AUDITING: AN INTERNATIONAL APPROACH
CERTIFICATION EVALUATION TEST COMPLETE
QUESTIONS AND CORRECT ANSWERS
◉ Assurance Services.
Answer: independent professional services that improve the quality
of information, or its context, for decision makers. Encompasses
attest services and financial statement audits
◉ Attest Services.
Answer: Services provided by a practitioner engaged to issue a
report on subject matter, or an assertion about subject matter, that is
the responsibility of another party. Encompasses financial statement
audits
◉ Audit Data Analytics.
Answer: Using analysis, modeling, and visualization to discover and
analyze patterns, anomalies, and other information in data in the
context of the audit
◉ Audit Evidence.
Answer: All the information used by the auditor in arriving at the
conclusions on which the audit opinion is based. Audit evidence
,includes the information contained in the accounting records
underlying the financial statements, as well as other information
◉ Audit Risk.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated
◉ Auditing.
Answer: A systematic process of objectively obtaining and
evaluating evidence regarding assertions about economic actions
and events to ascertain the degree of correspondence between those
assertions and established criteria and communicating the results to
interested users
◉ Information Asymmetry.
Answer: 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
◉ Materiality.
Answer: The maximum amount by which the auditor believes the
financial statements could be misstated and still not affect the
decisions of users
, ◉ Misstatement.
Answer: A departure from the applicable reporting framework (e.g.,
GAAP) that, if material, causes the financial statements to not be
presented fairly. Misstatements may be classified as fraud
(intentional), other illegal acts such as noncompliance with laws and
regulations (intentional or unintentional), and errors
(unintentional)
◉ Reasonable Assurance.
Answer: 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
◉ Reporting.
Answer: 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 (e.g., GAAP)
◉ Risk of Material Misstatement.
Answer: The preaudit risk that the entity's financial statements
contain a material misstatement whether caused by error or fraud
◉ Unqualified/unmodified audit report.
CERTIFICATION EVALUATION TEST COMPLETE
QUESTIONS AND CORRECT ANSWERS
◉ Assurance Services.
Answer: independent professional services that improve the quality
of information, or its context, for decision makers. Encompasses
attest services and financial statement audits
◉ Attest Services.
Answer: Services provided by a practitioner engaged to issue a
report on subject matter, or an assertion about subject matter, that is
the responsibility of another party. Encompasses financial statement
audits
◉ Audit Data Analytics.
Answer: Using analysis, modeling, and visualization to discover and
analyze patterns, anomalies, and other information in data in the
context of the audit
◉ Audit Evidence.
Answer: All the information used by the auditor in arriving at the
conclusions on which the audit opinion is based. Audit evidence
,includes the information contained in the accounting records
underlying the financial statements, as well as other information
◉ Audit Risk.
Answer: The risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated
◉ Auditing.
Answer: A systematic process of objectively obtaining and
evaluating evidence regarding assertions about economic actions
and events to ascertain the degree of correspondence between those
assertions and established criteria and communicating the results to
interested users
◉ Information Asymmetry.
Answer: 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
◉ Materiality.
Answer: The maximum amount by which the auditor believes the
financial statements could be misstated and still not affect the
decisions of users
, ◉ Misstatement.
Answer: A departure from the applicable reporting framework (e.g.,
GAAP) that, if material, causes the financial statements to not be
presented fairly. Misstatements may be classified as fraud
(intentional), other illegal acts such as noncompliance with laws and
regulations (intentional or unintentional), and errors
(unintentional)
◉ Reasonable Assurance.
Answer: 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
◉ Reporting.
Answer: 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 (e.g., GAAP)
◉ Risk of Material Misstatement.
Answer: The preaudit risk that the entity's financial statements
contain a material misstatement whether caused by error or fraud
◉ Unqualified/unmodified audit report.
