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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 misstatement that the auditor believes exists in the population.






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






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






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






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






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






7. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.






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






9. 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.






10. 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






11. 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 -






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






13. 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.






14. 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






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






16. The possibility that the sample drawn is not representative of the population and that - as a result - the auditor reaches an incorrect conclusion about the reliability of the control - the account balance - or class of transactions based on the samp






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






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






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






20. The method by which an entity's boardof 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 efficien






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






22. 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






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






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






25. Financial statements prepared under regulatory - tax - cash basis - or other definitive criteria having substantial support.






26. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






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






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






29. 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.






30. 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.






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






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






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






34. 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.






35. 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.






36. 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






37. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.






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. 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.






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






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






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






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






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






45. The possibility that the sample drawn is not representative of the population and that - as a result - the auditor reaches an incorrect conclusion about the reliability of the control - the account balance - or class of transactions based on the samp






46. 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.






47. 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






48. The deviation rate that the auditor expects to exist in the population.






49. The transmission of business transactions over telecommunication networks.






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