Cpa Reviewer

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CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila

AUDITING THEORY
CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS IN THE PHILIPPINES PREFACE 1. Which statement is incorrect regarding the Code of Ethics for Professional Accountants in the Philippines? a. Professional accountants refer to persons who are Certified Public Accountants (CPA) and who hold a valid certificate issued by the Board of Accountancy. b. Where a national statutory requirement is in conflict with a provision of the IFAC Code, the IFAC Code requirement prevails. c. The Code of Ethics for Professional Accountants in the Philippines is mandatory for all CPAs and is applicable to professional services performed in the Philippines on or after January 1, 2004. d. Professional accountants should consider the ethical requirements as the basic principles which they should follow in performing their work. Which statement is correct regarding the Code of Ethics for Professional Accountants in the Philippines? a. Professional accountants refer to persons who are Certified Public Accountants (CPA) in public practice and who hold a valid certificate issued by the Board of Accountancy. b. It is practical to establish ethical requirements which apply to all situations and circumstances that professional accountants may encounter. c. Professional accountants should consider the ethical requirements as the ideal principles which they should follow in performing their work. d. All CPAs are expected to comply with the ethical requirements of the Code and other ethical requirements that may be adopted and approved by IFAC. Apparent failure to do so may result in an investigation into the CPA’s conduct.

2.

Modifications to the IFAC Code 3. The following definitions from the IFAC Code were modified to consider Philippine regulatory requirements and circumstances, except a. Firm c. Professional accountants b. Professional accountants in public practice d. Lead engagement partner The following are modifications to the IFAC Code to consider Philippine regulatory requirements and circumstances, except a. The period for rotation of the lead engagement partner was changed from five to seven years. b. Advertising and solicitation by individual professional accountants in public practice were not permitted in the Philippines. c. Additional examples relating to anniversaries and websites wherein publicity is acceptable, as provided in BOA Resolution 19, Series of 2000, were included. d. Payment and receipt of commissions were not permitted in the Philippines.

4.

DEFINITIONS 5. Assurance engagement include the following, except a. An engagement conducted to provide a high level of assurance that the subject matter conforms in all material respects with identified suitable criteria. b. An engagement conducted to provide a moderate level of assurance that the subject matter is plausible in the circumstances. c. An engagement in accordance with the Philippine Standard on Assurance Engagement(s) issued by the Philippine Auditing Standards and Practices Council as approved by the Board of Accountancy/Professional Regulation Commission. d. An engagement to perform agreed-upon procedures. Close family include the following, except a. Parent b. Sibling

6.

c. Non-dependent child d. Spouse

AT-5903

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7.

Assurance team include a • All professionals participating in the assurance engagement • All others within a firm who can directly influence the outcome of the assurance engagement • For the purposes of an audit client, all those within a network firm who can directly influence the outcome of the audit engagement Yes b Yes c Yes d Yes

Yes

Yes

No

No

Yes 8.

No

No

Yes

Financial interest means a. Any bank account which is used solely for the banking of clients’ monies. b. Any monies received by a professional accountant in public practice to be held or paid out on the instruction of the person from whom or on whose behalf...
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