE THE FINANCIAL STATEMENTS AUDITED
• Managements assertions are;
- IMPLIED OR EXPRESS REPRESENTATIONS ABOUT THE ACCOUNTS IN THE FINANCIAL
STATEMENTS
• The criteria for evaluating quantitative information vary. For example, in the audit if historical
financial statements by CPA firms, the criteria are usually____.
- GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
• The main objective of operations auditing is_____.
- TO VERIFY FULFILLMENT OF PLANS AND SOUND BUSINESS REQUIREMENTS
• Which of the following statements is an example of an assertion made by management in an
entity’s financial statements?
- REPORTED INVENTORY BALANCES REFLECT ALL RELATED TRANSACTIONS FOR THE PERIOD
• The underlying conditions that create demand for users for reliable financial information do
not include the ____.
- EXPRESSION OF AN OPINION ON THE FAIRNESS OF THE FINANCIAL STATEMENTS
• This is an independent appraisal activity established within an entity as a service to the entity
- INTERNAL AUDIT FUNCTION
• A type of audit the purpose of which is to determine whether the client is following specific
procedures or rules set down by some higher authority
- COMPLIANCE AUDIT
• This type of audits performed to determine whether an entity’s financial statements are fairly
stated in conformity with generally accepted accounting principles
- FINANCIAL STATEMENTS AUDIT
• S1- CPA firms have as their primary responsibility the performance of the audit function on
published financial statements of all publicly traded corporations.
S2- The value on the CPA’s opinion lies in the fact that he has gathered sufficient, competent
evidential matter to support his opinion
- TRUE,TRUE
• Auditing includes both a(an)___.
- INVESTIGATE PROCESS AND A REPORTING PROCESS
• Internal auditing relates to an
- AUDIT WHICH SERVES THE NEEDS OF MANAGEMENT
• The constitution of the Philippines requires this office to “ keep general accounts of the
government and for such period as may be provided by law, preserve the vouchers
pertaining thereto____.
- COMMISSION ON AUDIT
• Which of the following best describes the reason why an independent auditor reports on
financial statements?
- DIFFERENT INTERESTS MAY EXIST BETWEEN THE COMPANY PREPARING THE STATEMENTS
AND THE PERSONS USING THE STATEMENTS
• To operate effectively, an internal auditor must be independent of ____.
- THE LINE FUNCTIONS OF THE ORGANIZATION
• The following phrases relate to the definition of auditing. Which one is correct?
- DEGREE OF CORRESPONDENCE BETWEEN ASSERTIONS AND PSA’S
• For what reason does an independent auditor gather evidence?
- TO FORM AN OPINION ON THE FINANCIAL STATEMENTS
• Internal auditors cannot be totally independent
- AS LONG AS AN EMPLOYEER-EMPLOYEE RELATIONSHIP EXISTS
• To provide for the greatest degree of independence in performing internal audit functions,
an internal auditor most likely should report to ____.
- THE SHAREHOLDERS OF THE COMPANY
• The auditor communicates the results of his/her work through the medium of the:
- AUDIT REPORT
• Which of the following types of audits are most similar?
- COMPLIANCE AUDITS AND INDEPENDENT FINANCIAL STATEMENT AUDIT
• Which of the following statements does not properly describe a limitation of an audit?
- MANY AUDIT CONCLUSIONS ARE MADE ON THE BASIS OF EXAMINING ALL AVAILABLE
EVIDENCE
• In government auditing, the three elements of expanded scope auditing are:
- FINANCIAL AND COMPLIANCE ECONOMY AND EFFICIENCY, PROGRAM RESULTS
• Audits classified according to subject matter are: financial statements audit, operational
audit and compliance audit. Which one of the following is most difficult to evaluate
objectively?
- EFFIENCY AND EFFECTIVENESS OF OPERATIONS
• The independent auditor lends credibility to client financial statements by __.
- ATTACHING AN AUDITOR’S OPINION TO CLIENT’S FINANCIAL STATEMENTS
• The market for auditing services is driven by _____.
- A DEMAND BY EXTERNAL USERS OF FINANCIAL STATEMENTS