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






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






3. The individual member of the population being sampled.






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






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






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






7. 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.






8. 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.






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






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






12. 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






13. 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.






14. Computer programs that allow auditors to test computer files and databases.






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






16. Financial statements prepared under regulatory - tax - cash basis - or other definitive criteria having substantial support.






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






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






19. 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






20. 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.






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






22. 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.






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






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






26. 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.






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






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






29. 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






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






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






32. 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






33. 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.






34. 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.






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






36. 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.






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






38. 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






39. A process that assess the quality of internal control performance over time.






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






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






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






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






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






45. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based - and includes the information contained in the accounting records underlying the financial statements and other information such as minutes of






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






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






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






49. 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.






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