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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 auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






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






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






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






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






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






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






8. A process designed by - or under the supervision of - the company's principal executive and principal financial officers - or persons performing similar functions - and effected by the company's board of directors - management - and other personnel -






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






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






11. Expressed or implied representations by management about information that is reflected in the financial statements. The three sets of assertions related to ending account balances - transactions - and presentation and disclosure.






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






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






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






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






16. The risk that the sample supports the conclusion that the control is operating effectively when it is not or that the recorded account balance is not materially misstated when it is materially misstated.






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






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






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






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






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






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






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






25. 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






26. 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






27. 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.






28. 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.






29. 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.






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






31. The transmission of business transactions over telecommunication networks.






32. 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






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






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






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






36. 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)






37. The risk that the sample supports the conclusion that the control is operating effectively when it is not or that the recorded account balance is not materially misstated when it is materially misstated.






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






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






40. 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






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






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






43. 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.






44. 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.






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






46. 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.






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






48. 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)-i.e. - a clean opinion.






49. 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.






50. The individual member of the population being sampled.