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






2. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.






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






4. Examination of internal or external records or documents that are in paper form - electronic form - or other media.






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






6. 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.






7. Specific acts performed by the auditor in gathering evidence to determine if specific assertations are being met.






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






9. 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






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






11. 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.






12. 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.






13. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider






14. 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.






15. The deviation rate that the auditor expects to exist in the population.






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






17. 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






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






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






20. 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.






21. Unintentional misstatements or omissions of amounts or disclosures.






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






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. 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






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






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






27. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






28. 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






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






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






31. 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.






32. Test to detect errors or fraud in individual transactions.






33. A confirmation request to which the recipient responds only if the amount or information stated is incorrect.






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






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






36. 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.






37. 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






38. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






39. 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.






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






41. 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.






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






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






44. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.






45. 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.






46. 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.






47. 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.






48. 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






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






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