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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. 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.






2. 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.






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






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






6. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






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






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






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






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






11. The policies and procedures that help ensure that management's directives are carried out.






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






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






14. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






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






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






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






18. 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.






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






20. 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.






21. 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.






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






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






24. 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.






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






26. Statements issued by the AICPA Auditing Standards Boards - considered as interpretations of the 10 GAAS statements.






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. 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 -






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






31. A service when a practitioner is engaged to issue or does issue a report on a subject matter - or an assertion about subject matter - that is the responsibility of another party. Encompasses financial statement audits.






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






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






34. 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






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






36. Business transactions between individuals and organizations that occur without proper documents - using computers - and telecommunication networks.






37. Existing condition or set of circumstances involving uncertainty about a possible loss that will ultimately be resolved when some future event occurs or fails to occur.






38. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.






39. 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.






40. The magnitude of an omission or misstatement of accounting information that - in light of surrounding circumstances - makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced.






41. 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.






42. Papers that document the evidence gathered by auditors to show the work they have done - the methods and procedures they have followed - and the conclusions they have developed in an audit of financial statements or other type of engagement.






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






44. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






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






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






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






48. 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.






49. 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.






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







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