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






2. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep






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






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






5. 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)-i.e. - a clean opinion.






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






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






8. 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






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






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






11. 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.






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






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






14. 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.






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






17. Standards against which the quality of the auditor's performance is measured.






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






19. 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






20. 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.






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






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






23. 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.






24. 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.






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






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






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






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






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






30. 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.






31. The amount of misstatement that the auditor believes exists in the population.






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






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






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






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






36. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






37. 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






38. 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.






39. 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.






40. 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






41. 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.






42. 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.






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






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






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






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






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






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






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






50. 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.







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