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






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






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






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






5. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






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






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






8. 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






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






10. 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






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






12. 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






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






14. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






15. 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






16. 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.






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






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






19. A violation of laws or governmental regulations.






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






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






22. 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






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






24. 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






25. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






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






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






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






29. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






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






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






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






33. 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






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






35. 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.






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






37. The use of normal distribution theory to estimate the dollar amount of misstatement for a class of transactions or an account balance.






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






39. 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






40. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






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






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






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






44. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.






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






46. The auditor's decision not to rely on the entity's controls and to audit the related financial statement account by relying more on substantive procedures.






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






48. 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.






49. 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.






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