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






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






3. Financial statements prepared under regulatory - tax - cash basis - or other definitive criteria having substantial support.






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






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






6. 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.






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






8. 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.






9. The process of covering a cash shortage by applying cash from one customer's accounts receivable against another customer's accounts receivable.






10. 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.






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






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






13. 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.






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






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






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






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






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






19. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities






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






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






22. Physical examination of the tangible assets.






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






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






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






26. 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.






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






28. 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






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






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






31. 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






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






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






34. 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)






35. 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.






36. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatememnt of the entity's financial statements will not be prevent - or detected and corrected on a timely basis.






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






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






39. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep






40. Violations of laws or government regulations.






41. 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.






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






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






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






45. 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.






46. 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






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






48. A control deficiency - or combination of control deficiencies - that adversely effects the entity's ability to initate - authorize - record - process - or report external financial data reliably in accordance with GAAP such that there is more than a






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






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







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