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






2. 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.






3. A process that assesses the quality of internal control performance over time.






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






5. 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






6. 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.






7. 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)






8. 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.






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






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






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






12. Unintentional misstatements or omissions of amounts or disclosures.






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






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






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






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






17. 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






18. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.






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






20. 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






21. Expressed or implied representations by management regarding recognition - measurement - presentation - and disclosure of information in the financial statements.






22. 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.






23. 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.






24. A violation of laws or governmental regulations.






25. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






26. 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.






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






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






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






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






31. An event occurring between the balance sheet date and the audit report release date - Type I - Type II






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






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






34. The policies and procedures that help ensure that management's directives are carried out.






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






36. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






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






38. 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) - except for a material misstatement that does no






39. The total of the projected misstatement plus the allowance for sampling risk.






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






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






42. 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.






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






44. 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.






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






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






47. 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.






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






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






50. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.







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