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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 risk that the sample supports the conclusion that the control is not operating effectively when it actually is or that the recorded account balance is materially misstated when it is not materially misstated.






2. 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.






3. 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






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






5. A violation of laws or governmental regulations.






6. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.






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






8. 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.






9. An objective for ICFR generally relates to a relevant financial statement assertion and states a criterion for evaluating whether the company's control procedures in a specific area provide reasonable assurance that a misstatement or omission in that






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






11. 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






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






13. The possibility that the auditor may use inappropriate audit procedures - fail to detect a misstatement when applying an audit procedure - or misinterpret an audit result.






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






15. 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.






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






17. Papers that document the evidence gathered by auditors to show the work they have done - the methods and procedures they have followed - and the conclusions they have developed in an audit of financial statements or other type of engagement.






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






19. 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






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






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






22. 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.






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






24. 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






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






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






27. A state of objectivity in fact and in appearance - including the absence of any significant conflicts of interest.






28. 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.






29. 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






30. 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.






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






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






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






34. The oversight mechanisms in place to help ensure the proper stewardship over an entity's assets. Management and the board of directors play primary roles - and the independent auditor plays a key facilitating role.






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






36. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider






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






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






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






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






41. 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.






42. Seeking information of knowledgeable persons - both financial and nonfinancial - throughout the entity or outside the entity.






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






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






45. 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.






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






47. An attitude that includes a questioning mind and a critical assessment of an audit evidence. The auditor should not assume that management is either honest or dishonest.






48. 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.






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






50. 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







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