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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. Unintentional misstatements or omissions of amounts or disclosures.






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






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






4. 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.






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






6. 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 -






7. 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






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






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






10. 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






11. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.






12. A term that implies some risk that a material misstatement could be present in the financial statements without the auditor detecting it - even when the auditor has exercised due care.






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






14. 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.






15. 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.






16. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR






17. Business transactions between individuals and organizations that occur without proper documents - using computers - and telecommunication networks.






18. 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)






19. Tests that concentrate on the details of amounts contained in an account balance and related footnotes.






20. The individual member of the population being sampled.






21. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






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






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






24. 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.






25. 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






26. 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.






27. A violation of laws or governmental regulations.






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






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






30. 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






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






32. 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






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






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






35. 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.






36. 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






37. 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






38. 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.






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






40. Expressed or implied representations by management regarding recognition - measurement - presentation - and disclosure of information in the financial statements.






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






42. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.






43. 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






44. 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.






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






46. A process that assesses the quality of internal control performance over time.






47. 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






48. The auditor's plan for the expected conduct - organization - and staffing of the audit.






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






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