DE LA SALLE LIPA

College of Business, Economics, Accountancy and Management

Accountancy Department
Auditing Theory
THE PHILIPPINE ACCOUNTANCY ACT OF 2004 (RA 9298)

Direction: Read and answer the following questions.

___1. Which of the following is not among the qualifications of a member of the Board of Accountancy?
a. He/She must have at least 10 years of experience in the practice of public accountancy.
b. He/She must be a natural-born Filipino citizen and a resident of the Philippines.
c. He/She must not be a director or officer of the accredited national professional organization at the time of appointment.
d. He/She must me of good moral character.
___2. Which of the following is not represented in the Auditing and Assurance Standards Council?
a. Board of Accountancy
b. Bureau of Internal Revenue
c. Commission on Audit
d. Securities and Exchange Commission
___3. Which of the following best describes the function of Auditing and Assurance Standards Council?
a. To monitor full compliance by auditors to PSAs.
b. To promulgate rules concerning the practice of the accountancy profession.
c. To promulgate auditing standards, practices and procedures that shall be generally accepted by the accounting
profession in the Philippines.
d. To undertake continuing research on both auditing and financial accounting in order to make them responsive to the
needs of the public.
___4. The following are the qualifications of applicants for CPA Board Exam in accordance with RA 9298, except
a. BS accountancy degree holder
b. He must of good moral character.
c. He must not been convicted of any criminal offense involving moral turpitude.
d. He must be a natural born Filipino citizen.
___5. Which of the following is not a function of the Board of Accountancy?
a. To issue, suspend, revoke, or reinstate the Certificate of Registration for the practice of the accountancy profession.
b. To supervise the registration, licensure and practice of accountancy in the Philippines.
c. To prescribe and/or adopt a Code of Ethics for the practice of accountancy.
d. To convict any CPA accused of crime punishable by RA 9298.
___6. Which of the following statements concerning the difference practices of accountancy profession is incorrect?
a. Members of the Integrated Bar of the Philippines are prohibited from teaching taxation subjects.
b. Practice in the Government includes working in a government-owned and/or controlled corporations, including those
performing proprietary functions where a civil service eligibility as a CPA is a prerequisite.
c. The practice of accountancy is not limited to Public Practice, Private Practice, Government Practice and Academe.
d. Public practice includes a person, be in his/her individual capacity, or as a partner or staff member in an accounting or
auditing firm, holding out himself or herself as one skilled in the knowledge, science and practice of accounting, and as
qualified person to render professional services as a certified public accountant.
___7. Which of the following statements concerning the Board of Accountancy is incorrect?
a. It shall be composed of a chairman and six members who shall hold office for a term of 3 years and no person who has
served 2 consecutive complete terms shall be eligible for reappointment until the lapse of one year.
b. The chairman and members of the BoA shall be appointed by the PRC Chairperson.
c. The BoA shall elect a vice-chairman from among its members for a term of one year.
d. The chairman and members of BoA shall receive compensation and allowances comparable to that being received by
the chairman and members of regulatory boards under the Commission as provided in the General Appropriations Act.
___8. Who has the power to remove or suspend a member of the Board of Accountancy?
a. PRC Chairperson
b. BoA Chairperson
c. President of the Philippines
d. PICPA Chairperson
___9. Which of the following statements concerning the CPA Examination is incorrect?
a. To be qualified as having passed the licensure examination for accountants, a candidate must obtain a weighted
general average of seventy-five percent with no grades lower than sixty five percent in any given subject.
b. A conditional candidate in the board exam shall take the examination of the conditional subject within 3 years from the
preceding examination.
c. The Board, subject to the approval of the PRC, may revise or exclude any of the subjects and their syllabi, and add new
ones as the need arises.
d. The BoA shall submit to the PRC the ratings obtained by each candidate within 10 calendar days after the examination,
unless extended for just cause.

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___10. When shall a candidate take refresher course with at least 24 units of subject given in the licensure examination?
a. Any candidate who fails in one complete CPA Board Examination.
b. Any candidate who fails in three complete CPA Board Examinations.
c. Any candidate who fails in two complete CPA Board Examinations.
d. Any candidate who fails in four complete CPA Board Examinations
___11. Which of the following statements is correct?
a. A professional Identification Card of CPA shall be issued to every CPA passer renewable every two years.
b. The BoA shall have the power to suspend or revoke the practitioners CPA or suspend him from practice even without
notice and hearing.
c. The BoA may, after the expiration of two years from the date of revocation of a certificate of registration and upon
application and for reasons deemed proper and sufficient, reinstate the validity of a revoked certificate of registration.
d. The CPA is allowed to indicate only his/her certificate of registration number, and date of issuance, duration of validity
even without Professional Tax Receipt Number on the documents he/she signs, users or issues in connection with his
practice.
___12. Any person who shall violate any of the provisions of RA 9298 or any of its IRRs, shall upon conviction, be punished by a
a. Fie of not less than 50,000 or by imprisonment for a period not exceeding 2 years or both.
b. Fine of not more than 50,000 or by imprisonment for a period exceeding 2 years or both.
c. Fine of not less than 100,000 or by imprisonment for a period not exceeding 3 years or both.
d. Fine of not more than 100,000 or by imprisonment for a period exceeding 3 years or both.
___13. Which of the following accredited national professional organization of CPAs shall be predominantly represented in the
Auditing and Assurance Standards Council?
a. ACPACI
b. ACPAPP
c. ACPAE
d. GACPA
___14. The following are the grounds for suspension or removal of members of the Board of Accountancy, except
a. Neglect of duty or incompetence
b. Violation or tolerance of any violation of RA 9298, its IRRs and the CPAs Code of Ethics
c. Charge or accusation of crimes involving moral turpitude
d. Manipulation or rigging of the CPAs licensure examination results, disclosure of secret and confidential information in
the exam.
___15. The following documents shall be submitted by all applications for the CPA board exam, except
a. National Bureau of Investigation clearance
b. Baccalaureate Transcript of Records with indication therein of date of graduation
c. College Diploma with indication therein of graduation
d. Marriage Contract in NSO Security paper
___16. Which of the following shall not be considered as public practice?
a. Performing audit or verification of financial transactions and accounting records.
b. Representing clients before government agencies on tax and other matters related to accounting.
c. Teaching of accounting, auditing, management advisory services, accounting aspect of finance business law, taxation
and other technically related subjects.
d. Design, installation, review and revision of accounting system and controls.
___17. Which of the following business organization is prohibited by RA 9298 for practicing public accountancy in the
Philippines?
a. Corporation
b. Partnership
c. Sole proprietorship
d. All are allowed.
___18. When shall an auditor be allowed to disclose confidential and privileged information obtained from a client?
a. When required or requested by the major stockholder of the client.
b. When asked by a bank of the client.
c. When such information is needed by the auditor for its investment interest.
d. When required to be produced through subpoena issued by any court, tribunal or government regulatory body.
___19. CPAs and firms or partnerships of CPAs engaged in the practice of public accountancy, including partners and staff
members, shall register with the PRC and BoA, and such registration shall be renewed
a. Every one year
b. Every three years
c. Every five years
d. Every two years

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___20. What is the rule as regards to foreigners who want to practice accountancy in the Philippines?
a. They can never practice accountancy in the Philippines.
b. They may practice accountancy if they pass the CPA Board Examination.
c. They may be allowed to practice accountancy if they study in the Philippines.
d. They may be allowed to practice accountancy if they can prove that Filipino citizens are also allowed to practice
accountancy in their country.
___21. What is the recognized accredited professional organization of CPAs in the Philippines?
a. Integrated Certified Public Accountants of the Philippines
b. Philippine Organization of Certified Public Accountants
c. Philippine Institute of Certified Public Accountants
d. Philippine Association of Certified Public Accountants
___22. It is an agency created to conduct an oversight into the quality of audit of financial statements through a review of the
quality control measures instituted by individual CPAs, Firms of Partnership in order to ensure compliance with accounting and
auditing standards and practices.
a. Quality Assurance Review
b. Inspection and Review Agency
c. Quality Inspection Committee
d. Quality Assessment Committee
___23. A registered professional or CPA shall be permanently exempted from CPE requirements
a. If he has obtained Doctorate study
b. If he has retired from employment
c. If he is working from government agency
d. If he has reached the age of 65 years old
___24. How many units of CPE must a CPA in practice obtained?
a. 20 CPE units every year
b. 60 CPE units every three years
c. 60 CPE units every year
d. 40 CPE units every two years
___25. What is the sanction for registered CPAs in the practice of accountancy who have not completed the CPE requirements?
a. They shall not be allowed to work in the country.
b. They shall be prohibited from practicing accountancy in the Philippines.
c. Their CPA licenses will be automatically revoked.
d. They shall not be allowed to renew their professional license.
___26. The following are the objectives of the Continuing Professional Education programs, except
a. To make the profession nationalistic.
b. To promote the general welfare of the public.
c. To attain and maintain the highest standards and quality in the practice of his profession.
d. To raise and maintain the professionals capability for delivering professional services.
___27. 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
___28. The death or disability of an individual CPA and/or 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 of liquidaton
a. 15 days
b. 30 days
c. 60 days
d. 90 days
___29. A partner surviving the death or withdrawal of all the other partners in a partnership may continue to practice under the
partnership name for a period of not more than ____ years after becoming a sole proprietorship.
a. 1
b. 2
c. 3
d. 4
___30. Which of the following statements is incorrect as regards to the practice of public accountancy?
a. Single proprietorship and partners of partnerships organized for the practice of public accountancy shall be registered
CPAs in the Philippines.
b. A partnership engaged in the practice of public accountancy may be carried on in the form of general partnership but
not on a limited partnership.

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c.
d.

A CPA is in public accounting when he/she represents his/her clients before government agencies on tax and other
matters related to accounting.
The SEC shall not register any corporation organized for the practice of public accountancy.

SOLUTION
1. A
2. B
3. C
4. D
5. D
6. A
7. B
8. C
9. B
10. C
11. C
12. A
13. B
14. C
15. D
16. C
17. A
18. D
19. B
20. D
21. C
22. A
23. D
24. B
25. D
26. A
27. C
28. B
29. B
30. B

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