43.
The Revised Accountancy Law incorporates the Code of Professional Ethics for
CPAs. The provision of management advisory services is among the areas of public
accounting. It is, however, not exclusive to CPAs. Considering these premises,
which of the following statements is applicable?
a. Management advisory services as a field of practice is considered as an integral
part of public accounting thus, the Code of Professional Ethics for CPAs covers
management advisory services.
b. CPAs in the practice of audit and management consulting services may advertise
and charge contingent fees.
c. The practice of management advisory services should not be extended to existing
audit clients since this will adversely affect the CPA’s independence.
d. CPAs in the practice of management advisory services are not bound by the Board
of Accountancy but are bound by the said law in the practice of audit.
43-A
44.
Which of the following statements is False?
a. CPAs provide management services to go around the ethical constraints as mandated
by the Accountancy Act.
b. Businesses hire management consultants to help define specific problems and
develop solutions.
c. Included in the practice of consulting is the provision of confidential service
in which the identity of the client is concealed.
d. CPAs performing management services may be considered to be in the practice of
management consulting.
44-A
45.
Which of the following statements is not acceptable?
a. A CPA represents three major players in the industry in rationalizing the
industry’s incentive before the government public hearing.
b. A CPA shares with a new and substantial client information regarding another
client belonging to the same industry.
c. A CPA provides consulting services to an existing audit client.
d. A CPA offers and provides consulting services to two major competing client.
45-B
46.
Mr. Rey Carlos, a CPA firm’s partner-in-charge of quality assurance and review
is arguing with Mr. Reuben Fortuna, the consulting partner regarding the question of
independence as Mr. Fortuna is presently rendering consulting services to T. Ang and
Nga Co., an audit client of the firm. Related to this issue of independence, all of
the following statements are not valid except
a. Independence is never sacrificed for as long as the auditor/consultant is correct
in his decisions for the client.
b. A CPA who renders both audit and consulting services to a client by virtue of his
competence/expertise and extensive knowledge of the client’s business is in the best
position to render decisions for the client and should do so.
c. The client is the ultimate decision maker and the auditor and/or consultant
should not make decisions for the client.
d. It is us up to professional judgment and discretion of the auditor/ consultant to
render decisions for the client for as long as his professional fees are
commensurate to the benefit that the client will derive from the engagement.
46-C
47.
Which of the following acts is not performed by an independent CPA engaged to
design the accounting system?
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