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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. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.






2. 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.






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






4. 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.






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






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






7. The risk that the sample supports the conclusion that the recorded account balance is materially misstated when it is not materially misstated.






8. 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






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






10. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.






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






12. 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.






13. 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






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






15. 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.






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






17. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






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






19. Standards against which the quality of the auditor's performance is measured.






20. 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.






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






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






23. The use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance.






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






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






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






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






28. A violation of laws or governmental regulations.






29. 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.






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






31. Risks resulting from significant conditions - events - circumstances - and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives - or through the setting of inappropriate objecti






32. 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 -






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






34. 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.






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






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






37. 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)






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






39. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.






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






41. 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.






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






43. 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.






44. 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.






45. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






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. 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.






48. 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.






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






50. A process that assesses the quality of internal control performance over time.