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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 control deficiency - or combination of control deficiencies - that adversely effects the entity's ability to initate - authorize - record - process - or report external financial data reliably in accordance with GAAP such that there is more than a






2. The transmission of business transactions over telecommunication networks.






3. 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.






4. 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.






5. 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.






6. 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






7. 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.






8. 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.






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






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






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






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






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






14. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






15. 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.






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






17. 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)






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






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






20. 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)-i.e. - a clean opinion.






21. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.






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






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






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






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






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






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






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






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






30. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.






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






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






33. A weakness in the design or operation of a control such that management or employeesm in the normal course of performing their assigned functions - fail to prevent - or detect misstatements on a timely basis.






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






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






36. 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.






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






38. 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.






39. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






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






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






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






43. 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.






44. The risk that the sample supports the conclusion that the control is not operating effectively when it actually is or that the recorded account balance is materially misstated when it is not materially misstated.






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






46. Issued when auditors do not express an opinion on the fairness of the entity's financial statements. Can be issued for pervasive going-concern uncertainties - pervasive scope limitations - and situations in which the auditors are not independent.






47. A measure of sampling risk added and subtracted to the projected misstatement to form a confidence interval.






48. 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.






49. 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






50. 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.







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