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






2. 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






3. 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.






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






5. 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






6. Violations of laws or government regulations.






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






8. 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)






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






10. 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






11. 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.






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






13. 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.






14. 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






15. A violation of laws or governmental regulations.






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






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






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






19. 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






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






21. 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.






22. 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.






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






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






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






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






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






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






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






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






31. 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.






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






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






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






35. 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






36. The auditor's plan for the expected conduct - organization - and staffing of the audit.






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






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






39. 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.






40. The individual member of the population being sampled.






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






42. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






43. 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






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






45. An event occurring between the balance sheet date and the audit report release date - Type I - Type II






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






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






48. 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






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






50. 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.