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 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






2. 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






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






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






5. 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.






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






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






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






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






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






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






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






13. Attribute sampling techniques used to estimate the dollar amount of misstatement for a class of transactions or an account balance.






14. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.






15. 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






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






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






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






19. Violations of laws or government regulations.






20. 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.






21. Unintentional misstatements or omissions of amounts or disclosures.






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






23. 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






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






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






26. The auditor's decision not to tely on the entity's controls and to audit the related financial statement accounts by relying more on substantive procedures.






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






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






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. 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.






32. 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.






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






34. 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






35. 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.






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






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






38. 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.






39. The magnitude of an omission or misstatement of accounting information that - in light of surrounding circumstances - makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced.






40. A weakness in the design or operation of a control such that management or employeesm in the normal course of performing their assigned functions - fail to prevent - or detect misstatements on a timely basis.






41. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider






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






43. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






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






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






46. 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.






47. 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.






48. An event occurring between the balance sheet date and the audit report release date - Type I - Type II






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






50. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.