BATCH20: AUD1

Which of the following statements best describes assurance services?

• A. Independent professional services that are intended to enhance the credibility of information to meet the needs of an intended user.

• B. Services designed to express an opinion on the fairness of historical financial statements based on the results of an audit.

• C. The preparation of financial statements or the collection, classification, and summarization of other financial information.

• D. Services designed for the improvement of operations, resulting in better outcomes.

The subject matter of an assurance engagement may include
I. Historical or prospective financial information
II. Internal controls
IIl Compliance with regulation

• A. I and II only

• B. I and III only

• C. II and III only

• D. I, II, and III

The auditor's satisfaction as to the reliability of an assertion being made by one party for use by another party is called

• A. Opinion

• B. Assurance

• 
  C. Examination

• D. Verification

In an engagement to perform agreed-upon procedures, a practitioner is engaged to

• A. Carry out those procedures of an audit nature to which the practitioner and the entity and any appropriate third parties have agreed and to report on factual findings.

• B. Use accounting expertise as opposed to auditing expertise to collect, classify, and summarize financial information.

• C. Provide a moderate level of assurance that the information is free of material misstatement.

• 
  D. Provide a high, but not absolute, level of assurance that the information is free of material misstatement.

The purpose of an audit of financial statements is to

• A. Relieve management or those charged with governance of the responsibility for the preparation and presentation of the financial statements in accordance with the applicable financial reporting framework.

• B. Obtain an absolute level of assurance that the financial statements as a whole are free from material misstatement.

• C. Enhance the degree of confidence of intended users in the financial statements.

• D. Assure the future viability of the entity by expressing an opinion on the 'entity's financial statements.
  

The overall objectives of the auditor in conducting an audit of financial statements are
I. To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether caused by fraud or error.
II. To report on the financial statements.
III. To obtain conclusive rather than persuasive evidence.
IV. To detect all misstatements, whether due to fraud or error.

• A. I and II only

• B. II and IV only

• C. I, II, and III only

• D. I, II, III, and IV

A pervasive characteristic of a CPA's role in a consulting services engagement is that of being a(an)

• A. Independent practitioner

• B. Computer expert

• C. Confidential reviewer

• D. Objective advisor

Which of the following is the most appropriate action to be taken by a CPA who has been asked to perform a consulting services engagement concerning the analysis of a potential merger if he/she has little experience with the industry involved?

• A. Accept the engagement but he/she should conduct research or consult with others to obtain sufficient competence.
  

• B. Decline the engagement because he/she lacks sufficient knowledge.

• C. Accept the engagement and issue a report that contains his/her opinion on the achievability of the results of the merger.

• D. Accept the engagement and perform it in accordance with Philippine Standards on Auditing (PSAs).
  

A CPA is in public accounting practice when he/she

• A. Represents his/her employer before government agencies on tax and other matters related to accounting.

• B. Represents his/her clients before government agencies on tax and other matters related to accounting.
  

• C. Teaches accounting, auditing, management advisory services, accounting aspect of finance, business law, taxation, and other technically related subjects.
  

• D. Holds, or is appointed to, in an accounting professional group in government or in a government-owned and/or controlled corporation where decision making requires professional knowledge in the science of accounting.
  

Which of the following statements concerning the practice of accountancy in the academe/education is incorrect?

• A. Members of the Integrated Bar of the Philippines are not allowed to teach business law and taxation subjects.
  

• B. The position of either the Dean or the Department Chairman or its equivalent that supervises the Bachelor of Science in Accountancy program of an educational institution is deemed to be in practice of accountancy in the academe/education.

• C. CPAs are allowed to teach business law subjects.
  

• D. The position of either the Dean or the Department Chairman or its equivalent that supervises the Bachelor of Science in Accountancy program of an educational institution must be occupied only by a duly registered CPA.