Home / My courses /

UGRD-ACTG6480-2133T /
PRELIM EXAM /
Prelim Exam

Started on Sunday, 5 June 2022, 9:37 PM

State Finished
Completed on Sunday, 5 June 2022, 10:20 PM
Time taken 42 mins 35 secs
Marks 29.00/34.00
Grade 85.29 out of 100.00

Question 1
Correct

Mark 1.00 out of 1.00

Which of the following is false?

Select one:
a.  Auditing is governed by GAAP while accounting is governed by GAAS/PFRS. 

b. Auditing begins when accounting ends. Accounting precedes auditing because without financial statements there could be no
audit of financial statements. 

c.  Auditing involves verification of financial statements as to its fairness of presentation while accounting involves preparation and
presentation of financial statements.

d. An auditor must be proficient/expert in accounting (since the auditor will use GAAP in evaluating the fairness of the financial
statements) as well as in auditing, specifically, in accumulation and interpretation of audit evidence.  An accountant need not be
proficient in auditing. 

Your answer is correct.

Question 2
Correct

Mark 1.00 out of 1.00

Which is not a characteristic of suitable criteria?

Select one:
a. reliability

b. neutrality

c. materiality 

d. undestandability

Your answer is correct.


Question 3

Incorrect

Mark 0.00 out of 1.00

In financial statements audit, financial reporting frameworks that are acceptable as valid criteria include the following except

Select one:
a. IASs

b. PFRSs

c. PSAs

d. PASs 

Your answer is incorrect.

Question 4
Correct

Mark 1.00 out of 1.00

The purpose of monitoring compliance with quality control policies and procedures is to provide an evaluation of any of the following
except

Select one:
a. None of the choices 

b. Whether the firm’s quality control policies and procedures have been appropriately applied, so that reports that are issued by
the firm or engagement partners are appropriate in the circumstances.

c. Adherence to professional standards and regulatory and legal requirements

d. Whether the quality control system has been appropriately designed and effectively implemented; and 

Your answer is correct.

Question 5

Incorrect

Mark 0.00 out of 1.00

The responsibility for the preparation of the financial statements and the accompanying footnotes belong to

Select one:
a. the auditor 

b. both management and the auditor equally

c. management

d. management for the statements and the auditor for the notes

Your answer is incorrect.


Question 6

Correct

Mark 1.00 out of 1.00

It refers to quality control policies and procedures adopted by CPA firms that are designed to provide reasonable assurance that the
firm and its personnel comply with professional standards and regulatory and legal requirements and that reports issued by the firm or
engagement partners are appropriate in the circumstances.

Select one:
a. management information system

b. quality assurance

c. accounting information system

d. system of quality control 

Your answer is correct.

Question 7
Correct

Mark 1.00 out of 1.00

It includes the preparation of tax returns (for individuals, corporations, estates and trusts, and other entities) and acting as client’s
representative to tax authorities or in tax litigations.

Select one:
a. tax compliance 

b. tax law

c. tax return

d. tax planning

Your answer is correct.

Question 8
Correct

Mark 1.00 out of 1.00

It is the measure of the quality of audit evidence.

Select one:
a. Appropriateness 

b. Relevance

c. Sufficiency

d. Reliability

Your answer is correct.


Question 9

Correct

Mark 1.00 out of 1.00

In an audit of financial statements, it includes the financial position, financial performance and cash flows of the entity.

Select one:
a. evidence

b. subject matter 

c. criteria

d. subject matter information

Your answer is correct.

Question 10

Correct

Mark 1.00 out of 1.00

The objective of the ordinary audit of financial statements is the expression of an opinion on

Select one:
a. the accuracy of the annual report.

b. the fairness of the financial statements in all material respects. 

c. the accuracy of the financial statements.

d. the accuracy of the balance sheet and income statement.

Your answer is correct.

Question 11
Incorrect

Mark 0.00 out of 1.00

Which of the following is not one of standards of field work?

Select one:
a. Sufficient understanding of the entity and its environment, including internal control

b. Consistent application of GAAP/PFRS

c. Adequate planning and proper supervision



d. Sufficient appropriate audit evidence

Your answer is incorrect.


Question 12

Incorrect

Mark 0.00 out of 1.00

All of the following are standards of reporting except

Select one:
a. Sufficient appropriate audit evidence

b. Whether the financial statements are in accordance with GAAP/PFRS

c. Consistent application of GAAP/PFRS

d. Adequacy of informative disclosures



Your answer is incorrect.

Question 13
Correct

Mark 1.00 out of 1.00

Which is not a general standard?

Select one:
a. Adequate planning and proper supervision


b. Due professional care

c. Independence

d. Adequate technical training and proficiency

Your answer is correct.

Question 14
Correct

Mark 1.00 out of 1.00

Which of the following would an auditor least likely perform as part of the auditor's preliminary engagement activities?

Select one:
a. evaluate compliance with ethical requirements, including independence.

b. obtain understanding of the legal and regulatory framework applicable to the entity. 

c. establish an understanding of the terms of the engagement.

d. perform procedures regarding the continuance of the client relationship and the specific audit engagement.

Your answer is correct.


Question 15

Correct

Mark 1.00 out of 1.00

The end product of the audit process.

Select one:
a. Conclusion

b. Assertion

c. Audit opinion

d. Auditor's report 

Your answer is correct.

Question 16
Correct

Mark 1.00 out of 1.00

They are a structured representation of historical financial information (including related notes which comprise a summary of
significant accounting policies and other explanatory information), intended to communicate an entity’s economic resources or
obligations at a point in time or the changes therein for a period of time in accordance with a financial reporting framework. 

Select one:
a. none of the choices

b. auditors' reports

c. financial statements 

d. compliance reports

Your answer is correct.

Question 17
Correct

Mark 1.00 out of 1.00

To ensure that CPAs work to the highest standards, the government through the Professional Regulatory Board of Accountancy (BOA)
has required all CPA firms and individual CPAs in public practice to obtain a certificate of accreditation to practice public accountancy.
Such certificate is valid for _______ years and can be renewed after complying with the requirements of the BOA. 

Select one:
a. 4

b. 2

c. 1

d. 3 

Your answer is correct.


Question 18

Correct

Mark 1.00 out of 1.00

The risk that the financial statements are materially misstated prior to audit.

Select one:
a. Control risk

b. Detection risk

c. Inherent risk

d. Risk of material misstatements 



Your answer is correct.

Question 19
Correct

Mark 1.00 out of 1.00

An agreement between the CPA firm or auditor and the client for the conduct of the audit. 

Select one:
a. contract

b. negotiation

c. engagement letter 

d. audit report

Your answer is correct.

Question 20
Correct

Mark 1.00 out of 1.00

The minimum standards of auditor’s performance that must be achieved on each audit engagement.

Select one:
a. accounting standards

b. PFRS

c. auditing standards 

d. GAAP

Your answer is correct.


Question 21

Correct

Mark 1.00 out of 1.00

Philippine Standards on Assurance Engagements (PSAEs) are applied to

Select one:
a. Review engagements 

b. FS audit engagements 

c. Related services

d. Other assurance engagements dealing with subject matters other than historical financial information 

Your answer is correct.

Question 22

Correct

Mark 1.00 out of 1.00

The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement
that exists and that could be material, either individually or when aggregated with other misstatements.

Select one:
a. control risk

b. inherent risk

c. financial risk

d. detection risk 

Your answer is correct.

Question 23
Correct

Mark 1.00 out of 1.00

These are engagements that provide high, but not absolute, level of assurance.

Select one:
a. reasonable assurance engagements 

b. limited assurance engagements

c. normal assurance engagements

d. absolute assurance

Your answer is correct.


Question 24

Correct

Mark 1.00 out of 1.00

The primary product of an audit engagement.

Select one:
a. Conclusion

b. Audit opinion

c. Evidence

d. Auditor's report 

Your answer is correct.

Question 25
Correct

Mark 1.00 out of 1.00

The following are generally accepted auditing standards except

Select one:
a. standards of field work

b. general standards

c. all of the standards are GAAS. 

d. standards of reporting

Your answer is correct.

Question 26
Correct

Mark 1.00 out of 1.00

The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that
could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and
corrected, on a timely basis by the entity’s internal control.

Select one:
a. financial risk

b. inherent risk

c. control risk 

d. detection risk

Your answer is correct.


Question 27

Correct

Mark 1.00 out of 1.00

It is a type of assurance service in which a practitioner is engaged to issue a written communication that expresses a conclusion about
the reliability of a written assertion that is the responsibility of another party. 

Select one:
a. attestation service 

b. consulting service

c. attestation

d. management advisory service

Your answer is correct.

Question 28
Incorrect

Mark 0.00 out of 1.00

An oversight into (or study or appraisal of) the quality of audit of financial statements through a review of quality control measures
established by CPA firms and individual CPAs in public practice to ensure compliance with accounting and auditing standards and
practices.

Select one:
a. quality service

b. quality control

c. quality review

d. quality assurance 

Your answer is incorrect.

Question 29
Correct

Mark 1.00 out of 1.00

The susceptibility of the subject matter information to a material misstatement, assuming that there are no related controls.

Select one:
a. audit risk

b. detection risk

c. control risk

d. inherent risk 

Your answer is correct.


Question 30

Correct

Mark 1.00 out of 1.00

An assurance engagement must have the following elements except

Select one:
a.  Three-party relationship

b. Professional fees 

c. Appropriate subject matter 

d. Sufficient appropriate evidence 

Your answer is correct.

Question 31
Correct

Mark 1.00 out of 1.00

It involves communicating the audit opinion to interested users.

Select one:
a. Reporting process 


b. Investigative process

c. Accounting process

d. None of the choices

Your answer is correct.

Question 32
Correct

Mark 1.00 out of 1.00

Person, persons or class of persons for whom the practitioner prepares the assurance report; they are the users to whom the
practitioner usually addresses the report.

Select one:
a. Practitioner

b. Intended user/s 

c. Auditor

d. Responsible party

Your answer is correct.


Question 33

Correct

Mark 1.00 out of 1.00

Under ____________________________________________, CPA firms are required to establish and implement a system of quality control.

Select one:
a. PSQC 3

b. PSQC 1 

c. PSQC 2

d. PSQC 4

Your answer is correct.

Question 34

Correct

Mark 1.00 out of 1.00

It means the outcome of the evaluation or measurement of a subject matter.

Select one:
a. criteria

b. subject matter information 

c. subject matter

d. evidence

Your answer is correct.

◄ Announcements

Jump to...

Midterm Exam ►