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






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






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






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






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






7. Expressed or implied representations by management about information that is reflected in the financial statements. The three sets of assertions related to ending account balances - transactions - and presentation and disclosure.






8. Physical examination of the tangible assets.






9. 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.






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






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






12. The individual member of the population being sampled.






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






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






15. 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






16. 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.






17. 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






18. 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






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






20. 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






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






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






23. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.






24. 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.






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






26. 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.






27. 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.






28. Specific acts performed by the auditor in gathering evidence to determine if specific assertions are met.






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






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






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






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






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






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






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






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






37. 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






38. 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.






39. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities






40. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






41. 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.






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






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






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






45. 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.






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






47. 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 -






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






49. 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.






50. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.