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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 susceptibility of an assertion to material misstatement - assuming no related controls






2. The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






3. The individual member of the population being sampled.






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






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






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






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






8. 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






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






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






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






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






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






14. 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.






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






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






17. A service when a practitioner is engaged to issue or does issue a report on a subject matter - or an assertion about subject matter - that is the responsibility of another party. Encompasses financial statement audits.






18. 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.






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






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






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






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






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






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






25. 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.






26. The amount of misstatement that the auditor believes exists in the population.






27. 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






28. A review of audit documentation by an additional person (normally - a partner or equivalent with the firm) who has not been involved with the audit; its purpose is to ensure that quality of the audit work and reporting is consistent with the quality






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






30. 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.






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






32. Standards against which the quality of the auditor's performance is measured.






33. 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.






34. 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.






35. The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested.






36. An organization created to provide professional accounting-related services - including auditing. Usually formed as a proprietorship or as a form of partnership.






37. 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






38. 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






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






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






41. 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






42. 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.






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






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 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.






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






47. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






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






49. Violations of laws or government regulations.






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