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






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






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






5. 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.






6. An attitude that includes a questioning mind and a critical assessment of an audit evidence. The auditor should not assume that management is either honest or dishonest.






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






8. 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






9. The amount of misstatement that the auditor believes exists in the population.






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






11. 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.






12. 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.






13. Statements issued by the AICPA Auditing Standards Boards - considered as interpretations of the 10 GAAS statements.






14. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented - or detected and corrected - on a timely basis.






15. 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






16. Unintentional misstatements or omissions of amounts or disclosures.






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






18. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.






19. When a subsequent event disclosed in the financial statements occurs after the date of the report but before the issuance of the related financial statements - the auditor may use dual dating. The auditor may use the original date of the report excep






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






21. 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






22. 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)






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






24. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.






25. Standards against which the quality of the auditor's performance is measured.






26. 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.






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






28. 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.






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






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






31. The risk that the sample supports the conclusion that the control is not operating effectively when it actually is or that the recorded account balance is materially misstated when it is not materially misstated.






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






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






34. 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.






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






36. 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)






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






38. The risk that the auditor will not detect a material misstatement that exists in the financial statements






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






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






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






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






43. Ten broad statements guiding the conduct of financial statement auditing.






44. A control deficiency - or combination of control deficiencies - that adversely effects the entity's ability to initate - authorize - record - process - or report external financial data reliably in accordance with GAAP such that there is more than a






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






46. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






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






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






49. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep






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