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






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






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






4. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.






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






6. Computer programs that allow auditors to test computer files and databases.






7. Computer programs that allow auditors to test computer files and databases.






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






9. 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.






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






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






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






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






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






15. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






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






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






18. 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






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






20. 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.






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






22. The end product of the auditor's work indicating the auditing standards followed - and expressing an opinion as to whether an entity's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






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






24. 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






25. A violation of laws or governmental regulations.






26. 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.






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






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






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






30. A process designed by - or under the supervision of - the company's principal executive and principal financial officers - or persons performing similar functions - and effected by the company's board of directors - management - and other personnel -






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






32. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






33. 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.






34. 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






35. 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






36. 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.






37. An event occurring between the balance sheet date and the audit report release date - Type I - Type II






38. 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






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






40. Papers that document the evidence gathered by auditors to show the work they have done - the methods and procedures they have followed - and the conclusions they have developed in an audit of financial statements or other type of engagement.






41. 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.






42. 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.






43. 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.






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






45. 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






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






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






48. 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.






49. The method by which an entity's boardof directors - management - and other personnel provide reasonable assurance about the achievement of objectives in the following categories: (1) reliability of financial reporting - (2) effectiveness and efficien






50. 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