THE PROFESSIONAL PRACTICE OF PUBLIC ACCOUNTING

RA 9298
1. The Continuing Professional Education (CPE) program mentioned in the IRR shall have the following objectives, except:
a. To promote the general welfare of the public
b. To provide and ensure the continuous education of accountancy students with the latest trends in the profession brought about by
modernization and scientific and technological advancement
c. To raise and maintain the professionals capability for delivering professional services
d. To attain and maintain the highest standards and quality in the practice of the profession

2. Which statement is(are) correct regarding CPE requirements for renewal of professional license?
I. The total CPE credit units required for CPAs shall be sixty (60) units for three (3) years, provided that a minimum of fifteen (15)
credit units shall be earned in each year.
II. Any excess credit units in one year may be carried over to the succeeding years within the three-year period.
III. Excess credit units earned shall not be carried over to the next three-year period without exception.
IV. 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 two years immediately prior to the date of renewal.

a. I, II and III only c. I, II and IV only
b. I and IV only d. I, II, III and IV

3. Which statement is incorrect 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 fifteen (15)
credit units shall be earned in each year.
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 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.

4. How many credit units per hour is (are) earned by a CPA who serves as a resource speaker at a CPE seminar?
a. 1 CU per hour c. 3 CU per hour
b. 5 CU per hour d. 2 CU per hour

5. Who is not permitted by law to practice public accountancy?
a. A corporation whose stockholders are all CPAs
b. A partnership of CPAs
c. A solo practitioner
d. A partnership of CPAs, with some non-CPA staff

6. Under the IRR of RA 9298, if a partner in a two-member partnership dies, the surviving partner may continue to practice as an
individual under the existing firm title which includes the deceased partners name
a. For a period of time not to exceed five years.
b. For a period of time not to exceed two years.
c. Indefinitely.
d. Until the partnership payout to the deceased partners estate is terminated.

7. A meaningful experience shall be considered as satisfactory compliance with the requirements of Section 28 if it is earned in
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. Provided the
accumulated teaching experience on these subjects shall not be less than three (3) school years.
A meaningful experience shall be considered as satisfactory compliance with the requirements of Section 28 if it is earned in
Public Practice and shall include at least one years as audit assistant and at least two years as auditor in charge of the audit engagement
covering full audit functions of significant clients.
a. True, False c. False, False
b. False, True d. True, True

8. 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, it shall file for renewal on or before
a. September 30, 2007 c. December 31, 2007
b. September 30, 2008 d. August 30, 2008

9. 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 c. Dec. 31, 2007
b. Dec. 31, 2008 d. Aug. 30, 2007

10. Individual CPAs, Firms or Partnerships of CPAs, including partners and staff members thereof shall register with the BOA and the
PRC. If Emong and Bobads, CPAs renewed its accreditation on August 30, 2005, it shall file for renewal on or before
a. September 30, 2007 c. December 31, 2007
b. September 30, 2008 d. August 30, 2008

11. The CPA Registration Number shall be engraved in what part of the CPAs seal?
a. Upper portion of the space between the bigger and smaller circle.
b. Lower portion of the space between the bigger and smaller circle.
c. Left and right portion of the space between the bigger and smaller circle and in the middle of the smaller circle.
d. Middle of the smaller circle.

12. Affixing the CPAs seal and signature is an indication of CPAs
a. Compliance with the requisite accounting and auditing standards and rules.
b. Independence with respect to the entity being audited.
c. Basic competence at the time of signing the document.
d. Collection of the audit fees from the client.

13. Special/temporary permit may be issued by the Board of Accountancy subject to the approval of PRC and payment of the fees the
latter has prescribed and charged thereof to the following persons
a. A foreign CPA called for consultation or for a specific purpose which, in the judgment of BOA is essential for the development of
the country
b. A foreign CPA engaged as professor, lecturer or critic in fields essential to the accountancy education in the Philippines and his/her
engagement is confined to teaching only.
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. All of the above

14. According to the Philippine Accountancy Act of 2004 (RA 9298), any person who shall violate RA 9298 or any of its
implementing rules and regulations as promulgated by the Board of Accountancy subject to the approval of the PRC, shall, upon
conviction, be punished by a fine
a. not less fifty thousand pesos (P50,000), or by imprisonment for a period not exceeding three (3) years, or both
b. not less one hundred thousand pesos (P100,000), or by imprisonment for a period not exceeding two (2) years, or both
c. not less fifty thousand pesos (P50,000), or by imprisonment for a period not exceeding two (2) years, or both
d. not less one hundred fifty thousand pesos (P150,000), or by imprisonment for a period not exceeding three (3) years, or both

15. Within __(I)___ days after the effectivity of RA 9298, the Board subject to the approval of PRC and in coordination with APO,
shall adopt and promulgate such rules and regulations to carry out the provisions of RA 9298 and which shall take effect __(II)____
days following its publication in the Official Gazette or in any major daily newspapers of general circulation?
I II
a. 90 30
b. 60 15
c. 90 15
d. 30 45

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

Revised Code of Ethics
PART B: PROFESSIONAL ACCOUNTANTS IN PUBLIC PRACTICE
Section 200 Introduction
1. Independence and other general principles are potentially affected by
I. Self-interest threat IV. Familiarity threat
II. Intimidation threat V. Advocacy Threat
III. Self-review threat

a. I, II, III, IV and V c. I, II and III
b. I, II, III and IV d. I only

2. Occurs as a result of the financial and other interests of a professional accountant or of an immediate or close family member
a. Self- interest threat c. Advocacy threat
b. Self-review threat d. Familiarity threat

3. Examples of circumstances that may create self-interest threat include
a. Contingent fees relating to assurance engagements
b. A financial interest in a client or jointly holding a financial interest with a client
c. A loan to or from an assurance client or any of its directors or officers
d. All of the above.

4. Which of the following least likely create self-interest threat
a. Undue dependence on total fees from a client.
b. Concern about the possibility of losing the engagement.
c. Having a close business relationship with a client.
d. Being pressured to reduce inappropriately the extent of work performed in order to reduce the fees

5. Occurs when a professional judgment needs to be re-evaluated by the professional accountant responsible for that judgment
a. Self-interest threat c. Advocacy threat
b. Self-review threat d. Familiarity threat

6. Examples of circumstances that may create self-review threat least likely include
a. Having prepared the original data used to generate records that are the subject matter of the engagement
b. A member of the assurance team being, or having recently been, an employee of the assurance client in a position to exert direct and
significant influence over the subject matter of the assurance engagement.
c. Performing services for an assurance client that directly affect the subject matter of the assurance engagement.
d. Potential employment with a client.

7. Examples of circumstances that may create self-review threat least likely include
a. A member of the assurance team being or having recently been a director of officer of that client.
b. The discovery of significant error during a re-evaluation of the work of the professional accountant in public practice.
c. Reporting on the operation of financial systems after being involved in their design or implementation.
d. Accepting gifts or preferential treatment from a client, unless the value is clearly insignificant.

8. Occurs when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised
a. Self-interest threat c. Advocacy threat
b. Self-review threat d. Familiarity threat

9. Occurs when, by virtue of a close relationship, a professional accountant becomes too sympathetic to the clients interests.
a. Self-interest threat c. Advocacy threat
b. Self-review threat d. Familiarity threat

10. Examples of circumstances that may create familiarity threat least likely include
a. A member of the assurance team giving an immediate family member or close family member who is a director or officer of the
assurance client.
b. A member of the assurance team having an immediate family member or close family member who, as an employee of the
assurance client, is in a position to exert direct and significant influence over the subject matter of the assurance engagement.
c. A former partner of the firm being a director, officer of the assurance client or an employee in a position to exert direct and
significant influence over the subject matter of the assurance engagement.
d. Promoting shares in a listed entity when that entity is a financial statement audit client

11. Intimidation threat
a. is not a threat to independence
b. Occurs when a member of the assurance tem may be deterred from acting objectively and exercising professional skepticism by
threats, actual or perceived
c. 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 to sympathetic to the client s interests.
d. Occurs when a firm, or a member of the assurance team, promotes, or may be perceived to promote, an assurance clients position
or opinion to the point that objectivity may, or may be perceived to be, compromised.

12. Which of the following is not likely a threat to independence?
a. Acting as an advocate on behalf of an assurance client in litigation or in resolving disputes with third parties.
b. Long association of a senior member of the assurance team with the assurance client.
c. Threat of replacement over a disagreement with the application of an accounting principle.
d. Owning immaterial indirect financial interest in an audit client.

13. Safeguards created by the profession, legislation or regulation, include the following, except
a. Educational, training and experience requirements for entry into the profession
b. Continuing education requirements
c. Legislation governing the independence requirements of the firm.
d. Policies and procedures that emphasize the assurance clients commitment to fair financial reporting


14. Safeguards in the work environment, include the following, except
a. Professional standards and monitoring and disciplinary processes.
b. The assurance client has competent employees to make managerial decision.
c. Internal procedures that ensure objective choices in commissioning non-assurance engagements.
d. A corporate governance structure, such as an audit committee, that provides appropriate oversight and communications regarding a
firms services.

15. Safeguards in the work environment, include the following except
a. Firm leadership that stresses the importance of independence and the expectation that members of assurance teams will act in the
public interest.
b. External review of the firms quality control system.
c. Policies and procedures to implement and monitor quality control of assurance engagements.
d. Policies and procedures that will enable the identification of interests or relationships between the firm or members of the assurance
team and assurance clients.
Section 290 Independence Assurance Engagements
16. Which of the following is incorrect regarding independence?
a. Independence consists of independence of mind and independence in appearance.
b. Independence of mind is the state of mind that permits the provision of an opinion without being affected by influences that
compromise professional judgement, allowing an individual to act with integrity, and exercise objectivity and professional skepticism.
c. Independence in appearance is the avoidance of facts and circumstances that are so significant a reasonable and informed third
party, having knowledge of all relevant information, including any safeguards applied, would reasonably conclude a firms or a
member of the assurance teams integrity, objectivity or professional skepticism had been compromised.
d. Independence is a combination of impartiality, intellectual honesty and a freedom from conflicts of interest.

17. For assurance engagements provided to an audit client, the following should be independent of the client
a b c d
The members of the assurance team Yes Yes Yes Yes
The firm Yes Yes No No
Network firms Yes No No Yes

18. For assurance engagements provided to clients that are not audit clients, when the report is not expressly restricted for use by
identified users, the following should be independent of the client
a b c d
The members of the assurance team Yes Yes Yes Yes
The firm Yes Yes No No
Network firms Yes No No Yes