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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. Specific acts performed by the auditor in gathering evidence to determine if specific assertions are met.






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






3. 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






4. 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.






5. 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.






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






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






8. 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.






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






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






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






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






13. A term that implies some risk that a material misstatement could be present in the financial statements without the auditor detecting it - even when the auditor has exercised due care.






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






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






16. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






17. 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.






18. 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.






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






20. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.






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






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






23. 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.






24. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR






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. 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






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






28. A transaction being traced by an auditor from origination through the entity's information system until it is reflected in the entity's financial reports; it encompasses the entire process of initiating - authorizing - recording - processing - and re






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






30. 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.






31. 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.






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






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






34. Physical examination of the tangible assets.






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






36. 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.






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






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






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






40. Unintentional misstatements or omissions of amounts or disclosures.






41. 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.






42. The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested.






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






44. 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.






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






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






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






48. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






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






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