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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. 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.






2. 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






3. Basic unit containing the elements of the population to be sampled






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






5. 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






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






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






8. Existing condition or set of circumstances involving uncertainty about a possible loss that will ultimately be resolved when some future event occurs or fails to occur.






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






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






11. 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)






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






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






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






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






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






18. 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






19. The extrapolation of sample results to the population; represents the auditors 'best estimate' of the misstatement in the sampling population






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






21. 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.






22. 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 -






23. A 'clean' audit report - indicating the auditor's opinion that a client's financial statements are fairly presented in accordance with agreed-upon criteria (eg. GAAP)






24. Consulting services that may provide advice and assistance concerning an entity's organization - personnel - finances - operations - systems - or other activities






25. 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






26. 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.






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






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






29. 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






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






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






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






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






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






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






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






37. 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.






38. 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






39. A financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause financial statements to be materially misstated.






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






41. 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






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






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






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






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






46. Violations of laws or government regulations.






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






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






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






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






Can you answer 50 questions in 15 minutes?



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