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






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






3. 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






4. 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.






5. 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.






6. 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.






7. The auditor's independent execution of procedures or controls that were originally performed as part of other entity's internal control - either manually or through the use of CAATs.






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. 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.






10. 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






11. Unintentional misstatements or omissions of amounts or disclosures.






12. A management letter is a report to management containing the auditors' recommendations for correcting any deficiencies disclosed by the auditors' consideration of internal control. The management letter also provides recommendations on where the comp






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






14. A violation of laws or governmental regulations.






15. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based - and includes the information contained in the accounting records underlying the financial statements and other information such as minutes of






16. 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.






17. 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






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






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






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






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






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. Papers that document the evidence gathered by auditors to show the work they have done - the methods and procedures they have followed - and the conclusions they have developed in an audit of financial statements or other type of engagement.






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






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






26. The process of correcting a material weakness as part of management's assessment of the effectiveness of ICFR






27. 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.






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






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






30. 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.






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






32. Controls that have a pervasive effect on the entity's system of internal control such as controls related to the control environment; controls over management override; the company's risk assessment process; centralized processing and controls - incl






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






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






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






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






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






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






39. 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






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






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






42. 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.






43. The uncertainty that results from sampling; the difference between the expected mean of the population and the tolerable deviation or misstatement.






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






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






46. 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.






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






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






49. 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






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