AUD- CPA EXAM STUDY GUIDE
Account Balances - Answers -One of three categories of financial statement assertions,
relating primarily to assets, liabilities, and equity interests.
Accounting Estimate - Answers -An approximation of a financial statement element,
item, or account used because data either is not readily available or is dependent upon
the outcome of future events.
Accounts Payable Confirmation - Answers -A request for independent verification of
payables.
Accounts Receivable Confirmation - Answers -A request for independent verification of
receivables. Note that confirming accounts receivable is a required, generally accepted
auditing producre.
Accuracy - Answers -A financial statement assertion in the "transactions and events"
category indicating that amounts and other data relating to recorded transactions and
events have been recorded properly.
Accuracy and Valuation - Answers -A financial statement assertion in the "presentation
and disclosure" category indicating that financial and other information are disclosed
fairly and at appropriate amounts.
Activity Ratio - Answers -A ratio that measures how effectively an enterprise is using its
assets.
Adverse Opinion - Answers -An auditor's report stating that the financial statements "do
not present fairly..."
Aging Schedule - Answers -A listing of accounts receivable categorized by age (i.e.,
current, 30 to 60 days, 60 to 90 days, etc.).
Agreed-upon Procedures - Answers -An engagement in which a practitioner is engaged
to issue a report of findings based on specific agreed-upon procedures.
AICPA Code of Professional Conduct - Answers -Guidelines for the behavior of
members of the American Institute of Certified Public Accountants (AICPA) in the
conduct of their professional affairs.
Allowance for Sampling Risk - Answers -In sampling, a "cushion" for protection against
undetected deviations that is added to the sample deviation rate to arrive at the upper
deviation rate.
, Analyst - Answers -An IT (Information Technology) department employee who
determines system requirements and designs a processing system to meet those
requirements.
Analytical Procedures - Answers -Evaluations of financial information made by a study
of plausible relationships among both financial and nonfinancial data.
Applicable Financial Reporting Framework - Answers -The financial reporting
framework that is acceptable in view of the nature of the entity and the objective of the
financial statements, or that is required by law or regulation.
Application Controls - Answers -Information processing controls that apply to the
processing of individual "applications" (e.g., controls surrounding receivables, controls
surrounding payroll, etc.).
Appropriate (Appropriateness of Audit Evidence) - Answers -The quality of being both
reliable (valid, factual, objective, and supportable) and relevant (related to the financial
statement assertion under consideration).
Articles of Incorporation - Answers -A document filed with the state to create a
corporation.
Assertion - Answers -A declaration about whether a subject matter is based on or in
conformity with selected criteria.
Association with Financial Statements - Answers -A relationship that arises when an
accountant consents to the use of his or her name in connection with financial
statements, or when an accountant has prepared the financial statements.
Assumption of Responsibility - Answers -A situation in which the group engagement
partner decides to assume responsibility for the work performed by a component
auditor, and therefore does not refer to the component auditor in the auditor's report.
Attest Engagements - Answers -An engagement in which a practitioner is engaged to
issue or does issue an examination, a review, or an agreed-upon procedures report on
subject matter, or on an assertion about the subject matter, that is the responsibility of
another party.
Attribute Sampling - Answers -A statistical sampling method used to estimate the rate
of occurrence of a specific characteristic or attribute in a population.
Attributes of Risk - Answers -Four characteristics used in analyzing risk: type,
significance, likelihood, and pervasiveness.
Audit - Answers -A methodical review and objective examination of an enterprise's
financial statements.
Account Balances - Answers -One of three categories of financial statement assertions,
relating primarily to assets, liabilities, and equity interests.
Accounting Estimate - Answers -An approximation of a financial statement element,
item, or account used because data either is not readily available or is dependent upon
the outcome of future events.
Accounts Payable Confirmation - Answers -A request for independent verification of
payables.
Accounts Receivable Confirmation - Answers -A request for independent verification of
receivables. Note that confirming accounts receivable is a required, generally accepted
auditing producre.
Accuracy - Answers -A financial statement assertion in the "transactions and events"
category indicating that amounts and other data relating to recorded transactions and
events have been recorded properly.
Accuracy and Valuation - Answers -A financial statement assertion in the "presentation
and disclosure" category indicating that financial and other information are disclosed
fairly and at appropriate amounts.
Activity Ratio - Answers -A ratio that measures how effectively an enterprise is using its
assets.
Adverse Opinion - Answers -An auditor's report stating that the financial statements "do
not present fairly..."
Aging Schedule - Answers -A listing of accounts receivable categorized by age (i.e.,
current, 30 to 60 days, 60 to 90 days, etc.).
Agreed-upon Procedures - Answers -An engagement in which a practitioner is engaged
to issue a report of findings based on specific agreed-upon procedures.
AICPA Code of Professional Conduct - Answers -Guidelines for the behavior of
members of the American Institute of Certified Public Accountants (AICPA) in the
conduct of their professional affairs.
Allowance for Sampling Risk - Answers -In sampling, a "cushion" for protection against
undetected deviations that is added to the sample deviation rate to arrive at the upper
deviation rate.
, Analyst - Answers -An IT (Information Technology) department employee who
determines system requirements and designs a processing system to meet those
requirements.
Analytical Procedures - Answers -Evaluations of financial information made by a study
of plausible relationships among both financial and nonfinancial data.
Applicable Financial Reporting Framework - Answers -The financial reporting
framework that is acceptable in view of the nature of the entity and the objective of the
financial statements, or that is required by law or regulation.
Application Controls - Answers -Information processing controls that apply to the
processing of individual "applications" (e.g., controls surrounding receivables, controls
surrounding payroll, etc.).
Appropriate (Appropriateness of Audit Evidence) - Answers -The quality of being both
reliable (valid, factual, objective, and supportable) and relevant (related to the financial
statement assertion under consideration).
Articles of Incorporation - Answers -A document filed with the state to create a
corporation.
Assertion - Answers -A declaration about whether a subject matter is based on or in
conformity with selected criteria.
Association with Financial Statements - Answers -A relationship that arises when an
accountant consents to the use of his or her name in connection with financial
statements, or when an accountant has prepared the financial statements.
Assumption of Responsibility - Answers -A situation in which the group engagement
partner decides to assume responsibility for the work performed by a component
auditor, and therefore does not refer to the component auditor in the auditor's report.
Attest Engagements - Answers -An engagement in which a practitioner is engaged to
issue or does issue an examination, a review, or an agreed-upon procedures report on
subject matter, or on an assertion about the subject matter, that is the responsibility of
another party.
Attribute Sampling - Answers -A statistical sampling method used to estimate the rate
of occurrence of a specific characteristic or attribute in a population.
Attributes of Risk - Answers -Four characteristics used in analyzing risk: type,
significance, likelihood, and pervasiveness.
Audit - Answers -A methodical review and objective examination of an enterprise's
financial statements.
