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Test your basic knowledge |
Auditing Vocab
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Study First
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 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
Audit documentation (working papers)
Audit risk
Blank or zero-balance confirmations
Expected misstatement
2. 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
Walkthrough
Qualified opinion
Recalculation
Risk of incorrect rejection
3. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population
Reliance strategy
Generally accepted auditing standards (GAAS)
Attribute sampling
Projected misstatement
4. A letter that corroborates oral representations made to the auditor by management or by other auditors and documents the continued appropriateness of such representations.
Representation letter
General controls
Audit procedures
Projected misstatement
5. 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.
Computer-assisted audit techniques (CAATs)
Audit documentation (working papers)
Confirmation
Other information
6. Controls that related to the overall information processing environment and have a pervasive effect on the entity's computer operations
General controls
Desired confidence level
Inquiry
Audit procedures
7. The risk that material misstatements that could occur will not be prevented - or detected and corrected - by internal controls.
Observation
Monetary unit sampling
Control risk
Tests of details of account balances and disclosures
8. The policies and procedures that help ensure that management's directives are carried out.
Control activities
Reliance strategy
Significant deficiency
Monitoring of controlsa
9. Controls that relate to the overall information processing environment and have a pervasive effect on the entity's computer operations.
General controls
Material Weakness
Reporting
Analytical procedures
10. Audit procedures performed to test the operating effectiveness of controls in preventing or detecting material misstatements at the relevant assertion level.
Dual dating
Expected misstatement
Tests of controls
Control environment
11. Computer programs that allow auditors to test computer files and databases.
Analytical procedures
Computer-assisted audit techniques (CAATs)
Other information
Internal Control
12. The susceptibility of an assertion to material misstatement - assuming no related controls
Computer-assisted audit techniques (CAATs)
Inherent risk
Qualified opinion
Application controls
13. Attribute sampling techniques used to estimate the dollar amount of misstatement for a class of transactions or an account balance.
Attribute sampling
Fraud
Business risks
Monetary-unit sampling
14. A system or code of conduct based on moral duties and obligations that indicates how an individual should behave.
Walkthrough
Ethics
Generally accepted auditing standards (GAAS)
Recalculation
15. 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
Tolerable deviation rate
Substantive tests of transactions
Sampling risk
Audit procedures
16. The auditor's decision to rely on the entity's controls - test those controls - and reduce the directs test of financial statement accounts.
Reliance strategy
Risk of incorrect acceptance
Electronic data interchange
Management advisory services
17. Specific acts performed by the auditor in gathering evidence to determine if specific assertions are met.
Dual-purpose tests
Ethics
Audit procedures
Audit Evidence
18. The probability that the true but unknown measure of the characteristic of interest is within specified limits.
Business processes
Desired confidence level
Other information
Illegal act
19. Violations of laws or government regulations.
Application controls
Classical variables sampling
Illegal acts
Reliance strategy
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.
Materiality
Risk of material misstatement
Risk of incorrect acceptance
Inspections of tangible assets
21. Unintentional misstatements or omissions of amounts or disclosures.
Assurance Services
Errors
Audit committee
ositive confirmation
22. Process of watching a process or procedure being performed by others.
Allowance for sampling risk
Reliance strategy
Observation
Disclaimer of opinion
23. 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
Electronic data interchange
Expected misstatement
Walkthrough
Sampling unit
24. A process that assess the quality of internal control performance over time.
Monitoring of controlsa
Monetary unit sampling
Significant account or disclosure
Control risk
25. An audit inquiry sent to the client's attorneys in order to obtain or corroborate information about litifation - claims - and assessments.
Reliability of evidence
Legal letter
Analytical procedures
Confirmation
26. 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.
Tests of details of account balances and disclosures
Substantive strategy
Engagement quality review
Upper misstatement limit
27. Controls that relate to the overall information processing environment and have a pervasive effect on the entity's computer operations.
Audit procedures
Representation letter
General controls
Relevant Assertions
28. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Confidence bound
Analytical procedures
Monitoring of controlsa
Observation
29. The risk that the entity's financial statements will contain a material misstatements whether caused by error or fraud.
Application controls
Risk of material misstatement
Reasonable assurance
Remediation
30. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
General controls
Analytical procedures
Substantive tests of transactions
Subsequent event
31. 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.
Working papers
Significant deficiency
ositive confirmation
Contingent liability
32. 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.
Financial Statement Assertions
Audit Evidence
Qualified opinion
Public accounting firm
33. The policies and procedures that help ensure that management's directives are carried out.
Assertions
Control activities
Assertions
Engagement letter
34. Audit evidence that includes minutes of meetings; confirmations from third parties; industry analysts' reports; comparable data about competitors (benchmarking); controls manuals; information obtained by the auditor from such audit procedures as inqu
Analytical procedures
General controls
Independence
Other information
35. 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.
Unqualified opinion
Significant deficiency
Business risks
Statements on Auditing Standards
36. Controls that relate to the overall information processing environment and have a pervasive effect on the entity's computer operations.
Substantive tests of transactions
Application controls
General controls
Significant account or disclosure
37. The amount of the planning materiality that is allocated to a financial statement account.
Working papers
Engagement risk
Tolerable misstatement
Illegal act
38. 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.
Control risk
Risk of incorrect acceptance
Qualified opinion
Entity-level controls
39. The magnitude of an omission or misstatement of accounting information that - in light of surrounding circumstances - makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced.
Attest
Tests of details of account balances and disclosures
Significant deficiency
Materiality
40. 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.
Control deficiency
Electronic (Internet) commerce
Nonstatistical sampling
Risk of incorrect rejection
41. 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
Internal Control
Representation letter
Significant account or disclosure
Control activities
42. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.
Significant risk
Allowance for sampling risk
Reliability of evidence
Audit sampling
43. 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.
Generally accepted auditing standards (GAAS)
Reporting
Scope limitation
Walkthrough
44. Computer programs that allow auditors to test computer files and databases.
Assertions
Computer-assisted audit techniques (CAATs)
Relevant Assertions
Reliance strategy
45. The deviation rate that the auditor expects to exist in the population.
Audit committee
Remediation
Reliance strategy
Expected population deviation rate
46. 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.
Assertions
Detection risk
Control environment
Statements on Auditing Standards
47. 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.
Corporate governance
Management advisory services
Audit sampling
Monitoring of controlsa
48. An event occurring between the balance sheet date and the audit report release date - Type I - Type II
Risk of incorrect acceptance
Substantive strategy
Risk assessment
Subsequent event
49. Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.
Upper misstatement limit
Reasonable assurance
Materiality
Analytical procedures
50. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.
Dual-purpose tests
Management letter
Audit strategy
Audit risk