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






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






3. 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






4. The risk that the auditor will not detect a material misstatement that exists in the financial statements






5. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.






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






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






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






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






10. Physical examination of the tangible assets.






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






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






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






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






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






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






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






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






19. A violation of laws or governmental regulations.






20. 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 -






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






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






23. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






24. 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






25. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented - or detected and corrected - on a timely basis.






26. 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






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






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






29. The method by which an entity's board of 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 efficie






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






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






32. 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






33. 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






34. 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.






35. Sampling that uses the laws of probability to select and evaluate the results of an audit sample - thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population






36. 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.






37. 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






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






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






40. 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






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






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






43. Sampling that uses the laws of probability to select and evaluate the results of an audit sample - thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population.






44. 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.






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






46. 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






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






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






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






50. 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







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