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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. 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.






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






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






4. 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.






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






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






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






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






9. 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.






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






11. 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.






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






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






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






15. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






16. A risk of material misstatement that is important enough to require special audit consideration.






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






18. 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.






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






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






21. Sampling that uses the laws of probability to select and evaluate the results of an audit sample - thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population






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






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






25. 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.






26. 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.






27. 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.






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






29. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






30. 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






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






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






33. Expressed or implied representations by management regarding the recognitions - measurement - presentation - and disclosure of information in the financial statements and related disclosures.






34. The auditor's decision not to rely on the entity's controls and to audit the related financial statement account by relying more on substantive procedures.






35. 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)






36. 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.






37. The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation - adverse publicity - or other events arising in connection wit financial statements audited and reported on.






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






40. 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






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






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






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






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






46. 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






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






48. Specific acts performed by the auditor in gathering evidence to determine if specific assertations are being met.






49. 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






50. 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