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






2. 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






3. 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.






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






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






6. 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






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






8. 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






9. 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.






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






11. 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.






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






13. 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






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






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






16. 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.






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






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






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






20. 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






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






22. 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






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






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






25. 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.






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






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






28. 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.






29. Sampling that uses the laws of probability to select and evaluate the results of an audit sample - thereby permitting the auditor to quantify the sampling risk for the purpose of reaching a conclusion about the population.






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






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






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






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






34. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.






35. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatememnt of the entity's financial statements will not be prevent - or detected and corrected on a timely basis.






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






37. The individual member of the population being sampled.






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






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






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






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






42. 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.






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






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






45. Violations of laws or government regulations.






46. 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.






47. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






48. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR






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






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