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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. 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.






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






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






4. 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.






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






6. The risk that the sample supports the conclusion that the control is not operating effectively when it actually is or that the recorded account balance is materially misstated when it is not materially misstated.






7. 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






8. 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.






9. 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.






10. 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






11. Expressed or implied representations by management regarding the recognitions - measurement - presentation - and disclosure of information in the financial statements and related disclosures.






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






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






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






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






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






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






18. 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






19. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based; includes the information contained in the accounting records underlying the financial statements and other information






20. 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






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






22. 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.






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






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






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






26. 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






27. A confirmation request to which the recipient responds whether or not he or she agrees with the amount or information stated.






28. The end product of the auditor's work indicating the auditing standards followed - and expressing an opinion as to whether an entity's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






29. Those policies and procedures that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition - use - or disposition of the company's assets that could have a material effect on the financial statements






30. 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






31. A range of acceptable amounts or a precisely determined point estimate for an estimate (eg. uncollectible receivables) - if that is a better estimate than any other amount






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






33. 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.






34. 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






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






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






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






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






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






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






41. An attitude that includes a questioning mind and a critical assessment of an audit evidence. The auditor should not assume that management is either honest or dishonest.






42. Unintentional misstatements or omissions of amounts or disclosures.






43. Physical examination of the tangible assets.






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






45. 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.






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






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






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






49. 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






50. 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







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