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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 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






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






3. A confirmation request to which the recipient responds only if the amount or information stated is incorrect.






4. The transmission of business transactions over telecommunication networks.






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






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






7. 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)






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






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






10. 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.






11. 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






12. 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






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






14. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






15. 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.






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






17. A violation of laws or governmental regulations.






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






19. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount






20. An organization created to provide professional accounting-related services - including auditing. Usually formed as a proprietorship or as a form of partnership.






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






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






23. The concept that an audit done in accordance with auditing standards may fail to detect a material misstatement in a client's financial statements. In an auditing context this term has been defined to mean a high - but not absolute level of assurance






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






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






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






27. 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






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






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






30. 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






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






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






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






34. 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.






35. 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






36. 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






37. A deficiency - or combination of deficiencies - that results in a reasonable possibility that a material misstatement of the company's annual or interim financial stsatements will not be prevented or detected on a timely basis






38. 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 -






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






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






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






42. The risk that the auditor will not detect a material misstatement that exists in the financial statements






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






44. The auditor's decision not to rely on the entity's controls and to audit the related financial statement account by relying more on substantive procedures.






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






46. 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.






47. 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)






48. 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.






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






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







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