Test your basic knowledge |

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






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






3. 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






4. 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.






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






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






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






8. 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.






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






10. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






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






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






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






14. 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.






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






16. 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






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






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






19. 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.






20. 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.






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






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






23. 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






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






25. Unintentional misstatements or omissions of amounts or disclosures.






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






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






28. 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.






29. 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






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






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






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






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






34. 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






35. 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






36. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






37. 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.






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






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






40. 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.






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






42. 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






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






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






45. 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.






46. 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.






47. 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.






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






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






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