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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. 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






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






3. 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.






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






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






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






7. 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






8. 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.






9. 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






10. 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






11. Intentional misstatements that can be classified as fraudulent financial reporting and/or misappropriation of assets.






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






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






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






15. 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.






16. The diagnosticity of evidence; that is whether the type of evidence can be relied on to signal the true state of the assertion.






17. Process of watching a process or procedure being performed by others.






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






19. A service when a practitioner is engaged to issue or does issue a report on a subject matter - or an assertion about subject matter - that is the responsibility of another party. Encompasses financial statement audits.






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






21. 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.






22. A deficiency in internal control exists when the design or operation of a control does not allow management or employees - in the normal course of performing their assigned functions - to prevent - or detect and correct misstatements on a timely basi






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






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






25. 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






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






27. 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.






28. 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






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






30. A subcommittee of the board of directors that is responsible for the financial reporting and disclosure process.






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






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






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






34. 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






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






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






37. The risk that the auditor will not detect a material misstatement that exists in the financial statements






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






39. A systematic process of (1) objectively obtaining an evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and (2) communicating the resu






40. 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.






41. 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.






42. The risk that the sample supports the conclusion that the recorded account balance is materially misstated when it is not materially misstated.






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






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






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






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






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






48. The identification - analysis - and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.






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






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