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






2. 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.






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






4. 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.






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






6. 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.






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






8. 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






9. 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






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






11. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.






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






13. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






14. 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






15. 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.






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






17. The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






18. 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






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






20. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






21. 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






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






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






24. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.






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






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






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






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






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






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






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






32. Issued when auditors do not express an opinion on the fairness of the entity's financial statements. Can be issued for pervasive going-concern uncertainties - pervasive scope limitations - and situations in which the auditors are not independent.






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






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






35. 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






36. 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.






37. 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






38. 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






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






40. 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.






41. 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






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






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






44. Ten broad statements guiding the conduct of financial statement auditing.






45. Expressed or implied representations by management about information that is reflected in the financial statements. The three sets of assertions related to ending account balances - transactions - and presentation and disclosure.






46. 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






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






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






49. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based - and includes the information contained in the accounting records underlying the financial statements and other information such as minutes of






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