Auditing theory

The chairman should have been or presently a senior practitioner in public accountancy. 14. The following sectors represented by the PICA to the membership of AAAS have one representative, except a. Government c. Commerce and industry b. Public practice d. Academe 15. Statements on financial accounting standards constituting GAP are issued by the a.

Philippine Institute of Spas. C. Audit Standards and Practices Council. B. Securities and Exchange Commission. D. Accounting Standards Council. 16. Indicate whether the following functions would be performed by: P S – Senior M – Manager AS – Audit Assistant (1) Supervises two or more concurrent audit engagements Performs detailed audit procedures Overall responsibility for audit Signs audit report s d. 17. The amount of audit fees depend largely on the – Partner a. Size and capitalization of the company under audit. B. Amount of profit for the year. C. Availability of cash. . Volume of audit work and degree of competence and responsibilities involved. Page 3 of 7 18. In determining audit fees, an auditor may take into account each of the following except a. Volume and intricacy of work involved. C. Number and cost of manors needed. B. Degree of responsibility assumed. D. Size and amount of capital of client. 19. Under this method of billing a client, the external auditors charges on the basis of time spent by principals/partners, supervisors, seniors and Juniors at predetermined rates agreed upon with the client Maximum fee basis c.

Flat sum basis Retainer basis d. Per diem basis RA No. 9298 – Philippine Accountancy Act of 2004 and its AIR 1 . Which of the following is not one of the specified objectives of the Accountancy Act of 2004? A. Examination for registration of Spas. B. Supervision, control, and regulation of accounting practice. C. Standardization and regulation of accounting education. D. Promulgation of accounting and auditing standards. In all of the following situations except one, a person is deemed to be engaged in professional accounting practice.

Which of them is the exception? A. Performing audits or verification of financial transactions and records for more than one client. B. Employed as the department chairman that supervises the BAS program of an educational institution. C. Employment as controller of a private business enterprise and such employment squires that the holder thereof should be a CPA. D. Appointment in the government where first grade civil service eligibility is a prerequisite. A person is not deemed to be engaged in professional accounting practice if a.

Her merely holds himself out as skilled in the science and practice of accounting and qualified to render services as a CPA. B. He merely offers to render services as a CPA to the public, but does not actually render such services. C. He offers or renders bookkeeping services to more than one client. D. He installs and revises accounting systems for more than one client. Practice in Public Accountancy shall constitute in a person a. Involved in decision making requiring professional knowledge in the science of accounting, or when such employment or position requires that the holder thereof must be a certified public accountant. . In an educational institution which involve teaching of accounting, auditing, management advisory services, finance, business law, taxation, and other technically related subjects. C. Who holds, or is appointed to, a position in an accounting professional group in government or in a government owned and/or controlled reparation, including those performing proprietary functions, where decision making requires professional knowledge in the science of accounting, d.

Holding out himself/herself as one skilled in the knowledge, science and practice of accounting, and as a qualified person to render professional services as a certified public accountant; or offering or rendering, or both, to more than one client on a fee basis or otherwise. Any position in any business or company in the private sector which requires supervising the recording of financial transactions, preparation of financial tenements, coordinating with the external auditors for the audit of such financial statements and other related functions shall be occupied only by a duly registered CPA.

Provided (choose the incorrect one) a. That the business or company where the above position exists has a paid-up capital of at least and/or an annual revenue of at least b. The above provision shall apply only to persons to be employed after the effectively of the Implementing Rules and Regulations of RA 9298. C. The above provision shall not result to deprivation of the employment of incumbents to the position. D. None of the above.