SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Auditing Vocab
Start Test
Study First
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 deviation rate that the auditor expects to exist in the population.
Independence
Expected population deviation rate
Computer-assisted audit techniques (CAATs)
Illegal acts
2. Expressed or implied representations by management about information that is reflected in the financial statements. The three sets of assertions related to ending account balances - transactions - and presentation and disclosure.
Unqualified audit report
Representation letter
Financial Statement Assertions
Control deficiency
3. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities
Management advisory services
Electronic (Internet) commerce
Reliance strategy
Analytical procedures
4. A state of objectivity in fact and in appearance - including the absence of any significant conflicts of interest.
Classical variables sampling
ateriality
Auditing
Independence
5. 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 -
Internal control over financial reporting
Generally accepted auditing standards
Substantive tests of transactions
Walkthrough
6. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.
Internal Control
General controls
Representation letter
Attribute sampling
7. The policies and procedures that help ensure that management's directives are carried out.
Professional skepticism
Dual dating
Control activities
Control objective
8. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.
Dual dating
Tolerable misstatement
Inspections of tangible assets
Tests of details of account balances and disclosures
9. Attribute-sampling techniques used to estimaed the dollar amount of misstatement for a class of transactions or an account balance.
Lapping
Reporting
Assertions
Monetary unit sampling
10. The risk that material misstatements that could occur will not be prevented - or detected and corrected - by internal controls.
Reporting
ositive confirmation
Internal control over financial reporting
Control risk
11. Controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system.
Tolerable deviation rate
Significant deficiency
Analytical procedures
Application controls
12. 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.
Contingent liability
General controls
Analytical procedures
Independence
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
Illegal act
Legal letter
Audit documentation (working papers)
Sampling risk
14. The auditor's decision to rely on the entity's controls - test those controls - and reduce the direct tests of the financial statements accounts.
Sampling unit
Reliance strategy
Substantive strategy
Control risk
15. 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)
Reporting
Business processes
Fraud
Nonstatistical sampling
16. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount
Monitoring of controls
Closest reasonable estimate
Tests of controls
Sampling risk
17. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.
Assertions
Lapping
Contingent liability
Reliability of evidence
18. 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.
Allowance for sampling risk
Scope limitation
Control environment
Significant deficiency
19. Controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system.
Application controls
Subsequent event
Engagement letter
Blank or zero-balance confirmations
20. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Sampling unit
Analytical procedures
Engagement quality review
Assertions
21. 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.
Financial Statement Assertions
Lapping
Contingent liability
Nonstatistical sampling
22. The risk that the sample supports the conclusion that the recorded account balance is materially misstated when it is not materially misstated.
Risk of inccorect rejection
Substantive tests of transactions
Monetary-unit sampling
Control deficiency
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
Qualified opinion
Reasonable assurance
Nonstatistical sampling
Standards of the PCAOB
24. 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.
Audit committee
Tests of details of account balances and disclosures
Attest
Control objective
25. The total of the projected misstatement plus the allowance for sampling risk.
Attribute sampling
Substantive procedures
Upper misstatement limit
Risk of incorrect acceptance
26. Specific acts performed by the auditor in gathering evidence to determine if specific assertions are met.
Significant deficiency
Lapping
Audit procedures
Representation letter
27. Determination of the mathematical accuracy of documents or records.
Dual dating
Internal control
Recalculation
Errors
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.
Material weakness
Risk of incorrect acceptance
Audit sampling
Confirmation
29. 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.
Tolerable deviation rate
Walkthrough
Control environment
Control deficiency
30. 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.
Audit strategy
Audit sampling
Electronic (Internet) commerce
Risk of incorrect acceptance
31. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population
Representation letter
Relevant Assertions
Projected misstatement
Significant risk
32. A systematic process of (1) objectively obtaining an evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and (2) communicating the resu
Analytical procedures
Control environment
Auditing
Reporting
33. Controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system.
Entity-level controls
Application controls
Audit sampling
Sampling risk
34. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting material misstatements at the relevant assertion level.
Tests of controls
Reliance strategy
Unqualified opinion
Internal control over financial reporting
35. 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.
Analytical procedures
Information asymmetry
Control deficiency
Monitoring of controlsa
36. The process of covering a cash shortage by applying cash from one customer's accounts receivable against another customer's accounts receivable.
Tests of details of account balances and disclosures
Lapping
Control risk
Errors
37. Expressed or implied representations by management that are reflected in the financial statement components.
Assertions
Electronic data interchange
Subsequent event
Control risk
38. The amount of the planning materiality that is allocated to a financial statement account.
Tolerable misstatement
Observation
Control deficiency
Legal letter
39. 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.
Reliance strategy
Classical variables sampling
Risk of incorrect acceptance
Board of directors
40. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati
Dual-purpose tests
Scope of the audit
Misstatement
Reliance strategy
41. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.
Business processes
Computer-assisted audit techniques (CAATs)
Confidence bound
Board of directors
42. Standards regarding the conduct of financial statement auditing for public companies. Currently - consist primarily of standards and statements established by the AICPA's Auditing Standards Board - as these statements and standards were adopted by th
Standards of the PCAOB
Financial statement assertions
Scope limitation
Control objective
43. An objective for ICFR generally relates to a relevant financial statement assertion and states a criterion for evaluating whether the company's control procedures in a specific area provide reasonable assurance that a misstatement or omission in that
Errors
Computer-assisted audit techniques (CAATs)
Control objective
Reliance strategy
44. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.
Significant deficiency
Risk of material misstatement
Integrated audit
Risk assessment
45. Tests to detect errors or fraud in individual transactions.
Risk of incorrect acceptance
Substantive tests of transactions
Confirmation
Internal control
46. Refers to the nature - timing - and extent of audit procedures - when nature refers to the type of evidence; timing refers to when the evidence will be gathered; and extent refers to how much of the type of evidence will be evaluated.
Confirmation
Sampling risk
Scope of the audit
Internal control over financial reporting
47. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.
Adverse opinion
Risk assessment
Other comprehensive basis of accounting
Materiality
48. The probability that the true but unknown measure of the characteristic of interest is within specified limits.
Business processes
Risk of material misstatement
Desired confidence level
Substantive tests of transactions
49. An organization created to provide professional accounting-related services - including auditing. Usually formed as a proprietorship or as a form of partnership.
Nonsampling risk
Blank or zero-balance confirmations
Assertions
Public accounting firm
50. An audit inquiry sent to the client's attorneys in order to obtain or corroborate information about litifation - claims - and assessments.
Electronic data interchange
Legal letter
Inspections of tangible assets
Reasonable assurance