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Auditing Vocab

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.






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






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






4. 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.






5. 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






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






7. 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.






8. A systematic process of (1) objectively obtaining an evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and (2) communicating the resu






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






11. Processes implemented by management to achieve entity objectives. Business processes are typically organized into the following categories: revenue - purchasing. human resource management - inventory management - and financing processes






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






13. 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.






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






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






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






17. 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






18. 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)






19. 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.






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






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






22. 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






23. 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.






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






25. 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






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






27. The transmission of business transactions over telecommunication networks.






28. 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.






29. A state of objectivity in fact and in appearance - including the absence of any significant conflicts of interest.






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






31. The amount of the planning materiality that is allocated to a financial statement account.






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






33. Expressed or implied representations by management regarding the recognitions - measurement - presentation - and disclosure of information in the financial statements and related disclosures.






34. 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






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






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






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






38. 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






39. 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.






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






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






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






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






44. 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






45. The method by which an entity's board of 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 efficie






46. 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.






47. 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.






48. 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.






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






50. 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







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