Test your basic knowledge |

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 transaction being traced by an auditor from origination through the entity's information system until it is reflected in the entity's financial reports; it encompasses the entire process of initiating - authorizing - recording - processing - and re






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






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






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






5. Physical examination of the tangible assets.






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






7. 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.






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






9. 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.






10. 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.






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






12. The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation - adverse publicity - or other events arising in connection wit financial statements audited and reported on.






13. Financial statements prepared under regulatory - tax - cash basis - or other definitive criteria having substantial support.






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






15. 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






16. 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.






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






18. The individual member of the population being sampled.






19. 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






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






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






22. 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






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






24. 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.






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






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






27. The transmission of business transactions over telecommunication networks.






28. 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






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






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






31. 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






32. Seeking information of knowledgeable persons - both financial and nonfinancial - throughout the entity or outside the entity.






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






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






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






36. 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.






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






38. 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.






39. 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.






40. 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






41. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based - and includes the information contained in the accounting records underlying the financial statements and other information such as minutes of






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






43. 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.






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






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






46. 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.






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






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






49. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based; includes the information contained in the accounting records underlying the financial statements and other information






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