AUDITING THEORY

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

1.

2.

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
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a CPA whose certificate of registration has been
revoked.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

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

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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 accountancy 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 registered 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?
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

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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.
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 staff 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
staff 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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partner(s) continue to practice under the partnership

name after becoming a sole practitioner?
a. 1 year
b. 2 years
c. 3 years
d. Indefinite period of time
23. Which of the following is not one of the qualifications
of the members of the Board of Accountancy?
a. He/She must not be a director or officer of
PICPA at the time of his appointment.
b. He/She must be a natural-born citizen and a
resident of the Philippines.
c. He/She must be a duly Certified Public
Accountant with at least ten years of
experience in practice of public
accountancy.
d. He/She must not have any direct or indirect
pecuniary interest in any school, college,
university, or institution offering a BS
Accountancy course or institution conducting
review classes in preparation for the licensure
examination at the time of his appointment to
the Board.
24. Which of the following is not one of the qualifications
of the members of the Board of Accountancy?
a. Must be a natural-born CPA and a resident
of the Philippines.
b. Must be a duly registered Certified Public
Accountant with at least ten years of experience
in practice of accountancy.
c. Must be of good moral character.
d. Must not have been convicted of crimes involving
moral turpitude.
25. No person shall serve the Professional Regulatory
Board of Accountancy for more than:
a. 3 years
b. 6 years
c. 9 years
d. 12 years
26. The President of the Philippines, upon the
recommendation of the Commission, may suspend or
remove any member of the Board of Accountancy.
Which of the following is not a valid ground for
suspension or removal of members of the Board of
Accountancy?
a. Neglect of duty or incompetence
b. A member of the Board manipulated the CPA
licensure examination results.
c. A member of the Board has been sued of
crimes involving moral turpitude.
d. A member of the Board has violated RA 9298.
27. Which statement is correct regarding the term of
office of the chairman and the members of the Board
of Accountancy (BOA)?
a. A person may serve in the Board of
Accountancy for eight consecutive years.
b. No person who has served three (3) successive
complete terms shall be eligible for
reappointment until the lapse of one (1) year
c. Appointment to fill up an unexpired term is to be
considered a complete term.
d. No person shall serve in the Board for more than
10 years.
28. Which of the following is not one of the functions of

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the Board of Accountancy specifically provided under

the RA 9298?
a. To monitor the conditions affecting the practice
of accountancy and adopt such measures
deemed proper for the enhancement and
maintenance of high professional, ethical,
accounting and auditing standards.
b. To make investigations as it deems necessary to
determine whether any person has violated any
provisions of this law or any standards
promulgated by the Board as part of the rules
governing the practice of accountancy
c. To delegate its power and function to
determine and prepare test questions for
the CPA licensure examination.
d. To conduct an oversight into the quality of audits
of financial statements through a review of the
quality control measures.
29. Which is the least function of the Board of
Accountancy?
a. To prepare, adopt, issue or amend syllabi at the
subjects for examinations in consultation with
the academe.
b. To investigate violations of the RA 9298
c. To prepare questions for the CPA licensure
examination which shall strictly within the scope
of the syllabi of the subjects for examination.
d. To supervise PICPA.
30. The following statements relate to the RA 9298.
Which statement is true?
a. The Professional Regulation Commission has the
authority to remove any member of the Board of
Accountancy for negligence, incompetence, or
any other just cause.
b. No person shall be appointed as a member
of the Board of Accountancy unless he has
been in the practice of accountancy for at
least 10 years, among others.
c. Insanity is not a ground for proceeding against a
CPA.
d. After three years, subject to certain conditions,
the Board of Accountancy may order the
reinstatement of a CPA whose certificate of
registration has been revoked.
31. Which of the following is not a function of the Board
of Accountancy?
a. To supervise the registration, licensure and
practice of accountancy in the Philippines
b. To prescribe and/or adopt a code of ethics for
the practice of accountancy
c. To issue, suspend, revoke, or reinstate the
certificate of registration for the practice of the
accountancy profession
d. To adopt an official seal of the
Commission.
32. The person authorized to remove a member of BOA
on valid grounds and after due process is:
a. The Commissioner of the PRC.
b. The Chairman of BOA, unless he is the one
under investigation.
c. The President of the Philippines.
d. Congress of the Philippines.
33. The following are the grounds for suspension or
removal of members of BOA, except
a. Neglect of duty.

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b. Incompetence.
c. Violation of the CPAs Code of Ethics.
d. Pending case involving moral turpitude.
34. Which of the following statements about the
composition of the Board of Accountancy is
incorrect?
a. The Board shall be composed of a chairman and
six members.
b. The members of the Board shall be appointed by
the President of the Philippines from a list of
three recommendees for each position and
ranked by the Commission from a list of five
nominees for each position submitted by
Accredited Professional Organization or PICPA.
c. The Board shall elect a chairman from
among its members to serve for a term of
one year.
d. If the APO fails to submit its nominees within 60
days prior to the expiry of the term of an
incumbent chairman or member, the Commission
in consultation with the Board shall submit to the
president a list of three nominees for each
vacant position.
35. Who has the power to suspend or remove any
member of the Board of Accountancy?
a. The Chairman of the FRSC
b. The Chairman of the PRC
c. The Chairman of the AASC
d. The President of the Philippines
36. This standard setting body shall have a chairman
who had been or presently a senior accounting
practitioner in any of the scope of accounting
practice.
a. PICPA
b. ACPAPP
c. FRSC
d. AASC
37. This standard setting body shall have a chairman
who had been or presently a senior accounting
practitioner in public accountancy.
a. BOA
b. AASC
c. FRSC
d. ACPAE
38. The Chairman and the members of the FRSC and
AASC shall have a term of
a. 1 year
b. 3 years
c. 5 years
d. 6 years
39. The following statements relate to the term of office
of the Chairman and
members of the Board of
Accountancy (BOA). Which is false?
a. The Chairman and members of the BOA shall
hold office for a term of three (3) years.
b. Any vacancy occurring within the term of a
member shall be filled up for the unexpired
portion of the term only.
c. Appointment to fill up an unexpired term is not
to be
considered as a complete term.
d. No person who has served two successive
complete terms as chairman or member
shall be eligible for reappointment until

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the lapse of two (2) years.

40. The Board of Accountancy shall elect a vice-chairman
from among its members for a term of
a. Two (2) years
b. One (1) year
c. Three (3) years
d. Five (5) years
41. According to Section 9(A) of the IRR, the
Commission upon the recommendation of the Board
shall create an accounting standard setting body to
be known as the
a. Accounting Standards Board
b. Accounting Standards Council
c. Financial Reporting Standards Council
d. Financial Reporting Standards Board
42. The Financial Reporting Standards Council shall be
composed of
a. 8 members
b. 14 members
c. 15 members
d. 17 members
43. According to Section 9(A) of the IRR, the
Commission upon the recommendation of the Board,
shall create an auditing standard setting body to be
known as the
a. Auditing and Assurance Standards Council
(AASC)
b. Auditing Standards Board
c. Auditing Standards Council
d. Auditing Standards and Practices Council (ASPC)
44. The Auditing and Assurance Standards Council
(AASC) shall be composed of
a. 8 members
b. 14 members
c. 15 members
d. 17 members
45. Which of the following does not have representation
in the Financial Reporting Standards Council (FRSC)?
a. Board of Investments (BOI)
b. Philippine Institute of CPAs (PICPA)
c. Bureau of Internal Revenue (BIR)
d. Board of Accountancy (BOA)
46. The following are represented both to the Financial
Reporting Standards Council (FRSC) and Auditing
and Assurance Standards Council (AASC), except:
a. Bangko Sentral ng Pilipinas
b. Bureau of Internal Revenue
c. Securities and Exchange Commission
d. Board of Accountancy
47. Which of the following functions to promulgate
auditing standards?
a. National Accredited Professional Organization
b. Financial Reporting Standards Council
c. Auditing and Assurance Standards Council
d. ACPAPP
48. The auditing standard setting body created by the
Board of Accountancy is known as
a. Accounting Standards Council (ASC)
b. Financial Reporting Standards Council (FRSC)
c. Auditing Standards and Practices Council (ASPC)
d. Auditing and Assurance Standards Council

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(AASC)
49. Which of the following statements about Accounting
Standard Setting Council is false?
a. The accounting standard setting body is to be
known as Financial Reporting Standards Council
(FRSC).
b. The Accounting standard setting body shall be
composed of a chairman and fourteen members.
c. The public accounting practice is the sector
that is most represented in the accounting
standard setting council.
d. The chairman and members of the standard
setting council shall be appointed by the
Commission upon the recommendation of the
Board in coordination with APO.
50. The sector that is most represented in the AASC is
the:
a. Commerce and Industry
b. Academe
c. Public Practice
d. Government
51. Which of the following statements is correct about
AASC?
a. The AASC shall be composed of a chairman and
six members.
b. The chairman and members of the AASC shall be
appointed by the President of the Philippines
from a list of three recommendees ranked by the
Commission from the list of 5 nominees for each
position submitted by APO.
c. The chairman and members of the AASC
shall have a term of three years renewable
for another term.
d. The AASC shall elect a Vice-Chairman from
among its members for a term of one year.
52. Which of the following statements about Accounting
Standard Setting Council is false?
a. The accounting standard setting body is to be
known as Financial Reporting Standards Council
(FRSC).
b. The Accounting standard setting body shall be
composed of a chairman and fourteen
members.
c. The chairman and members of the standard
setting council shall
be appointed by the Commission upon the
recommendation of the Board in coordination
with APO.
d. The public accounting practice is the sector
that is most represented in the accounting
standard setting council.
53. Educational Technical Council (ETC) differs from
accounting and auditing standard setting councils in
that
a. The chairman and members of ETC are
appointed by the Commission.
b. The chairman of ETC must have been or
presently a senior accounting practitioner
in Academe/Education.
c. ETC is composed of 15 members with a
chairman.
d. The chairman and members of ETC have a three
year term renewable for another term.
54. Which of the following is not one of the functions of

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ETC?
a. Determine a minimum standard curriculum for
the study of accountancy to be implemented in
all schools offering BS Accountancy.
b. Establish teaching standards, including the
qualifications of the members of the faculty of
schools and colleges of accountancy.
c. Monitor the progress of the program on the
study of accountancy and undertaking measures
for the attainment of a high quality accountancy
education in the country.
d. Recommend to the BOA the revocation of
the Certificate of Registration and the
professional identification card of an
individual CPA or CPA firm including any of
their members who have not observed the
quality control measures or who have not
complied with the standards of quality
prescribed for the practice of public
accountancy.
55. Which of the following is not a requisite in applying
for the CPA licensure examinations?
a. Good moral character
b. Natural-born citizen of the Philippines
c. Holder of the degree of Bachelor of Science in
Accountancy
d. Has not been convicted of any criminal offense
involving moral turpitude
56. An applicant for the CPA licensure examination
should be
I. A Filipino citizen
II. Of good moral character
III. A holder of the degree of Bachelor of Science in
Accountancy
a. I and II only
b. I and III only
c. II and III only
d. I, II, and III
57. The following documents shall be submitted by
applicants for the CPA licensure examination, except
a. Certificate of Live Birth in National Statistics
Office (NSO) security paper.
b. Marriage contract in NSO security paper
for married male applicants.
c. NBI clearance.
d. Transcript of records with indication therein of
date of graduation and Special Order number
unless it is not required.
58. A candidate who obtains the rating of seventy-five
percent (75%) and above in at least a majority of the
subjects shall receive a conditional credit for the
subjects passed. He/she shall take an examination in
the remaining subjects within
a. One (1) year from the preceding examination.
b. Two (2) years from the preceding
examination.
c. Three (3) years from the preceding examination.
d. Five (5) years from the preceding examination.
59. Which of the following statements is correct?
a. Any candidate who fails in two (2) complete CPA
board examinations will no longer be allowed to
take another set of examinations.
b. Any candidate who fails in two (2)
complete CPA board examinations shall be

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disqualified from taking another set of

examinations unless he/she submits
evidence to the satisfaction of the Board
that he/she enrolled in and completed at
least twenty-four (24) units of subjects
given in the licensure examination.
The examination in which the candidate was
conditioned and the removal examination oh the
subject in which he/she failed shall be counted
as two (2) complete examinations.
The refresher course should be completed within
two (2) years from the preceding examination.

he/she shall receive a conditional credit for the

subject passed.
c. A candidate who receives a conditional credit
shall take an examination on the remaining
subjects within two years from the preceding
examination.
d. A candidate who gets a conditional credit
and takes an examination on the
remaining subjects must get an average of
at least 75% on the subjects reexamined
and at least 65% in each of the subjects
reexamined.

60. Which of the following shall be issued to examinees

who passed the CPA licensure examination?
a. Certificate of accreditation
b. Personal identification card
c. Certificate of full compliance and PRC ID.
d. Certificate of registration and professional
identification card

65. The following are grounds for the suspension or

revocation of certificate of registration and
professional identification card, except:
a. Unprofessional or unethical conduct.
b. Practice in more than one field of
accountancy.
c. Possession of unsound mind.
d. Conviction of a criminal offense involving moral
turpitude.

c.

d.

61. To be qualified as having passed the CPA licensure

examination:
a. The candidate must have a general weighted
average of at least 75%.
b. The candidate must not have a grade lower than
65% in any given subject.
c. A and B
d. Neither A nor B
62. Any candidate who fails in 2 complete CPA Board
Examinations shall be disqualified from taking
another set of examination unless he or she submits
evidence to the satisfaction of the Board that
a. He/She enrolled in and completed at least
24 units of subjects given in the licensure
examination.
b. He/She enrolled the subjects given in the CPA
Board Examination in the regular course offering.
c. He/She is ready to take another set of
examination.
d. He/She enrolled in an educational institution
offering or conducting review classes in
preparation for CPA Board Examination.
63. The following statements relate to CPA examination
ratings. Which of the following is incorrect?
a. To pass the examination, candidates should
obtain a general weighted average of 75% and
above, with no rating in any subject less than
65%.
b. Conditioned
candidates
shall
take
an
examination in the remaining subjects within two
years from the preceding examination.
c. Candidates who obtain a rating of 75% and
above in at least four subjects shall receive a
conditional credit for the subjects passed.
d. Candidates who failed in four complete
examinations shall no longer be allowed to
take the examinations the fifth time.
64. The following statements relate to the rating in the
CPA licensure examination. Identify the incorrect
statement.
a. A candidate must have a general weighted
average of at least 75% with no grades lower
than 65% in any given subject in order to pass
the CPA licensure examination.
b. In the event a candidate obtains a rating of 75%
and above in at least a majority of the subjects,

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66. The following are grounds for refusal to issue a

certificate
of
registration
and
professional
identification card to any successful examinee
except:
a. Guilty of immoral and dishonorable conduct.
b. Conviction for a political offense.
c. Unsound mind.
d. Conviction of a criminal offense involving moral
turpitude.
67. A CPA whose certificate has been revoked:
a. Has committed a crime involving moral
turpitude.
b. Is required to take the CPA Board Licensure
examinations before reinstatement.
c. May be reinstated by the BOA after the
expiration of 2 years from the date of
revocation.
d. Can no longer be reinstated as a CPA.
68. The Board of Accountancy may issue certificate of
registration and professional identification card to
any successful examinee:
a. Of unsound mind
b. Convicted by a court of political offense.
c. Guilty of immoral or dishonorable conduct.
d. Who has falsely represented himself/herself in
his/her application for examination.
69. The Board of Accountancy may, after the expiration
of ____ years from the date of revocation of a
certificate of registration, reinstate the validity of a
revoked certificate of registration.
a. 2
b. 3
c. 4
d. 5
70. It involves a study or appraisal by the Board or its
duly authorized representatives, of the quality of
audit of financial statements through an evaluation of
the quality control measures instituted by the CPA
firm to ascertain compliance with ethical and
technical standards of public practice.
a. Quality review
b. Peer review
c. Compliance audit
d. External audit
71. A body created by the BOA to conduct an oversight

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of the quality of audit of financial statements by

reviewing the firms quality control is known as:
a. Quality Review Committee (QRC)
b. Financial Reporting Standards Council (FRSC)
c. Auditing and Assurance Service Council (AASC)
d. Educational Training Committee (ETC)
72. Which of the following is one of the functions of the
QRC?
a. To promulgate accounting and auditing
standards that will be generally accepted in the
Philippines.
b. To evaluate periodically the performance of
educational institutions offering accountancy
education.
c. To prescribe and or/ adopt a Code of Ethics for
the practice of accountancy.
d. To conduct a review on applicants for
registration to practice public accountancy
and render a report which shall be
attached to the application for registration.
73. All CPAs who are considered in the practice of
accountancy shall abide by the requirements, rules
and regulations on continuing professional education.
For this purpose, it is required that all registered
CPAs must complete a number of CPE units
equivalent to
a. 60 credit units in three years
b. 45 credit units in three years
c. 30 credit units in three years
d. 15 credit units in three years
74. For every CPE seminars or conventions attended,
participant CPAs shall get a CPE credit equivalent to
a. One credit unit per hour.
b. Two credit units per hour.
c. Three credit units per hour.
d. Five credit units per hour.
75. Unless otherwise exempted, registered CPAs in the
practice of accountancy who have not completed the
CPE requirements shall
a. Be dropped from the roster of CPAs.
b. Not be allowed to renew their professional
licenses.
c. Present evidence to the satisfaction of the Board
that they have the necessary knowledge, skills
and experience to discharge their professional
responsibility.
d. Submit a letter addressed to the Board indicating
the reasons for not complying with the CPE
requirements.
76. Which of the following statements is correct about
the PRC CPE Council?
a. The Council shall be composed of six members
and a chairperson.
b. The members of the Board shall choose a
chairperson from among themselves.
c. The members of the Council shall be appointed
by the Commission upon recommendation of the
Board in coordination with APO.
d. The chairperson and members of the Council
shall have a term of three years renewable for
another term.
77. How many CPE credit units must be accumulated by
a registered accounting professional within the 3year period?

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a.
b.
c.
d.

15 credit units
45 credit units
60 credit units
90 credit units

78. The following statements relate to CPE credit units.

Which is incorrect?
a. The total CPE credit units for registered
accounting professionals shall be sixty (60) credit
units for three (3) years, provided that a
minimum of fifteen (15) credit units shall be
earned in each year.
b. Any excess credit units in one year may be
carried over to the succeeding years within the
three-year period.
c. Excess credit units earned may be carried
over to the next three-year period
including credit units earned for doctoral
and master's degrees.
d. One credit hour of CPE program, activity or
source shall be equivalent to one (1) credit unit.
79. The following statements relate to the exemption
from CPE requirements. Which is false?
a. A registered professional shall be
permanently exempted from CPE
requirements upon reaching the age of 60
years old.
b. A registered professional shall be permanently
exempted from CPE requirements upon reaching
the age of 65 years old.
c. A registered professional who is working or
practicing his/her profession abroad shall be
temporarily exempted from compliance with CPE
requirements during the period of his/her stay
abroad provided that he/she has been out of the
country for at least two years immediately prior
to the date of renewal.
d. A registered professional who is furthering
his/her studies abroad shall be temporarily
exempted from compliance with CPE
requirements during the period of his/her stay
abroad provided that he/she has been out of the
country for at least two years immediately prior
to the date of renewal.
80. A registered professional shall be permanently
exempted from CPE requirements upon reaching the
age of
a. 55 years old
b. 65 years old
c. 60 years old
d. 70 years old
81. As defined in Annex "C" of the IRR, this refers to the
inculcation,
assimilation
and
acquisition
of
knowledge, skills, proficiency and ethical and moral
values, after the initial registration of a professional
that raise and enhance the professional's technical
skills and competence.
a. Professional Development
b. Continuing Professional Education
c. Continuing Professional Development
d. Professional Growth and Development
82. The PRC CPE Council
implementing its CPE
following statements is
Council's composition?
a. The PRC CPE Council

shall assist the BOA in

program. Which of the
incorrect concerning the
shall be composed of a

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chairperson and two (2) members.

b. The Chairperson shall be chosen from
among the members of the BOA by the
PRC.
c. The first member shall be the President or, in
his/her absence or incapacity, any officer chosen
by the Board of Directors of PICPA.
d. The second member shall be the President or, in
his/her absence or incapacity, any officer of the
organization of Deans or Department Heads of
schools, colleges or universities offering the
degree requiring licensure examination.
83. A registered CPA who is working or practicing his/her
profession or furthering abroad shall be temporarily
exempted from compliance with CPE requirements
during the period of his/her stay abroad, provided
that prior to the date of renewal he/she has been out
of the country for at least
a. Four years
b. Three years
c. Two years
d. One year
84. Rodz, CPA is applying for renewal of his professional
license. He is exempted from the CPE requirements
a. If he is at least 65 years old
b. If he is working abroad and he has been out of
the country for at least two years immediately
prior to the date of renewal.
c. Either A or B
d. Under no circumstances
85. Special/temporary permit may be issued by the
Board to the following persons except:
a. A foreign CPA engaged as a professor or lecturer
in the fields essential to accountancy education
in the Philippines.
b. A foreign CPA called for consultation or specific
purpose which is essential for the development
of the country and that there are no Filipino
CPAs qualified for such consultation or specific
purpose.
c. A foreign CPA with specialization in any branch
of accountancy and his/her service is essential
for the advancement of accountancy in the
Philippines.
d. A foreign CPA who can prove that the
country of which he or she is a citizen
admits citizens of the Philippines to the
practice of the same profession without
restriction.
86. Which of the following statements concerning the
issuance of Certificates of Registration and
Professional Identification Cards to successful
examinees is correct?
a. The Certificate of Registration issued to
successful examinees is renewable every three
(3) years.
b. The Professional Identification Card issued to
successful examinees shall remain in full force
and effect until withdrawn, suspended or
revoked in accordance with RA 9298.
c. The BOA shall not register and issue a
Certificate of Registration and Professional
Identification Card to any successful
examinee of unsound mind.
d. The BOA may, after the expiration of three (3)
years from the date of revocation of a Certificate

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of Registration, reinstate the validity of a

revoked Certificate of Registration.
87. Which of the following statements concerning
ownership of working papers is incorrect?
a. All working papers made by a CPA and his/her
staff in the course of an examination remain the
property of such CPA in the absence of a written
agreement between the CPA and the client to
the contrary.
b. Working papers include reports submitted
by a CPA to his/her client.
c. Working papers include schedules and
memoranda prepared and submitted by the
client of the CPA.
d. Working papers shall be treated confidential
and privileged unless such documents are
required to be produced through subpoena
issued by any court, tribunal, or government
regulatory or administrative body.
88. The following statements relate to the use of seal by
registered CPAs. Which is incorrect?
a. The seal should be of a design prescribed by the
Board bearing the CPA's name, registration
number, and title.
b. A registered CPA shall obtain and use a
seal of a design that will suit his/her taste.
c. The auditor's reports shall be stamped with the
CPA's seal, indicating therein his/her current
Professional Tax Receipt (PTR) number,
date/place of payment when filed with
government authorities or when used
professionally.
d. The seal of a CPA shall be circular in form.
89. A special/temporary permit may be issued by the
Board of Accountancy (BOA) to the following
persons, except
a. A foreign CPA engaged as professor, lecturer or
critic in fields essential to accountancy education
in the Philippines and his/her engagement is
confined to teaching only.
b. A foreign CPA called for consultation or for
a specific purpose which, in the judgment
of the BOA, is essential for the
development of the country regardless of
whether there are Filipino CPAs who are
qualified for such consultation or specific
purposes.
c. A foreign CPA who is an internationally
recognized expert or with specialization in any
branch of accountancy and his/her service is
essential for the advancement of accountancy in
the Philippines.
d. A foreign CPA called for consultation or for a
specific purpose which, in the judgment of the
BOA, is essential for the development of the
country and that there is no Filipino CPA
qualified for such consultation or specific
purposes.
90. Section 34 of the IRR provides that a foreign CPA
shall not be allowed to practice accountancy in the
Philippines unless he/she can prove, in the manner
provided by the rules of court that, by specific
provision of law, the country of which he/she is a
citizen, subject or national admits Filipino citizens to
the practice of the same profession without
restriction. Which of the following statements

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concerning foreign reciprocity is incorrect?

a. A foreign CPA should submit an authentic or
authenticated copy of the law on reciprocity of
his/her country/state officially translated in the
English language.
b. If the letter/document and the copy of the law
submitted by a foreign CPA are satisfactory to
the BOA, he/she shall be allowed to practice
accountancy in the Philippines but has to apply
for accreditation to do so.
c. A foreign CPA who desires to practice
accountancy in the Philippines shall
present/submit a letter or any document
signed and under official seal by the appropriate official of his/her country/state
requesting the Chairman of the PRC to
allow him/her to practice accountancy in
the Philippines.
d. By express provision of the law of a foreign
CPA's country/state, Filipino CPAs are allowed to
practice accountancy in his/her country/state on
terms of strict and absolute equality with the
citizens or subjects of said country or state.
91. The following documents are to be submitted by a
foreign applicant whose letter/document and the
copy of the law on foreign reciprocity of his/her
country/state are satisfactory to the BOA, except
a. The original or certified copy of any official
documents issued by the Bureau of Immigration
and Deportation allowing the applicant to enter
and reside in the Philip
pines.
b. Certificate of Registration or its equivalent
stating that the foreign applicant is duly
registered or licensed CPA or its equivalent in
his/her country/state.
c. Certificate of Religious Affiliation.
d. Original or authenticated copy of transcript of
records or equivalent document of the course for
licensure examination where he/she studied duly
authorized or accredited by his/her
country/state.
92. Any person who shall violate any of the provisions of
the Philippines Accountancy Act or any of its IRR
promulgated by the Board of Accountancy subject to
the approval of the PRC, shall upon conviction, be
punished by
a. Lethal injection
b. A fine of not more than P50,000
c. Imprisonment for a period not exceeding two
years
d. A fine of not less than P50,000 or by
imprisonment for a period not exceeding
two years or both
93. The following statements relate to roster of CPAs.
Identify the incorrect statement.
a. A roster showing the names and place of
business of all registered CPAs shall be prepared
and updated by the Board.
b. Copies of the roster shall be made available to
any party as may be deemed necessary.
c. The Board, upon approval of the Commission,
may delegate the preparation of this roster to
the APO.
d. The publication of the roster in the official
gazette or in any major news paper of
public circulation shall be deemed

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compliance with the requirement of RA

9298.
94. The PICPA shall renew its certificate of accreditation
once every:
a. Two years
b. Three years
c. four years
d. five years
95. Affixing the CPA's seal and signature on the auditor's
report is an indication of:
a. CPA's acceptance of responsibility for the
financial statements audited.
b. Compliance by the CPA of the requisite
accounting and auditing standards and
rules.
c. CPA's accreditation to practice public
accountancy.
d. Fair presentation of financial statements audited.
96. The following statements relate to the submission of
nominations to the Board of Accountancy. Which is
correct?
a. The Accredited National Professional
Organization of CPAs (APO) shall submit its
nominations to the President of the Philippines
not later than sixty (60) days prior to the expiry
of the term of an incumbent chair
man or member.
b. The APO shall submit its nominations to the PRC
not later than thirty (30) days prior to the expiry
of the term of an incumbent chairman or
member.
c. If the APO fails to submit its own nominee(s) to
the PRC within the required period, the PRC in
consultation with the Board of Accountancy shall
submit to the President of the Philippines a list of
five (5) nominees for each position.
d. There should be adequate documentation
to show the qualifications and primary
field of professional activity each nominee.
97. Which of the following statements about working
paper is correct?
a. Working papers prepared by a CPA
including those prepared and submitted by
the client are the personal property of the
auditor and the client has no right to these
working papers.
b. Working papers may substitute the client's
accounting records.
c. Working papers should not serve as a reference
source for the clients accounting records.
d. Working papers are subject to confidentiality
rules and they cannot be shown to third parties
in any circumstances.
98. The following statements relate to RA 9298. Identify
the incorrect statement.
a. Implementing rules and regulations shall take
effect 15 days following its publication in the
official gazette or in any daily newspapers of
general circulation.
b. Any person who shall violate any of the
provisions of RA No. 9298 or the IRR shall
upon conviction, be punished by a fine of
not more than P50,000.00 or by
imprisonment for a period not exceeding 2
years or both.

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c.

d.

The board may after the expiration of 2 years

from the date of revocation of Certificate of
registration may reinstate the revoked
certificate.
All graduates with bachelors degree major in
Accounting shall be allowed to take the CPA
Licensure examination within two years from the
effectivity of RA 9298 or until May 2006.

99. The following statements relate to RA 9298. Which

statement is true?
a. The Professional Regulation Commission has the
authority to remove any member of the Board of
Accountancy for negligence, incompetence, or
any other just cause.
b. Insanity is not a ground for proceeding against a
CPA.
c. A person shall be considered to be in the
professional practice of accounting if, as
an officer in a private enterprise, he makes
decisions
requiring
professional
accounting knowledge.
d. After three years, subject to certain conditions,
the Board of Accountancy may order the
reinstatement of a CPA whose certificate of
registration has been revoked.
100.
Section 36 (Penal Provision) of RA 9298 states
that any person who shall violate any of the
provisions of the Philippine Accountancy Act or any
of its implementing rules and regulations shall, upon
conviction, be punished by
a. A fine of not less than P50,000.
b. Imprisonment for a period not exceeding two (2)
years.
c. A fine of not less than P50,000 or by
imprisonment for a period not exceeding two (2)
years.
d. A fine of not less than P50,000 or by
imprisonment for a period not exceeding
two (2) years, or both.
101.
The death or disability of an individual CPA
and/or the dissolution and liquidation of a firm or
partnership of CPAs shall be reported to the BOA not
later than days from the date of such death,
dissolution or liquidation.
a. 15
b. 30
c. 60
d. 90
102.
Which of the following has the power to conduct
an oversight into the quality of audits of financial
statements through the review of the quality control
measures instituted by auditors?
a. Bureau of Internal Revenue
b. Securities and Exchange Commission
c. Board of Accountancy
d. Insurance Commission

d.

Independent Quality Control Review

104.
The operation of the Quality Assurance Review
Department (QARD) of the PICPA shall be supervised
by a/an
a. Oversight Committee
b. Executive Committee
c. Supervisory Board
d. Accountability Board
105.
the
a.
b.
c.
d.

The Head of the QARD who will be appointed by

Executive Committee is the
Chief Inspector
Chief of Administration
Chief Auditor
Chief Quality Assurance Reviewer

106.
Which of the following is an incorrect
qualification of the Chief Inspector of the QARD?
a. Must have at least 5 years experience in
the practice of public accountancy.
b. Must be of good moral character.
c. Must not have been found guilty of violating any
professional, ethical and regulatory auditing
standards.
d. Must have reached the level of senior manager
or partner of an accounting firm that has among
its clients, publicly listed entities.
107.
Who is responsible for the non-technical aspect
of the QAR program?
a. Chief Inspector
b. Chief of Administration
c. Assistant to the Chief Inspector
d. Chairman of the Executive Committee
108.
a.
b.
c.
d.

The QAR program covers all CPAs in

Public Accounting
Government
Education/Academe
Commerce and Industry

109.
What is the required minimum number of CPE
credit units that an accounting teacher shall earn in
each year prior to renewal of accreditation?
a. 15 units
b. 20 units
c. 10 units
d. No minimum number of credit units required
110.
The Certificate of Accreditation issued by the
PRC to an accounting teacher shall
a. Be valid for 2 years and renewable every 2
years.
b. Be valid initially for 3 years and renewable
annually.
c. Remain in full force and effect unless revoked,
cancelled or withdrawn.
d. Be valid for 3 years and renewable every 3
years.

103.
In the exercise of its power to conduct an
oversight into the quality of audits, the BOA
organized the Department of the Philippine Institute
of Certified Public Accountants (PICPA) to conduct an
independent study, appraisal, or review of the quality
of audit of financial statements.
a. Quality Control Review
b. Quality Assurance Review
c. Independent Quality Assurance Review

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