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






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






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






4. 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.






5. 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.






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






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






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






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






10. 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.






11. Independent professional services that improve the quality of information - or its context - for decision makers. Encompasses attest services and financial statement audits.






12. A letter that formalizes the contract between the auditor and the client and outlines the responsibilities of both parties.






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






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






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






16. 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.






17. 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.






18. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






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






20. 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.






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






22. 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.






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






24. 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.






25. Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.






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






27. The amount of misstatement that the auditor believes exists in the population.






28. 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






29. 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.






30. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






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






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






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






34. 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.






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






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






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






38. 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.






39. The method by which an entity's boardof 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 efficien






40. The concept that an audit done in accordance with auditing standards may fail to detect a material misstatement in a client's financial statements. In an auditing context this term has been defined to mean a high - but not absolute level of assurance






41. 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






42. A deficiency - or combination of deficiencies - in internal control - such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented - or detected and corrected - on a timely basis.






43. 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






44. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






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






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






47. Violations of laws or government regulations.






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






49. 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.






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