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Auditing Vocab

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Audit evidence that includes minutes of meetings; confirmations from third parties; industry analysts' reports; comparable data about competitors (benchmarking); controls manuals; information obtained by the auditor from such audit procedures as inqu






2. Specific acts performed by the auditor in gathering evidence to determine if specific assertations are being met.






3. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






4. Intentional misstatements that can be classified as fraudulent financial reporting and/or misappropriation of assets.






5. The tone of an organization - which reflects the overall attitude - awareness - and actions of the board of directors - management - and owners influencing the control consciousness of its people.






6. Controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system.






7. Controls that relate to the overall information processing environment and have a pervasive effect on the entity's computer operations.






8. The deviation rate that the auditor expects to exist in the population.






9. A deficiency - or a combination of deficiencies - in internal control that is less severe than a material weakness - yet important enough to merit attention by those charged with governance.






10. The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation - adverse publicity - or other events arising in connection wit financial statements audited and reported on.






11. The possibility that the sample drawn is not representative of the population and that - as a result - the auditor reaches an incorrect conclusion about the reliability of the control - the account balance - or class of transactions based on the samp






12. The auditor's opinion that the financial statements present fairly - in all material respects - in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) - except for a material misstatement that does no






13. An attitude that includes a questioning mind and a critical assessment of an audit evidence. The auditor should not assume that management is either honest or dishonest.






14. A process designed by - or under the supervision of - the company's principal executive and principal financial officers - or persons performing similar functions - and effected by the company's board of directors - management - and other personnel -






15. The risk that the sample supports the conclusion that the control is operating effectively when it is not or that the recorded account balance is not materially misstated when it is materially misstated.






16. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.






17. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.






18. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR






19. The possibility that the sample drawn is not representative of the population and that - as a result - the auditor reaches an incorrect conclusion about the reliability of the control - the account balance - or class of transactions based on the samp






20. The auditor's opinion that the financial statements present fairly - in all material respects - in accordance with generally accepted accounting principles (or other comprehensive basis of accounting)-i.e. - a clean opinion.






21. Tests that concentrate on the details of amounts contained in an account balance and related footnotes.






22. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.






23. A violation of laws or governmental regulations.






24. Computer programs that allow auditors to test computer files and databases.






25. Sampling that uses the laws of probability to select and evaluate the results of an audit sample - thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population.






26. Expressed or implied representations by management that are reflected in the financial statement components






27. Expressed or implied representations by management regarding the recognitions - measurement - presentation - and disclosure of information in the financial statements and related disclosures.






28. Attribute-sampling techniques used to estimaed the dollar amount of misstatement for a class of transactions or an account balance.






29. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based - and includes the information contained in the accounting records underlying the financial statements and other information such as minutes of






30. The process of covering a cash shortage by applying cash from one customer's accounts receivable against another customer's accounts receivable.






31. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data






32. Determination of the mathematical accuracy of documents or records.






33. The risk that material misstatements that could occur will not be prevented - or detected and corrected - by internal controls.






34. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.






35. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.






36. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






37. An event occurring between the balance sheet date and the audit report release date - Type I - Type II






38. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






39. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






40. Tests that concentrate on the details of amounts contained in an account balance and related footnotes.






41. Audit procedures performed to test material misstatements in an account balance - transaction class - or disclosure component of the financial statements.






42. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






43. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






44. Expressed or implied representations by management about information that is reflected in the financial statements. The three sets of assertions related to ending account balances - transactions - and presentation and disclosure.






45. Papers that document the evidence gathered by auditors to show the work they have done - the methods and procedures they have followed - and the conclusions they have developed in an audit of financial statements or other type of engagement.






46. The end product of the auditor's work indicating the auditing standards followed - and expressing an opinion as to whether an entity's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






47. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






48. Attribute sampling techniques used to estimate the dollar amount of misstatement for a class of transactions or an account balance.






49. Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.






50. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.