1. The Philippine Standards on Auditing issued by AASC a.

Are applicable only when an independent audit involving an expression of an opinion on financial statements is carried out. b. Are the only authoritative source of standards for members of the accountancy profession in the Philippines. c. Are general guidelines to help auditors. d. Re uire that in no circumstances would an auditor may !udge it necessary to depart from a PSA" even though such a departure may result to more effective achievement of the ob!ective of an audit. #. The exposure period allowed for each exposure draft of PSA to be considered by the organi$ations and persons to whom it is sent for comment is generally a. %our months b. Two months c. Three months d. Six months &. 'hich of the following is not true of Philippine Auditing Practice Statements (PAPSs)* a. These statements are not intended to replace PSAs b. These statements are intended to have the authority of the PSAs c. These statements are issued to provide practical assistance to auditors in implementing the PSAs d. These are not form of interpretations issued by the AASC +. 'hich of the following statements is false* a. ,n exceptional circumstances" an auditor may !udge it necessary to depart from a PSA in order to more effectively achieve the ob!ective of an audit. 'hen such situation arises" the auditor is re uired to !ustify the departure. b. PSAs need only be applied to material matters. c. ,ssuance of final auditing standards" interpretations and statements re uires approval of the ma!ority of the AASC members. d. ,ssuance of exposure draft re uires the approval of the ma!ority of the AASC members. -. .ased on the structure of AASC pronouncements" related service include* Assurance Review A greed upon procedures Compilation a. /es /es 0o 0o b. 0o 0o /es /es c. /es /es /es 0o d. 0o /es /es /es 1. 'hich of the following pronouncements issued by AASC is designed to resolve issues relating to PSAs* a. Philippine Auditing Practices Statements b. ,nterpretations c. Statements of Auditing Standards in the Philippines d. 2enerally Accepted Auditing Standards 3. 'hich of the following is correct about Philippine Auditing Practices Statements (PAPS)*

a. These are issued to resolve issues relating to PSAs. b. These statements are intended to have the authority of PSAs. c. These statements are issued to provide practical assistance to auditors in implementing PSAs or to promote good practice. d. These statements are forms of interpretations issued by AASC. 4. Pronouncements issued by AASC may be in the form of Philippine Standards Philipine Philippine Philippine 5n Auditing Standards on Standards on Standards Assurance Review on Related 6ngagements 6ngagements Services a. /es /es /es /es b. /es 0o /es 0o c. 0o /es /es 0o d. 0o /es 0o /es 7. 'hich of the following best describes the function of Auditing and Assurance Standards Council (AASC)* a. To establish and promulgate generally accepted accounting principles in the Philippines. b. To investigate violations of Accountancy Act. c. To promulgate auditing standards" practices and procedures that shall be generally accepted by the accounting profession in the Philippines. d. To determine the minimum re uirements for admission in the accounting profession. 18. The Philippine Standards on Auditing (PSA) can be described as a. Providing very specific guidance about the specific activities an auditor must perform on each engagement. b. Similar to Philippine %inancial Reporting Standards (P%RS). c. 9efining the minimum standards of performance for an auditor. d. Providing assurance that an auditor will not issue the wrong :ind of opinion. 11. A uality control policy that re uires personnel in the form to adhere to independence" integrity" ob!ectivity" confidentiality and professional behavior" relates to a. 6thical Re uirements b. Assignment c. ;uman resources d. Consultation 1#. 'hich of the following uality control ob!ectives would be least important to the auditor* a. 6ngagement performance b. ;uman resources

c. 9etermination of audit fee d. ,ndependence 1&. 'hich of the following is one of the elements of a CPA firm<s uality control system* a. =eadership responsibilities b. Computer assisted audit techni ues c. Control activities d. Control environment 1+. 6lements of a CPA firm<s uality control that should be considered in establishing its uality control policies and procedures must include> ?onitoring 6thical 6ngagement Re uirements Performance a. /es /es /es b. /es /es 0o c. /es 0o /es d. 0o /es /es 1-. 'hich of the following is an element of a CPA firm<s uality control system that should be considered in establishing its uality control policies and procedures* a. Complying with laws and regulations b. @sing statistical sampling techni ues c. ,ndependence d. Considering audit ris: and materiality 11. The person responsible for the audit engagement and its performance and for the auditor<s report that is issued in behalf of the firm is the a. uality control reviewer b. engagement partner c. client<s management d. those charged with governance 13. The ob!ective of the uality control policies to be adopted by an audit firm will ordinarily incorporate all of the following except> a. Ris: assessment b. =eadership responsibilities c. 6ngagement performance d. ;uman resources 14. The 0ature and extent of a CPA firm<s control policies and procedures depend on The CPA %irm<s The nature of the CostA.enefit CPA %irm<s Practice considerations a. /es /es /es b. /es /es 0o c. /es 0o /es d. 0o /es /es 17. The main purpose of implementing a system of uality control is to provide the firm with reasonable assurance that a. The firm and its personnel will comply with PSA and legal re uirements to enable the form to issue an appropriate report. b. The audit will be performed in accordance with PSA.

c. The firm will issue a report that is appropriate in the circumstances. d. All of the above #8. A firm of independent auditors must establish and follow uality control policies and procedures because these standards a. Are necessary to meet increasing re uirements of auditors liability as insurers. b. Are re uired by the S6C for auditors of all forms. c. ,nclude formal filing of records of such policies and procedures to a regulatory agency. d. 2ive reasonable assurance that the firm as a whole will comply with professional standards. #1. The wor: performed by the assistants should be reviewed by personnel of at least e ual competence to consider all of the following except> a. The conclusions expressed are consistent with the results of the wor: performed. b. The wor: was ade uately performed and documented. c. The ob!ectives of the audit have been achieved. d. The engagement personnel are independent of the audit client. ##. 'hich of the following is a policy that must be established to comply with the uality control engagement performance* a. The firm is to be staffed by personnel who have attained and maintained the technical standards and professional competence re uired to enable them to fulfill their responsibilities. b. There is a sufficient direction" supervision" and review of wor: performed at all levels to provide reasonable assurance that the wor: performed meets appropriate standards of uality. c. The form should assign responsibility for each engagement to an engagement partner. d. The continued ade uacy and operational effectiveness of uality control policies and procedures are to be observed. #&. ,n connection with the element of assignment" a CPA firm<s system of uality control should ordinarily establish procedures that a. Provide ade uate supervision at all levels" considering the training" ability and experience of the personnel assigned. b. 6ncouragement personnel to use authoritative sources on complex or unusual matter. c. Re uire preparation of time budgets for audits to determine manpower re uirements and to schedule the audit wor:. d. 6stablish ualifications deemed necessary for various levels of responsibility within the firm. #+. ,n pursuing the firm<s uality control ob!ectives with respect to assigning personnel to engagements" the auditors may use policies and procedures such as a. 9esigning senior ualified personnel to provide advice on accounting or auditing uestions throughout the engagement. b. Re uiring timely identification of the staffing re uirements of specific engagements so that enough ualified personnel can be made available. c. 6stablishing at entry levels a policy for recruiting that includes minimum standards of academic preparation and accomplishments. d. 6valuate clients upon occurrence of specified events to determine whether the relationships ought to be continued. #-. ,n compliance with the element of human resources" the firm should address issues

relating to a. engagement performance b. assignment of engagement teams c. consultations d. differences of opinion #1. 'hich of the following uality control procedures relates to engagement performance* a. ;iring b. 9irection c. Professional development d. Advancement #3. ?aintaining or providing access to ade uate reference libraries and other authoritative sources is a procedure that is most li:ely performed to comply with the policy of a. monitoring b. s:ills and competence c. consultation d. assignment #4. ,n connection with the element of engagement performance" a CPA firm<s system uality control should ordinarily provide that all personnel a. ;ave the :nowledge re uired to enable them to fulfill responsibilities assigned. b. Review and test compliance with the firm<s uality control policies and procedures. c. See: assistance from persons having appropriate levels of :nowledge" !udgment and authority. d. Approximately maintain independence when providing assurance services. #7. ,n pursuing a CPA firm<s uality control ob!ectives" a CPA firm may maintain records indicating which partners or employees of the CPA firm were previously employed by the CPA firm<s client. 'hich uality control element would this be li:ely satisfy* a. ?onitoring b. Assignment c. ,ndependence d. S:ills and competence &8. 'hich of the following uality control policies and procedures does not relate to human resources and assignment* a. 6mphasi$e independence of mental attitude in training programs and in supervision and review of the audits. b. ?onitor the effectiveness of recruiting programs. c. ,dentify criteria which will be considered in evaluating individual performance and expected proficiency. d. ,dentify on a timely basis the staffing re uirements of specific audits. &1. Buality Control for Audits of financial ,nformation states" in part" that for audits of financial statements of listed entities" the engagement partner should not issue the auditor<s report until the completion of the a. 6ngagement Buality Control Review b. ?anagement Review

c. 6ngagement Team Review d. 6ngagement Partner Review &#. This uality control element is concerned with providing reasonable assurance that policies and procedures related to the other elements are suitable designed and being effectively implemented. a. ?onitoring b. 6ngagement performance c. ;uman resources d. 6thical re uirements &&. The engagement partner should ta:e responsibility for the direction" supervision" and performance of the audit engagement in compliance with professional standards and regulatory and legal re uirements" and for the auditor<s report that is issued to be appropriate in the circumstances. Supervision includes the following" except. a. Trac:ing the progress of the audit engagement. b. Addressing significant issues arising during the audit engagement" considering their significant" and modifying the planned approach approximately. c. ,nforming the members of the engagement team of their responsibilities. d. ,dentifying matters for consultation or consideration by more experienced engagement team members during the audit engagement. &+. This uality control element re uires a CPA firm to establish policies and procedures to provide it with reasonable assurance that engagements are performed in accordance with professional standards and regulatory and legal re uirements" and that the firm or the engagement partner issue reports that are appropriate in the circumstances. a. 6thical re uirements b. 6ngagement performances c. ?onitoring d. ;uman resources &-. The firm should establish policies and procedures designed to provide with reasonable assurance that it has sufficient personnel with the capabilities" competence" and commitment to ethical principles necessary to perform its engagements in accordance with professional standards and regulatory and legal re uirements" and to enable the firm or engagement partners to issue reports that are appropriate in the circumstances. a. 6thical re uirements b. 6ngagement performance c. ?onitoring d. ;uman resources &1. The engagement partner should be satisfied that appropriate procedures regarding the acceptance and continuance of client relationships and specific audit engagements have been followed and that conclusions reached in this regard are appropriate and have been documented. Acceptance and continuance of client relationships and specific audit engagements include considering> ,. The integrity of the principal owners" :ey management" and those changed with governance of the entity. ,,. 'hether the engagement team is competent to perform the audit engagement and has the necessary time and resources. ,,,. 'hether the firm and the engagement team can comply with ethical re uirements.

a. , only b. , and ,, only c. ,, and ,,, only d. ," ,, and ,,, &3. 'ho should ta:e responsibility for the overall uality on audit engagement* a. 6ngagement uality control review b. 6ngagement partner c. 6ngagement team d. CPA firm &4. The firm should establish policies and procedures designed to promote an internal culture based on the recognition that uality is essential in performing engagements. Such policies and procedures should re uire the form<s chief executive officer (or e uivalent) or" if appropriate" the firm<s managing board of partners (or e uivalent)" to assume ultimate responsibility for the firm<s system of uality control. a. 6thical re uirements b. ?onitoring c. ;uman resources d. =eadership responsibilities for uality within the firm &7. A deficiency in the firm<s system of uality control is an indication that> a. The audit engagement was not performed in accordance with professional standards. b. The auditor<s report was not appropriate c. both a and b d. neither a nor b +8. ,n connection with the element of monitoring" a CPA firm<s system of uality control should ordinarily provide for the maintenance of a. A file of minutes of staff meetings. b. @pdated personnel files c. 9ocumentation to demonstrate compliance with its policies and procedures. d. 9ocumentation to demonstrate compliance with peer review directives. +1. Buality control policies and procedures should provide the firm reasonable assurance that the policies and procedures relating to the other elements of uality control are being effectively applied. This statement defines the uality control elements of a. Planning b. ,ndependence" integrity and ob!ectivity c. Assignment d. ?onitoring +#. A CPA firm<s uality control procedures pertaining to the acceptance of a prospective audit client would most li:ely include a. ,n uiry of management as to whether disagreements between the predecessor auditor and the prospective client were resolved satisfactorily. b. Consideration of whether sufficient competent evidential matter may be obtained to afford a reasonable basis for an opinion. c. ,n uiry of third parties" such as the prospective client<s ban:ers and attorneys" about information regarding the prospective client and its management. d. Consideration of whether the internal control structure is sufficiently effective to permit a reduction in the re uired substantive tests.

+&. ,n ma:ing a decision to accept or retain" the firm should consider all of the following except a. ,ts competence b. ,ts ability to comply with ethical re uirements c. The integrity of the client<s management d. The type of opinion to be issued ++. The primary purpose of establishing uality control policies and procedures for deciding whether to accept a new client is to a. 6nable the CPA firm to attest to the integrity of the client management. b. Satisfy the CPA firm<s duty to the public concerning the acceptance of new clients. c. ?inimi$e the li:elihood of association with clients whose management lac:s integrity. d. Anticipate before performing any field wor: whether an unmodified opinion can be expressed. +-. The primary factor that should be considered in determining the extent of supervision needed by an assistant is the assistant<s a. 'illingness to exercise due care b. Competence c. Professional certification d. ,ndependence