Auditing Theory

Mr. George R. James, CPA

Module 4 – Financial Statement Audits

The Need for Financial Statement Audits

1. Financial information may be obtained by external users, such as creditors and investors, for
their respective economic decision-making activities. These parties need reliable and credible
financial information. An audit process is being used to establish the reliability or unreliability
if the financial information.

2. Without an audit, economic decisions are more likely to be made from biased financial
information resulting from a business entity’s undisclosed errors, irregularities and/or illegal
acts.

Definition of an Audit
3. An audit is 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 to interested
users.

A. Systematic process – consists of a series of sequential steps

B. Obtaining and evaluating evidence – no evidence, no opinion. The evidence in an audit of
financial statements comes in the form of accounting records, source documents and other
corroborating information.
C. Assertions – representations of management, explicit or otherwise, embodied in the
financial statements
D. Ascertain the degree of correspondence between the assertions and established criteria –
the established criteria in an audit of financial statements refers to GAAP or PFRS → the
work done by the client in preparing or presenting the financial statements is compared
against the requirements of PFRS.
E. Communicating the results to interested users – the auditor communicates the result of his
or her work through the audit report.

Accounting vs. Auditing

4. Accounting is the recording, classifying, and summarizing of economic events in a logical
manner for the purpose of providing financial information for decision-making while auditing
pertains to gathering and evaluation of evidence regarding the fair presentation of financial
statements.

5. An auditor must possess not only an understanding of accounting principles but also an
expertise in the accumulation and interpretation of audit evidence. This skill is the major
characteristic that distinguishes auditors from accountants.

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The Objective of Financial Statement Audits

6. In conducting a financial statement audit, the overall objectives of the auditor are:
A. To obtain reasonable assurance whether the financial statements are free from material
misstatement, whether due to fraud or error, to enable the auditor to express an opinion on
whether the FSs are prepared, in all material respects, in accordance with an applicable
financial reporting framework; and
B. To report on the financial statements and communicate as required by the Philippine
Standards on Auditing (PSAs), in accordance with the auditor’s findings.

Division of Responsibilities – Auditor

7. Auditor – by performing audit procedures to gather audit evidence, the auditor shall obtain
reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error.

8. The auditor is responsible to comply with relevant ethical requirements (as stated in the Code
of Ethics), and comply with applicable Engagement Standards issued by the Auditing and
Assurance Standards Council.

9. The auditor is responsible to use a system of quality control to have reasonable assurance about
compliance of the audit with applicable engagement standards, compliance with relevant
national and regulatory requirements, and appropriateness of the report issued.

Division of Responsibilities – Management and Those Charged with Governance

10. The responsibility for preparing and presenting the financial statements rests with management
and those charged with governance.

11. Financial statements need to be prepared in accordance with one, or a combination of:
A. Accounting standards generally accepted in the Philippines;
B. International Financial Reporting Standards; and
C. Another authoritative and comprehensive financial reporting framework.

12. Management establishes and maintains a system of internal control to have reasonable
assurance about the compliance of the financial statements with PFRS (aside from other
objectives, which shall be discussed in another module)

Information Risk
13. Information risk is the risk that unreliable information will be provided to decision-makers. It
is the risk that a client’s financials statements might be false or misleading.

14. The following factors contribute to information risk:

A. Remoteness of information users from information providers – users usually have no
access to facilities where the financial statements were prepared, and have not seen the
manner in which the financial statements were prepared and presented.

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B. Potential bias and motives of information provider – the information provider may have an
incentive to present a more positive picture of the company in order to influence the
decisions of information users (such as convince banks to lend money to the company,
convince potential investors to buy company shares, etc.)

C. Voluminous data – there is higher risk of misstatements as the number of transactions of

the company increases.

D. Complex exchange transactions – as time passes, more complex accounting transactions

pose a greater challenge to accountants and management of an entity. The more complex
a transaction is, the harder it is to properly account and reflect in the financial statements –
and the greater the risk that there would be errors in accounting for it.

15. Information risk may be reduced by:

A. Allowing users to verify information – this is impractical, owing to the fact that many
information users do not have the training to gather and evaluate evidence

B. Letting users share information risk with management – this is also impractical, since users
also bear the risk of loss due to the wrong decisions they might make.

C. Having the financial statements audited. – the most cost-effective solution.

16. An audit conducted in accordance with PSAs is designed to provide reasonable assurance that
the financial statements taken as a whole are free from material misstatements, whether caused
by fraud or error – reducing information risk.

General Principles Governing and Audit of Financial Statements (PSA 200)

17. The general principles governing an audit of financial statements include the following—
A. Comply with relevant ethical requirements, including those pertaining to independence,
relating to financial statement audit engagements.

B. Plan and perform an audit with professional skepticism recognizing that circumstances may
exist that cause the financial statements to be materially misstated.

C. Exercise professional judgment in planning and performing an audit of financial

statements.

D. Obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level
and thereby enable the auditor to draw reasonable conclusions on which to base the
auditor’s opinion.

E. Comply with all ISAs relevant to the audit.

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Independence
18. Independence – a combination of integrity and objectivity.

19. Independence of mind – The state of mind that permits the provision of an opinion without
being affected by influences that compromise professional judgment, allowing an individual
to act with integrity, and exercise objectivity and professional judgment.

20. Independence in appearance – The avoidance of facts and circumstances that are so significant
a reasonable and informed third party, having knowledge of all relevant information, including
any safeguards applied, would reasonably conclude a firm’s, or a member of the assurance
team’s, integrity, objectivity or professional skepticism had been compromised.

Professional Skepticism and Professional Judgement

21. Professional skepticism – An attitude that includes a questioning mind, being alert to
conditions which may indicate possible misstatement due to error or fraud, and a critical
assessment of evidence.

22. Professional judgment – The application of relevant training, knowledge and experience,
within the context provided by auditing, accounting and ethical standards, in making informed
decisions about the courses of action that are appropriate in the circumstances of the audit
engagement.

Audit Evidence
23. Evidence –all information used by the auditor in arriving at the conclusions on which the audit
opinion is based. Evidence includes: the information contained in the accounting records
underlying the financial statements and other information.

24. Accounting records include the following:

A. Records of initial entries and supporting records
B. Checks, records of electronic fund transfers, invoices, and contracts
C. General and subsidiary ledgers
D. Journal entries and other AJE to the financial statements that are not reflected in formal
journal entries
E. Records such as worksheets and spreadsheets supporting cost allocations, computations,
reconciliations and disclosures.

25. Accounting records, on their own, do not constitute sufficient, appropriate audit evidence
(other evidence must be obtained). Other information includes:
A. Minutes of meetings and confirmations from third parties
B. Analysts’ reports comparable data about competitors (benchmarking)
C. Controls manuals
D. Information obtained by the auditor from inquiry, observation and inspection

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E. Other information developed by, or available to, the auditor that permits the auditor to
reach conclusions through valid reasoning.

26. Attributes of audit evidence (REVIEW):

A. Sufficiency – measure of quantity of audit evidence. As the risk of material misstatement
increases, more audit evidence is likely to be required.
B. Appropriateness – measure of the quality of audit evidence (relevance and reliability). The
higher the quality of audit evidence, the less audit evidence may be required.

Audit Materiality and Audit Risk

27. Materiality – “Information is material if its omission or misstatement could influence the
economic decisions of users taken on the basis of the financial statements.” What is material
is a matter of professional judgment.

28. Materiality should be considered by the auditor when determining the nature, extent and timing
of substantive tests and when evaluating the effect of misstatements.

29. Audit risk is the risk that the auditor gives an inappropriate audit opinion when the FS are
materially misstated.

30. The auditor should use professional judgment to assess audit risk and to design audit
procedures to ensure audit risk is reduced to an acceptably low level.

31. Components of Audit Risk

A. Inherent risk – susceptibility of an account balance or a class of transactions to
misstatement that could be material, Individually Or When Aggregated (IOWA) with
misstatements in other balances or classes, assuming that there were no related internal
controls.

B. Control risk – the risk that a misstatement that could occur in an account balance or class
of transactions and that could be material IOWA, will not be prevented or detected and
corrected on a timely basis by the accounting and internal control systems.

C. Detection risk – the risk that an auditor’s substantive procedures will not detect a
misstatement that exists in an account balance or class of transactions that could be material
IOWA.

32. The auditor should consider materiality and its relationship with audit risk when conducting
an audit engagement.

33. There is an inverse relationship between materiality and audit risk. The higher the materiality
level, the lower the audit risk and vice-versa.

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Theoretical Framework of Auditing

34. The theoretical framework of auditing has been developed over the years, based on the work
of by Robert K. Mautz and Hussein Amer Sharaf (1961). More concepts have been added by
local and international authors.

35. Theoretical framework of auditing:

A. The data to be audited can be verified.
B. Auditors must have independence and freedom from management constraint.
C. An audit benefits the public.
D. In the absence of clear evidence to the contrary, what was held true in the past for the client
enterprise will hold true in the future.
E. There should be no long-term conflict between the auditors and the management, although
short-term conflicts may exist between managers who prepare data and auditors who
examine the data.
F. Effective internal control structures reduce the probability of irregularities and
misstatements in the financial statements.

Limitations of Financial Statement Audits

36. Since an audit of financial statements is an assurance engagement, the limitations of assurance
engagements also apply to audits of financial statements (see Module 1 item 24).

37. An audit of financial statements is not a guarantee of the exactness or accuracy of assertions
in the financial statements.

38. Human weakness, such as fatigue and carelessness, may cause auditors to overlook pertinent
evidence, examine the wrong type of evidence, or draw the wrong conclusions from the
evidence examined.

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Module 4Q – Exercises on Financial Statement Audits

Instruction: Select the letter of the best answer.

1. A structured representation of historical financial information, including related notes,

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.
A. Annual report C. Accounting records
B. Engagement documentation D. Financial statements

2. The criteria for evaluating quantitative information vary. For example, in the audit of historical
financial statements by CPA firms, the criteria are usually
A. PFRS or GAAP C. National Internal Revenue Code
B. PSAs D. SEC Circulars

3. Which of the following parties is responsible for an entity’s financial statements?

A. Those charged with governance and entity management.
B. The external audit team.
C. The partner who signs the audit report.
D. The Philippine Securities and Exchange Commission.

4. This term describes the role of person(s) or organization(s) with responsibility for overseeing
the strategic direction of the entity and obligations related to the accountability of the entity.
A. Governance C. Control environment
B. Audit committee D. Management

5. This comprises officers and others who also perform senior managerial functions, and includes
directors and the audit committee only in those instances when they perform such functions.
A. Top rank personnel C. Board of directors
B. Those charged with governance D. Management

6. An operating committee of a company's board of directors that is in charge of overseeing

financial reporting and disclosure.
A. Governance C. Control environment
B. Audit committee D. Management

7. Identify the concept: “A client’s financial statements may be materially false and/or
misleading.”
A. Business risk. C. Client risk.
B. Information risk. D. Risk assessment.

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8. Which of the following methods is most commonly used to reduce information risk?
A. Allow users to verify information.
B. Users share information risk with management.
C. Have the financial statements audited.
D. Allow all users to prepare the statements.

9. The following are conditions that create a demand from users for assurance on reliability of
financial information:
A. Transactions that are numerous and complex.
B. Users separated from accounting records by distance and time.
C. Financial decisions that are important to investors and users.
D. All of the choices are examples of the said conditions.

10. Which of the following best describes the reason why independent auditors report on financial
statements?
A. A management fraud may exist and it is more likely to be detected by independent
auditors.
B. A poorly designed internal control structure may be in existence.
C. A misstatement of account balances may exist and is generally corrected as the result
of the independent auditor’s work.
D. Different interests may exist between the company preparing the statements and the
persons using the statements.

11. The best statement of the responsibility of the auditor with respect to audited financial
statements is:
A. The auditor’s responsibility on fair presentation of financial statements is limited only
up to the date of the audit report.
B. The auditor’s responsibility is confined to his expression of opinion about the audited
financial statements.
C. The responsibility over the financial statements rests with the management and the
auditor assumes responsibility with respect to the notes of financial statements.
D. The auditor is responsible only to his qualified opinion but not for any other type of
opinion.

12. The general principles for conducting financial statement audits include which of the
following?
A. Compliance with the Code of Ethics for CPAs.
B. Compliance with Philippine Standards on Auditing.
C. Planning and performing the audit with professional skepticism.
D. All of the choices apply.

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13. Philippine Standards on Auditing (PSAs) should be looked upon by practitioners as:
A. Ideals to strive for, but which are not achievable.
B. Maximum standards which denote excellent work.
C. Benchmark to be used on all audits, reviews, and compilations.
D. Minimum standards of performance which must be achieved on each audit
engagement.

14. An attitude that includes a questioning mind, being alert to conditions which may indicate
possible misstatement due to error or fraud, and a critical assessment of evidence.
A. Professional skepticism C. Conservative advocacy
B. Materiality D. Reasonable assurance

15. The phrase used to express the auditor’s opinion is:

A. “absence of material and pervasive misstatements in the financial statements”
B. “present fairly, in all material respects”
C. “provide reasonable, but not absolute assurance”
D. All of these choices are acceptable phrases to express the auditor’s opinion.

16. This means the gathering of the audit evidence necessary for the auditor to conclude that there
are no material misstatements in the financial statements, taken as a whole.
A. Professional judgment C. Audit risk
B. Conservatism D. Reasonable assurance

17. This term refers to the possibility of harm or loss or danger. It can also refer to a factor, thing,
or element or course involving uncertain danger; or a hazard.
A. Materiality B. Jeopardy C. Contingency D. Risk

18. Which of the following best describes audit risk?

A. The susceptibility of an account balance or class of transactions to misstatement that
could be material, individually or when aggregated with misstatements in other
balances of classes, before consideration of any related controls.
B. The risk that a misstatement that could occur in an account balance or class of
transactions and that could be material individually or in the aggregate, will not be
prevented or detected and corrected on a timely basis by the company’s internal control.
C. The risk that an auditor’s substantive procedures will not detect a misstatement that
exists in an account balance or class of transactions that could be material, individually
or when aggregated with misstatements in other balances or classes.
D. The risk that the auditor gives an inappropriate audit opinion when the financial
statements are materially misstated.

19. Inherent risk and control risk collectively are known as:
A. The dual risk team C. The risk of material misstatement
B. The risk of information dissemination D. The dependent variables of risk

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20. This term refers to the application of relevant training, knowledge and experience, within the
context provided by auditing, accounting and ethical standards, in making informed decisions
about the courses of action that are appropriate in the circumstances of the audit engagement
A. Professionalism C. Professional judgment
B. Conservatism D. Materiality

21. An audit has inherent limitations that affect the auditor’s ability to detect material
misstatements. Which of the following is among the factors that result to these inherent
limitations?
A. Use of testing.
B. Inherent limitations of accounting and internal control system.
C. Evidence that is basically persuasive rather than conclusive.
D. All of the choices properly describe factors that result to inherent limitations of audits.

-end of module-

Illustrative Example: Audit Report

INDEPENDENT AUDITOR’S REPORT

To the Stockholders and Board of Directors
Learning Advancement Review Center, Inc.
One LEAD Building
Don Jorge Santiago Industrial Park
E. Garcia Avenue, Bagayao Global City
Taguig City

Opinion

We have audited the financial statements of Learning Advancement Review Center, Inc. (the Company), which
comprise the statement of financial position as at December 31, 2017, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Company as at December 31, 2017, and its financial performance and its cash flows for the year then ended in
accordance with Philippine Financial Reporting Standards (PFRSs).

Basis for Opinion

We conducted our audit in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of
our report. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants
in the Philippines (Code of Ethics) together with the ethical requirements that are relevant to our audit of the financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

For each matter listed in the following pages, our description of how our audit addressed the matter is provided in that
context.

Risk

The economic climate and levels of competition remain challenging for the Company. The Company has completed
a Strategic Review, details of which were announced in the half year statement, and as a result has decided to close or
curtail some of its operations. There is therefore a risk that the impairment charge may be misstated. Determining the
level of impairment involves forecasting and discounting future cash flows and estimation of recoverable amounts
which are inherently uncertain. This is one of the key judgmental areas that our audit has concentrated on.

Our response

Our audit procedures included, among others, considering the impairment risk associated with the following different
types of asset:

• In respect of assets within review school branches which continue to operate we critically assessed and
challenged the Company’s impairment model. This included consideration of the discounted cash-flow
forecasts on a branch by branch basis and assessing the cash flow forecasts against the historical performance
of those branches and against the Company’s budgets. We assessed the appropriateness of the discount rate
including benchmarked it against similar national review centers. We also recalculated the impairment model
to assess the sensitivity of the key assumptions including growth rate and discount rate;

• in respect of fixtures and fittings within branches which had either been closed or were identified by the
Company for closure as a result of the Strategic Review, we critically assessed the Company’s identification
of assets that were obsolete, using our experience of the Company and review of historical experience,
whether such assets have any recoverable value;

• in respect of land and buildings which had been identified and announced in the half year statement as surplus
to requirements, or where development plans had been aborted, we considered whether such assets had been
written off or impaired where necessary down to their recoverable amounts. We critically challenged the
Company’s assumptions in relation to recoverable amounts with reference to external third party valuations
obtained by the Company. We considered the qualifications and independence of the appraisers and the
movement in market values of property in relevant locations; and

• we have also considered the adequacy of the Company’s disclosures about the degree of estimation involved
in determining the amount of impairment and the sensitivity to key assumptions involved.

Risk

The Company has significant intangible assets arising from the acquisition of products both launched and in
development. Recoverability of these assets is based on forecasting and discounting future cash flows, which are
inherently highly judgmental. For products in development the main risk is achieving successful trial results and
obtaining required regulatory approvals. For launched products, the key risk is the ability to successfully
commercialize the individual product concerned.

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Our response

In this area our principal audit procedures included testing the Company’s controls surrounding intangible asset
impairments and evaluating the Company’s assumptions used in assessing the recoverability of intangible assets, in
particular, revenue and cash flow projections, useful economic lives and discount rates. We also performed sensitivity
analysis over individual intangible asset models, where there was a higher risk of impairment, to assess the level of
sensitivity to key assumptions and focus our work in those areas. For products in development, a key assumption is
the probability of obtaining the necessary clinical and regulatory approvals. Our procedures for products in
development included critically assessing the reasonableness of the Company’s assumptions through consideration of
trial readouts, regulatory announcements and the Company’s internal governance and approval process. We also
interviewed a range of key Research, Development and Commercial personnel and compared the assumptions with
industry practice where available. For launched products we challenged key assumptions including the size of the
review school market, the product’s projected share of this and expected pricing and associated costs. Our procedures
also included holding discussions with relevant management personnel and challenging management’s statements by
reviewing analyst commentaries, consensus forecasts and retrospective assessment of the accuracy of the Company’s
projections. We also assessed the adequacy of related disclosures in the Company’s financial statements.

Other Information

Management is responsible for the other information. The other information comprises the information included in
the SEC Form 17-A and Annual Report for the year ended December 31, 2017. The SEC Form 17-A and Annual
Report for the year ended December 31, 2017 are expected to be made available to us after the date of this auditor’s
report.

Our opinion on the financial statements does not cover the other information and we will not express any form of
assurance conclusion thereon.

In connection with our audits of the financial statements, our responsibility is to read the other information identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audits, or otherwise appears to be materially misstated.

Other Matter

The statement of comprehensive income, statement of changes in equity and statement of cash flows for December
31, 2016 were audited by another auditor who expressed an unmodified opinion on those statements on February 5,
2017.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with
PFRSs, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
PSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Mr. George D.R. James.

James, Sison & Co.

BOA Registration No. 1234,
valid from December 6, 2016 to December 31, 2019
SEC Accreditation No. 0001-FR-900,
issued on January 10, 2017; effective until January 9, 2020 (Group F)
TIN 007654321

By:

George D.R. James

Partner
CPA License No. 190614
SEC Accreditation No. 0719-AR-80
issued on June 4, 2016; effective until June 3, 2019, (Group F)
TIN 987654321
BIR Accreditation No. 10-2720096-14-2015
issued on September 1, 2015, effective until September 1, 2018
PTR No. A-1234567,
issued on January 10, 2018, Taguig City

Taguig City, Philippines

March 30, 2018

(all names, including CPA license numbers, accreditation numbers, issuance dates, expiration dates and locations
mentioned are fictitious and intended for illustrative purposes only. Any similarities with actual names, license
numbers, accreditation numbers, issuance dates, expiration dates and locations are purely coincidental.)

~~ NOW IS THE TIME TO MAKE A COMMITMENT. ~~

Module 4Q – Financial Statement Audits 38