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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 concept that the manager generally has more information about the true financial position and results of operations of the entity than the absentee owner does.






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






3. 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






4. 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 -






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






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






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






8. Unintentional misstatements or omissions of amounts or disclosures.






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






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






13. 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.






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






15. Controls that have a pervasive effect on the entity's system of internal control such as controls related to the control environment; controls over management override; the company's risk assessment process; centralized processing and controls - incl






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






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






18. 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.






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






20. The risk that the sample supports the conclusion that the recorded account balance is materially misstated when it is not materially misstated.






21. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






22. 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






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






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






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






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






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






28. 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






29. 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)






30. 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.






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






32. 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






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






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






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






36. 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.






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






38. 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.






39. 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.






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






41. 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.






42. 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.






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






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






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






46. 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.






47. 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.






48. 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.






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






50. 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