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






2. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatememnt of the entity's financial statements will not be prevent - or detected and corrected on a timely basis.






3. 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.






4. Standards regarding the conduct of financial statement auditing for public companies. Currently - consist primarily of standards and statements established by the AICPA's Auditing Standards Board - as these statements and standards were adopted by th






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






6. The amount of misstatement that the auditor believes exists in the population.






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






8. 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.






9. 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.






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






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






12. A weakness in the design or operation of a control such that management or employeesm in the normal course of performing their assigned functions - fail to prevent - or detect misstatements on a timely basis.






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






14. A control deficiency - or combination of control deficiencies - that adversely effects the entity's ability to initate - authorize - record - process - or report external financial data reliably in accordance with GAAP such that there is more than a






15. 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.






16. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented - or detected and corrected - on a timely basis.






17. A transaction being traced by an auditor from origination through the entity's information system until it is reflected in the entity's financial reports; it encompasses the entire process of initiating - authorizing - recording - processing - and re






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






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






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






21. 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






22. Audit sampling that relies on the auditor's judgment to dewtermine the sample size - select the sample - and/or evaluate the results for the purpose of reaching a conclusion about the population.






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






24. 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.






25. Tests to detect errors or fraud in individual transactions.






26. 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.






27. The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested.






28. 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.






29. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.






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






31. Seeking information of knowledgeable persons - both financial and nonfinancial - throughout the entity or outside the entity.






32. Expressed or implied representations by management regarding recognition - measurement - presentation - and disclosure of information in the financial statements.






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






34. 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.






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






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






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






38. 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.






39. 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.






40. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.






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






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






43. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.






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






45. Test to detect errors or fraud in individual transactions.






46. 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






47. The oversight mechanisms in place to help ensure the proper stewardship over an entity's assets. Management and the board of directors play primary roles - and the independent auditor plays a key facilitating role.






48. The amount of the planning materiality that is allocated to a financial statement account.






49. The transmission of business transactions over telecommunication networks.






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