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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. 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






2. A violation of laws or governmental regulations.






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






4. 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.






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






6. 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 -






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






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






9. 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






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






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






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






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






14. 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.






15. 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






16. The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation - adverse publicity - or other events arising in connection wit financial statements audited and reported on.






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






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






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






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






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






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






23. 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






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






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






26. 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






27. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount






28. A control deficiency - or combination of control deficiencies - that adversely effects the entity's ability to initate - authorize - record - process - or report external financial data reliably in accordance with GAAP such that there is more than a






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






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






31. 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






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






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






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






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






36. 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.






37. The individual member of the population being sampled.






38. Violations of laws or government regulations.






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






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






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






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






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






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






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






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






48. Unintentional misstatements or omissions of amounts or disclosures.






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






50. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population







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