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Unformatted text preview: Page 1 of 12 CEBU CPAR CENTER Mandaue City, Cebu AUDITING THEORY FIRST PREBOARD EXAMINATION INSTRUCTIONS: CHOOSE THE BEST ANSWER FOR EACH OF THE FOLLOWING. MARK THE LETTER OF YOUR CHOICE WITH A VERTICLE LINE ON THE ANSWER SHEET PROVIDED. STRICTLY NO ERASURES ARE ALLOWED. 1. The current periods auditor who did not audit the prior periods financial statements. a. Existing auditor c. Incoming auditor b. Continuing auditor d. Predecessor auditor 2. They are not presented as complete financial statements capable of standing alone, but are an integral part of the current period financial statements intended to be read only in relationship to the current period figures. a. Corresponding figures c. Prior period figures b. Comparative financial statements d. Comparatives 3. Comprises officers and others who also perform senior managerial functions. a. Management c. Audit committee b. Governance d. Board of directors 4. It exists when other information, not related to matters appearing in the audited financial statements, is incorrectly stated or presented. a. Material inconsistency c. Material weaknesses b. Material misstatement of fact d. Misstatement 5. A document, ordinarily issued by an entity on an annual basis, which includes its financial statements together with the audit report thereon. a. Environmental performance report c. Special purpose audit report b. Annual report d. Prospectus 6. When the professional accountant has obtained sufficient appropriate evidence to be satisfied that the subject matter is plausible in the circumstances, he or she can provide what level of assurance? a. None c. Moderate b. High d. Absolute 7. Which statement is correct regarding assurance engagements? a. The objective of an assurance engagement is for a professional accountant to evaluate or measure a subject matter that is the responsibility of another party against identified suitable criteria, and to express a conclusion that provides the intended user with a level of assurance about that subject matter. b. All engagements performed by professional accountants are assurance engagements. c. Whether a particular engagement is an assurance engagement will depend upon whether it exhibits all the following elements - a three party relationship, a subject matter, suitable criteria and a conclusion. d. All engagements undertaken by an auditor that is similar to an agreed-upon procedures engagement does not result in the expression of a conclusion that provides a level of assurance. AT-3 rd Batch-1stPB Page 2 of 12 8. There are fundamental principles that the professional accountant has to observe when performing assurance engagements. 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?...
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- Spring '10