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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. 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.






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






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






4. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.






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






6. A violation of laws or governmental regulations.






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






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






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






10. Process of watching a process or procedure being performed by others.






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






13. 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.






14. 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.






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






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






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






18. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.






19. 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.






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






21. The risk that the auditor will not detect a material misstatement that exists in the financial statements






22. 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.






23. 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






24. Test to detect errors or fraud in individual transactions.






25. 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.






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






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






28. Violations of laws or government regulations.






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






30. 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.






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






32. 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.






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






34. 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






35. Physical examination of the tangible assets.






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






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






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






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 total of the projected misstatement plus the allowance for sampling risk.






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






42. 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.






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






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






45. 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






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






47. The individual member of the population being sampled.






48. 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






49. 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.






50. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)