Test your basic knowledge |

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






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






3. Risks resulting from significant conditions - events - circumstances - and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives - or through the setting of inappropriate objecti






4. 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.






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






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






7. 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






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






9. 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.






10. 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.






11. 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.






12. An audit of both financial statements and internal control over financial reporting - provided by the external auditor. Required for public companies.






13. 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.






14. 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






15. Standards regarding the conduct of financial statement auditing for public companies. Currently - consist primarily of standards and statements established by the AICPA's Auditing Standards Board - as these statements and standards were adopted by th






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






17. 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)






18. 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






19. Unintentional misstatements or omissions of amounts or disclosures.






20. A deficiency - or combination of deficiencies - that results in a reasonable possibility that a material misstatement of the company's annual or interim financial stsatements will not be prevented or detected on a timely basis






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






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






23. 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.






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






25. The process of covering a cash shortage by applying cash from one customer's accounts receivable against another customer's accounts receivable.






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






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






28. 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.






29. The risk that the auditor may unknowingly fail to appropriately modify the opinion on materially misstated financial statements.






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






31. 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






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






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






34. A lack of evidence that may preclude the auditor from issuing a clean opinion - usually resulting from an inability to conduct an audit procedure considered necessary.






35. 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.






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






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






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






39. Substantive tests that concentrate on the details of items contained in the account balance and disclosures.






40. An account or disclosure is significant if there is a reasonable possibility that the account or disclosure could contain a misstatement that - individually or when aggregated with others - has a material effect on the financial statements - consider






41. The probability that the true but unknown measure of the characteristic of interest is within specified limits.






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






43. 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






44. 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






45. 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)






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






47. Seeking information of knowledgeable persons - both financial and nonfinancial - throughout the entity or outside the entity.






48. The maximum deviation rate from a prescribed control that the auditor is willing to accept without altering the planned assessed level of control risk.






49. The oversight mechanisms in place to help ensure the proper stewardship over an entity's assets. Management and the board of directors play primary roles - and the independent auditor plays a key facilitating role.






50. A violation of laws or governmental regulations.






Can you answer 50 questions in 15 minutes?



Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests