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






2. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.






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






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






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






6. 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






7. Expressed or implied representations by management that are reflected in the financial statement components






8. 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.






9. Unintentional misstatements or omissions of amounts or disclosures.






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






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






12. A violation of laws or governmental regulations.






13. 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.






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






15. 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.






16. 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.






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






18. 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.






19. 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






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






21. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






22. A term that implies some risk that a material misstatement could be present in the financial statements without the auditor detecting it - even when the auditor has exercised due care.






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






24. 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.






25. 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






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






27. 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.






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






29. 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






30. 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






31. 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






32. 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.






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






34. 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






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






36. 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.






37. 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.






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






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






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






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






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






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






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






45. 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.






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






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






48. 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.






49. A service when a practitioner is engaged to issue or does issue a report on a subject matter - or an assertion about subject matter - that is the responsibility of another party. Encompasses financial statement audits.






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