Auditing Vocab
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Avg score: 27% • Most missed: “An audit of both financial statements and internal control over financial report…”
Auditing Vocab
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25 Questions

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

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

3. 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.

4. A violation of laws or governmental regulations.

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

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

7. 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

8. Violations of laws or government regulations.

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

10. Accounting principles that are generally accepted for the preparation of financial statements in the United States. GAAP standards are currently issued primarily by the FASB - with oversight and influence by the SEC.

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

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

13. 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.

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

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

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

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

18. 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

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

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

21. 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.

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

23. 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.

24. 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.

25. 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

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