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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. 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.






2. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






3. 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.






4. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






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






6. 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 -






7. Violations of laws or government regulations.






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






9. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.






10. 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






11. 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.






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






13. 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.






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






15. Audit evidence that includes minutes of meetings; confirmations from third parties; industry analysts' reports; comparable data about competitors (benchmarking); controls manuals; information obtained by the auditor from such audit procedures as inqu






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






17. 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






18. 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.






19. 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






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






21. 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.






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






23. 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.






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






25. A process that assess the quality of internal control performance over time.






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






27. 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.






28. 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






29. 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.






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






31. 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






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






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






34. 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.






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






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






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






38. The individual member of the population being sampled.






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






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






41. 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.






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






43. Tests to detect errors or fraud in individual transactions.






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






45. 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.






46. The end product of the auditor's work indicating the auditing standards followed - and expressing an opinion as to whether an entity's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






47. Audit procedures performed to test material misstatements in an account balance - transaction class - or disclosure component of the financial statements.






48. 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.






49. 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






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