1.

The single features that most clearly distinguishes auditing, attestation, and assurance is
a. Type of service.
b. Training required to perform
c. Scope of services.
d. CPA’s approach to the service
2. The following statements regarding the term of BOA members are incorrect, except
a. Any vacant occurring within the term of a member shall be filled up for the next
three (3) years, equal to one complete term.
b. A member who has served for two successive complete terms shall mot be eligible
for reappointment until the lapse of three (3) years.
c. A member who has served for a total of four non-successive complete terms is
not eligible for reappointment every after the prescribed “cooling” period.
d. Appointment to fill up an unexpired term is considered to be as a complete term.
3. Which of the following is incorrect regarding the practice in the academe?
a. Members of the Integrated Bar of the Philippines may be allowed to teach
business law and taxation subjects.
b. The Vice President of Academic Affairs of a university offering BS Accountancy
shall be duly registered CPA.
c. The dean of the College of Business and Accountancy is not required to be a
CPA, provided the program head of the BS Accountancy is a CPA.
d. A person teaching accounting, auditing and management advisory services shall
be a duly registered CPA.
4. To be accredited in public practice, a CPA shall accumulate at least __ CPD units
a. 15 credit units
b. 100 credit units
c. 45 credit units
d. 120 credit units
5. A reasonable assurance engagement is one in which the aim is a reduction in assurance
engagement risk.
a. To an acceptably low level in the circumstances of the engagement as the basis
for a positive form of expression of the practitioner’s conclusion.
b. To a level that is acceptable in the circumstances of the engagement, but where
the risk is greater that for a reasonable assurance engagement, as the basis for a
negative form of expression of the practitioner’s conclusion.
c. Such that the auditor is responsible not only for the conclusion but also for the
subject matter.
d. None of the choices apply.
6. Classify the following statements related to the underlying theories behind the necessity
for audit services:
I. Managers generally have more information about the financial position and
operations of the entity compared to other stakeholders.
II. In theory, the will and wishes of the shareholders should be operationalized by
management but problems exist with respect to goal congruence.
a. Both are related to the agency theory
b. Both are related to the information asymmetry theory
 c. Agency theory, information asymmetry
d. Information asymmetry, agency theory
7. The following are considered grounds for the suspension or revocation of a CPA’s
Certificate of Registration, except
a. The CPA is guilty of immoral and dishonorable conduct
b. The CPA became of unsound mind
c. Violation of the provisions of Code of Ethics for Professional Accountants.
d. The CPA is convicted of political offense.
8. STATEMENT 1: Evidence is more relevant when it is obtained from independent sources
outside the entity.
STATEMENT 2: Evidence provided by original documents is more reliable than evidence
provided by photocopies or facsimiles
a. Only 1 is true
b. Only 2 is true
c. Both 1 and 2 are true
d. Neither 1 nor 2 are true
9. Which of the following types of audits are most similar?
a. Operational audits and compliance audits.
b. Independent financial statement audits and operational audits.
c. Compliance audits and independent financial statement audits.
d. Internal audits and independent financial statement audits.
10. An operating committee of a company's board of directors that is in-charge of
overseeing financial reporting and disclosure.
a. Audit committee
b. Management
c. Governance
d. Control environment
11. An assurance engagement is:
a. An engagement in which a practitioner is engaged to issue, or does issue, a
written communication that expresses conclusion about the reliability of a written
assertion that is the responsibility of another party.
b. A systematic process of objectivity obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of
correspondence between those assertions and established criteria and
communicating the results to interested users.
c. An engagement in which the auditor provides a moderate level of assurance that
the information subject of the engagement is free of material misstatement.
d. An engagement intended to enhance the credibility of information about a
subject matter by evaluating whether the subject matter conforms in all material
respects with suitable criteria, thereby improving the likelihood that the
information will meet the needs of an intended users.
12. Usually, an operational audit is performed
a. By independent external auditors.
b. By a team consisting of an equal number of external and internal auditors.
 c. Only when an operating division is experiencing declines in productivity or
profitability.
d. By internal auditors at the request of top management or the board of directors.
13. Which of the following is true about non-assurance services?
a. Audit engagements are non-assurance services
b. Review engagements are non-assurance services
c. Non-assurance services lack one or more element(s) of an assurance
engagement
d. All of the above are true about non-assurance services
14. On July 1, 2016, Millan, CPA, was appointed as a member of the Board of Accountancy
to replace a sick member which was initially appointed last July 1, 2015. He was
reappointed immediately for his second term after the relevant term he filled in. Which
of the following is/are correct?
STATEMENT 1: The expiration of her second term is on July 1, 2022.
STATEMENT 2: He can be reappointed immediately after her second term
a. Statement 1 only
b. Statement 2 only
c. Both Statement 1 and 2
d. Neither statement
15. Evaluate the following statements related to the purpose of audit engagements:
I. Enhance the degree of confidence of intended users of the financial statements.
II. Provide government agencies, such as BIR with basis for assessments.
III. To prove accuracy and reliability of financial statements.
IV. To obtain reasonable assurance about whether the financial statements are free
from material misstatements, due to fraud and error.
a. All statements are true
b. All statements are false
c. Only I and IV are true
d. Only III and IV are true
16. In an engagement to perform agreed-upon procedures, an auditor is engaged to
a. Use accounting expertise as opposed to auditing expertise to collect, classify,
and summarize financial information.
b. Provide a moderate level of assurance that the information is free of material
misstatement.
c. Carry out those procedures of an audit to which the auditor and the entity and
any appropriate third parties have agreed and to report on factual findings.
d. Provide a high, but not absolute level of assurance that the information is free of
material misstatement.
17. A certificate under seal, bearing a registration number, issued to an individual, by the
PRC, upon recommendation by the Board of Accountancy, signifying that the individual
has complied with all the legal and procedural requirements for such issuance,
including, in appropriate cases, having successfully passed the CPA licensure
examinations.
a. Certificate of registration.
b. Certificate of identification.
 c. Certificate of accreditation.
d. Certificate of quality review.
18. STATEMENT 1: An audit staff is considered to in practice in commerce and industry since
he/she/they is employed by an auditing, which is considered a private entity.
STATEMENT 2: Accounting personnel of a private entity who coordinates with external
auditors is considered to be in public practice.
a. Only 1 is true
b. Only 2 is true
c. Both 1 and 2 are true
d. Both 1 and 2 are false
19. Which is an engagement in which a practitioner expresses a conclusion designed to
enhance the degree of confidence of the intended users other than the responsible
party about the outcome of the evaluation or measurement of a subject matter against
criteria?
a. Audit engagement
b. Assurance engagement
c. Attestation engagement
d. Management consulting engagement
20. Which is correct concerning the framework for assurance engagements?
a. It provides a frame of reference against which audit engagements are evaluated
b. It establishes specific guidelines and procedural requirements for the
performance of assurance engagements
c. It provides a frame of reference for accountants in public practice when
performing assurance engagements
d. It is intended for reference of public accountants only
21. Which of the following is not true regarding the designation of a member of Board of
Accountancy?
a. The PICPA submits to PRC five (5) nominees for each position.
b. The PRC ranks the nominees submitted by PICPA into three (3) recommendees.
c. The Board of Accountancy has seven (7) members including the chairman.
d. The President of PICPA appoints a member from the list of recommendees ranked
by PICPA.
22. Evaluate the following statements:
I. Assurance services can enhance the usefulness of information.
II. Assurance services help information users make decisions based on more
credible information.
a. Both are true
b. True, false
c. Both are false
d. False, true
23. Classify the following statements as to the level of assurance:
I. The aim is a reduction in assurance engagement risk to an acceptably low level
in the circumstances of the engagement as the basis for a positive form of
expression of the practitioner’s conclusion.
 II. The aim is a reduction in assurance engagement risk to a level that is acceptable
in the circumstances of the engagement, but where that risk is greater than for a
reasonable assurance engagement, as the basis for a negative form of expression
of the practitioner’s conclusion.
a. Limited, Absolute
b. Reasonable, Limited
c. Limited, Reasonable
d. Absolute, Limited
24. STATEMENT 1: A member of the Board of Accountancy representing the academe
sector is encouraged to still have a connection or interest in a university or college
offering BS Accountancy or in a review school offering CPA review services.
STATEMENT 2: A member of the Board of Accountancy representing the public practice
is prohibited from continuing his/her public practice since this may interfere with his/her
duties as member of the Board.
a. Only 1 is true
b. Only 2 is true
c. Both 1 and 2 are true
d. Both 1 and 2 are false
25. The Quality Review Committee (QRC) shall have the following functions:
a. Conduct quality control review on applicants for registration to practice public
accountancy and render a report on such quality review
b. Revoke the certificate of registration and professional ID of an individual CPA,
firm, or partnership of CPAs who have not observed quality control measures.
c. Both A and B
d. Neither A nor B
26. Which of the following procedures ordinarily performed during an audit are also
performed in a review engagement?
a. Assessment of accounting and internal control systems.
b. Inquiry and analytical procedures.
c. As if doing something (AIDS)
d. Tests of records and responses to inquiries.
27. Which of the following statements refers to the definition of auditing?
a. A systematic process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of
correspondence between these assertions and established criteria and
communicating the results thereof.
b. A service activity which function is to provide quantitative information primarily
financial in nature about economic entities that is intended to be useful in making
economic decisions.
c. The art of recording, classifying and summarizing in a significant manner and in
terms of money, transactions and events which are in part at least of a financial
character and interpreting the results thereof.
d. The process of identifying, measuring and communicating economic information
to permit informed judgment and decisions by users of the information.
28. Why should CPAs in the Philippines adhere to the SMOs (Statement of Membership
Obligations) of the International Federation of Accountants (IFAC)?
a. because of globalization and ASEAN integration
b. because the Philippine Institute of Certified Public Accountants (PICPA) is a
member professional organization of IFAC
c. because it is required by the Code of Ethics
d. because it is required by RA 9298
29. Which is a type of audit is performed to determine whether an entity’s financial
statements are fairly presented in accordance with an identified financial reporting
framework.
a. Compliance audit
b. Operational audit
c. Financial statement audit
d. Internal audit
30. Which best describes the representations by management, explicit or otherwise, that
are embodied in the financial statements, as used by the auditor to consider the
different types of potential misstatements that may occur.
a. Notes to the financial statements
b. Audit evidence
c. Financial statement assertions
d. Disclosure requirements
31. The following numbers are required to be indicated by the CPA on the documents
he/she signs, uses or issues, except
a. Certificate of Registration Number
b. Tax identification Number
c. Professional tax receipt number
d. Business telephone number
32. Financial statements need to be prepared in accordance with one, or a combination
of:
a. IFRS
b. PFRS
c. Other authoritative basis
d. All of the answers.
33. Any candidate who fails in _____ complete CPA Board Examinations shall be
disqualified from taking another set of examinations unless he/she submits evidence to
the satisfaction of the BOA that he/she enrolled in and completed at least _____ of
subjects given in the licensure examination.
a. 3, 15 units per year for a total of 60 units
b. 2, 15 units/year, total of 60 units
c. 2, 24 units
d. 3, 24 units
34. STATEMENT 1: Observation of the application of a control is more reliable than inquiry
about the application of a control.
STATEMENT 2: Evidence that is generated internally is more relevant when the related
controls are effective.
 a. Only 1 is true
b. Only 2 is true
c. Both 1 and 2 are true
d. Neither 1 nor 2 are true
35. Engagement risk is influenced by the risks associated with the following, except:
a. Nature and extent of the process used to collect and evaluate evidence
b. Unreasonably low professional fee
c. Nature and form of the subject matter
d. Nature and form of the criteria applied to the subject matter
36. According to the IRR of RA 9298, this group is tasked to assist the PRC in accepting,
evaluating, and approving applications for accreditation of CPE programs, activities or
sources as to their relevance to the profession and determine the number of CPE credit
units to be earned on the basis of the contents of the programs, activity or source
submitted by the CPE providers.
a. PRC Quality Review Committee
b. PRC CPE Council
c. PRC Education Technical Council
d. PRC CPD Committee
37. Classify the following types of audits:
• This type of audit involves a review of an organization’s procedures and methods for
the purpose of evaluating efficiency and effectiveness of operations, identifying areas
for improvement, and making recommendations to improve performance.
• This type of audit involves a review of an organization’s procedures to determine
whether the organization has adhered to specific procedures, rules or regulations set
down by some higher authority.
a. Operations, compliance
b. Compliance, operations
c. Both are operations audits
d. Both are compliance audits
38. Which of the following is not correct?
a. “Juan dela Cruz, CPA” denotes an individual CPA
b. “Juan dela Cruz, CPA and Company” denotes a partnership name
c. “Juan dela Cruz, CPA and Associates” denotes a firm name
d. None of the above
39. The framework for assurance engagements identifies engagement to which the
following standards apply, except,
a. Philippine Standards on Review Engagements (PSREs)
b. Philippine Standards on Related Services (PSRSs)
c. Philippine Standards on Auditing (PSAs)
d. Philippine Standards on Assurance Engagements (PSAEs)
40. Suitable criteria are required for reasonably consistent evaluation or measurement of
the subject matter of an assurance engagement. Which of the following statements
concerning the characteristics of suitable criteria is correct?
a. Reliable criteria contribute to conclusions that are clear, comprehensive, and not
subject to significantly different interpretations.
 b. Relevant criteria allow reasonably consistent evaluations or measurement of the
subject matter including, where relevant, presentations and disclosure, when
used in similarly qualified practitioners.
c. Neutral criteria contribute to conclusions that are free from bias.
d. Criteria are sufficiently complete when they contribute to conclusions that are
clear, comprehensive, and not subject to different interpretations.
41. Which of the following statements is not a distinction between independent auditing
and internal auditing?
a. Independent auditors represent third party users external to the auditee entity,
whereas internal auditors report directly to management.
b. Although independent auditors strive for both validity and relevance of evidence,
internal auditors are concerned almost exclusively with validity.
c. Internal auditors are employees of the auditee, whereas independent auditors
are independent contractors.
d. The internal auditor's span of coverage goes beyond financial auditing to
encompass operational and performance auditing.
42. A subset of internal auditing that reviews an entity’s activities for efficiency and
effectiveness.
a. Management audit
b. Financial Audit
c. Operational Audit
d. Compliance Audit
43. Independence is required of a CPA performing:
a. Audits, but not any other professional services.
b. All attestation services, but not other professional services.
c. All attestation and tax services, but not other professional services.
d. All professional services.
44. Which is/are overall responsibilities of the internal audit function?
I. Serve as an independent assurance and consulting activity designed to add
value and improve the company's operations.
II. Assess the company's methods for safeguarding its assets and, as appropriate,
verify the existence of the assets.
a. Both
b. Neither
c. I only
d. II only
45. Which internal audit activity directly contributes to the improvement of the
organization’s governance process
I. Evaluating the design of ethics-related activities
II. Evaluating the effectiveness of internal controls over financial reporting
a. Both
b. Neither
c. I only
d. II only
46. These are the benchmarks used to evaluate or measures the subject matter including,
where relevant, benchmarks for presentation and disclosure.
a. Assertions
b. Quality controls
c. GAAP
d. Criteria
47. In government auditing, the three elements of expanded scope auditing are:
a. National government audit, local government audit, corporation audit.
b. Financial and compliance, economy and efficiency, program results.
c. Goal analysis, audit of operations, audit of systems.
d. Pre-audit, post-audit, internal audit.
48. Which of the following best describes the operational audit?
a. It requires the constant review by internal auditors of the administrative controls
as they relate to operations of the company.
b. It concentrates on implementing financial and accounting control in a newly
organized company.
c. It attempts and is designed to verify the fair presentation of a company's results
of operations.
d. It concentrates on seeking out aspects of operations in which waste would be
reduced by the introduction of controls.
49. To provide for the greatest degree of independence in performing internal auditing
functions, an internal auditor most likely should report to
a. Vice-President for Finance.
b. Corporate Stockholders.
c. Board of Directors.
d. Corporate Controller.
50. This type of activity is a subset of internal audit that attempts to measure the
effectiveness with which an organizational unit is administered.
a. Economy and efficiency audit
b. Management audit
c. Financial Audit
d. Compliance Audit
51. A member of the Board shall, at the time of his/her appointment, possess the following
qualifications, except
a. Must be a natural-born citizen and a resident of the Philippines
b. Must be a duly registered CPA with at least (10) years of work experience in any
scope of practice of accountancy.
c. Must be associated to at least one educational institution
d. Must be a good moral character and must not have convicted of crimes involving
moral turpitude
52. Which of the following is not a distinction between a compilation and a review?
a. The CPA must be independent as a prerequisite to performing a review
engagement, but need not be independent to perform a compilation.
b. Analytical procedures are applied in a review engagement, but are not required
in a compilation.
 c. In conducting a review, the CPA must obtain an understanding of the client's
internal control system; but this is not necessary for a compilation engagement.
d. A compilation offers no assurance, whereas a review provides limited assurance.
53. In an assurance engagement, this refers to the information obtained by the practitioner
in arriving at the conclusions on which the opinion is based.
a. Criteria
b. Evidence
c. Assertions
d. PSAs
54. Millan, CPA, was appointed as a member of the BOA last July 1, 2019. Assuming that he
was immediately reappointed for her second term, when will be the earliest date that
his term can start
a. July 1, 2024
b. July 1, 2025
c. July 1, 2026
d. July 1, 2027
55. Martin and Martha, who are CPAs, organized a partnership for the practice of public
accounting. Which of the following is the best name of the firm?
a. Martin and Martha, CPAs
b. Martin and Martha, Auditors and Tax Consultants
c. Martin and Martha, Inc.
d. Martin and Martha, Members, PICPA
56. Which of the following is true when a CPA’s Certificate of Registration has been
revoked?
a. For the Certificate of Registration to be reinstated, the CPA is required to retake
and pass the LECPA.
b. The Board of Accountancy may reinstate the licence after the expiration of two
(2) years from the date of revocation.
c. The revoked Certificate of Registration cannot be reinstated at all.
d. The only ground for the revocation of the CPA licence is the conviction for a
criminal offense involving moral turpitude.
57. In connection with the LECPA, which of the following is not correct?
a. The Board of Accountancy shall submit to the PRC the ratings obtained by each
candidate within 10 working days after the examinations, unless extended for just
cause.
b. Changes in the subjects in the LECPA shall not be more often than every three
years.
c. All successful candidates in the examination are required to take oath of
profession, generally, before any member of the Board of Accountancy.
d. A person who is convicted of any criminal offense involving moral turpitude
cannot apply for the LECPA.
58. Regarding the chairpersons of FSRSC and AASC, which of the following is correct?
a. The chairperson of FSRSC is appointed by the President of the Philippines, while
the chairperson of the AASC is appointed by the PRC.
 b. The chairperson of FSRSC is appointed by the PRC, while the chairperson of the
AASC is appointed by the President of the Philippines.
c. Both the chairpersons of the FSRSC and AASC are appointed by the President of
the Philippines.
d. Both the chairpersons of the FSRSC and AASC are appointed by the PRC.
59. The results the auditor’s work is communicated through the:
a. Audit engagement letter.
b. Audit report.
c. Management letter.
d. Notes to the financial statements.
60. Assurance engagement include the following, except
a. An engagement conducted to provide a high level of assurance that the subject
matter conforms in all material respects with the identified suitable criteria.
b. An engagement conducted to provide a moderate level of assurance that the
subject matter is plausible in the circumstances.
c. An engagement in accordance with the Philippine Standard in Assurance
Engagement(s) issued by the Auditing and Assurance Standard Council as
approved by the Board of Accountancy /Professional Regulation Commission.
d. An engagement to perform agreed-upon procedures.
61. In an assurance engagement, this refers to the information obtained by the practitioner
in arriving at the conclusions on which the opinion is based.
e. Criteria
f. Evidence
g. Assertions
h. PSAs
62. The following are grounds for suspension or removal of members of the PRBOA, EXCEPT:
a. Neglect of duty or incompetence.
b. Violation or tolerance of any violation of RA 9298 and its IRR, or the Code of Ethics
and technical and professional standards of practice for CPAs.
c. Pending case on a crime involving moral turpitude.
d. Manipulation or rigging of the CPA licensure examination results
63. What is the minimum number of CPD credit units that a registered professional
accountant in public practice should accumulate within the three-year period for the
renewal of Professional ID Card?
a. 15 credit units
b. 100 credit units
c. 45 credit units
d. 120 credit units
64. STATEMENT 1: Examples of subject matter information include the entity’s financial
performance, financial position, etc.
STATEMENT 2: Examples of subject matter includes the amount of income and expenses
appearing the entity’s income statement or the amount =s of assets and liabilities in the
entity’s statement of financial position.
a. Only 1 is true
b. Only 2 is true
 c. Both 1 and 2 are true
d. Neither 1 nor 2 are true
65. Public accountancy can be practiced through the following forms, except
a. Individual CPA
b. General Professional Partnership
c. Limited Liability Partnership
d. Corporation
66. CPD competence areas include:
a. technical competence.
b. professional values, ethics, and attitudes.
c. professional skills.
d. All of the above.
67. Which of the following is not represented in both AASC and FRSC?
a. SEC
b. PRBOA
c. BSP
d. BIR
68. The following are among the powers and functions of the PRBOA, EXCEPT:
a. To prescribe and/or adopt a Code of Ethics for the practice of accountancy
b. To ensure, in coordination with DepEd and CHED that all senior high schools and
higher education institutions offering accountancy-related programs and strand
comply with prescribed policies, standards and requirements
c. To conduct an oversight into the quality of audits of financial statements
d. None of the choices
69. The Accredited Integrated Professional Organization (AIPO) shall submit its nominations
for the PRBOA, with complete documentation, to the Commission
a. Not later than sixty (60) days prior to the expiry of the term of an incumbent
chairman or member.
b. On the date of expiry of the term of an incumbent chairman or member.
c. After the 60th day from the expiry of the term of an incumbent chairman or
member.
d. Upon request by the Commission for the submission of nominations.
70. A CPA candidate obtained the following ratings in a licensure exam:
Auditing 96
Advanced Financial Accounting and Reporting 90
Financial Accounting and Reporting 63
Management Services 89
Regulatory Framework for Business Transactions 73
Taxation 93
Based on the above information, the candidate’s status is:
a. Passed
b. Failed
c. Conditional
d. Topnotcher