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






2. 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






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






4. Intentional misstatements that can be classified as fraudulent financial reporting and/or misappropriation of assets.






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






6. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






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






8. The susceptibility of an assertion to material misstatement - assuming no related controls






9. 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.






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






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






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






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






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






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






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






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






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






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






20. 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






21. 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.






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






23. 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






24. 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) - except for a material misstatement that does no






25. The deviation rate that the auditor expects to exist in the population.






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






27. A violation of laws or governmental regulations.






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






29. 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.






30. Risks resulting from significant conditions - events - circumstances - and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives - or through the setting of inappropriate objecti






31. 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.






32. 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.






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






34. Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.






35. 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






36. 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.






37. 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






38. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






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






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






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






42. 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.






43. 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






44. 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.






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






46. 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.






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






48. 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.






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






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