SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Auditing Vocab
Start Test
Study First
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. Controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system.
Confirmation
Application controls
Significant deficiency
Accounting records
2. 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
Business processes
Statements on Auditing Standards
Material Weakness
Audit strategy
3. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting and correcting - material misstatements at the relevant assertion level.
Dual-purpose tests
Audit Evidence
Tests of controls
Generally accepted accounting principles (GAAP)
4. Intentional misstatements that can be classified as fraudulent financial reporting and/or misappropriation of assets.
Sampling risk
Control deficiency
Fraud
Misstatement
5. The risk that material misstatements that could occur will not be prevented - or detected and corrected - by internal controls.
Control risk
Inquiry
Risk of inccorect rejection
Desired confidence level
6. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.
Classical variables sampling
Inspections of tangible assets
Internal control
Integrated audit
7. Examination of internal or external records or documents that are in paper form - electronic form - or other media.
Inspections of records and documents
Lapping
Disclaimer of opinion
Reliability of evidence
8. The susceptibility of an assertion to material misstatement - assuming no related controls
Illegal acts
Inherent risk
Legal letter
Relevant Assertions
9. 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.
Monitoring of controls
Observation
Classical variables sampling
Control environment
10. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.
Reliance strategy
Classical variables sampling
Assurance Services
Materiality
11. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.
Business processes
Risk of incorrect acceptance
Illegal act
Engagement letter
12. Tests that concentrate on the details of amounts contained in an account balance and related footnotes.
Confirmation
Tests of details of account balances and disclosures
Generally accepted accounting principles (GAAP)
Electronic (Internet) commerce
13. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.
Unqualified opinion
Representation letter
Assertions
Misstatement
14. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.
Tests of details of account balances and disclosures
Analytical procedures
Control environment
Ethics
15. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.
Relevance of evidence
Misstatement
Reliance strategy
ositive confirmation
16. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Professional skepticism
Statistical sampling
Significant account or disclosure
Analytical procedures
17. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.
Engagement quality review
Audit committee
Control environment
Allowance for sampling risk
18. The auditor's decision to rely on the entity's controls - test those controls - and reduce the directs test of financial statement accounts.
Reliability of evidence
Statistical sampling
Relevant Assertions
Reliance strategy
19. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting material misstatements at the relevant assertion level.
Tolerable misstatement
Professional skepticism
Risk of material misstatement
Tests of controls
20. 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
Monitoring of controlsa
Closest reasonable estimate
Blank or zero-balance confirmations
Attest
21. 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.
Nonstatistical sampling
Errors
Information asymmetry
Statistical sampling
22. Controls that relate to the overall information processing environment and have a pervasive effect on the entity's computer operations.
Computer-assisted audit techniques (CAATs)
Tests of controls
General controls
Nonstatistical sampling
23. 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
Electronic (Internet) commerce
Tests of controls
Assertions
Control objective
24. 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
Generally accepted auditing standards (GAAS)
Significant risk
Qualified opinion
Analytical procedures
25. The deviation rate that the auditor expects to exist in the population.
Generally accepted auditing standards
Expected population deviation rate
Corporate governance
Generally accepted auditing standards (GAAS)
26. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
Reporting
Assertions
Analytical procedures
Contingent liability
27. A violation of laws or governmental regulations.
Substantive tests of transactions
Application controls
Substantive strategy
Illegal act
28. The use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance.
Classical variables sampling
Audit strategy
Statements on Auditing Standards
Generally accepted accounting principles (GAAP)
29. 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.
General controls
Nonsampling risk
Integrated audit
Inquiry
30. 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
Analytical procedures
Business risks
Safeguarding of Assets
Significant deficiency
31. 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.
General controls
Corporate governance
General controls
Confirmation
32. 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.
ateriality
Audit evidence
Inspections of records and documents
Nonstatistical sampling
33. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR
General controls
Upper misstatement limit
Remediation
Desired confidence level
34. Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.
Public accounting firm
Audit sampling
Fraud
Audit procedures
35. 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
Control risk
Risk of inccorect rejection
Materiality
Dual dating
36. 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.
Audit evidence
Contingent liability
Electronic (Internet) commerce
Monetary-unit sampling
37. Controls that have a pervasive effect on the entity's system of internal control such as controls related to the control environment; controls over management override; the company's risk assessment process; centralized processing and controls - incl
Substantive strategy
Significant risk
Entity-level controls
Expected misstatement
38. 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
Application controls
Assertions
Control deficiency
Risk of incorrect rejection
39. The amount of the planning materiality that is allocated to a financial statement account.
Electronic (Internet) commerce
Substantive tests of transactions
Tolerable misstatement
Financial statement assertions
40. The total of the projected misstatement plus the allowance for sampling risk.
Qualified opinion
Upper misstatement limit
Audit sampling
Control risk
41. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population
Confidence bound
Contingent liability
Projected misstatement
Professional skepticism
42. 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.
Monetary unit sampling
Public accounting firm
Significant deficiency
Control objective
43. 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
Audit procedures
Internal Control
Reasonable assurance
Materiality
44. 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.
Statistical sampling
Risk of incorrect acceptance
Legal letter
General controls
45. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.
Positive confirmation
Information asymmetry
Sampling risk
Substantive tests of transactions
46. 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.
Material Weakness
Application controls
Sampling risk
Audit sampling
47. Sampling used to estimate the proportion of a population that possesses a specified characteristic.
Other comprehensive basis of accounting
Attribute sampling
Desired confidence level
Observation
48. Audit sampling that relies on the auditor's judgment to determine sample size - select the sample - and/or evaluate the results for the purpose of reaching a conclusion about the population.
Significant account or disclosure
Nonstatistical sampling
Substantive tests of transactions
Analytical procedures
49. Computer programs that allow auditors to test computer files and databases.
Reperformance
Illegal act
Computer-assisted audit techniques (CAATs)
Confidence bound
50. Attribute-sampling techniques used to estimaed the dollar amount of misstatement for a class of transactions or an account balance.
Safeguarding of Assets
Observation
Monetary unit sampling
Audit sampling