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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. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Upper misstatement limit
Audit sampling
Analytical procedures
Sampling unit
2. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.
Other information
Independence
Nonstatistical sampling
Audit risk
3. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.
Tolerable misstatement
Audit committee
Statements on Auditing Standards
General controls
4. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.
Audit procedures
Dual dating
Tests of details of account balances and disclosures
Risk of material misstatement
5. An organization created to provide professional accounting-related services - including auditing. Usually formed as a proprietorship or as a form of partnership.
Sampling risk
Reperformance
Upper misstatement limit
Public accounting firm
6. Computer programs that allow auditors to test computer files and databases.
Allowance for sampling risk
Computer-assisted audit techniques (CAATs)
Control deficiency
Qualified opinion
7. Computer programs that allow auditors to test computer files and databases.
Computer-assisted audit techniques (CAATs)
Inquiry
Fraud
Classical variables sampling
8. Expressed or implied representations by management regarding recognition - measurement - presentation - and disclosure of information in the financial statements.
Nonsampling risk
Assertions
Material weakness
Analytical procedures
9. 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.
ateriality
General controls
Assertions
Independence
10. Standards against which the quality of the auditor's performance is measured.
Generally accepted auditing standards
Relevant Assertions
Significant deficiency
Accounting records
11. Business transactions between individuals and organizations that occur without paper documents - using computers and telecommunication networks.
Engagement quality review
Accounting records
Desired confidence level
Electronic (Internet) commerce
12. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.
Engagement quality review
Control objective
Confirmation
Risk assessment
13. A process that assess the quality of internal control performance over time.
Analytical procedures
Significant deficiency
Analytical procedures
Monitoring of controlsa
14. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.
Board of directors
Recalculation
Audit evidence
Remediation
15. 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
Risk of incorrect acceptance
Audit procedures
Inspections of records and documents
Accounting records
16. Tests to detect errors or fraud in individual transactions.
Scope limitation
Substantive tests of transactions
Independence
Significant deficiency
17. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.
Confirmation
Assurance Services
Board of directors
Substantive tests of transactions
18. 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
Tolerable misstatement
Standards of the PCAOB
Reliance strategy
Management advisory services
19. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Audit risk
Sampling unit
Electronic data interchange
Analytical procedures
20. 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.
ateriality
Tests of controls
Sampling risk
Control environment
21. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.
Business processes
Unqualified opinion
Allowance for sampling risk
Significant risk
22. 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
Legal letter
Assurance Services
Management letter
23. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.
Analytical procedures
Representation letter
Reliability of evidence
Misstatement
24. 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
Reliance strategy
Reliance strategy
Independence
Statistical sampling
25. A violation of laws or governmental regulations.
Substantive strategy
Illegal act
Business processes
Negative confirmation
26. 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.
Nonstatistical sampling
Substantive tests of transactions
Significant deficiency
Expected population deviation rate
27. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Analytical procedures
Scope limitation
Significant deficiency
Confirmation
28. Audit procedures performed to test material misstatements in an account balance - transaction class - or disclosure component of the financial statements.
Substantive procedures
Application controls
Monetary unit sampling
Reliance strategy
29. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR
Remediation
Analytical procedures
Confirmation
Scope of the audit
30. 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 -
Subsequent event
Walkthrough
Tests of controls
Internal control over financial reporting
31. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
Independence
Analytical procedures
Material weakness
Computer-assisted audit techniques (CAATs)
32. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.
Tests of details of account balances and disclosures
Risk of inccorect rejection
Computer-assisted audit techniques (CAATs)
Audit sampling
33. 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.
Significant deficiency
Monetary-unit sampling
Control risk
Attest
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
Control activities
Public accounting firm
Sampling risk
Tests of controls
35. Risks resulting from significant conditions - events - circumstances - and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives - or through the setting of inappropriate objecti
Business risks
Application controls
Financial Statement Assertions
Reliance strategy
36. 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.
Attest
Significant account or disclosure
Computer-assisted audit techniques (CAATs)
Classical variables sampling
37. An event occurring between the balance sheet date and the audit report release date - Type I - Type II
Inquiry
Application controls
Audit procedures
Subsequent event
38. A review of audit documentation by an additional person (normally - a partner or equivalent with the firm) who has not been involved with the audit; its purpose is to ensure that quality of the audit work and reporting is consistent with the quality
Substantive tests of transactions
Fraud
Engagement quality review
Reliance strategy
39. A confirmation request on which the recipient fills in the amount or furnishes the information requested.
Audit procedures
Blank or zero-balance confirmations
Illegal acts
Nonstatistical sampling
40. 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.
Subsequent event
Material weakness
Risk of incorrect acceptance
Working papers
41. 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.
Monitoring of controlsa
Confidence bound
Scope of the audit
Nonsampling risk
42. 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.
Management letter
Safeguarding of Assets
Classical variables sampling
Risk of incorrect acceptance
43. 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.
Control activities
Risk of incorrect acceptance
Control activities
Significant deficiency
44. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.
Representation letter
Entity-level controls
Control activities
Substantive tests of transactions
45. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements
Significant deficiency
Safeguarding of Assets
Sampling unit
Risk assessment
46. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Significant deficiency
Analytical procedures
Audit Risk
Financial Statement Assertions
47. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting and correcting - material misstatements at the relevant assertion level.
Tests of controls
General controls
Significant deficiency
Engagement risk
48. 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.
Observation
Substantive tests of transactions
Audit procedures
Statistical sampling
49. 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
Internal Control
Control deficiency
Observation
Remediation
50. 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
Generally accepted accounting principles (GAAP)
Material weakness
Control environment
Walkthrough