119052810-MCQ-RA-9298

AUDITING THEORY

Red Sirug RA 9298 – PHILIPPINE ACCOUNTANCY ACT OF 2004 (Multiple Choice Questions)

1. The objective of the Philippine Accountancy Act of 2004 includes: a. The standardization and regulation of accounting education. b. The examination for registration of certified public accountants. c. The supervision, control, and regulation of the practice of accountancy in the Philippines. d. All of the above 2. The Philippine Accountancy Act of 2004 shall provide for and govern: a. The supervision, control, and regulation of the practice of accountancy in the Philippines. b. The standardization and regulation of accounting education. c. The examination for registration of certified public accountants. d. All of the above 3. The document that contains the norm and principles governing the practice of the accountancy profession in the highest standards of ethical conduct a. RA 9298 b. Code of Ethics for CPAs in the Philippines c. IRR to RA 9298 d. PSA 220 on Quality Control 4. The following statements relate to some of the provisions of RA 9298. Which is correct? a. Audit working papers are generally the property of the company whose financial statements were audited. b. After three (3) years, subject to certain conditions, the Board of Accountancy may order the reinstatement of a CPA whose certificate of registration has been revoked. c. The penal provision (Sec. 36) of RA 9298 applies only to the violation of any of the provisions of RA 9298 because its Implementing Rules and Regulations are unenforceable. d. It shall be the primary duty of the PRC and the BOA to effectively enforce the provisions of RA 9298. 5. Which of the following organization has been recognized by the Commission on October 2, 1975 per Accreditation No. 15, As Accredited Professional Organization? a. Board of Accountancy (BOA) b. Association of CPA's in Public Practice (ACPAPP) c. Association of CPAs in Education (ACPAE) d. Philippine Institute of CPAs (PICPA) 6. The area of practice of accountancy namely public accountancy, commerce and industry, academe / education and government are called: a. Sectors b. Scope of practice of accountancy c. Section d. Segment

7. As used in RA 9298, this term refers to the area of practice of accountancy: a. Segment b. Line c. Sector d. Section 8. A Certified Public Accountant or CPA is: a. A person who holds a valid Certificate of Registration issued by the PRC b. A person who holds a valid professional Identification Card issued by the PRC c. A person who holds a valid Certificate of Registration and a valid Professional Identification Card issued by the PRC d. A person who is engaged in the practice of public accountancy 9. A CPA is in public accounting practice when he/she: a. Holds, or is appointed to, in an accounting professional group in government or in a government-owned and/or controlled corporation where decision making requires professional knowledge in the science of accountin g. b. Represents his/her clients before government agencies on tax and other matters related to accounting. c. Represents his/her employer before government agencies on tax and other matters related to accounting. d. Teaches accounting, auditing, management advisory services, accounting aspect of finance, business law, taxation, and other technically related subjects. 10. Which of the following statements concerning the practice of accountancy in commerce and industry is incorrect? a. A CPA is in the practice of accountancy in commerce and industry when he/she is involved in decision making requiring professional knowledge in the science of accounting, as well as the accounting aspects of finance and taxation. b. A CPA is in the practice of accountancy in commerce and industry when he/she renders professional services as a Certified Public Accountant to more than one client on a fee basis. c. A CPA is in the practice of accountancy in commerce and industry when he/she represents his/her employer before government agencies on tax and other matters related to accounting. d. A CPA is in the practice of accountancy in commerce and industry when such employment or position requires that the

holder thereof must be a Certified Public Accountant.

AT – RA 9298

Red Sirug

knowledge, science and practice of accounting and as a qualified person to render professional services as a CPA to more than one client. b. A person is appointed as a marketing director of a government owned and controlled corporation. c. A person in educational institution teaching accounting, auditing, business law, taxation or other technically related subjects. d. A person representing his/her employer before government agencies on tax and other accounting related matters. 12. Which of the following statements concerning the practice of accountancy in the academe/education is incorrect? a. Members of the Integrated Bar of the Philippines are not allowed to teach business law and taxation subjects. b. The position of either the Dean or the Department Chairman or its equivalent that supervises the Bachelor of Science in Accountancy program of an educational institution is deemed to be in practice of accoun- tancy in the academe/education. c. CPAs are allowed to teach business law subjects. d. The position of either the Dean or the Department Chairman or its equivalent that supervises the Bachelor of Science in Accountancy program of an educational institution must be occupied only by a duly reg- istered CPA. 13. Which of the following statements concerning the practice of accountancy is correct? a. A CPA is in the practice of accountancy in the government when he/she is involved in the audit or verification of financial transactions and accounting records of his/her clients. b. A CPA is in public accountancy when he/she renders his/her professional services as a CPA to more than one client on a fee basis in the design, installation, review, and revision of accounting systems and controls. c. A CPA is in the practice of accountancy in the academe/education when he/she is in an educational institution teaching any of the subjects included in the BSA curriculum. d. A CPA is in the practice of accountancy in commerce and industry when his/her position requires civil service eligibility as a Certified Public Accountant. 14. Which is not permitted by RA 9298 to practice public accountancy? a. A CPA in individual capacity. b. A sole proprietorship. c. A general partnership. d. A corporation, whose stockholders are all CPAs. 15. Which is permitted by RA 9298 to practice public accountancy?

11. Which of the following does not constitute a practice of accountancy? a. A person holding out himself as one skilled in the

Page 1 a. A corporation whose stockholders are all CPAs b. A corporation whose some of stockholders are CPAs c. Limited liability partnership d. A non-stock corporation whose members are all CPAs

16. The names under which a CPA practices the profession must: a. Indicate any specialization. b. Contain more than three name. c. Include one fictitious name. d. Not misleading as to form of organization. 17. A certificate of accreditation shall be issued to CPA's in public practice only upon showing, in accordance with rules and regulations promulgated by the BOA and approved by the PRC, that such registration has acquired a: a. Minimum of 3 years meaningful experience in any of the areas of practice of accountancy including taxation. b. Minimum of 3 years meaningful experience in any of the areas of practice of accountancy. c. Minimum of 3 years meaningful experience in any of the areas of public practice including taxation. d. Minimum of 3 years meaningful experience in any of the areas of public practice excluding taxation. 18. The minimum meaningful experience in public accountancy as required by RA 9298 shall include: a. At least one year as audit assistant and at least one year as auditor in charge. b. At least one year as audit assistant and at least two years as auditor in charge. c. At least two years as audit assistant and at least two years as auditor in charge. d. At least two years as audit assistant and at least one year as auditor in charge.

AT – RA 9298

Red Sirug

19. Any position in any business or company in the private sector which requires supervising the recording of financial transactions, preparation of financial statements, 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 if the business or company where the above position exists has a. An annual revenue of at least P5,000,000.00 b. A total asset of at least P10,000,000 c. A paid-up capital of at least P10,000,000.00 d. A paid-up capital of at least P5,000,000.00 20. Individual CPAs, Firms or Partnerships of CPAs, including partners and staf members thereof shall register with the BOA and the PRC. If the application for registration of AB and Co., CPAs was approved on August 30, 2005, the registration will expire on a. Sept. 30, 2007 b. Dec. 31, 2007 c. Dec. 31, 2008 d. Aug. 30, 2007 21. CPAs, firms and partnerships of CPAs engaged in the practice of public accountancy including partners and staf members thereof, shall register with the PRC and the BOA, such registration to be renewed every a. Three years on or before December 31 b. Three years on or before September 30 c. Two years on or before December 31 d. Two years on or before September 30 22. Based on R.A. 9298, how many years can a partner who survived the death or withdrawal of other

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