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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. The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






2. 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.






3. 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






4. 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.






5. 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.






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






7. 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.






8. The susceptibility of an assertion to material misstatement - assuming no related controls






9. The auditor's plan for the expected conduct - organization - and staffing of the audit.






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






11. 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.






12. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep






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






14. A risk of material misstatement that is important enough to require special audit consideration.






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






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






18. The method by which an entity's board of directors - management - and other personnel provide reasonable assurance about the achievement of objectives in the following categories: (1) reliability of financial reporting - (2) effectiveness and efficie






19. 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.






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






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






22. 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.






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






24. The concept that the manager generally has more information about the true financial position and results of operations of the entity than the absentee owner does.






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






26. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.






27. The possibility that the auditor may use inappropriate audit procedures - fail to detect a misstatement when applying an audit procedure - or misinterpret an audit result.






28. Processes implemented by management to achieve entity objectives. Business processes are typically organized into the following categories: revenue - purchasing. human resource management - inventory management - and financing processes






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






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






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






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






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






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






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






36. Process of watching a process or procedure being performed by others.






37. Ten broad statements guiding the conduct of financial statement auditing.






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






39. 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






40. 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






41. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities






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






43. 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






44. 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.






45. 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






46. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






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






48. 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.






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






50. 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