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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. 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.






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






3. A confirmation request on which the recipient fills in the amount or furnishes the information requested.






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






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






6. 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.






7. Statements issued by the AICPA Auditing Standards Boards - considered as interpretations of the 10 GAAS statements.






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






9. 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.






10. 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






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






12. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






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






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






15. 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






16. 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.






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






18. 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






19. Audit sampling that relies on the auditor's judgment to determine sample size - select the sample - and/or evaluate the results for the purpose of reaching a conclusion about the population.






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






21. An objective for ICFR generally relates to a relevant financial statement assertion and states a criterion for evaluating whether the company's control procedures in a specific area provide reasonable assurance that a misstatement or omission in that






22. 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.






23. 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






24. 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.






25. 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.






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






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






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






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






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






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






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






33. 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.






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






35. 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






36. 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






37. 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






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






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






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






41. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






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






43. The auditor's opinion that the financial statements do not present fairly in accordance with generally accepted accounting principles (or other comprehensive basis of accounting) due to a pervasively material misstatement.






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






45. 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.






46. 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






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






48. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






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







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