QUIZZER 1 [1]

Philippine Accountancy Act of 2004

1. The primary duty to enforce the provisions of RA 9298 and its IRR rests with
a. PRC b. BOA c. PRC and BOA d. AASC

2. The following are the objectives of the R.A. No. 9298, except
a. The standardization and regulation of accounting education
b. The examination for registration of certified public accountants
c. The development of virtuous, productive and well-rounded certified public accountants
d. The supervision, control, and regulation of the practice of accountancy in the Philippines

3. It is the area of practice of accountancy namely public accountancy, commerce and industry,
academe/education and government.
a. Scope of Services b. Field c. Area d. Sector

4. A person who holds a valid Certificate of Registration and a valid Professional Identification Card issued by the
Commission upon recommendation by the Board to those who have satisfactorily complied with all the legal and
procedural requirements for such issuance, including in appropriate cases, having passed the CPA licensure
examination
a. Professional Accountant c. Certified Public Accountant
b. Practitioner in Public Accounting d. Board Passer

5. An organization engaged in the practice of public accountancy, consisting of a sole proprietor, either alone or
with one or more staff member(s).
a. Individual CPA b. Firm c. Partnership d. Sole Proprietor

6. A certified public accountant engaged in the practice of public accountancy under his/her name, by
himself/herself only or with one or more staff member(s).
a. Individual CPA b. Firm c. Partnership d. Sole Proprietor

7. A CPA is in public practice when he/she

a. Represents his/her employer before government agencies on tax and other matters related to
accounting.
b. Represents his/her clients before government agencies on tax and other matters related to accounting.
c. Teaches accounting, auditing, management advisory services, accounting aspect of finance, business
law and other technically related subjects.
d. 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.

8. 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. Provided (choose the incorrect one)
a. That the business or company where the above position exists has a paid-up capital of at least
P5,000,000 and/or an annual revenue of at least P 10,000,000.
b. The above provision shall apply only to persons to be employed after the effectivity of the
Implementing Rules and Regulations of RA 9298.
c. The above provision shall not result to deprivation of the employment of incumbents to the position.
d. That the business or company where the above position exists has an annual revenue of at least
P5,000,000 and/or paid-up capital of at least P 10,000,000.

9. A meaningful experience shall be considered as satisfactory compliance with the requirements of Section
28 of RA 9298 if it is earned in (Choose the incorrect one)
a. Commerce and industry and shall include significant involvement in general accounting, budgeting, tax
administration, internal auditing, liaison with external auditors, representing his/her employer before
government agencies on tax and matters related to accounting or any other related functions.
b. Academe/education and shall include teaching for at least three (3) trimesters or two (2) semesters
subjects in either financial accounting, business law and tax, auditing problems, auditing theory,
financial management and management services.
c. Government and shall include significant involvement in general accounting, budgeting, tax
administration, internal auditing, liaison with the Commission on Audit or any other related functions.
d. Public practice and shall include at least two years as audit assistant and at least one year as auditor
QUIZZER 1 [2]
in charge of audit engagement covering full audit functions of significant clients.

10. Which of the following is defined as “the integrated national professional organization of Certified Public
Accountants accredited by the Board and the Commission per PRC Accreditation No. 15 dated October 2, 1975”
by R.A. 9298?
a. Accredited National Professional Organization of Certified Public Accountants or APO
b. Financial Reporting Standards Council or FRSC
c. Association of CPA’s in Parlor Operations or ACPAPO
d. Philippine Institute of Certified Public Accountant or PICPA

11. A study, appraisal, or review by the Board or its duly authorized representatives, of the quality of audit of
financial statements through a review of the quality control measures instituted by an Individual CPA, Firm or
Partnership of CPAs engaged in the practice of public accountancy to ascertain his/her/its compliance with
prescribed professional, ethical and technical standards of public practice.
a. Quality Review c. Peer Review
b. Quality Control d. Advancement and Quality Compliance Oversight

12. Documents showing the outline embodying topics and concepts of major subjects prescribed in specific
course of study to serve as the basis for test questions in the CPA licensure examinations.
a. Syllabus c. Candidates’ Body of Knowledge (CBOK)
b. Curriculum d. Syllabi

13. The Professional Regulatory Board of Accountancy of

a. a chairman and 6 members
b. a chairman and 6 members appointed by PRC
c. a chairman and 6 members appointed by the President of the Philippines
d. 6 members of Independent Auditing Firms

14. A member of the BOA shall, at the time of his/her appointment, possess the following qualifications, except
a. Must be a natural-born citizen and resident of the Philippines.
b. Must be a duly registered CPA with more than ten (10) years of work experience in any scope of
practice of accountancy.
c. Must be of good moral character and must not have been convicted of crimes involving moral
turpitude.
d. Must not be a director or officer of the APO at the time of his/her appointment.

15. Which statement is incorrect regarding the term of office of the chairman and the members of the Board of
Accountancy (BOA)?
a. The Chairman and members of the Board shall hold office for a term of three years.
b. No person who has served two (2) successive complete terms shall be eligible for reappointment until
the lapse of one (1) year.
c. A person may serve the BOA for not more than twelve years.
d. A member of the BOA may continuously serve office for more than nine years.

16. The Commission upon the recommendation of the Board shall within ninety (90) days from the effectivity of the
IRR, create an accounting standard setting body to be known as the
a. Accounting Standards Council c. Financial Reporting Standards Committee
b. Financial Reporting Standards Council d. Accounting Standards Committee

17. The Commission upon the recommendation of the Board shall within ninety (90) days from the effectivity of the
IRR, create an auditing standard setting body to be known as the
a. Auditing, Assurance and Practices Council c. Auditing and Assurance Standards Committee
b. Auditing and Assurance Standards Council d. Auditing Standards and Practices Committee

18. The creation of FRSC and AASC is intended to assist the BOA in carrying out its function to
a. To monitor the conditions affecting the practice of accountancy and adopt such measures, rules and
regulations and best practices as may be deemed proper for the enhancement and maintenance of
high professional, ethical, accounting and auditing standards.
b. To supervise the registration, licensure and practice of accountancy in the Philippines.
c. To prescribe and adopt the rules and regulations necessary for carrying out the provisions of RA 9298.
d. To prepare, adopt, issue or amend the syllabi of the subjects for examinations.
QUIZZER 1 [3]
19. The PRC upon the recommendation of the Board of Accountancy (BOA) shall create a council to assist the
BOA in carrying out its powers and functions and in attaining its objective of continuously upgrading the
accountancy education in the Philippines to make the Filipino CPA globally competitive. This council is to
be known as the
a. CPAs in Education Council c. Council of CPAs in Education
b. Education Technical Council d. CPAs in the Academe Council

20. Which of the following does not fall under the admission requirements for CPA examinations?
a. A Filipino citizen
b. Is of good moral character
c. At least twenty one years of age
d. Has not been convicted of any criminal offense involving moral turpitude

21. Under foreign reciprocity, special/temporary permit may be issued by the Board subject to the approval of the
Commission and payment of the fees the latter has been prescribed and charged thereof to the following
persons except
a. A foreign CPA called for consultation or for a specific purpose which, in the judgment of the Board, is
essential for the development of the country.
b. A foreign CPA engaged as a professor, lecturer or critic in fields essential to accountancy education in the
Philippines
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 advancement of accountancy in the Philippines
d. A foreign certified public accountant who visits the Philippines to study additional learning in the field of
computer system and design.

22. The following were the ratings of examinees who took the easy but tricky CPA Board Examination on May 2013.
 Examinee 1 - All subjects garnered a rating of 95%.
 Examinee 2 - All subjects garnered a rating of 75%.
 Examinee 3 - One subject garnered a rating of 81% and the other six garnered a rating of 74%.
 Examinee 4 - One subject garnered a rating of 64% and the other six garnered a rating of 85%.
 Examinee 5 - Three subjects garnered a rating of 75% and the other four garnered a rating of 74%.
 Examinee 6 - All subjects garnered a rating of 74%.
 Examinee 7 - Four subjects garnered a rating of 95%, one with 73% and other 2 with 64%.
 Examinee 8 - Three subjects garnered a rating of 95%, one with 74% and other three with 73%.
Of the ratings presented above, how many examinees obtain a conditional status in the Board Exam?
a. 4 b. 2 c. 3 d. 1

23. A CPA certificate is evidence of

a. Independence as a professional.
b. Basic competence at the time of certification.
c. Membership in the accredited association.
d. Completion of continuing professional education program.

24. The Board shall submit to the Commission the ratings obtained by each candidate within
a. 2 calendar days after the examination c. 10 calendar days after the examination
b. 5 calendar days after the examination d. 15 calendar days after the examination

25. Which of the following statement is incorrect in accordance with Sec 18 Failing Candidates to Take Refresher
Course?
a. any candidate who fails two complete CPA Board Examinations shall take the Refresher Course
b. must be enrolled in and completed at least twenty four units of subjects given in the licensure examination
c. the examination in which the candidate was conditioned together with the removal examination on the
subject in which he/she failed shall be counted as two complete examinations
d. the examination in which the candidate was conditioned together with the removal examination on the
subject in which he/she failed shall be counted as 1 complete examination

26. Which of the following is not one of the grounds for proceedings against a CPA?
a. Gross negligence or incompetence in the practice of his profession.
b. Engaging in public practice while being employed in a private enterprise.
c. Insanity.
d. Immoral or dishonorable conduct.
QUIZZER 1 [4]
27. A certificate of accreditation shall be issued to certified public accountants in public practice only upon
showing, in accordance with rules and regulations promulgated by the Board and approved by the
Commission, that such registrant has acquired how many years of meaningful experience in any of the
areas of public practice?
a. One b. Two c. Three d. Four

28. It 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 c. Continuing Professional Education
b. Quality Review d. Continuous Professional Education

29. Which statement is correct regarding CPE requirements for renewal of professional license?
a. The total CPE credit units required for CPAs shall be sixty (60) units for three (3) years, provided that a
minimum of twenty (20) credit units shall be earned in each year.
b. A registered professional shall be permanently exempted from CPE requirements upon reaching the
age of 60 years old.
c. A registered professional who is working abroad shall be temporarily exempted from compliance with
CPE requirement during his/her stay abroad, provided that he/she is has been out of the country for at
least one year immediately prior to the date of renewal.
d. Those who failed to renew professional licenses for a period of five (5) continuous years from initial
registration, or from last renewal shall be declared delinquent.

30. A registered professional who is working or practicing his/her profession or furthering his/her studies
abroad shall be temporarily exempted from compliance with CPE requirement during the period of his/her
stay abroad, provided that he/she has been out of the country for at least
a. one year immediately prior to the date of renewal
b. two years immediately prior to the date of renewal
c. three years immediately prior to the date of renewal
d. five years immediately prior to the date of renewal

31. A registered professional shall be permanently exempted from CPE requirements upon reaching the age of
a. 55 years old b. 60 years old c. 65 years old d. 70 years old

32. Who is not permitted by law to practice accountancy?

a. A partnership of CPAs c. A corporation whose stockholders are all CPAs
b. An individual CPA practitioner d. A partnership of CPAs with some non-CPA staff

33. 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

34. Below are the names of three CPA firms and pertinent facts relative to each firm. Unless otherwise
indicated, the individuals named are CPAs and partners, and there are no other partners. Which firm name
and related facts indicates a violation of the IRR of RA 9298?
a. Joyce, Ara and Angela, CPAs (Joyce died about 10 years ago, Ara and Angela are continuing the firm)
b. Lupin and Fujico, CPAs ( the name of Goymon a third active partner is omitted in the firm name)
c. Hugo and Pugo, CPAs (Hugo died 25 months ago, Pugo is continuing the firm as a sole proprietor)
d. Bubu and Bibi, CPAs (Bibi died 3 years ago; Bobot was admitted into the partnership 2 months after
Bibi's death.)

35. Any person who shall violate any of the provisions of RA 9298 or any of its implementing rules and
regulations as promulgated by the Board subject to the approval of the Commission, shall, upon conviction,
be punished by
a. A fine of not less than fifty thousand pesos (P50,000.00) or by imprisonment for a period not exceeding
two (2) years or both.
b. A fine of not less than one hundred thousand pesos (P100,000.00) or by imprisonment for a period not
exceeding two (2) years or both.
c. A fine of not less than fifty thousand pesos (P50,000.00) or by imprisonment for a period not exceeding
three (3) years or both.
d. A fine of not less than one hundred thousand pesos (P100,000.00) or by imprisonment for a period not
exceeding three (3) years or both.
QUIZZER 1 [5]

Organizations Affecting the Accountancy Profession

1. The following statements relate to the qualifications of the SEC commissioners. Which is incorrect?
a. The commissioners must be natural-born citizens of the Philippines.
b. The commissioners must be of good moral character, of unquestionable integrity, of known probity, and
patriotism, and with recognized competence in social and economic disciplines.
c. The majority of the commissioners, including the Chairperson, shall be members of the Philippine Bar.
d. The Chairperson and the commissioners must be at least thirty-five (35) years of age.

2. Which of the following is not a function of the Bangko Sentral ng Pilipinas (BSP)?
a. Recommend measures to improve the efficiency and effectiveness of government operations.
b. Supervise banks and exercise regulatory powers over non-bank institutions performing quasi-bank
functions.
c. Determine the exchange rate policy of the Philippines.
d. Extend discounts, loans and receivables to banking institutions for liquidity purposes.

3. The BSP Monetary Board is composed of seven (7) members appointed by the President of the Philippines for a
term of
a. 4 years b. 5 years c. 6 years d. 7 years

4. The COA conducts a comprehensive audit that includes

a. Financial and compliance audits c. Compliance and performance audits
b. Financial and financial-related audits d. Financial, compliance, and performance audits

5. The Securities and Exchange Commission has some of the following powers and functions relevant to public
accounting professions, except?
a. Issue cease and desist orders to prevent fraud or injury to the investing public;
b. Impose sanctions for the violation of laws and the rules, regulations and orders issued pursuant thereto;
c. Issues and may revoke public practitioner’s certificates and grants license thereto
d. Approve, reject, suspend, revoke or require amendments to registration statements, and registration and
licensing applications;

6. The chairman of the Commission on Audit shall serve

a. 3 years without appointment c. 6 years without reappointment
b. 5 years with reappointment d. 7 years without reappointment

7. The following are the reportorial responsibility of the Commission on Audit, except
a. Financial condition and operation of the not-for-profit corporations to the President and the Congress.
b. Operational efficiency and effectiveness of the government and its agencies.
c. Accountability of government records.
d. Accountability of government funds

8. Which of the following is a correct qualification of the Chairman and Two Commissioners of the Commission on
Audit?
a. A citizen of the Philippines.
b. At least 40 years of age upon appointment.
c. CPA's with no less than 5 years of auditing experience or members of Philippine bar who have been
engaged in law practice for at least 5 years.
d. Must not have been candidates for any elective position preceding appointment.

9. Which of the following is not one of the duties of the Commission on Audit
a. Define the scope of its audit and examination
b. Assume fiscal responsibility for the government and its instrumentalities
c. Keep the general accounts of the government
d. Promulgate accounting rules and regulations

10. Which of the following agencies is least likely to affect the public accounting profession
a. Department of Trade and Industry c. Insurance Commission
b. Bankgo Sentral ng Pilipinas d. Bureau of Internal Revenue
QUIZZER 1 [6]
Code of Ethics for Professional Accountants in the Philippines
1. The Code of Ethics for Professional Accountants in the Philippines is approved by ______, recommended for
adoption by the _____.
a. BOA, PICPA b. SEC, BOA c. PICPA, BOA d. BOA, President

2. Which of the following statements best describes why the profession of certified public accountants has deemed
it essential to promulgate a code of professional ethics and to establish a mechanism for enforcing observation
of the Code?
a. A pre-requisite to success is the establishment of an ethical code that primarily defines the professional’s
responsibility to clients and colleagues.
b. A distinguishing mark of a profession is its acceptance of responsibility to the public.
c. A requirement of most state laws calls for the profession to establish a code of ethics.
d. An essential means of self-protection for the profession is the establishment of flexible ethical standards by
the profession.

3. Which of the following is not a modification made to IFAC Code of Ethics?

a. The term “corporation” was deleted from the definitions
b. The period of rotation of the lead engagement partner was changed from seven to five years
c. The phrase “who are certified public accountants and who hold a valid certificate issued by the
Board of Accountancy” was added in the definition of professional accountant
d. The paragraph on advertising and solicitation was modified to include advertisements on
newspapers of national circulation.

4. Which of the following statements best describes Integrity?

a. Be straightforward and honest in performing professional services.
b. Perform professional services with due care, competence and diligence
c. Do not compromise professional judgement because of bias, conflict of interest or undue influence of others.
d. Do not use of disclose any such confidential information without proper and specific authority or unless there
is a legal or professional right or duty to disclose.

5. The principle of professional competence and due care imposes which of the following obligations on CPA’s?
a. To refrain from disclosing confidential information obtained as a result of professional and business
relationships without proper and specific authority unless there is a legal or professional right or duty to
disclose.
b. To comply with relevant laws and regulations and avoid any situation that may bring discredit to the
profession.
c. To act diligently in accordance with applicable technical and professional standards when providing
professional services.
d. Not to compromise professional or business judgment because of bias, conflict of interest or undue
influence of others.

6. According to the Code of Ethics, professional competence and due care may be divided into two phases:
attainment of professional competence and maintenance of professional competence. The attainment of
professional competence requires the following, except
a. initially a high standard of general education
b. a continuing awareness of and an understanding of relevant technical professional and business
developments.
c. specific education, training and examination in professionally relevant subjects
d. whether prescribed or not, a period of work experience

7. After beginning an audit of a new client, Ash, CPA, discovers that the professional competence necessary for the
engagement is lacking. Ash informs management of the situation and recommends another CPA, and
management engages the other CPA. Under these circumstances:
a. Ash’s lack of competence should be considered to be a violation of generally accepted auditing standards
b. Ash may request compensation from the client for any professional services rendered to it in connection
with the audit
c. Ash’s request for a commission from the other CPA is permitted because a more competent audit can now
performed
d. Ash may be indebted to the other CPA since the other CPA can collect form the client only the amount the
client originally agreed to pay Ash
QUIZZER 1 [7]
8. AAA Commercial Inc. engages the services of Al, CPA, to make a project study on the expanded food vending
operations of the corporation with the corresponding staffing and compensation package for its executive staff.
Al, however, has primarily auditing expertise and only in general merchandising operations. Al may properly:
a. Accept the engagement and carry it out consistent with auditing standards
b. Accept the engagement but exercise due professional care
c. Accept the engagement and acquire the necessary competence or consult with established authorities
d. Decline the engagement for lack of experience or competence in an entirely new line of specialization

9. AAA Corporation recently entered into several transactions involving complex accounting procedures. Joy, chief
accountant was asked by the Corporation’s directors if he can properly account for transactions. Joy does not
possess the competence required under the circumstances. Which of the following responses would not be a
violation of the Code of Personal Ethics?
a. Joy agrees to handle the accounting issues involved but does not engage an expert for assistance or
support
b. Joy represents that he is an expert on the complex accounting procedure, and agrees to tackle the
recording issues involved in the transactions
c. Joy engages an expert on the relevant accounting procedures in order to properly account for the complex
accounting procedures
d. All of the above choices are ethical responses

10. The requirement of which principle is of particular importance in an assurance engagement in ensuring that the
conclusion of the professional accountant has value to the intended user
a. Professional competence and due care c. Objectivity
b. Professional behavior d. Integrity

11. Objectivity in the Code refers to a CPA’s ability:

a. To independently distinguish between accounting practices that are acceptable and those that are not.
b. To maintain an impartial attitude on all matters which come under the CPA’s review
c. To be unyielding in all matters dealing with auditing procedures
d. To independently choose between alternate accounting principles and auditing standards

12. In which of the situations given below would disclosure by a CPA be in violation of the Code?
a. Disclosing confidential information in order to properly discharge the CPA’s responsibilities in accordance
with his profession’s standards
b. Disclosing confidential information in compliance with a subpoena issued by a court
c. Disclosing confidential information to another accountant interested in purchasing the CPA’s practice
d. Disclosing confidential information in a review of the CPA’s professional practice by the PICPA Quality
Review Committee

13. Owen, CPA, has an overbearing superior, and the superior is suppressing the recording of certain transactions
of the company. Owen is being asked to act contrary to technical and professional standards. The Code of
Ethics states that the first remedy in case of ethical conflict.
a. Follow the established policies of the employing organization to seek a resolution of such conflicts
b. Review the conflict problem with the superior
c. Review the conflict problem with the next higher managerial level, after giving notice to the immediate
superior of the intention to do so
d. Seek counseling and advice on a confidential basis with an independent advisor or the applicable
professional accountancy body or regulatory body

14. The state of mind that permits the provision of an opinion without being affected by influences that compromise
professional judgment.
a. Professional skepticism c. Objectivity
b. Independence in appearance d. Independence of mind

15. The avoidance of facts and circumstances that are so significant a reasonable and informed third party, having
knowledge of all relevant information, would reasonably conclude a CPA’s integrity, objectivity or professional
skepticism had been compromised.
a. Principles of segregation c. Independence in mind
b. Independence in appearance d. Preemptive estoppel

16. Occurs when a firm or a member of the assurance team could benefit from a financial interest in, or other self-
interest conflict with, an assurance client
QUIZZER 1 [8]
a. Self-interest b. Self-review c. Advocacy d. Familiarity

17. Occurs when any product or judgment of a previous assurance engagement or non-assurance engagement
needs to be re-evaluated in reacting conclusions on the assurance engagement.
a. Self-interest b. Self-review c. Advocacy d. Familiarity

18. Occurs when a firm, or a member of the assurance team, promotes, or may be perceived to promote, an
assurance client’s position or opinion to the point that objectivity may, or may be perceived to be, compromised.
Such may be the case if a firm or a member of the assurance team were to subordinate their judgment to that of
the client.
a. Self-interest b. Self-review c. Advocacy d. Familiarity

19. Occurs when a member of the assurance team was previously a director or officer of the assurance client, or
was an employee in a position to exert direct and significant influence over the subject matter of the assurance
engagement.
20. Self-interest b. Self-review c. Advocacy d. Familiarity

21. Occurs when, by virtue of a close relationship with an assurance client, its directors, officers or employees, a firm
or a member of the assurance team becomes too sympathetic to the client’s interest
a. Self-interest b. Intimidation c. Advocacy d. Familiarity

22. Occurs when a member of the assurance team may be deterred from acting objectively and exercising
professional skepticism by threats, actual or perceived, form the directors, officers or employees of an assurance
client.
a. Self-interest b. Intimidation c. Advocacy d. Familiarity

23. These are policies and procedures designed to eliminate or to reduce threats to fundamental principles to an
acceptable level.
a. International controls b. Control activities c. Safeguards d. Segregation of duties

24. Regarding safeguards, the Code of Ethics focuses on:

a. Reducing or eliminating all threats to independence
b. Reducing all threats to independence
c. Eliminating all threats to independence
d. Reducing or eliminating threats to independence which are not clearly insignificant

25. Which of the following may be considered by a professional accountant to eliminate or reduce threats to an
acceptable level?
i. Safeguards created by the profession, legislation or regulation
ii. Safeguards created in the work environment
iii. Resign from the client or the employer
iv. Decline or discontinue the professional engagement
a. I and II only b. III and IV c. I and IV only d. II and II only

26. Which of the following circumstances may create self-interest threats for a professional accountant in public
practice?
a. Performing a service for a client that directly affects the subject matter of the assurance engagement
b. Acting as an advocate on behalf of an assurance client in litigation or disputes with third parties
c. A financial interest in a client or jointly holding a financial interest with a client
d. Being threatened with litigation

27. The following are examples of circumstances that may create familiarity threats, except
a. Promoting shares in a listed entity when that entity is a financial statement audit client
b. Long association of senior personnel with the assurance client
c. A member of the engagement team having a close or immediate family relationship with a director or officer
of the client
d. A former partner of the firm being a director or officer of the client or an employee in a position to exert direct
and significant influence over the subject matter of the engagement

28. The following may create intimidation threats, except

a. Being threatened with dismissal or replacement in related to a client engagement
b. Being threatened with litigation
QUIZZER 1 [9]
c. Being pressured to reduce inappropriately the extent of work performed in order to reduce fees
d. A member of the assurance team being, or having recently been, a director or officer of the client

29. Which of the following is an example of engagement-specific safeguards in the work environment?
a. Advising partners and professional staff of those assurance clients and related entities from which they must
be independent
b. Disclosing to those charged with governance of the client the nature of service provided and extent of fees
charged
c. A disciplinary mechanism to promote compliance with the firm’s policies and procedure
d. Published policies and procedures to encourage and empower staff to communicate to senior levels within
the firm any issue relating to compliance with the fundamental principles that concerns them.

30. A direct financial interest or material indirect financial interest in the assurance client of a member of the
assurance team or his immediate family member may create a significant self-interest threat. Which of the
following safeguards would be least likely considered to eliminate the threat or reduce it to an acceptable level?
a. Discuss the matter with those charged with governance of the assurance client
b. Dispose of the direct financial interest prior to the individual becoming a member of the assurance team;
c. Dispose of the indirect financial interest in total or dispose of a sufficient amount of it so that the remaining
interest is no longer material prior to the individual becoming a member of the assurance team; or
d. Remove the member of the assurance team from the assurance engagement.

31. A loan, or guarantee of a loan, from an assurance client that is a bank or a similar institution, to a member of the
assurance tear or his immediate family, would not create a threat to independence provided the loan, or a
guarantee, is
a. Immaterial to the member of the assurance team or his immediate family
b. Immaterial to the assurance client
c. Immaterial to both the member of the assurance team or his immediate family and the assurance client
d. Made under normal lending procedure, terms and requirements

32. This is the communication to the public of information as to the services or skills provided by professional
accountants in public practice with a view to procuring professional business.
a. Advertising b. Publicity c. Solicitation d. Marketing services

33. This is the communication to the public of facts about a professional accountant which are not designed for the
deliberate promotion of that professional accountant
a. Advertising b. Publicity c. Solicitation d. Marketing services

34. In which of the following situations would a CPA be in violation of the rules of professional ethics in determining
professional fees?
a. A fee based on appropriate rates per hour or per day for the time of each person engaged in performing
professional services
b. A fee which is lower compared to the fee charged in the prior year for similar services
c. A fee based on appropriate rates per hour, where the appropriate rate is based on the fundamental premise
that the organization and conduct of the CPA and the services provided to clients are well planned,
controlled and manage
d. A fee that is based on 10% of the client’s adjusted net income for the current year

35. Which of the following actions by a CPA in public practice will not result in violation of the Code of Ethics
regarding commissions?
a. Accepting commission for referring a client to a third party.
b. Accepting commission for the referral of the products or services of others.
c. Receipt of referral fees by the referring CPA when no services are performed by the referring accountant.
d. Entering into an arrangement for the purchase of the whole or part of an accounting practice requiring
payments to individuals formerly engaged in the practice or payments to their heirs or estates.

36. The rendering of two or more types of professional services concurrently:

a. Is a violation of the Code of Ethics.
b. Would impair integrity, objectivity or independence, or the good reputation of the profession.
c. Does not itself impair integrity, objectivity or independence.
d. Is inconsistent with the practice of public accountancy.

37. Which statement is incorrect regarding client’s monies?

QUIZZER 1 [10]
a. Client’s monies should not be held by the CPA if there is reason to believe that the monies were obtained
form, or are to be used for, illegal activities.
b. A CPA in public practice should maintain one or more bank accounts for client’s monies.
c. Monies may only be drawn from the client account on the instructions of the client.
d. Fees due from a client may be drawn from client’s monies without the need of notifying the client.

38. Which fundamental principle may be threatened when the CPA in public practice is asked to provide a second
opinion on the application of accounting, auditing, reporting or other standards or principle to specific
circumstances or transactions by, or on behalf of a company or entity that is not an existing client?
a. Integrity c. Confidentiality
b. Professional competence and due care d. Professional behavior

39. A client seeking a second opinion does not permit the CPA to communicate with the existing accountant. In such
cases, the CPA should:
a. Issue a disclaimer of opinion due to a significant client-imposed scope limitation
b. Consider whether, taking all the circumstances into account, it is appropriate to provide the opinion sought
c. Consider whether to issue a qualified opinion or disclaimer of opinion due to significant client-imposed
scope limitation
d. Communicate the client’s refusal activity directly to the existing accountant

40. Circumstances that threaten the ability of a professional accountant in business to perform duties with the
appropriate degree of professional competence and due care include the following, except:
a. Insufficient time for properly performing or completing the relevant duties
b. Incomplete, restricted or otherwise inadequate information for performing the duties properly
c. Sufficient experience, training and/or education
d. Inadequate resources for the proper performance of the duties

 END 