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






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






3. Violations of laws or government regulations.






4. 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.






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






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






7. 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.






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






9. 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.






10. 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.






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






12. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






13. 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






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






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






16. The transmission of business transactions over telecommunication networks.






17. 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.






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






19. 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.






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






21. 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






22. The method by which an entity's board of 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 efficie






23. Attribute sampling techniques used to estimate the dollar amount of misstatement for a class of transactions or an account balance.






24. 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.






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






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






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






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






29. 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.






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






31. 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






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






33. 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.






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. 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.






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






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






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






39. 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






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






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






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






43. 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.






44. A review of audit documentation by an additional person (normally - a partner or equivalent with the firm) who has not been involved with the audit; its purpose is to ensure that quality of the audit work and reporting is consistent with the quality






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






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






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






48. The amount of the planning materiality that is allocated to a financial statement account.






49. 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






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







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