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






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






3. 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.






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






5. 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






6. 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






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






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






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






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






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






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






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






14. 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.






15. 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






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






17. Examination of internal or external records or documents that are in paper form - electronic form - or other media.






18. 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






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






20. 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.






21. 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.






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






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






24. 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 -






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






26. The auditor's plan for the expected conduct - organization - and staffing of the audit.






27. 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






28. A confirmation request to which the recipient responds only if the amount or information stated is incorrect.






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






30. 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.






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






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






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






34. 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






35. 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.






36. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






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






38. Specific acts performed by the auditor in gathering evidence to determine if specific assertations are being met.






39. 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.






40. 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.






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






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






43. 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.






44. The process of obtaining and evaluating direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions.






45. The concept that the manager generally has more information about the true financial position and results of operations of the entity than the absentee owner does.






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






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






48. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






49. Violations of laws or government regulations.






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







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