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






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






3. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






4. 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






5. 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.






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






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






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






9. Violations of laws or government regulations.






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






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






12. The auditor's plan for the expected conduct - organization - and staffing of the audit.






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






14. 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






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






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






17. 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.






18. 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.






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






20. 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.






21. 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.






22. 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.






23. 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.






24. 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






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






26. 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.






27. 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






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






29. 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






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






31. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount






32. A measure of sampling risk added and subtracted to the projected misstatement to form a confidence interval.






33. 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






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






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






36. A deficiency - or combination of deficiencies - that results in a reasonable possibility that a material misstatement of the company's annual or interim financial stsatements will not be prevented or detected on a timely basis






37. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






38. 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






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






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






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






42. 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






43. 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.






44. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






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






46. 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.






47. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






48. 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.






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






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