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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 extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






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






3. 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.






4. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.






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






6. 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






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






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






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






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






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






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






13. Physical examination of the tangible assets.






14. 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.






15. The auditor's decision not to rely on the entity's controls and to audit the related financial statement account by relying more on substantive procedures.






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






17. 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.






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






19. 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)






20. 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






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






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






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






24. 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.






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. 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






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






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






29. The susceptibility of an assertion to material misstatement - assuming no related controls






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






31. The magnitude of an omission or misstatement of accounting information that - in light of surrounding circumstances - makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced.






32. Examination of internal or external records or documents that are in paper form - electronic form - or other media.






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






34. 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.






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






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






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






38. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






39. 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






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






41. Statements issued by the AICPA Auditing Standards Boards - considered as interpretations of the 10 GAAS statements.






42. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






43. 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






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






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






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






47. The auditor's decision not to tely on the entity's controls and to audit the related financial statement accounts by relying more on substantive procedures.






48. 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.






49. 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






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







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