In a compilation engagement, if the
accountant becomes aware of material
misstatements, the accountant should try
to agree appropriate amendments with
entry. If such amendments are not made
and the financial information is considered
to be misleading, the accountant avoids:
 Withdraw from the agreement
Your accounting firm has accepted a
compilation engagement from a client in
which your firm is not dependent. In that
case you:
 May accept the engagement and
disclose the lack of independence
The concept of the reasonable assurance is
provided for which one of the following
engagements
 Audit
Which of the following results in a
conclusion that represents positive
assurance?
 Examination
The distribution of which of the following
types of report is unrestricted?
 Examination and reviews
Which of the following statements about
assurance engagements is not correct?
 The Philippine Standards on
Assurance Engagements issued by
AASC describe the objectives and
elements of assurance engagement
to provide high, moderate or low
level of assurance
Which of the following is an example of an
assurance engagement?
 Reporting on financial statements
prepared using other
comprehensive basis of accounting
Which of the following services provides a
moderate level of assurance about the
client financial statement?
 Review
Which of the following is not one of the
elements of an assurance engagement?
 An opinion about whether the
subject matter conforms, in all
material respects to identified
criteria.
According to PSA 3000, assurance
engagement should exhibit five elements
including
 A written assurance report
Subject matter of an assurance engagement
may take many formula including
 Yes- data
 Yes- system
 Yes- behavior
Which of the following is not one of the
requirements before accepting an
assurance engagement?
 The responsible party and the
intended user of assurance report
should be from different
organization
Which of the following generalization is
incorrect about the reliability of evidence
gathered by practitioner?
 Evidence obtained indirectly by the
practitioner is more likely reliable
than that obtained directly
Which of the following is false? PSAE 3000
 Specifies the procedure that the
professional accountant should
adopt in the performance of all
assurance engagement
When a CPA is associated with the
preparation of forecast all of the following
should be disclosed except
 Probability of achieving the forecast
Given one or more hypothetical
assumption, a responsible party may
prepare to the best of its knowledge and
belief an entity expected financial position,
results of operations and cash flow. This
prospective financial information is known
as
 Financial Position
In an engagement to examine prospective
financial information the author should
obtain sufficient appropriate evidence to
whether
 1.2,3,4
Financial forecast is a
 Prospective financial information
prepared on the basis of
assumption as to future events
which management expects to take
place and the actions management
expects to take as of the date the
information is prepared
An examination of financial forecast is a
professional service that involve
 Evaluating the preparation of the
financial forecast and the support
underlying management
assumption
When an accountant examines financial
forecast that fails to disclose several
significant assumptions used to prepare the
forecast, the accountant should describe
the assumption in the accountants report
and issue a report that contains a (an)
 Adverse opinion
Accepting engagement to examine financial
projection most likely would be appropriate
if the projection will be distributed to

 A bank with which the entity is

negotiating for a loan

Which of the following is correct concerning

prospective financial statements?

 Any type of prospective financial

statements would normally by
appropriate for limited use

Financial forecast are based on:

 No- assumption
 Yes- best estimates
 No- a member of hypothetical
assumption and best estimates

When an auditor believe that the

presentation and disclose of the
prospective financial information is not
adequate the auditor should be

 Either a or b

The party responsible for assumption

identified in the preparation of prospective
financial statement is usually

 The clients management