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






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






3. 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






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






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






6. The individual member of the population being sampled.






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






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






9. Expressed or implied representations by management that are reflected in the financial statement components.






10. 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.






11. The transmission of business transactions over telecommunication networks.






12. 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






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






14. An attitude that includes a questioning mind and a critical assessment of an audit evidence. The auditor should not assume that management is either honest or dishonest.






15. 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






16. 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.






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






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






19. 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.






20. 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






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






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






23. 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






24. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.






25. 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






26. Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.






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






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






29. 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.






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






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






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






33. 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.






34. 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.






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






36. 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






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






38. 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






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






40. Expressed or implied representations by management that are reflected in the financial statement components






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






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






43. 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






44. 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.






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






46. The risk that the auditor will not detect a material misstatement that exists in the financial statements






47. 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






48. 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.






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






50. 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.