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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. 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.






2. When a subsequent event disclosed in the financial statements occurs after the date of the report but before the issuance of the related financial statements - the auditor may use dual dating. The auditor may use the original date of the report excep






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






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






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






6. An instance where a financial statement assertion is not in accordance with the criteria against which it is audited (e.g: GAAP). Misstatements may be classified as fraud (intentional) - other illegal acts such as noncompliance with laws and regulati






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






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






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






10. Sampling used to estimate the proportion of a population that possesses a specified characteristic.






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






12. 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.






13. 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.






14. The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation - adverse publicity - or other events arising in connection wit financial statements audited and reported on.






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






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






17. 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.






18. 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.






19. 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






20. Business transactions between individuals and organizations that occur without paper documents - using computers and telecommunication networks.






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






22. 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






23. 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.






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






25. The records of initial entries and supporting records - such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers - journal entries - and other adjustments to the financial statements that are no






26. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated.






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






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






29. Violations of laws or government regulations.






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






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






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






33. 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.






34. The auditor's plan for the expected conduct - organization - and staffing of the audit.






35. A committee consisting of members of the board of directors - charged with overseeing the entity's system of internal control over financial reporting - internal and external auditors - and financial reporting process. Members typically must be indep






36. 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






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






38. 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






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






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






41. 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.






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






43. 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 -






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






45. Test of transactions that both evaluate the effectiveness of controls and detect monetary errors.






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






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






48. 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.






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






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