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






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






3. A confirmation request on which the recipient fills in the amount or furnishes the information requested.






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






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






6. 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.






7. A risk of material misstatement that is important enough to require special audit consideration.






8. 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.






9. 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






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






11. 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.






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






13. 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.






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






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






16. 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






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






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






19. 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.






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






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






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






23. 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






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






25. 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.






26. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.






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






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






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






31. 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






32. 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.






33. 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






34. 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)






35. 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.






36. 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.






37. 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.






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






39. 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.






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






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






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






43. 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






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






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






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






47. 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






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






49. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






50. 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