Test your basic knowledge |

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






2. 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.






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






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






5. 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






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






7. 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.






8. 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.






9. A systematic process of (1) objectively obtaining an evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and (2) communicating the resu






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






11. Audit evidence that includes minutes of meetings; confirmations from third parties; industry analysts' reports; comparable data about competitors (benchmarking); controls manuals; information obtained by the auditor from such audit procedures as inqu






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






13. Violations of laws or government regulations.






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






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






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






17. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.






18. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider






19. 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.






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






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






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






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






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






25. Standards regarding the conduct of financial statement auditing for public companies. Currently - consist primarily of standards and statements established by the AICPA's Auditing Standards Board - as these statements and standards were adopted by th






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






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






28. Process of watching a process or procedure being performed by others.






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






30. 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.






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






32. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount






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






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






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






36. 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






37. 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






38. Examination of internal or external records or documents that are in paper form - electronic form - or other media.






39. A violation of laws or governmental regulations.






40. 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.






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. 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.






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






44. 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.






45. 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.






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






47. The possibility that the sample drawn is not representative of the population and that - as a result - the auditor reaches an incorrect conclusion about the reliability of the control - the account balance - or class of transactions based on the samp






48. 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 -






49. 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.






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