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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 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






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






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






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






5. 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.






6. 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






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






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






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






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






11. 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.






12. 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






13. Unintentional misstatements or omissions of amounts or disclosures.






14. 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.






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






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






17. 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






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






19. 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.






20. 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.






21. 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.






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






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






24. Physical examination of the tangible assets.






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






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






27. 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






28. 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






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






30. A weakness in the design or operation of a control such that management or employeesm in the normal course of performing their assigned functions - fail to prevent - or detect misstatements on a timely basis.






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






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






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






34. 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.






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






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






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






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






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






40. 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






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






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






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. Standards against which the quality of the auditor's performance is measured.






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






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






47. 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.






48. 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






49. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






50. 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