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    Philippine Standards On Auditing: Review Questions

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    Dave Manalo
    Foreign public accounting firms have established offices globally and formed partnerships to serve multinational clients worldwide in a uniform manner. They also form correspondent relationships with local accounting firms, where each relies on the other's work while following a common code of ethics. Auditors may depart from Philippine Standards on Auditing in exceptional circumstances if necessary to more effectively achieve the audit's objective, but they must justify such departures. Philippine Auditing Practice Statements provide practical assistance but do not have the same authority as the standards. The chapter questions direct the reader to specific paragraphs in the standards for answers.

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    Philippine Standards On Auditing: Review Questions

    Uploaded by

    Dave Manalo
    2K views2 pages
    Foreign public accounting firms have established offices globally and formed partnerships to serve multinational clients worldwide in a uniform manner. They also form correspondent relationships with local accounting firms, where each relies on the other's work while following a common code of ethics. Auditors may depart from Philippine Standards on Auditing in exceptional circumstances if necessary to more effectively achieve the audit's objective, but they must justify such departures. Philippine Auditing Practice Statements provide practical assistance but do not have the same authority as the standards. The chapter questions direct the reader to specific paragraphs in the standards for answers.

    Original Description:

    Auditing, Theory, Cabrera, Solution, Manual

    Original Title

    Chapter 06 Ans

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    Foreign public accounting firms have established offices globally and formed partnerships to serve multinational clients worldwide in a uniform manner. They also form correspondent relationships with local accounting firms, where each relies on the other's work while following a common code of ethics. Auditors may depart from Philippine Standards on Auditing in exceptional circumstances if necessary to more effectively achieve the audit's objective, but they must justify such departures. Philippine Auditing Practice Statements provide practical assistance but do not have the same authority as the standards. The chapter questions direct the reader to specific paragraphs in the standards for answers.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    2K views2 pages

    Philippine Standards On Auditing: Review Questions

    Uploaded by

    Dave Manalo
    Foreign public accounting firms have established offices globally and formed partnerships to serve multinational clients worldwide in a uniform manner. They also form correspondent relationships with local accounting firms, where each relies on the other's work while following a common code of ethics. Auditors may depart from Philippine Standards on Auditing in exceptional circumstances if necessary to more effectively achieve the audit's objective, but they must justify such departures. Philippine Auditing Practice Statements provide practical assistance but do not have the same authority as the standards. The chapter questions direct the reader to specific paragraphs in the standards for answers.

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    of 2

    CHAPTER 6

    PHILIPPINE STANDARDS ON AUDITING

    I. Review Questions

    1. Foreign public accounting firms have found that to retain their multinational
    clients, they have had to develop the capacity to provide services worldwide.
    Although the roots of at least two of the big firms in the United States are
    traceable to European ancestry, public accounting firm involvement in
    international activities has paralleled the gradual involvement of businesses in
    international activities. In the early 1900s, some public accounting firms
    established representative offices in foreign countries. As business activity
    expanded, the firms opened offices in foreign cities. During the 1970s, some
    countries forced these firms to close their offices. To be able to serve their
    clients, the firms established correspondent relationships with locally owned
    accounting firms; in these relationships, local partners remain separate, local,
    autonomous organizations. Because domestic and foreign partners in a
    correspondent relationship agree to follow a common code of ethics and practice
    guidelines, each is able to rely on the work the other performs. A big firm
    auditing a U.S. business with significant activities in France, for example, would
    rely on its Paris office to audit the activities of the business in France.

    The largest firms have organized worldwide partnerships to achieve a greater


    uniformity of quality, to facilitate management of personnel, and to coordinate
    research and professional development of personnel. Many small public
    accounting firms establish correspondent relationships with foreign public
    accounting firms or join a federation. Firms in a federation call on one another
    to perform services for clients, following agreed-upon standards in conducting
    the work they do for one another.

    2. Yes. According to paragraph 10 of the Preface to Philippine Standards on


    Auditing and Related Services, “an auditor may, in exceptional circumstances,
    judge it necessary to depart from a PSA in order to more effectively achieve the
    objective of an audit. When such a situation arises, the auditor should be
    prepared to justify the departure.”

    3. No. According to paragraph 14 of the Preface to the Philippine Standards on


    Auditing and Related Services, “PAPSs are issued to provide practical
    assistance to auditors in implementing the PSAs or to promote good practice.
    These Statements are not intended to have the authority of the PSAs.”
    6-2 Solutions Manual - Principles of Auditing and Other Assurance Services

    4. Refer to page 211, paragraph 6 of PSA 120.

    5. Refer to page 211, paragraph 6 of PSA 120.

    6. Refer to page 211, paragraphs 8, 9 and 10 of PSA 120.

    7. Refer to page 214, paragraph 2 of PSA 200.

    8. Refer to page 214, paragraph 4 of PSA 200.

    9. Refer to page 215, paragraph 8 of PSA 200.

    10. Refer to page 215, paragraph 7 of PSA 200.

    II. Multiple Choice Questions

    1. d 4. d 7. c 10. a *
    2. b 5. c 8. d 11. d
    3. b 6. c 9. d

    * b and d are also options available to the auditor

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