NFJPIA-Region X and CARAGA Council

RFJPIA Cup Level 2 Auditing Theory ELIMINATION ROUN

EA!" ROUN
RFJPIA CUP LE#EL 2 Auditing Theory $EA!" %UE!TION &'( The need for assurance services arises because: a. There is a consonance of in eres s of he !re!arer and he user of he financial s a e"en s. )* There i+ , potenti,l )i,+ in providing in-or.,tion* c. #cono"ic ransac ions are less co"!le$ han he% &ere a decade ago. d. 'os users oda% have access o he s%s e" ha genera es he financial s a e"en s he% use. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $EA!" %UE!TION &2( (hich of he follo&ing is e$!lici l% included in he Audi or)s res!onsibili % sec ion of he audi or*s re!or + a. Reason for "odifica ion of o!inion. b. ,Phili!!ine Financial Re!or ing - andards.. c. /Philippine+ !t,nd,rd+ on Auditing0* d. /ivision of res!onsibili % &i h ano her audi or. e. 'anage"en re!resen a ions. RFJPIA CUP LE#EL 2 Auditing Theory $EA!" %UE!TION &1( The "easure of variabili % of a s a is ical sa"!le ha serves as an es i"a e of he !o!ula ion variabili % is he: a. 0asic !recision. b. Range. c. 'easures of cen ral endenc%. d. !t,nd,rd devi,tion* e. In erval. RFJPIA CUP LE#EL 2 Auditing Theory $EA!" %UE!TION &2( If a con rol o al &ere o be co"!u ed on each of he follo&ing da a i e"s1 &hich &ould bes be iden ified as a hash o al for a !a%roll C0I- a!!lica ion+ a. Ne !a% b. ep,rt.ent nu.)er+* c. 2ours &or3ed d. To al debi s. e. To al credi s. RFJPIA CUP LE#EL 2 Auditing Theory $EA!" %UE!TION &3( (hen he audi or de er"ines ha de ec ion ris3 regarding a financial s a e"en asser ion for a "a erial accoun balance or class of ransac ions canno be reduced o an acce! able level1 he audi or should e$!ress:

a. b. c. d. e.

4ualified or adverse o!inion. 5n6ualified o!inion &i h e$!lana or% !aragra!h. %u,li-ied or di+4l,i.er o- opinion* 5n6ualified o!inion. Adverse or disclai"er of o!inion.

A#ERA5E ROUN
RFJPIA CUP LE#EL 2 Auditing Theory $A#ERA5E %UE!TION &'( (hich of he follo&ing is no e$!lici l% referred o in he Code of # hics as source of echnical s andards+ ,* Co..i++ion on Audit* b. Audi ing and Assurance - andards Council. c. -ecuri ies and #$change Co""ission. d. Relevan legisla ion. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $A#ERA5E %UE!TION &2( This occurs &hen a fir" or a "e"ber of he assurance ea"1 !ro"o es or "a% be !erceived o !ro"o e an assurance clien )s !osi ion or o!inion o he !oin ha ob7ec ivi % "a% or "a% be !erceived o be co"!ro"ised. -uch "a% be he case if a fir" or a "e"ber of he assurance ea" &ere o subordina e heir 7udg"en o ha of he clien . An+6er7 Advo4,4y thre,t* RFJPIA CUP LE#EL 2 Auditing Theory $A#ERA5E %UE!TION &1( An audi or &ho discovers ha clien e"!lo%ees have co""i ed an illegal ac ha has a "a erial effec on he clien *s financial s a e"en s "os li3el% &ould &i hdra& fro" he engage"en if : a. The illegal ac is viola ion of generall% acce! ed accoun ing !rinci!les. )* The 4lient doe+ not t,8e the re.edi,l ,4tion th,t the ,uditor 4on+ider+ ne4e++,ry* c. The illegal ac &as co""i ed during a !rior %ear ha &as no audi ed. d. The audi or has alread% assessed con rol ris3 a he "ini"u" level. e. The audi or canno reduce he "a erial effec of he illegal ac o an i""a erial one. RFJPIA CUP LE#EL 2 Auditing Theory $A#ERA5E %UE!TION &2( A &ri en re!resen a ion fro" a clien *s "anage"en &hich1 a"ong o her "a ers1 ac3no&ledges res!onsibili % for he fair !resen a ion of financial s a e"en s should nor"all% be signed b% he: ,* Chie- e9e4utive o--i4er ,nd the 4hie- -in,n4i,l o--i4er* b. Chief financial officer and he chair"an of he 08/. c. Chair"an of he audi co""i ee of he 08/. d. Chief e$ecu ive officer1 he chair"an of he 08/ and he clien *s la&%er. e. Chief e$ecu ive officer1 chief financial officer and he chair"an of he 08/. RFJPIA CUP LE#EL 2 Auditing Theory $A#ERA5E %UE!TION &3(

C0I- con rols are fre6uen l% classified as o general con rols and a!!lica ion con rols. (hich of he follo&ing is an e$a"!le of an a!!lica ion con rol+ a. Progra""ers "a% access he co"!u er onl% for es ing and 9debugging9 !rogra"s. b. All !rogra" changes "us be full% docu"en ed and a!!roved b% he infor"a ion s%s e"s "anager and he user de!ar "en au hori:ing he change. c. A se!ara e da a con rol grou! is res!onsible for dis ribu ing ou !u 1 and also co"!ares in!u and ou !u on a es basis. d. 5se of !ass&ords and iden ifica ion codes. e* In pro4e++ing +,le+ order+: the 4o.puter 4o.p,re+ 4u+to.er ,nd produ4t nu.)er+ 6ith intern,lly +tored li+t+*

IFFICULT ROUN
RFJPIA CUP LE#EL 2 Auditing Theory $ IFFICULT %UE!TION &'( In s ud%ing a clien *s in ernal con rols1 an audi or "us be able o dis inguish be &een !reven ion con rols and de ec ion con rols. 8f he follo&ing da a !rocessing con rols1 &hich is he bes de ec ion con rol+ a. Polic% re6uiring !ass&ord securi %. b. 0ac3u! and recover% !rocedure. c. Access con rols. d. 5se of da a encr%! ion echni6ues. e* Revie6 o- .,4hine utili;,tion log+* RFJPIA CUP LE#EL 2 Auditing Theory $ IFFICULT %UE!TION &2( (hen he audi or encoun ers so!his ica ed co"!u er-based s%s e"s1 he or she "a% need o "odif% he audi a!!roach. 8f he follo&ing condi ions1 &hich one is no a valid reason for "odif%ing he audi a!!roach+ a. 'ore advanced co"!u er s%s e"s !roduce less docu"en a ion1 hus reducing he visibili % of he audi rail. b. In co"!le$ co"!u er-based s%s e"s1 co"!u er verifica ion of da a a he !oin of in!u re!laces he "anual verifica ion found in less so!his ica ed da a !rocessing s%s e"s. c. In egra ed da a !rocessing has re!laced he "ore radi ional se!ara ion of du ies ha e$is ed in "anual and ba ch !rocessing s%s e"s. d* Re,l<ti.e pro4e++ing o- tr,n+,4tion+ h,+ en,)led the ,uditor to 4on4entr,te le++ on the 4o.pletene++ ,++ertion* e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $ IFFICULT %UE!TION &1( In an a!!lica ion of "ean !er uni sa"!ling1 he follo&ing infor"a ion has been ob ained: Re!or ed boo3 value P;<<1<<< Poin es i"a e =es i"a ed o al value> ?@A1<<< Allo&ance for sa"!ling ris3 =!recision> B- CC1<<< Tolerable error B- D?1<<<

The a!!ro!ria e conclusion &ould be ha he re!or ed boo3 value is: a. Acce! able onl% if he ris3 of incorrec re7ec ion is a leas &ice he ris3 of incorrec acce! ance. b. Acce! able onl% if he ris3 of incorrec acce! ance is a leas &ice he ris3 of incorrec re7ec ion. c. Acce! able onl% if he ris3 of overreliance is a leas &ice he ris3 of underreliance. d* A44ept,)le* e. No acce! able. RFJPIA CUP LE#EL 2 Auditing Theory $ IFFICULT %UE!TION &2( 0ased on RA @C@E1 ho& "an% %ears can a !ar ner &ho survived he dea h or &i hdra&al of o her !ar nerFs con inue o !rac ice under he !ar nershi! na"e af er beco"ing a sole !rac i ioner+ An+6er7 2 ye,r+* RFJPIA CUP LE#EL 2 Auditing Theory $ IFFICULT %UE!TION &3( The follo&ing !rocedures "a% be !erfor"ed b% CPAs in an engage"en : A. Considera ion of in ernal con rol C. 8bserva ion G. In6uir% and anal%sis D. Ins!ec ion ?. Confir"a ion ;. 8b aining "anage"en re!resen a ion le er (hich of he foregoing are nor"all% !erfor"ed in an agreed-u!on !rocedures engage"en + An+6er7 2: 1: 2 ,nd 3 only*

CLINC=ER %UE!TION!
RFJPIA CUP LE#EL 2 Auditing Theory $CLINC=ER %UE!TION &'( (hich of he follo&ing is no a dis inguishing fea ure of ris3-based audi ing+ a. Iden if%ing areas !osing he highes ris3 of financial s a e"en errors. b. Anal%sis of in ernal con rol. 4* Colle4ting ,nd ev,lu,ting eviden4e* d. Concen ra ing audi resources in hose areas !resen ing he highes ris3 of financial s a e"en errors. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $CLINC=ER %UE!TION &2( In conduc ing a subs an ive es of an accoun balance1 an audi or h%!o hesi:es ha no "a erial error e$is s. The ris3 ha sa"!le resul s &ill su!!or he h%!o hesis &hen a "a erial error ac uall% does e$is is he ris3 of: a. Incorrec re7ec ion. b. Al!ha error. c. In4orre4t ,44ept,n4e* d. T%!e I error. e. Ris3 of overreliance.

RFJPIA CUP LE#EL 2 Auditing Theory $CLINC=ER %UE!TION &1( In a dis ribu ed da a base =//0> environ"en 1 con rol es s for access con rol ad"inis ra ion can be designed &hich focus on: a. Reconcilia ion of ba ch con rol o als. b. 2ash o als. 4* E9,.in,tion o- logged ,4tivity* d. Prohibi ion of rando" access. e. Anal%sis of s%s e" genera ed core du"!s. RFJPIA CUP LE#EL 2 Auditing Theory $CLINC=ER %UE!TION &2( (hich of he follo&ing "igh be de ec ed b% an audi or*s revie& of clien *s sales cu -off+ a. #$cessive goods re urned for credi . b. 5nrecorded sales discoun s c. Ha!!ing of %ear end accoun s receivable d* In-l,ted +,le+ -or the ye,r* e. None of he above. he

RFJPIA CUP LE#EL 2 Auditing Theory $CLINC=ER %UE!TION &3( An audi or confir"s a re!resen a ive nu"ber of o!en accoun s receivable as of /ece"ber GA1 C<A<1 and inves iga es res!onden s* e$ce! ions and co""en s. 0% his !rocedure1 he audi or &ould be "os li3el% o learn of &hich of he follo&ing+ ,* One o- the 4,+hier+ h,+ )een 4overing , per+on,l e.)e;;le.ent )y l,pping* b. 8ne of he sales cler3s has no been !re!aring charge sli!s for credi sales o fa"il% and friends c. 8ne of he C0I- con rol cler3s has been re"oving all sales invoices a!!licable o his accoun fro" he da a file. d. The credi "anager has "isa!!ro!ria ed re"i ances fro" cus o"ers &hose accoun s have been &ri en off. e. The in ernal con rol is effec ive.

FINAL ROUN
EA!" %UE!TION!
RFJPIA CUP LE#EL 2 Auditing Theory $A>IC( ACE %UE!TION This e$is s &hen o her infor"a ion con radic s infor"a ion con ained in he financial s a e"en s. ,* M,teri,l in4on+i+ten4y* b. 'a erial difference. c. 'a erial devia ion. d. 'a erial error. e. None of he choices. RFJPIA CUP LE#EL 2 Auditing Theory $MTIM( JO>ER %UE!TION The er" 9!resen fairl%1 in all "a erial res!ec 91 "eans

a. The financial s a e"en s confor" o GAAP. b. The financial s a e"en s "a% s ill be "a eriall% "iss a ed because he audi ors "a% no have discovered he errors. c. The financial s a e"en s are accura el% !re!ared. d* The ,uditor 4on+ider+ only tho+e .,tter+ th,t ,re +igni-i4,nt to the u+er+ o- the -in,n4i,l +t,te.ent+* e. I""a erial a"oun s are o"i ed fro" he financial s a e"en s. RFJPIA CUP LE#EL 2 Auditing Theory $!IC( This occurs &hen b% vir ue of a close rela ionshi! &i h an assurance clien 1 i s direc ors1 officers or e"!lo%ees1 a fir" or a "e"ber of he assurance ea" beco"es oo s%"!a he ic o he clien )s in eres s. An+6er7 F,.ili,rity thre,t* RFJPIA CUP LE#EL 2 Auditing Theory $PCC( (hich of he follo&ing ac s isFare considered fraud+ A. Al era ion of records or docu"en s. C. 'isin er!re a ion of fac s. G. 'isa!!ro!ria ion of asse s. D. Recording of ransac ions &i hou subs ance. ?. Clerical "is a3es. An+6er7 ': 1 ,nd 2 only* RFJPIA CUP LE#EL 2 Auditing Theory $M#C( This refers o he co""unica ion o he !ublic of infor"a ion as o he service or s3ills !rovided b% !rofessional accoun an s in !ublic !rac ice &i h a vie& of !rocuring !rofessional business. An+6er7 Adverti+ing* RFJPIA CUP LE#EL 2 Auditing Theory $CMU( (hich of he follo&ing fac ors isFare essen ial o an effec ive in ernal audi ing organi:a ion+ A. 8!era ing res!onsibili %. C. 8rgani:a ional s a us G. 8b7ec ivi % An+6er7 2 ,nd 1 only* RFJPIA CUP LE#EL 2 Auditing Theory $COC( The audi or*s re!or should be da ed as of he da e on &hich he: ,* Field 6or8 i+ 4o.pleted* b. Re!or is delivered o he clien . c. Re!or is sub"i ed o he audi co""i ee. d. Fiscal !eriod under audi ends. e. Revie& of he &or3ing !a!ers is co"!le e.

A#ERA5E %UE!TION!
RFJPIA CUP LE#EL 2 Auditing Theory $JPI( ACE %UE!TION

(hich of he follo&ing audi ing !rocedures &ould he audi or no a!!l% o a cu off ban3 s a e"en + a. Trace %ear end ou s anding chec3s and de!osi s in ransi o he cu off ban3 s a e"en . )* Re4on4ile the ),n8 ,44ount ,+ o- the end o- the 4uto-- period* c. Co"!are da es1 !a%ees and endorse"en s on re urned chec3s &i h he cash disburse"en s record. d. /e er"ine ha he %ear end de!osi in ransi &as credi ed b% he ban3 on he firs &or3ing da% of he follo&ing accoun ing !eriod. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $?!U( JO>ER %UE!TION The "os effec ive "eans for he audi or o de er"ine &he her a recorded in angible asse !ossesses he charac eris ics of an asse is o: a. Iouch he !urchase b% reference o underl%ing docu"en a ion. b. In6uire as o he s a us of !a en a!!lica ions. c. Regis er he !a en a he Pa en 8ffice o es i s validi % and acce! abili %. d* Ev,lu,te the -uture revenue<produ4ing 4,p,4ity o- the int,ngi)le ,++et* e. Anal%:e research and develo!"en e$!endi ures o de er"ine ha onl% hose e$!endi ures !ossessing fu ure econo"ic benefi have been ca!i ali:ed. RFJPIA CUP LE#EL 2 Auditing Theory $!MC( The !robabili % of a significan idle ca!aci % loss increases under &hich of he follo&ing condi ions+ a. -ales and !roduc ion have increased significan l% during he !eriod under audi . )* !,le+ ,nd produ4tion h,ve de4lined .,teri,lly during the period under ,udit* c. -ales have declined so"e&ha 1 bu !roduc ion has re"ained cons an in an ici!a ion of a sales recover% in he follo&ing accoun ing !eriod. d. The clien has increased i s overhead absor! ion ra e effec ive a he beginning of he follo&ing accoun ing !eriod. e. -ales and !roduc ion re"ained cons an during he !eriod under audi . RFJPIA CUP LE#EL 2 Auditing Theory $F!UU( An audi re!or con ains he follo&ing !aragra!h: 90ecause of he inade6uacies in he co"!an%*s accoun ing records during he %ear ended June G<1 C<<G1 i &as no !rac icable o e$ end our audi ing !rocedures o he e$ en necessar% o enable us o ob ain cer ain eviden ial "a er as i rela es o classifica ion of cer ain i e"s in he consolida ed s a e"en s of o!era ions.9 This !aragra!h "os li3el% describes a. A "a erial de!ar ure fro" GAAP re6uiring a 6ualified audi o!inion. b. An uncer ain % ha should no lead o a 6ualified o!inion. c. A "a er ha re6uires an adverse o!inion.

d. A "a er ha he audi or &ishes o e"!hasi:e and ha does no lead o a 6ualified audi o!inion. e* A .,teri,l +4ope re+tri4tion re@uiring , @u,li-i4,tion o- the ,udit opinion* RFJPIA CUP LE#EL 2 Auditing Theory $AU( 5nder &hich of he follo&ing circu"s ances &ould a disclai"er of o!inion no be a!!ro!ria e+ ,* The -in,n4i,l +t,te.ent+ -,il to 4ont,in ,de@u,te di+4lo+ure 4on4erning rel,ted p,rty tr,n+,4tion+* b. The clien refuses o !er"i i s a orne% o furnish infor"a ion re6ues ed in a le er of audi in6uir%. c. The audi or is engaged af er fiscal %ear-end and is unable o observe !h%sical inven ories or a!!l% al erna ive !rocedures o verif% heir balances. d. The audi or is unable o de er"ine he a"oun s associa ed &i h illegal ac s co""i ed b% he clien *s "anage"en . e. 5nder no circu"s ances. RFJPIA CUP LE#EL 2 Auditing Theory $IIT( 'organ1 CPA1 is he !rinci!al audi or for a "ul i-na ional cor!ora ion. Ano her CPA has e$a"ined and re!or ed on he financial s a e"en s of a significan subsidiar% of he cor!ora ion. 'organ is sa isfied &i h he inde!endence and !rofessional re!u a ion of he o her audi or1 as &ell as he 6uali % of he o her audi or*s e$a"ina ion. (i h res!ec o 'organ*s re!or on he consolida ed financial s a e"en s1 a3en as a &hole1 'organ a. 'us no refer o he e$a"ina ion of he o her audi or. b. 'us refer o he e$a"ina ion of he o her audi or. 4* M,y re-er to the e9,.in,tion o- the other ,uditor* d. 'a% refer o he e$a"ina ion of he o her audi or1 in &hich case 'organ "us include in he audi or*s re!or on he consolida ed financial s a e"en s a 6ualified o!inion &i h res!ec o he e$a"ina ion of he o her audi or. e. 'a% refer onl% if he o her audi or consen s. RFJPIA CUP LE#EL 2 Auditing Theory $!FAC( In &hich of he follo&ing re!or s should a CPA no e$!ress nega ive or li"i ed assurance+ ,* A +t,nd,rd 4o.pil,tion report on -in,n4i,l +t,te.ent+ o- , non< pu)li4 entity* b. A s andard revie& re!or on financial s a e"en s of a non-!ublic en i %. c. A s andard revie& re!or on in eri" financial s a e"en s of a !ublic en i %. d. A s andard co"for le er on financial infor"a ion included in a regis ra ion s a e"en of a !ublic en i %. e. All of he above. RJPIA CUP LE#EL 2 Auditing Theory $L CU(

Co"for le ers are ordinaril% signed b% he a. Clien . )* Independent ,uditor* c. In ernal audi or. d. Inde!enden audi or and clien . e. Inde!enden audi or and in ernal audi or.

IFFICULT %UE!TION!
RFJPIA CUP LE#EL 2 Auditing Theory $LC( ACE %UE!TION The engage"en ea" for he C<A< audi of he financial s a e"en s of -ari"ano3 Co"!an% is co"!osed of he follo&ing: Par ner: Jose 'ar6ue: -enior associa e: Asserina Ta"a%o 'anager: -hirle% Cordova Audi associa es: Cris % #s!enilla1 Jona Hee Follo&ing Phili!!ine - andards on Audi ing1 &ho a"ong he above &ould be considered as he audi or+ ,* Jo+e M,r@ue; only* b. Jose 'ar6ue: and Asserina Ta"a%o onl%. c. Jose 'ar6ue:1 Asserina Ta"a%o and all he audi associa es onl%. d. Jose 'ar6ue:1 Asserina Ta"a%o and -hirle% Cordova onl%. e. All of he". RFJPIA CUP LE#EL 2 Auditing Theory $NFJPIA( JO>ER %UE!TION The follo&ing s a e"en s rela e o CPA e$a"ina ion ra ings. (hich of he follo&ing is incorrec + a. To !ass he e$a"ina ion1 candida es should ob ain a general &eigh ed average of J?K and above1 &i h no ra ing in an% sub7ec less han ;?K. b. Candida es &ho ob ain a ra ing of J?K and above in a leas four sub7ec s shall receive a condi ional credi for he sub7ec s !assed. 4* C,ndid,te+ 6ho -,iled in -our 4o.plete e9,.in,tion+ +h,ll no longer )e ,llo6ed to t,8e the e9,.in,tion+ the -i-th ti.e* d. Condi ioned candida es shall a3e an e$a"ina ion in he re"aining sub7ec s &i hin &o %ears fro" he !receding e$a"ina ion. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $CT>C( (hich s a e"en is incorrec regarding he na ure of es s of con rols+ a. As he !lanned level of assurance increases1 he audi or see3s "ore reliable audi evidence. b. Those con rols sub7ec o es ing b% !erfor"ing in6uir% co"bined &i h ins!ec ion or re!erfor"ance ordinaril% !rovide "ore assurance han hose con rols for &hich he audi evidence consis s solel% of in6uir% and observa ion. 4* The ,)+en4e o- .i++t,te.ent+ dete4ted )y , +u)+t,ntive pro4edure provide+ ,udit eviden4e th,t 4ontrol+ rel,ted to the ,++ertion )eing te+ted ,re e--e4tive*

d. A "a erial "iss a e"en de ec ed b% he audi or)s !rocedures ha &as no iden ified b% he en i % ordinaril% is indica ive of he e$is ence of a "a erial &ea3ness in in ernal con rol. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $!PU!( The assess"en of he ris3s of "a erial "iss a e"en a he financial s a e"en level is affec ed b% he audi or)s unders anding of he con rol environ"en . (ea3nesses in he con rol environ"en ordinaril% &ill lead he audi or o: a. 2ave "ore confidence in in ernal con rol and he reliabili % of audi evidence genera ed in ernall% &i hin he en i %. b. Conduc so"e audi !rocedures a an in eri" da e ra her han a !eriod end. c. /ecrease he nu"ber of loca ions o be included in he audi sco!e. d. (i hdra& fro" he engage"en . e* Modi-y the n,ture o- ,udit pro4edure+ to o)t,in .ore per+u,+ive ,udit eviden4e* RFJPIA CUP LE#EL 2 Auditing Theory $L!U( (hich of he follo&ing is leas li3el% a !rocedure ha &ould be !erfor"ed b% he audi or near he audi or)s re!or da e+ ,* Re,ding the .inute+ o- the .eeting+ o- +h,reholder+: the )o,rd o- dire4tor+ ,nd ,udit e9e4utive 4o..ittee+ held throughout the ,udit ye,r* b. Reading he en i %)s la es available in eri" financial s a e"en s. c. In6uiring of he clien )s legal counsel concerning li iga ions and clai"s. d. Revie&ing he !rocedures ha "anage"en has es ablished o ensure ha subse6uen even s are iden ified. e. All are !erfor"ed near he audi or)s re!or . RFJPIA CUP LE#EL 2 Auditing Theory $!TC( (hich of he follo&ing s a e"en s is no rue regarding he co"!e ence of audi evidence+ ,* Relev,n4e i+ enh,n4ed )y ,n e--e4tive in-or.,tion +y+te.* b. To be co"!e en 1 evidence "us be bo h valid and relevan . c. Ialidi % is rela ed o he 6uali % of he clien )s infor"a ion s%s e". d. Relevance "us al&a%s rela e o audi ob7ec ives. e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $FCC( (hich one of he follo&ing1 if !resen 1 &ould su!!or a finding of cons ruc ive fraud on he !ar of a CPA+ a. Privi % of con rac . b. In en o deceive. 4* Re48le++ di+reg,rd* d. 8rdinar% negligence.

e. None of he above. RFJPIA CUP LE#EL 2 Auditing Theory $!EC( An audi or co"!ares C<A< revenues and e$!enses &i h hose of he !rior %ear inves iga ing all changes e$ceeding A<K. 0% his !rocedure he audi or &ould be "os li3el% o learn ha : a. An increase in !ro!er % a$ ra es has no been recogni:ed in he clien *s accrual. b. The C<A< !rovision for uncollec ible accoun s is inade6ua e1 because of &orsening econo"ic condi ions. c. Four h 6uar er !a%roll a$es &ere no !aid. d* The 4lient 4h,nged it+ 4,pit,li;,tion poli4y -or +.,ll tool+ in 2B'B* e. All of he above. RFJPIA CUP LE#EL 2 Auditing Theory $M!UM( #$!erience has sho&n ha cer ain condi ions in an organi:a ion are s%"! o"s of !ossible "anage"en fraud. (hich of he follo&ing condi ions &ould no be considered an indica or of !ossible fraud+ a. 'anagers regularl% assu"ing subordina es* du ies. b. 'anagers dealing in "a ers ou side heir !rofi cen er*s sco!e. c. 'anagers no co"!l%ing &i h cor!ora e direc ives and !rocedures. d* M,n,ger+ +u)Ce4t to -or.,l per-or.,n4e revie6+ on , regul,r ),+i+* e. None of he above.

RFJPIA CUP LE#EL 2 Auditing Theory $MU( Given he increasing use of "icroco"!u ers as a "eans for accessing da a bases1 along &i h on-line real- i"e !rocessing1 co"!anies face a serious challenge rela ing o da a securi %. (hich of he follo&ing is no an a!!ro!ria e "eans for "ee ing his challenge+ a. Ins i u e a !olic% of s ric iden ifica ion and !ass&ord con rols housed in he co"!u er sof &are ha !er"i onl% s!ecified individuals o access he co"!u er files and !erfor" a given func ion. b. Hi"i er"inals o !erfor" onl% cer ain ransac ions. c. Progra" sof &are o !roduce a log of ransac ions sho&ing da e1 i"e1 %!e of ransac ion1 and o!era or. d* Prohi)it the net6or8ing o- .i4ro4o.puter+ ,nd do not per.it u+er+ to ,44e++ 4entr,li;ed d,t, ),+e+* e. All are a!!ro!ria e "easures for "ain aining da a securi %.