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






2. The individual member of the population being sampled.






3. 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






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






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






6. The transmission of business transactions over telecommunication networks.






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






8. 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.






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






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






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






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






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






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






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






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






18. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






19. 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) - except for a material misstatement that does no






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






21. 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






22. 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.






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






24. The method by which an entity's boardof 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 efficien






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






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






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






28. 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)






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






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






31. 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.






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






33. 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






34. 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






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






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






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. 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.






39. A transaction being traced by an auditor from origination through the entity's information system until it is reflected in the entity's financial reports; it encompasses the entire process of initiating - authorizing - recording - processing - and re






40. Process of watching a process or procedure being performed by others.






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






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 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.






44. Controls that have a pervasive effect on the entity's system of internal control such as controls related to the control environment; controls over management override; the company's risk assessment process; centralized processing and controls - incl






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






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






47. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.






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






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






50. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep