TRUE or FALSE

1. PSA 220 deals with the specific responsibilities of

the auditor regarding quality control procedures
and engagement quality control reviewer (EQCR)
for all assurance engagements and related
services.

False
 TRUE or FALSE

2. A basic objective of a CPA firm is to provide

professional services that conform to professional
standards. Reasonable assurance of achieving
this basic objective is provided through a system
of quality controls

True
 TRUE or FALSE

3. The CEO of the audit firm should take

responsibility for the overall quality on each audit
engagement.

False
 TRUE or FALSE

4. The implementation of quality control procedures

that are applicable to the individual audit
engagement is the responsibility of the
engagement team

True
 TRUE or FALSE

5. Quality control policies for the acceptance and

continuance of clients are established to enable
the auditor to report on management’s integrity

False
 TRUE or FALSE

6. Peer review is one of the elements of a system of

quality control

False
 TRUE or FALSE

7. Objectivity is one of the elements in ethical

requirements in a firm’s quality control system

True
 MULTIPLE CHOICE
8. The firm’s system of quality control should
include policies and procedures that address each
of the following elements, except:
a) Monitoring
b) Relevant ethical requirements
c) Integrity
d) Human resources

C
 MULTIPLE CHOICE
9. Which of the following is an element of a CPA
firm’s quality control system that should be
considered in establishing its quality control
policies and procedures?
a) Considering audit risk and materiality
b) Using statistical sampling techniques
c) Managing human resources
d) Complying with laws and regulations

C
 MULTIPLE CHOICE
10. In pursuing its quality control objectives with
respect to acceptance of a client, a CPA firm is not
likely to
a) Make inquiries of the proposed client’s legal
counsel
b) Review the personnel practices of the proposed
client
c) Review the financial statements of the proposed
client
d) Make inquiries of previous auditors

B
 MULTIPLE CHOICE
11. Which of the following is not an element of quality
control as defined by Philippine Standards on Quality
Control?
a) Leadership responsibility for quality
b) Independence
c) Human resources
d) Acceptance and continuance of engagement and
client relationship

B
 MULTIPLE CHOICE
12. Which of the following quality control elements is
most closely associated with the requirement to
promote a culture of quality?
a) Monitoring
b) Engagement performance
c) Leadership responsibilities
d) Human resources

C
 MULTIPLE CHOICE
13. The statement “quality control policies and
procedures should be relevant, adequate, effective,
and complied with” is most closely associated with
what quality control element?
a) Monitoring
b) Engagement performance
c) Leadership responsibilities
d) Relevant ethical requirements

A
 MULTIPLE CHOICE
14. Which of the following is one of the elements of
quality control?
a) Assurance of proper levels of association
b) Due professional care
c) Engagement performance
d) Supervision

C
 MULTIPLE CHOICE
15. A requirement that working papers be reviewed by
the supervisor, and any deficiencies be discussed with
the preparer is an example of a quality control
procedure in the area of:
a) Acceptance and continuance of client relationships
and specific engagements
b) Engagement performance
c) Human resources
d) Relevant ethical requirements