1AT

1. Certain fundamental beliefs called "postulates" underlie auditing theory.
Which of the
following is not a postulate of auditing?
a. No long-term conflict exists between the auditor and the management of the enterprise
under audit.
b. Economic assertions can be verified.
c. The auditor acts exclusively as an auditor.
d. An audit has a benefit only to the owners.

2. In all cases, audit reports must
a. Be signed by the individual who performed the audit procedures.
b. Certify the accuracy of the quantitative information which was audited.
c. Communicate the auditor’s finding to the general public.
d. Inform readers of the degree of correspondence between the quantifiable information
and the established criteria.

3. The auditor communicates the results of his or her work through the medium of the
a. Engagement letter c. Management letter.
b. Audit report d. Financial statements.

4. As used in auditing, which of the following statements best describes "assertions"?
a. Assertions are the representations of management as to the reliability of the
information system.
b. Assertions are the auditor's findings to be communicated in the audit report.
c. Assertions are the representations of management as to the fairness of the
financial statements.
d. Assertions are found only in the footnotes to the financial statements.

5. The expertise that distinguishes auditors from accountants is in the
a. Ability to interpret generally accepted accounting principles.
b. Requirement to possess education beyond the Bachelor’s degree.
c. Accumulation and interpretation of evidence.
d. Ability to interpret ASC Statements.

6. The framework for auditing and related services as addressed by PSA excludes
a. Review c. Compilation
b. Tax services d. Agreed upon procedure

7. It refers to the level of auditor’s satisfaction as to the reliability of an assertion being made
by one party for use by another party.
a. Confidence level c. Assurance level
b. Reasonableness level d. Tolerable level

8. Indicate the level of assurance provided by audit and related services.
a b c d
 Audit High High Negative Absolute
 Review Moderate None Moderate High
 Agreed-upon procedures None None None Limited
 Compilation None None None None

9. Which of the following is true of the report based on agreed-upon-procedures?
a. The report is restricted to those parties who have agreed to the procedures to be
performed.
b. The CPA provides the recipients of the report limited assurance as to reasonableness
of the assertion(s) presented in the financial information.
c. The report states that the auditor has not recognized any basis that requires
revision of financial statements.
d. The report should state that the procedures performed are limited to analytical
procedures and inquiry.

10. Which of the following is an objective of a review engagement?
a. Expressing a positive opinion that the financial information is presented in conformity
with generally accepted accounting principles.
b. Expressing a limited assurance to users who have agreed as to procedures that
will be performed by the CPA.
c. Reporting whether material modifications should be made to such financial
statements to make them conform with generally accepted accounting
principles.
d. Reporting that the financial statements, in all materials respects, fairly present the
financial position and operating results of the client.

11. According to Philippine Standard on Auditing, the procedures employed in doing compilation
are:
a. Designed to enable the accountant to express a limited assurance.
b. Designed to enable the accountant to express a negative assurance.
c. Not designed to enable the accountant to express any form of assurance.
d. Less extensive than review procedures but more extensive than agreed-upon
procedures.

12. Any services in which the CPA firm issues a written communication that express a
conclusion with respect to the reliability of a written assertion that is the responsibility of
another party is a (n)
a. Accounting and bookkeeping service c. Attestation
service
b. Management advisory service d. Tax service

13. The three types of attestation services are:
a. Audits, review, and compilations
b. Audits, compilations, and other attestation services
c. Reviews, compilations, and other attestation services
d. Audits, reviews, and other attestation services

14. Which of the following is not primary category of attestation report?
a. Compilation report
b. Review report
c. Audit report
d. Special audit report based on a basis of accounting other than generally
accepted accounting principles.

15. The primary goal of the CPA in performing the attest function is to
a. Detect fraud
b. Examine individual transactions so that the auditor may certify as to their validity
c. Determine whether the client's assertions are fairly stated
d. Assure the consistent application of correct accounting procedures

16. Which of the following criteria is unique to the independent auditor’s attest function?
a. General competence
b. Familiarity with the particular industry of each client
c. Due professional care
d. Independence

17. Assurance engagement
a. Is an engagement in which a practitioner is engaged to issue, or does issue, a
written communication that expresses a conclusion about the reliability of a
written assertion that is the responsibility of another party.
b. Is a systematic process of objectively 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. Is an engagement in which the auditor provides a moderate level of assurance
that the information subject to the engagement is free of material misstatement.
d. Is 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 user.

18. The single feature that most clearly distinguishes auditing, attestation, and assurance is
a. Type of service. c. Scope of services.
Training required to perform the service d. CPA’s approach to the service

1AT

Uploaded by

Copyright:

Available Formats

1AT

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1AT

Uploaded by

Copyright:

Available Formats

1. Certain fundamental beliefs called "postulates" underlie auditing theory.

You might also like