1. Which of the following refers to “evidence” element of assurance engagement?

- ​Information
obtained by the practitioner in arriving at the conclusion on which the opinion is based

2. Which of the following criteria is unique to the independent auditor’s attest function? -
Independence

3. Results of compliance audits are typically reported to someone within the organizational unit
being audited rather than to be a broad spectrum of outside users. Which of the following audits
can be regarded as generally being a compliance audit? - ​BIR agents’ examinations of
taxpayer returns

4. Concerning retention of working papers, the PSQC - ​Requires retention for at least 7 years

5. Which of the following is incorrect regarding the “three-party relationship” element of assurance
engagement? - ​Professional accountants are those persons who are member of the
PICPA, who should be in public practice

6. Which one of the following is not a key attribute needed to perform assurance? - ​Accounting
Skills

7. A service that always requires that a report is provided to a third party is - ​Attention and Audit

8. The following are assurance engagements, except - ​Tax Services

9. The following statements relate to external auditing. Which of the following statements is
incorrect? - ​To be effective, internal auditors should submit their reports to the senior
management.

10. The criteria against which the auditor measures the fairness of financial statement presentation
are known as - ​GAAP

11. Assertions are representations by management, explicit or otherwise, that are embodied in the
financial statements. Management's assertions in the financial statements are of relevance to
the audit process because: - ​they are utilized by auditors in developing proper tests and
procedures
12. Which of the following professionals has primary responsibility for the performance of an audit?
- ​The partner in charge of the engagement

13. Control activity component of internal control - ​Consists of the policies and procedures that
help ensure that management directives are carried out

14. In planning an audit engagement, the auditor is required to develop and document a(an) I.
Audit Plan II. Flowchart III. Overall Audit Strategy - ​ both 1 and III

15. In planning an audit engagement, the auditor is required to develop and document a(an) I. Audit
Plan II. Flowchart III. Overall Audit Strategy - ​Concluding that the entity’s management
probably lacks integrity

16. In designing audit programs, an auditor establishes specific audit objectives that relate primarily
to the: - ​ financial statements assertion

17. During the consideration of internal control in a financial statement audit, an auditor is not
obligated to - ​Search for significant deficiencies in the operation of the internal control.

18. Which of the following is most likely documented in an audit program? - ​Planned substantive
procedures on accounts receivable

19. The basic concept of internal control which recognizes that the cost of internal control should
not exceed the benefits expected to be derived is known as - ​reasonable assurance

20. Which of the following procedures would an auditor least likely perform while obtaining an
understanding of a client in a financial statement audit? -​Selecting a sample of vendors'
invoices for comparison to receiving reports.

21. An auditor is required to establish an understanding with a client regarding the responsibilities
for each engagement. This understanding generally includes ​- The auditor's responsibility to
plan and perform the audit to provide reasonable, but not absolute, assurance of
detecting material errors or fraud

22. Which of the following is not included in an engagement letter? - ​Satisfactory title to assets,
liens on assets and assets pledged
23. Concerning retention of working papers, the PSQC -​ Requires retention for at least 7 years

24. Unlike consulting services, assurance services? - ​Report on the quality of information

25. Assurance services may include which of the following except? - ​Engagements to testify in
legal proceeding regarding accounting, auditing. Taxation or other matters

26. It is the risk that the practitioner expresses an inappropriate conclusion when the subject matter
information is materially misstated ​- Assurance engagement risk

27. Auditing is a systematic process that includes all of the following except - ​Providing important
managerial decisions for a client

28. Which of the following is broadest in scope? - ​Operations audit

29. Which of the following is not normally a service rendered by public accountants? ​- Internal
auditing

30. The need for assurance services arises for all of the following reasons except - The correct
answer is: Closeness between a user and the organization

31. Initial audit planning involves four matters. Which of the following is not one of these? ​-Request
that bank balances be confirmed

32. When the auditor attempts to understand the operation of the accounting system by tracing a
few transactions through the accounting system, the auditor is said to be: - performing a
walk-through.

33. The auditor must evaluate the design of relevant controls and determine whether they have
been implemented. Evaluating the implementation of the entity’s internal control would involve -
Determining whether control exists and the entity is using it

34. Flowcharting as a means of internal control evaluation provides the following advantage over
the use of questionnaires and descriptive narratives: - ​Ease in following information flow
35. Which of the following procedures would an auditor least likely perform while obtaining an
understanding of a client in a financial statement audit? - Selecting a sample of vendors'
invoices for comparison to receiving reports.

36. The auditor could assess control risk for an account at the maximum when - ​material
weaknesses exists in an account

37. Which of the following should an auditor obtain from the previous auditor before accepting an
audit work?​ - Facts that might bear on the integrity of management

38. An audit engagement letter least likely includes - Identification of specific audit procedures
that the auditor needs to undertake

39. Auditing is a systematic process that includes all of the following except -​Providing important
managerial decisions for a client

40. The highest level of assurance that may be provided by the practitioner is reasonable assurance
(less than absolute) as a result of the following factors, except - ​Conclusive Evidence

41. Which of the following is not one of the levels of materiality set by an auditor in F/S audit?

42. In performing an attestation engagement, a CPA typically ​Expresses a conclusion about an

43. Which of the following statements is not true with respect to assurance, assertion-based
assurance, and audit services? ​These services are applied only to financial statement and
financial statement accounts

44. An attitude that includes a questioning mind and a critical assessment of audit evidence is
referred to as ​Professional skepticism

45. The subject matter of an assurance engagement may take many forms, including ​Behavior,
Systems and processes, Data

46. Which one of the following is not part of the attest process? ​Providing the accuracy of the
books and records
47. The characteristic for determining whether criteria in engagement are suitable include the
following, except ​Verifiability

48. An auditor should design the written audit program so that ​the audit procedures selected will
achieve specific objectives

49. In an audit of financial statements, materiality is determined using the perspective of ​Users of
the financial statements

50. Materiality is expressed in terms of ______ in the financial statements ​Misstatement

51. Which of the following relates to management’s philosophy and operating style of control
environment ​Management’s approach to taking and managing business risks

52. An assumption underlying analytical procedures is that ​Relationships among data may
reasonably be expected to exist and continue in the absence of known conditions to the
contrary

53. Which of the following procedures would an auditor most likely include in the planning phase of
a financial statement audit? ​Obtain an understanding of the entity's risk assessment
process

54. What is the best method an auditor may use to detect fraud in the financial statements of
clients?​ Use professional Skepticism

55. Operational auditing is primarily oriented toward. ​Future improvements to accomplish the
goals of management.

56. Broadly defined, the subject matter of any audit consist of ​Assertions

57. Which of the following would best be described as an assurance service? - ​Offering an opinion
concerning the accuracy of statements made on a client’s web site relating to the client’s
online privacy policies

58. The primary reason for a financial statement audit by a CPA independent of the company is to -
Provide increased assurance to users as to the fairness of the financial statements
59. An audit program is created to specify which of the following? - ​audit objectives and
procedures to be followed during the audit process

60. Which of the following is the most important qualitative factor that auditors should consider
when making materiality judgments? - ​The misstatement will cause the client to fail to meet
an earnings forecast

61. Which of the following risks of material misstatement relating to cash pertains to completeness
assertion? ​Cash is understated because not all bank accounts and receipts have been
recorded
62. Concluding analytical procedures are used ​As an overall review of financial information in
the final review stage of the audit

63. Which of the following matters is generally included in an auditor's engagement letter?
Limitations of the engagement

64. Which of the following relates to management’s philosophy and operating style of control
environment? ​Management’s approach to taking and managing business risks

65. ​The purpose of the requirement in auditing standards of having communication

66. ​An understanding of a client’s business and industry and knowledge about operations
are essential for performing an adequate audit. For a new client, most of this information
is obtained ​from the predecessor auditor

67. Which of the following is not typically included in initial audit planning? ​Perform
analytical procedures as substantive tests

68. ​Which of the following is not one of the subcomponents of the control environment?
Adequate separation of duties
69. Philippine Standards on Assurance Engagements defines and describes the elements and
objectives of an assurance engagement.
 Philippine Framework from Assurance Engagements contain basic principles, essential
procedures and related guidance, consistent with the concepts in the Framework, for the
performance of assurance engagement. ​Both statements are False
70. ​Which of the following control activities refers to performance reviews control?
Reviews of actual performance versus budgets and prior performance
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