AUDITING AND ASSURANCE PRINCIPLES

QUIZ #1

The objective of financial statement audit is to determine*

Whether the company’s use of its resources is valid

If information risk is evidently reduced to the minimum

Any reservation about management’s internal control system

If the reports prepared by management conform to the required contract provisions.

A characteristic of ideal profession based on member’s expertise in the

systematic theory*

Professional authority

Regulations Code

Community sanction

A Culture

Which of the following refers to the core competencies to sustain advantage for a
CPA?*

Communication skills

Demographic shift

Value proposition

Market permission

As a core value, a CPA attains competence by:*

Building strategic collaboration of multidisciplinary solutions

Demonstrating technical proficiency thru superior expertise and knowledge

Skillful resolution over challenging ambiguities and complexities

 Engaging in lifelong learning on developments in the profession

One of the five different areas that the professional accountant’s mindset needs
to embrace is:*

Leadership Skills and Problem-solving skills

Lifelong learning and commitment to excellence

Investor and wide stockholders focus

Integration and Collaboration

Demographic shift is one of 10 insights to 2025 CPA Horizon. Which following

refers to such insight?*

Leverage strengths to expand market values

More time spending values to clients

Emerging specialization to enhance expertise

Flexible work arrangement & work at home options

Lifelong learning is one of 10 insights to 2025 CPA Horizon.  Which following

details refers to such insight?*

Increase visibility in multiple business areas

Staying current with standards and trends

Expanding marketability to global acceptance

Demonstrate superior technical proficiency

A characteristic of ideal profession achieved thru formal college-level education

in academic environment*

Community sanction

Integrity

Systematic Theory
 Leadership skill

An audit enhances the quality of financial statements and management’s report

thru—*

Carrying out the duties imposed upon regulatory agencies

Reduction of information risks.

Full support of a free-market economy

Attachment of an auditor’s opinion

The characteristic of an ideal profession which limits membership or inclusion is

known as*

Regulation code

Professional authority

A culture

Community sanction

Who among the following CPA belongs to the public sector?

A branch accountant in Metrobank

A CPA connected with the Commission on Audit

A CPA-instructor in Urdaneta City University

An audit team leader in Sycip, Gorres, and Velayo Auditing firm

These are the essentials and enduring beliefs of the CPA profession which it
upholds over time.*

Core objectivity

Core values

Core competencies
 Core integrity

A CPA should possess leadership skill as its core competency thru*

Inspiring and motivating others to achieve excellence

Identifying strategic directions to meet the needs of clients

Performing analysis and applying business acumen for decision making

Exchanging reliable and relevant information effectively

A mindset that a professional accountant should embrace includes

professionalism and ethical behavior which involve:*

Presenting more current information to be disclosed in the financial reports

Acting as navigator supporting the needs of governing bodies and management

Applying professional skills and judgment to ambiguous and imperfect situations

Upholding the Code of Ethics with emphasis on ethical behavior

Business, institutions and individuals must maintain records of the financial

condition and progress of the business in order to*

Prove that financial statements were not carelessly prepared

Reduce, if not eliminate, information risk

Serve as a strong basis for credit and borrowing

Gather evidences in providing high level of assurance on the financial reports

Which of the following is not included among the core competencies of a CPA?*

Synthesizing intelligence to insights

Relevance in the global market

Integration & collaboration

 Leadership skills

Which of the following situation illustrates an information risk?*

The bank statement reported the actual cash balance of the business

The auditor confirmed FIFO method of inventory valuation used consistently

The construction engineer reported the actual cost of the building constructed

The business incurred net loss but reported a net profit

The Accounting Profession requires CPAs to possess core values in order to*

Develop a financial model signifying control in management environment

Maintain the unique character and value in adopting changes in global economies

Design cost-benefit analysis for governing decisions

Promote adherence to legitimate and ethical practices

These are unique combination of human skills, knowledge and technology

providing values and results to CPAs*

Core values

Core objectivity

Core competencies

Core proposition

Changes in accounting standards and accounting related information have

brought about globalization of Accounting & Auditing.  Among these changes is:*

Increased Risk Reporting

Demographic Shifts

Areas in off-the-job training

Pre-certification and life-long learning

A core value that requires CPAs to maintain impartiality and free of personal bias
and conflict of interest*

Worldwide Profession

Objectivity

Relevance in the global market

Increased risk reporting

One of several factors that create a demand for an independent external audit is*

The desire to maintain the status of the accounting profession as elite

The need of reliable and credible financial information

To apply the core values and core competencies of an accountant

The increased of amount capital involved and number of potential investors

A free-market economy can exist and further strengthened thru sharing of:*

Financial data reflective of correct economic conditions of assets and liabilities

Data that favors one party over another

Income statement that can evaluate and guide management operations

Financial reports of agencies imposed upon them by law

A person becomes a Certified Public Accountant by:*

Attending a prestigious CPA review school

Issuance of a college diploma before passing the CPALE

Merely acquiring an extensive experience in an accounting firm

Passing the CPALE after obtaining the BSA college degree

Which of the following is not included among the core values of a CPA?*
 Continually pursue new and broad skills and knowledge

Competence

Leadership skills

Honesty and holding to rigorous standards of professional ethics

The characteristic in an ideal profession that prevents abuse of monopoly and to

discipline members is*

Regulation code

Systematic theory

A culture

Community sanction

In developing capabilities and competencies in education as required, a CPA may

include as a development activity:*

Accounting standards and reporting requirements

Off-the-job training

Regulatory and professional ethics

Appropriate Research Program

The practice of accountancy includes the following except:*

Practice in government where the CPA is a senator

Practice in commerce

Practice in public accountancy

Practice in education/academe

Which of the following refers to the core values to retain advantage of CPA in the
global economy?*
 Commitment to excellence

Anticipating and serving evolving needs

Pride in the profession

Integration and collaboration

To acquire the required capabilities and competence, a CPA in public practice is

bound by:*

Objectives and scopes formulated within the framework of the profession

Statistical management data developed within the organization

Professional and accounting standards and reporting requirements

Core competencies and Core values

QUIZ #2
Which of the following standards are to be applied in the audit of subject matters
other than historical information?

Philippine Standards on Review Engagement

Philippine Standards on Assurance Engagement

Philippine Standards on Auditing

Philippine Standards on Related Services

Which of the following is broader in scope and concept than the others?

All of these choices are equal in scope and concept

Auditing services

Assurance services
 Attestation services

The following are the elements of an assurance engagement except—

Five party relationship among the practitioners

Reliable information gathered by the practitioner

Written conclusion of the practitioner

Representations by management

A summary of findings rather than assurance is most likely to be issued on which

engagement?

Compilation

Review

Audit

Attestation

Assurance engagements should not have this type of element—

Policies and procedures about the preparation and presentation of financial data

Conclusion that conveys the assurance obtained about a subject matter information

The person who prepares the assurance report

Data on a company’s performance in non-monetary terms

Which of the following is a non-assurance engagement?

Preparation and Presentation of Financial Statement

Risk Assessment engagement

Business Performance Measurement

IT Assurance Services

Which of the following pertains to the reliability of audit evidence?

 Conclusions that are free from bias

Clear and comprehensive criteria applied to the measurement process

Strict compliance with the PSA

When related controls are effective

Which is not true of the intended user?

They have to accept the assertions provided by the responsible party

Persons for whom the practitioner prepares the report for specific purpose

The responsible party may also be one of the intended users

They may not be the exclusive recipient of the auditor’s report

Which of the following is not an example of an assurance service?

Identifies sets of risks that affect business organizations

Periodic reporting to family members about the degree of compliance of caregivers

Assurance to users that web site owners met established criteria on business practices, and
information processes

Preparation of tax returns for corporations

Which of the following engagement standards are to be applied in the audit of

historical financial statements?

Philippine Standards on Auditing (PSA)

Philippine Standards on Related Services (PSRS)

Philippine Standards on Assurance Engagements (PSAE)

Philippine Standards on Review Engagement (PSRE)

When a CPA engages in tax planning, the task would entail—

 Determination of tax risks on planned activities to minimize tax liabilities

Doing manual or automated bookkeeping

Preparation of tax returns for individual clients

Engagement in an assurance service

The item “Electrical Engineer” would be examples to what element of an

assurance engagement?

Practitioner

Intended User

Responsible Party

Subject Matter

The item “Philippine Standard on Review Engagement” would be examples to

what element of an assurance engagement?

Evidence

Subject Matter

Criteria

Assurance Report

A report on the factual findings is the type of report that the practitioner submits
when performing—

Attestation

Review

Agreed-upon engagement

Assurance engagement

What does and auditor provide with regard to management assertion made in an
Assurance engagement?

Satisfaction as to reliability of the assertions

 Services corresponding to the retainer’s fee received

Financial Statements of the client

Negative conclusion on the status of the business

The item “Corporate Building Supervisor” would be examples to what element of

an assurance engagement?

Subject Matter

Responsible party

Intended User

Practitioner

The objective of a compilation engagement is for the CPA to—

review the credibility of the financial information

issue an opinion on verifiability of the financial information

formulate and evaluate proposed action needed for the business operation

collect, classify, summarize financial information

Which of the following characteristics need to be exhibited in determining the

suitability of a criteria in an assurance engagement?

Based on practitioner’s own expectations, judgment, and personal experience

Allows incoherent evaluation of the subject matter

Significantly leads to different or variable interpretations and understanding

Includes relevant factors that may affect the conclusions of an engagement situation

The Philippine Standard on Assurance Engagement (PSAEs) are to be applied

in-- 

Assurance engagements dealing with subject matters other than historical financial
information
 Assurance engagements dealing with historical information

Audit or Review of historical financial information

Compilation engagements or agreed-upon procedures to information

The item “Plant Facilities” would be examples to what element of an assurance

engagement?

Assurance report

Evidence

Criteria

Responsible party

What level of assurance does a CPA give on an advisory report?

Moderate

High

Low

None

Which of the following engagements requires compliance with independence

requirements?

Agreed-upon procedures

Review

Compilation

Tax services

Non-assurance engagement includes all of the following except--

Preparation of tax returns

Examination of tax returns

Management advisory services

 Compilation

The item “Chief Financial Officer” would be examples to what element of an

assurance engagement?

Evidence

Practitioner

Responsible Party

Subject matter

Which is responsible for determining the nature, timing, extent of procedures in a

compilation engagement?

Responsible Party but not the Practitioner

Practitioner

Practitioner and Responsible Party

Practitioner, Responsible Party, and Intended Users

The audit of a company’s financial statement by a practitioner—

May need issuance of a report containing factual findings in the engagement

Is wider in scope of procedures than a review engagement

Applies similar processes with those of a compilation service

Requires detailed analysis of selective accounts

The item “Capital Expenditure Budget” would be examples to what element of an

assurance engagement?

Assurance report

Evidence

Responsible Party

Subject matter
Which one of the following is not a part of the attestation process?

Gathering evidence about assertions

Posting of transaction entries to the subsidiary ledgers

Communicating the conclusions reached

Evaluation evidence against objective criteria

Which of the following best describes “related services”?

Independent Financial Statement Audit and Compilation

Tax compliance and agreed-upon procedures

Direct Reporting or reasonable assurance engagement

Review, Tax Services, and CPA Web Trust

These are independent professional services that improve the quality of

information, its context, for decision makers.

Assurance engagement

Assurance report

Assurance

Assurance services

Which example below can best illustrate the assurance engagement element of
“Subject Matter”?

Manufacturing Process

PSA

Ordinary Stockholder

Branch Accountant
A practitioner may accept and engagement to perform agreed-upon procedures
on the specific subject matter of specified elements, or items of a financial
statement if—

The report does not list the procedures performed

Issuance and use of the report is restricted

The financial statements are prepared in accordance with special purpose framework

The auditor is also he entity’s continuing auditor

Which of the following is responsible for an entity’s financial statements?

The entity’s governance (Board of Directors)

The entity’s suppliers of materials

The entity’s management

The entity’s internal auditors

What sets the difference between an Assurance engagement and a non-

assurance engagement?

The subject matter information

The assurance report

The information risk

The assurance report with an opinion

Which of the following is not a key attribute that is essential to perform an

assurance service?

Accounting skills

Subject matter knowledge

Independence

Established criteria or standards

The item “Labor Laws” would be examples to what element of an assurance
engagement?

Evidence

Responsible party

Criteria

Subject matter

An assurance engagement that provides a high level of assurance that the

financial statements present fairly the financial position of the business.

Independent financial statement audit

Review

Compilation

Agreed-upon procedures

Which of the following forms may the subject matter of an assurance engagement
take?

Procedures applied to specific activities to achieve a specific result

Rules used to evaluate the object of an assurance engagement

None among the options for selection

The party that prepares the assurance report

The item “Customers’ Complaints” would be examples to what element of an

assurance engagement?

Subject matter

Criteria

Evidence

Intended User
The statement that “In our opinion, the accompanying financial statements
present fairly the financial position of ……..”  expresses which of the following?

Negative conclusion in Assurance

Auditor’s Qualified opinion

Positive form of confirmation

Negative form of confirmation

In the audit opinion formulation process, which flow of processes below would be the
most logical sequence to be applied in the audit engagement?
Reporting → Risk Assessment → Risk Response
Risk Assessment → Reporting → Risk Response
Risk Assessment → Risk Response
Risk Response → Risk Assessment → Reporting

Which of the following statements about independent financial statement audit is

incorrect?
All these options are correct about independent financial statements audit
Scope of the audit refers to audit procedures necessary to achieve the audit objectives
Auditor’s opinion enhances the credibility of the financial statements
The phrase used to express the auditor’s opinion is “present fairly, in all material respects”

An independent audit aids in the communication of economic data because the audit—
Assure the readers of financial statements that fraudulent activities were uncovered
Guarantees that financial data are fairly presented
Lends credibility to the financial statements
Confirms the accuracy of management’s financial representations

The purpose of an audit of financial statements is to—

Assure the future viability of the entity by expressing a favorable opinion
Enhance the degree of confidence of intended users in the financial statements
Obtain an absolute level of assurance regarding management assertions
Uncover any wrongdoing perpetrated by management and employees
What account below can be classified under classes of transactions?
Accounts Payable
Notes Receivable Discounted
Purchase Discount
Preferred Stocks

An audit involves ascertaining the degree of correspondence between assertions and

established criteria. Which of the following standards would not be a valid criterion in-- 
BOA Syllabus for 2022 CPALE
Philippine Standard on Auditing
Philippine Financial Reporting Standard
Generally Accepted Accounting Principles

Following items are advantages and practical benefits of an independent audit to Client
or Management, except--
Financial statements become more credible and reliable
Minimizes commission of fraud by management and employees
Client benefits from constructive suggestions in improving entity’s operations
Provides legal community an independent basis in administering estates and trust

Which following statements is not true about the general principles regarding
independent audit?
Compliance with relevant professional ethics is voluntary
Attitude of professional skepticism should be applied by the auditor
An auditor should exercise professional judgment in planning an audit
The audit engagement should be conducted in accordance with the PSA

Which of the following is an assertion about account balances?

Rights and Obligations
Preparation
Authorization
Cut-off

Upon completion of a typical audit, the auditor has—

Total assurance that all material errors and irregularities have been found
A low level of assurance that all material errors and irregularities have been found
No assurance that all material errors and irregularities have been found
High level of assurance that all material errors and irregularities have been found

Expectation gap is the difference between--

The external auditor and the internal auditor
An operational audit and compliance audit
The criteria and the assertion
What the public expects from the auditor and what the public will actually get

The following items are the possible causes of remoteness of information users from
information providers, except—
Improvement in capturing financial data due to development in technology
Dispersals of business among numerous geographic locations
Complex corporate structure
Separation of owners from management

A management assertion which states: All transactions and events have been properly
authorized.
Authorization
Classification
Completeness
Existence

Which of the following statements about independent financial statement audit is

correct?
The procedures to be applied in an audit should be determined by the client who engaged the
services of the auditor
The audit of financial statements relieves management of its responsibilities for the financial
statements
The auditor’s opinion is not an assurance as to the future viability of the business with
which management has conducted the affairs of the entity
The audit is designed to provide limited assurance that the financial statements are free from
material misstatements.

Which of the following is an assertion about classes of transaction?

Presentation
Existence
Occurrence
Accuracy, Valuation and Allocation

What account below can be classified under account balances?

Salaries & Allowances
Investment Properties
Office Supplies Expense
Cost of Sales
Which among the possible solutions to reduce information risks is most acceptable to
investors?
Have the financial statements examined by an auditor
All of these options are acceptable to investors
User share information risks with providers
Allow users to verify information

A typical objective of an operational audit is for the auditor to—

Report on the entity’s relative success in attaining profit maximization
Determine whether the financial statements fairly present the entity’s operations
Make the recommendations for improving performance
Evaluate the feasibility of attaining the entity’ operational objectives

The term “efficiency” in performance auditing refers to—

Using resources to maximize output for a given input
Achievement of intended results operations, programs, or activities
Acquisition of resources at appropriate time and within specified time
Achievement of objectives within specified time frame

Independent auditors of financial statements perform audits that reduce and control—
Complexity of financial statements
Timelines of financial statements
Information risks faced by investors
Business risk faced by investors

An element in the definition of auditing that refers to the closeness that an assertion can
be identified with established criteria.
Competent, independent person
Degree of correspondence
Communicating the results
Systematic process

A management assertion which states: Transactions and events that have been
recorded or disclosed have occurred, and such transactions pertain to the entity.
Rights and Obligation
Accuracy
Occurrence
Classification
Which of the following is a responsibility of the management regarding financial
statements? 
provide all records to the auditor necessary in evidence gathering
Preparation of the audit report
Examine the acceptability of the audit report
form an opinion on the financial statements

An element in the definition of auditing that identifies the standards against which the
assertion or representations are judged.
Competent, independent person
Assertions about economic actions and events
Established criteria
Degree of correspondence

Which of the following is not among the characteristics of auditing?

It ascertains the degree of correspondence between assertions and established criteria
It includes communication of the results to the PICPA
A systematic process
It involves objectively obtaining and evaluating evidence about assertions

What account below can be classified under classes of transactions*

Freight-Out
Pag-ibig Payable
Deferred Tax Asset
Due From/To Branches

The independent audit is important to readers of financial statements because it—

Measures and communicates financial data included in financial statements
Reports on the accuracy of all information in the financial statements
Involves the objective examination and reporting of management prepared statements
Determines the proper stewardship of management of the client company

Which following statement is true regarding inherent limitations of an audit?

There is an unavoidable risk that some material misstatements may not be detected due
to these limitations in an audit
Internal control designed by management is infallible
All evidences gathered in an audit are conclusive
An auditor is always correct in the exercise of professional judgment

The level of Assurance provided by on an audit report is-- 

Absolute
None
High, but not absolute
Moderate

Professional skepticism dictates that when management makes a statement to the

auditor, the auditor shall-- 
Disregard the statement for lack of evidence
Believe the statement without verification
Verify before accepting such statement
Require the statement be put in writing

Most of the independent auditor’s work in formulating an opinion on financial statements

consists of—
Gathering and evaluating evidential matter
Providing solutions to mitigate risks in business operation
Designing the internal control of the business
Comparing recorded accountability with assets

What account below can be classified under account balances?

Patent amortization
Cost of Goods Sold
Sales Returns & Allowances
Advances to suppliers

Which following statements is not true in types of an auditor? 

Compliance audit caters to internal users, while management audit assists the organization in
the effective discharge of their duties
Both internal audit and external audit are conducted throughout the year
Compliance Audit, Operational Audit, or Financial Statement Audit examines reliability of
Financial Statements assertions
Internal Auditor work under permanent status, while external auditors are on contractual
basis

Correct answer
Internal Auditor work under permanent status, while external auditors are on contractual basis
What is the proper organizational role of internal auditing?
To serve as investigative arm of those charged with governance
To serve as an independent, objective assurance that adds value to operations
To assist external auditor in order to reduce external audit fee
To perform studies to assist in the attainment of more efficient operations

Under PSA 260 and the SEC Code of Corporate Governance, Corporate Board of
Directors will be referred as—
Those Charged with Bank Audits
Those Charged with Collection of Receivables
Those Charged with the Province Governance
Those Charged with Governance

Which of the following is not a cause of information risk?

Voluminous data
Separation of authorities and functions
Remoteness of the provider of the information
Complex exchange transaction

An audit designed to provide reasonable assurance of detecting violations of specific

provisions of contracts or grant agreements would be—
A Performance Audit
A Management Audit
A Compliance Audit
An Operational Audit

An element in the definition of auditing requiring the examiner must be qualified to

understand the criteria used and the competence to know how and what evidence to
accumulate to reach the proper conclusion.
Systematic process
Competent, independent person
Interested users
Degree of correspondence

What item below can be classified under account balances?

Statement of Financial Position
Income Statement
Statement of Cash Flows
Notes & Disclosures
As provided in the definition of Auditing, auditor must evaluate evidence against criteria
to:
establish the responsibilities of management as regards its assertions
involve application of analytical skills, or professional judgment
deter potential conflict between management and investors
determine the validity as to closeness of assertion to established criteria

Which of the following statements is correct about error?

It is unintentional misstatement in financial statements
It is omission of regulations in financial statement
It is intentional misstatement in financial statement
It is non-compliance of rules in financial statement

What audit activity below is not included in risk response?

Audit evaluation
Adjustment of audit procedures
Application of assessed risk response
Design of overall responses

The phrase reasonable assurance is intended to inform the users that-- 

The auditor will provide an unqualified opinion to the financial statements
The auditor had updated the overall audit strategy and audit plan
Had decided continuity of audit to an existing client
There are some risks that the financial statements are not fairly stated

An activity or set of activities that will accomplish a specific organizational goal and have
maximum impact on the success of an organization.
Resource management
Client’s strategy
Core business process
Key processes
Risk-based Audit approach requires that risky areas of a business must be identified by
the auditors for the following reasons, except—
to determine which account balances are more prone to material misstatements
competition for clients among audit firms is high
how the misstatements might occur
how a client might be able to cover them up

Which following statement is not an important consideration in integrating the concepts

of materiality and risk in the conduct of a risk-based audit?
Auditors should understand expectations of financial reporting to minimize lawsuits that the
users may bring forth
All clients are worth accepting
Testing or sampling is not an absolute assurance that financial statements are free of material
misstatements
Competition for clients among audit firms is high

In applying risk-based approach, auditors direct their attention to those-- 

transactions between entities measured in economic terms
responsibilities of those charged with governance in implementing controls
business processes aimed to perform or create values in operation
key risk areas of financial statements that may contain errors or noncompliance

Auditors must focus on the risks to the entity’s operation and ensure controls are in
place—
To use the audit risk model as guide.
To perform the audit on the average output
To focus on the complexities of inherent risk
To mitigate or compensate for those risks

What are the fundamental concepts vital in the planning and development of an audit
approach?
Materiality and Risk
Resource Management
Business Risk and Audit Risk
Fraud and Error

Which among the causes of misstatements is difficult for the management to comply?
Misapplication of accounting policies
Non-compliance to laws and regulations
Incorrect accounting estimates
Clerical errors
The risk caused by financial loss because management is not honest and prevents the
continuity of the audit process.
Business risk
Financial reporting risk
Audit risk
Engagement risk

Of the four component of risks, what types of risk are applicable to the auditor?
Business risk and Financial Reporting risk
Audit risk and business risk
Engagement risk and audit risk
Financial reporting risk and Engagement risk

What item below is an example of non-routine transaction for an entity engaged in

merchandising?
Purchase of inventories using just in time method
Hiring of sales manager
Warehousing of purchased inventories
Presence of BIR auditors verifying tax payments

When the auditor declared: We conducted our audits in accordance with the PSA, it
means that the auditor--
made partial compliance to all the standards
performed the audit on the average output
Made selective compliance to all the standards
performed full compliance to all the standards

The phrase free of material misstatements is intended to inform the users that—
Some transactions as more susceptible to errors due to their complexities
Audit risk is judgmentally determined
Significant misstatements may be identified at any stage in the audit process
The auditor’s responsibility is limited to material financial information

The purpose of obtaining reasonable assurance while applying risk-based audit

approach is attained thru—
Identifying low risk areas to perform less to perform less extensive procedures
Complete assessment of misstatements in account balances
Expression of an opinion by the auditor
Full identification of all risks for reporting to the management
What audit activity below is not included in reporting?
Evidence evaluation
Planning the audit
Submission of audit opinion
Preparation of audit report

The audit strategy should involve identifying the objective and scope of the audit thru:
Coordination of woks of experts
Location of the components of the entity
Proper review and monitoring of team’s activities
Analytical procedures

Benefit attained in audit planning--

Establishment of proper audit fees
Coordinates the work to be performed by other experts and practitioners
Aids in deciding the type of opinion to be rendered
Identification of resources to be deployed

Audit risk can be avoided by an auditor through—

Setting audit risk at an acceptably low level
Accepting only conclusive evidence as basis of opinion
Non-submission of audit report
Setting minimum audit fee at a premium price

Labor unrest is what type of risk?

Financial reporting risk
Business risk
Engagement risk
Audit risk

The audit process is divided into three phases which can be performed by the auditor in
this particular order--
Audit Planning → Issuance of Audit report → Pre-engagement activities
Issuance of audit report → study of internal control → completing the audit
Post-Audit responsibilities → Test of Control → Pre-engagement activities
Substantive Testing → Audit Planning → Post-Audit responsibilities

Which of the following could be classified as an error?

Preparation of records by employees to cover a fraudulent scheme
Misappropriation of assets for the benefit of management
Misinterpretation by management of facts that existed in preparation of financial
statements
Intentional omission of the recording of a transaction to benefit third parties

The process of using a company's resources in the most efficient way possible is called
—
Routine transactions
Risk management
Resource management
Effective management

In verifying client’s strategy, the presence of this item assures investors that the
business will operate continuously or for indefinite periods.
Long-range plan
Fewer material misstatement
Internal control system
Specific goals and objectives

Which of the following act is not considered as non-compliance with laws and
regulations--
All of these choices are considered non-compliance of laws and regulations
Act of omission
Act of commission
Unintentional act

The responsibility for the prevention and detection of non-compliance of laws and
regulation rests with--    
The auditor
The client’s lawyer
Management
The auditor’s lawyer

These activities deliver results that are directed towards specific and measurable goals
which ensure business organization to remain competitive.
Medium-range plans
Key processes, objectives, and inputs
Process control failures
Core business processes
What audit documentation below is included in risk assessment?
Work performed
Changes in materiality
Update of overall strategy conclusion on audit
Assessment of risk of material misstatement at assertion level

An auditor has to evaluate matters that requires judgment or management intervention

that may result in material misstatement such as—
Petty Cash Fund accounting
Proof of cash
Preparation of financial statements
Subsequent measurement of financial assets @ amortized cost