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






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






3. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






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






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






6. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






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






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






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






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






11. 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.






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






13. 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.






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






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






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






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






18. 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






19. 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.






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






21. 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






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






23. Audit sampling that relies on the auditor's judgment to determine sample size - select the sample - and/or evaluate the results for the purpose of reaching a conclusion about the population.






24. 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






25. A confirmation request on which the recipient fills in the amount or furnishes the information requested.






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






27. 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.






28. 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.






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






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






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






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






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






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






35. Physical examination of the tangible assets.






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






37. 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.






38. 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.






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






40. 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.






41. Intentional misstatements that can be classified as fraudulent financial reporting and/or misappropriation of assets.






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






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






44. 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






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






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






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






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






49. The transmission of business transactions over telecommunication networks.






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