Test your basic knowledge |

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






2. 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.






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






4. 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






5. 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.






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






7. Examination of internal or external records or documents that are in paper form - electronic form - or other media.






8. 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.






9. 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.






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






11. 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.






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






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






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






15. 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






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






17. 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.






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






19. 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.






20. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based; includes the information contained in the accounting records underlying the financial statements and other information






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






22. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.






23. Processes implemented by management to achieve entity objectives. Business processes are typically organized into the following categories: revenue - purchasing. human resource management - inventory management - and financing processes






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






25. 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.






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






27. Audit procedures performed to test material misstatements in an account balance - transaction class - or disclosure component of the financial statements.






28. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.






29. 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.






30. 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.






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






32. 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.






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






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






35. 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.






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






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






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






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






40. 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.






41. 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.






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






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






44. 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.






45. 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.






46. The process of covering a cash shortage by applying cash from one customer's accounts receivable against another customer's accounts receivable.






47. 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.






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






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






50. Risks resulting from significant conditions - events - circumstances - and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives - or through the setting of inappropriate objecti