Which of the following is an element of a CPA firm’s quality control system that should be considered in establishing its quality control policies and procedures?

The relationship between control risk and detection risk is ordinarily

Mill, CPA, was engaged by a group of royalty recipients to apply agreed-upon procedures to financial data supplied by Modern company regarding Modern’s written assertions about its compliance with contractual requirements to pay royalties. Mill’s report on these agreed-upon procedures should contain a (an)

The external auditor may use the work of internal auditors if

On the basis of the audit evidence gathered and evaluated, an auditor decides to increase the assessed level of control risk from that originally planned. To achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor would

Rodolfo I. Potenciano, CPA (RIP), I will Pass Inc.’s external auditor performed analytical procedures during the audit of the latter’s financial statements as of and for the year ended December 31, 2017. Upon performing the analytical procedures, RIP observes that the operating income has significantly declined between the preceding year and the current year.  As such, RIP should next

In obtaining an understanding of the entity’s internal controls that are relevant to audit planning, an auditor is required to obtain a knowledge about the

Which of the following are considered control environment factors?

Human resources
Detection                            Policies and
    Risk                                 practices  

An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that

Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements?

During the audit of the 2019 financial statements of Goldirock’s Corp, an entity which supplies hardware materials to construction companies, Mr. Henry Chips received several types of documentary evidences. Which of the following is considered as the most reliable?

Wald, CPA, is preparing unaudited financial statements for Zaikin Company. During the engagement, Wald becomes aware that the statements are misleading. Wald should

In accordance with the provisions of Republic Act No. 9298, the following are the available penalties against violating CPAs

I. Revocation of CPA license.

II. Suspension of the CPA license

III. Imprisonment and/or fines

To exercise due professional care, an auditor should

How should the Philippine Standards on Auditing be looked on by CPA practitioners?

The primary difference between an audit of the balance sheet and the audit of income statement is that the audit of the balance sheet date more with the verification of

Before accepting an engagement with a new client, the CPA firm shall assess the following except

Yayamaning Co. engages the services of Mr. Ka Hirapan, CPA to make a project study on the expanded food vending operations of the Corporation with the corresponding staffing and compensation package for its executive staff. Ka Hirapan, however, has primarily auditing expertise and only in general merchandising operations.  Mr. Ka Hirapan may properly

Engagement letters are widely used in practice for professional engagements of all types. The primary purpose of the engagement letter is to

Internal accounting control comprises the plan of organization and the procedures and records that are concerned with the safeguarding of assets and the

The audit risk against which the auditor requires reasonable protection is a combination of two separate risks. The first of these is that material errors will occur in the accounting process by which the financial statements are developed and the second is that

A and Z are partners in a two-member partnership providing CPA services. A dies, leaving Z as the sole survivor in the partnership.  Subsequent to the death of A, the surviving partner may continue to practice as an individual under the existing firm title (which includes A’s name) for not more than

After accepting an assurance engagement, a practitioner is not allowed to change the engagement to a non-assurance engagement or from a reasonable assurance engagement to a limited assurance engagement, except when there is reasonable justification for the change. Which of the following ordinarily will justify a request for a change in the engagement?

1. 1. A change in circumstances that affects the intended user’s requirements.
   2. A misunderstanding concerning the nature of the engagement.

An accountant providing a compilation service must

A firm of CPAs may use policies and procedures such as notifying professional personnel as to the name of audit clients having publicly held securities and conforming periodically with such personnel that prohibited relations do not exist. This is done to achieve effective quality control in which of the following areas?

The level of assurance provided by an audit of detecting a material misstatement is referred to as:

Which of the following is correct regarding benefits of audit planning?

When a practitioner knows that a subject of an assurance engagement may be misleading because they were not prepared in conformity with its criteria, he or she must issue

The responsibility for adopting sound accounting policies, maintaining an adequate internal control structure, and making fair representations in the financial statements rests

An auditor may compensate for a weakness in the internal control structure by increasing the

Which of the following is correct regarding business risk?

Which of the following statements is not correct about materiality?

Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement?