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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. Statements issued by the AICPA Auditing Standards Boards - considered as interpretations of the 10 GAAS statements.






2. The process of obtaining and evaluating direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions.






3. A confirmation request on which the recipient fills in the amount or furnishes the information requested.






4. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting and correcting - material misstatements at the relevant assertion level.






5. An audit inquiry sent to the client's attorneys in order to obtain or corroborate information about litifation - claims - and assessments.






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






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






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






9. When a subsequent event disclosed in the financial statements occurs after the date of the report but before the issuance of the related financial statements - the auditor may use dual dating. The auditor may use the original date of the report excep






10. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






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






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






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






14. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






15. 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






16. An objective for ICFR generally relates to a relevant financial statement assertion and states a criterion for evaluating whether the company's control procedures in a specific area provide reasonable assurance that a misstatement or omission in that






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






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






19. The auditor's decision to rely on the entity's controls - test those controls - and reduce the direct tests of the financial statements accounts.






20. 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






21. Physical examination of the tangible assets.






22. Specific acts performed by the auditor in gathering evidence to determine if specific assertions are met.






23. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting material misstatements at the relevant assertion level.






24. The magnitude of an omission or misstatement of accounting information that - in light of surrounding circumstances - makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced.






25. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based; includes the information contained in the accounting records underlying the financial statements and other information






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






27. The application of an audit procedure to less than 100 percent of the items within an account or class of transactions for the purpose of evaluating some characteristic of the balance or class.






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






29. 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.






30. A measure of sampling risk added and subtracted to the projected misstatement to form a confidence interval.






31. 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.






32. Unintentional misstatements or omissions of amounts or disclosures.






33. Existing condition or set of circumstances involving uncertainty about a possible loss that will ultimately be resolved when some future event occurs or fails to occur.






34. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






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






36. Basic unit containing the elements of the population to be sampled






37. Issued when auditors do not express an opinion on the fairness of the entity's financial statements. Can be issued for pervasive going-concern uncertainties - pervasive scope limitations - and situations in which the auditors are not independent.






38. The auditor's decision to rely on the entity's controls - test those controls - and reduce the directs test of financial statement accounts.






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






40. 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.






41. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






42. The total of the projected misstatement plus the allowance for sampling risk.






43. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






44. A state of objectivity in fact and in appearance - including the absence of any significant conflicts of interest.






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. Business transactions between individuals and organizations that occur without paper documents - using computers and telecommunication networks.






47. The auditor's decision not to tely on the entity's controls and to audit the related financial statement accounts by relying more on substantive procedures.






48. A term that implies some risk that a material misstatement could be present in the financial statements without the auditor detecting it - even when the auditor has exercised due care.






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






50. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider