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






2. 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






3. 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.






4. 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.






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






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






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






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






9. Basic unit containing the elements of the population to be sampled






10. 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






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






12. 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.






13. 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.






14. Sampling used to estimate the proportion of a population that possesses a specified characteristic.






15. The use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance.






16. 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.






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






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






19. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






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






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






22. 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.






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






24. The oversight mechanisms in place to help ensure the proper stewardship over an entity's assets. Management and the board of directors play primary roles - and the independent auditor plays a key facilitating role.






25. 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.






26. 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.






27. 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.






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 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






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






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






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






33. 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.






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






35. 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






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






37. 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.






38. 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.






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. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based; includes the information contained in the accounting records underlying the financial statements and other information






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






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






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






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






45. A measure of sampling risk added and subtracted to the projected misstatement to form a confidence interval.






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






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






48. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.






49. 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






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