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A. It refers to the professional accountant having obtained evidence based on procedures agreed upon
between the practitioner and the intended users to be satisfied that findings be reported to the
intended users.
B. It refers to the professional accountant having obtained sufficient external and internal appropriate
evidence to be satisfied that the subject matter is plausible in the circumstances.
C. It refers to the professional accountant having obtained sufficient appropriate evidence to conclude
that the subject matter conforms in all material respects with identified suitable criteria.
D. It refers to the professional accountant having obtained sufficient evidence to conclude that he has
no knowledge of any required modifications to be made in the financial statements in order for them to
conform of prescribed criteria.
A. An auditor is engaged to carry out those procedures of an audit nature to which the auditor and the
entity and any appropriate third parties have agreed and to report on factual findings.
B. The recipients of the report must form their own conclusions from the report by the auditor.
C. The report is restricted to those parties that have agreed to the procedures to be performed.
3. Which of the following engagements provides third parties the highest level of assurance about the
clients financial statements?
A. Audit
B. Review
C. Agreed-upon procedures
D. Compilation
4. In which of the following situations can third parties assume responsibility of the auditor regarding
association with financial information?
B. When the auditor consents to the use of the auditor's name in a professional connection.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
C. Either a or b.
D. Neither a nor b.
A. Engagement risk is the risk that the practitioner will express an inappropriate conclusion that the
subject matter conforms in all material respects with suitable criteria.
B. All components of the engagement risk model will be significant for all assurance engagements.
C. The extent to which the practitioner considers the relevant components of engagement risk will be
affected by the engagement circumstances.
D. Business risk is not part of engagement risk and does not affect the application of Philippine Standard
on Assurance Engagements.
6. A concept relating to the accumulation of the audit evidence necessary for the auditor to conclude
that there are no material misstatements in the financial statements taken as a whole.
A. Reasonable assurance
B. Positive assurance
C. Moderate assurance
D. Negative assurance
7. Which statement is incorrect regarding the external auditors consideration of the work of internal
auditing?
A. The external auditor should consider the activities of internal auditing and their effect, if any, on
external audit procedures.
B. The external auditor should obtain a sufficient understanding of internal audit activities to assist in
planning the audit and developing an effective audit approach.
C. During the course of planning the audit, the external auditor should perform a preliminary
assessment of the internal audit function when it appears that internal auditing is relevant to the
external audit of the financial statements in specific audit areas.
D. When the external auditor intends to use specific work of internal auditing, the external auditor
need not evaluate and test that work to confirm its adequacy for the external auditor's purposes.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
C. Stating in the auditors management letter that the examination was made in accordance with
generally accepted auditing standards.
9. Which of the following is responsible for the fairness of representations made in financial
statements?
10. The exposure period allowed for each exposure draft of PSA to be considered by the organizations
and persons to whom it is sent for comment is generally
A. Four months
B. Three months
C. Two months
D. Six months
A. The PSAs and Interpretations may also have application, as appropriate, to other related activities of
auditors.
B. PSAs contain basic principles and essential procedures (identified in bold type black lettering)
together with related guidance in the form of explanatory and other material.
12. The following should be occupied only by a duly registered CPA, except
A. Any position in any business or company in the private sector which requires supervising the
recording of financial transactions.
B. Any position in any business or company in the private sector which requires preparation of financial
statements.
C. Any position in any business or company in the private sector which requires coordinating with the
internal auditors for the audit of financial statements.
D. The position of the dean that supervises the BSA program of an educational institution.
13. Which of the following is not represented in the Auditing and Assurance Standards Council?
A. Board of Accountancy
14. A study, appraisal, or review by the BOA 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.
A. Peer review
B. Quality review
C. Analytical review
D. Administrative review
15. Emong, CPA is applying for renewal of his professional license. He is exempted from the CPE
requirements
B. If he is working abroad and he has been out of the country for at least two years immediately prior to
the date of renewal.
C. Either a or b.
D. Under no circumstances.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
A. The Professional Regulation Commission has the authority to remove any member of the Board of
Accountancy for negligence, incompetence, or any other just cause.
D. After three years, subject to certain conditions, the Board of Accountancy may order the
reinstatement of a CPA whose certificate of registration has been revoked.
17. There is a need for assurance that all services obtained from a professional accountant are carried
out to the highest standards of performance. This statement relates to
A. Credibility
B. Professionalism
C. Quality of Services
D. Confidence
A. I, II, III
B. II, III, I
C. III, II, I
D. II, I, III
19. A partner or employee of the firm serving as an officer or as a director on the board of an assurance
client will most likely create
A. Intimidation threat
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
B. Self-review threat
C. Advocacy threat
D. Familiarity threat
A. A former officer, director or employee of the assurance client serve as a member of the assurance
team.
B. A director, an officer or an employee of the assurance client in a position to exert direct and
significant influence over the subject matter of the assurance engagement has been a member of the
assurance team or partner of the firm.
C. Assisting an audit client in matters such as preparing accounting records or financial statements.
21. This process may include, particularly in the case of large complex audits, requesting personnel not
otherwise involved in the audit to perform certain additional procedures.
A. Direction
B. Supervision
C. Review
D. All of these
22. Which of the following is least likely a factor that affects the extent of quality control procedures?
23. Which statement is incorrect regarding the auditors responsibility to consider fraud and error in the
audit of financial statements?
B. The auditor is may be held responsible for the prevention of fraud and error.
C. The auditor should consider the risk of material misstatements in the financial statements resulting
from fraud or error.
D. The risk of not detecting a material misstatement resulting from error is lower than the risk of not
detecting a material misstatement resulting from fraud.
A. Using the auditors knowledge of the business, the auditor may identify events or conditions that
provide an opportunity, a motive or a means to commit fraud, or indicate that fraud may already have
occurred.
B. A missing document, an out of balance general ledger, or an analytical procedure that does not make
sense may be the result of circumstances other than fraud.
C. Fraud risk factors indicate the existence of fraud because they often have been present in
circumstances where frauds have occurred.
D. The presence of fraud risk factors may affect the auditors assessment of inherent risk or control risk.
25. Cash receipts from sales on account have been misappropriated. Which of the following acts would
conceal this defalcation and least likely to be detected by an auditor?
26. Example of the type of information that may come to the auditor's attention that may indicate that
noncompliance with laws or regulations has occurred most likely include
A. Payments for specified services or loans to consultants, related parties, employees or government
employees.
B. Payments for goods or services made to the country from which the goods or services originated.
D. Sales commissions or agent's fees that appear reasonable in relation to those ordinarily paid by the
entity or in its industry or to the services actually received.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
27. When the auditor knows that an illegal act has occurred, the auditor must
D. Consider the effects on the financial statements, including the adequacy of disclosure.
28. Which statement is correct regarding the auditors communications of audit matters with those
charged with governance?
A. The auditors communications of matters include all audit matters of governance interest.
B. An audit of financial statements is designed to identify all matters that may be relevant to those
charged with governance.
C. The auditors communications with those charged with governance may be made orally or in
writing.
29. It is in the interest of both client and auditor that the auditor sends an engagement letter,
preferably before
30. When a change in the type of engagement from higher to lower level of assurance is reasonably
justified, the report based on the revised engagement (choose the incorrect one)
A. Should not contain a separate paragraph that refers to the original engagement.
B. Should not refer to any procedures that may have been performed in the original engagement.
31. A basic tool used by the auditor to control the audit work and review the progress of the audit.
A. Audit program
B. Progress flowchart
C. Engagement letter.
A. Assess the conclusions reached and the evaluation of the overall financial statement presentation
through the use analytical procedures.
33. An understanding of the clients business and industry and knowledge about the companys
operations are essential for doing an adequate audit. For a new client, most of this information is
obtained
34. The managements assessment of the entitys ability to continue as a going concern covers a period
of:
35. Which of the following would an auditor most likely use in determining the auditors preliminary
judgment about materiality?
36. How can the audit program best be described at the beginning of the audit process?
A. Tentative.
B. Comprehensive.
C. Conclusive.
D. Optional.
A. Detection risk is eliminated if an auditor were to examine 100 percent of the account balance or class
of transactions
B. There is an inverse relationship between detection risk and the combined level of inherent and
control risk.
C. The assessed level of inherent and control risk can be sufficiently low, thus resulting to eliminating the
need for substantive tests.
D. Audit risk may be more appropriately determined by assessing inherent and control risk separately.
C. ABC Company, a client company, lacks sufficient working capital to continue operations.
D. A client fails to discover employee fraud on a timely basis because bank accounts are not reconciled
monthly.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
39. Which of the following is a valid statement about the assessment of control risk?
A. There is a positive relationship between detection risk and the combined level of inherent and control
risk.
B. The auditor should consider the assessed levels of inherent and control risks in determining the
nature, timing, and extent of substantive procedures required to eliminate audit risk.
C. Misstatements discovered by conducting substantive procedures may cause the auditor to modify
the previous assessment of control risk.
D. The assessed level of inherent and control risks can be sufficiently low in order to eliminate the
auditors need to perform substantive tests on some assertions. The assessed level of inherent and
control risks can be sufficiently low in order to eliminate the auditors need to perform substantive tests
on some assertions.
40. The auditor should perform which of the following as risk assessment procedure?
A. Analytical procedures
B. Confirmation
C. Recalculation
D. Re-performance
41. Which of the following is least likely a potential benefit of effectiveness and efficiency for an entitys
internal control that IT provides?
B. Enhance the ability to monitor the performance of the entitys activities and its policies and
procedures.
D. Consistently apply predefined business rules and perform complex calculations in processing large
volumes of transactions or data.
A. Consists of the policies and procedures that help ensure that management directives are carried out.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
B. Includes the governance and management functions and the attitudes, awareness, and actions of
those charged with governance and management concerning the entitys internal control and its
importance in the entity.
C. Is the entitys process for identifying business risks relevant to financial reporting objectives and
deciding about actions to address those risks, and the results thereof.
D. Consists of the procedures and records established to initiate, record, process, and report entity
transactions (as well as events and conditions) and to maintain accountability for the related assets,
liabilities, and equity.
43. Which of the following situations will normally result to increase in the extent of audit procedures?
44. The auditor should determine overall responses to address the risks of material misstatement at the
financial statement level. Such responses most likely include
B. Emphasizing to the audit team the need to maintain professional skepticism in gathering and
evaluating audit evidence.
45. Which statement is incorrect regarding the nature, timing and extent of tests of controls?
A. Those controls subject to testing by performing inquiry combined with inspection or reperformance
ordinarily provide more assurance than those controls for which the audit evidence consists solely of
inquiry and observation.
B. If the auditor plans to rely on controls that have not changed since they were last tested, the auditor
should test the operating effectiveness of such controls at least once in every third audit.
C. The length of time period between retesting controls is a matter of professional judgment, but
cannot exceed three years.
NFJPIA - UNIVERSITY OF THE PHILIPPINES
2016 MOCK CPA BOARD EXAMINATIONS
Source: www.proprofs.com
D. The more the auditor relies on the operating effectiveness of controls in the assessment of risk, the
greater is the extent of the auditors tests of controls.
46. Which of the following statements is correct regarding the auditors primary objective in performing
procedures to obtain an understanding of the internal control structure?
A. The primary objective is to provide the auditor with an evaluation of the consistency of application of
managements policies.
B. The primary objective is to provide the auditor with knowledge necessary for audit planning.
C. The primary objective is to provide the auditor with evidential matter to use in assessing inherent risk.
D. The primary objective is to provide the auditor with a basis for modifying tests of controls.
47. Which of the following would most likely indicate internal control deficiency for the revenue cycle
(including cash receipts)?
B. Cash receipts received in the mail are received by a secretary with no recordkeeping responsibility.
D. Cash disbursements over P100,000 does not require two signatures on the check.
B. Setting the planned assessed level of control risk at the maximum will eliminate these tests.
D. Inquire of the accounts receivable clerk regarding the effectiveness of the computer program in
updating accounts receivable balances.
49. After obtaining an understanding of an entitys internal controls, an auditor may assess control risk
at the maximum for some assertions because the auditor:
50. The report of the service organization auditor on the suitability of design (Type A) will not ordinarily
include an opinion by the service organization auditor that:
A. The description of the service organization's accounting and internal control systems, ordinarily
prepared by the management of the service organization is accurate.
C. The accounting and internal control systems are operating effectively based on the results from the
tests of control.
D. The accounting and internal control systems are suitably designed to achieve their stated objectives.