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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. 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.






2. 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.






3. The risk that the auditor will not detect a material misstatement that exists in the financial statements






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






5. 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.






6. 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






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






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






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






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






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






12. The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning - performance - and supervision of the engagement and provides the basis for the review of the quality of






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






14. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






15. 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.






16. 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






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






18. Ten broad statements guiding the conduct of financial statement auditing.






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






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






21. Violations of laws or government regulations.






22. 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






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






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






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






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






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






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






29. 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.






30. 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






31. 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.






32. 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.






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






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






35. An audit inquiry sent to the client's attorneys in order to obtain or corroborate information about litifation - claims - and assessments.






36. A risk of material misstatement that is important enough to require special audit consideration.






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






39. 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.






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






41. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.






42. A state of objectivity in fact and in appearance - including the absence of any significant conflicts of interest.






43. 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






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






46. 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.






47. A transaction being traced by an auditor from origination through the entity's information system until it is reflected in the entity's financial reports; it encompasses the entire process of initiating - authorizing - recording - processing - and re






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






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






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






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