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






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.






3. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities






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






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 -






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.






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






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






9. Attribute-sampling techniques used to estimaed the dollar amount of misstatement for a class of transactions or an account balance.






10. The risk that material misstatements that could occur will not be prevented - or detected and corrected - by internal controls.






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






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.






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






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.






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)






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






17. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.






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.






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






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






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.






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






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






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.






25. The total of the projected misstatement plus the allowance for sampling risk.






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






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






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.






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.






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.






31. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






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






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






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






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.






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






37. Expressed or implied representations by management that are reflected in the financial statement components.






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






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.






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






41. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.






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






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






44. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






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






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.






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.






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






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






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