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






2. 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.






3. 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






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






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






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






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






8. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






9. When a subsequent event disclosed in the financial statements occurs after the date of the report but before the issuance of the related financial statements - the auditor may use dual dating. The auditor may use the original date of the report excep






10. Violations of laws or government regulations.






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






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






13. 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






14. Unintentional misstatements or omissions of amounts or disclosures.






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






16. 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






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






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






19. The process of obtaining and evaluating direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions.






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






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






22. 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






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 concept that the manager generally has more information about the true financial position and results of operations of the entity than the absentee owner does.






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






26. 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.






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






28. 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.






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






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






31. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.






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






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 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






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






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






37. The oversight mechanisms in place to help ensure the proper stewardship over an entity's assets. Management and the board of directors play primary roles - and the independent auditor plays a key facilitating role.






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






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






40. 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.






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






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






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






44. A risk of material misstatement that is important enough to require special audit consideration.






45. 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






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






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






48. 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.






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






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