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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. Physical examination of the tangible assets.






2. 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






3. The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






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






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






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






7. 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.






8. 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






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






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






11. Persons elected by the stockholders of a corporation to oversee management and to direct the affairs of the corporation.






12. 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.






13. 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.






14. 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.






15. A review of audit documentation by an additional person (normally - a partner or equivalent with the firm) who has not been involved with the audit; its purpose is to ensure that quality of the audit work and reporting is consistent with the quality






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






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






18. 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






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






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






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






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. 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.






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






25. 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.






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






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






28. 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.






29. Standards regarding the conduct of financial statement auditing for public companies. Currently - consist primarily of standards and statements established by the AICPA's Auditing Standards Board - as these statements and standards were adopted by th






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






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






32. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






33. 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.






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






35. 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






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






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






38. 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.






39. Determination of the mathematical accuracy of documents or records.






40. 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.






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






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






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






44. 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






45. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.






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






47. Attribute-sampling techniques used to estimaed the dollar amount of misstatement for a class of transactions or an account balance.






48. A deficiency - or combination of deficiencies - that results in a reasonable possibility that a material misstatement of the company's annual or interim financial stsatements will not be prevented or detected on a timely basis






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






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