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ACCT 527 MIDTERM QUESTIONS WITH 100% VERIFIED
ANSWERS
Access Controls - ANSWER controls that ensure that only
authorized personnel have access to the firm's assets
Accounting record - ANSWER The documents, journals, and
ledgers used in transaction cycles.
advisory services - ANSWER they are professional services
offered by public accounting firms to improve their client
organizations' operational efficiency and effectiveness
application controls - ANSWER they are designed to be
application-specific. They ensure the validity, completeness,
and accuracy of financial transactions
attest services - ANSWER an engagement in which a
practitioner is engaged to issue, or does issue, a written
communication that expresses a conclusion about the
reliability of a written assertion that is the responsibility of
another party.
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audit objective - ANSWER Audit goals derived from
management assertions that lead to the development of audit
procedures.
audit opinion - ANSWER Opinion of auditor regarding the
presentation of financial statements.
audit planning - ANSWER Stage at which the auditor
identifies the financially significant applications and attempts
to understand the controls over the primary transactions that
are processed by these applications.
audit procedure - ANSWER Tasks performed by auditors to
gather evidence that supports or refutes management
assertions.
audit risk - ANSWER Probability that the auditor will render
unqualified opinions on financial statements that are, in fact,
materially misstated.
auditing - ANSWER a form of independent attestation
performed by an expert who expresses an opinion about the
fairness of a company's financial statements
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completness - ANSWER the idea that no piece of information
essential to a decision or task should be missing
Computer-Assisted Audit Tools and Techniques (CAATTs) -
ANSWER the test that performs traditional substantive tests
and other data analysis and reporting tasks
control activities - ANSWER policies and procedures used to
ensure that appropriate actions are taken to deal with the
organization's risks
control environment - ANSWER the foundation of internal
control
computer fraud - ANSWER the use of a computer to commit
fraud
control risk - ANSWER likelihood that the control structure is
flawed because controls are either absent or inadequate to
prevent or detect errors in the account
corrective controls - ANSWER actions taken to reverse the
effects of errors detected in the previous step
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Committee of Sponsoring Organizations (COSO) - ANSWER
The committee that decides to focus on an effective model for
internal controls from a management perspective.
data processing - ANSWER a method that manages the
computer resources used to perform the day-to-day processing
of transaction
detection risk - ANSWER risk that auditors are willing to take
that errors not detected or prevented by the control structure
will also not be detected by the auditor
detective controls - ANSWER Devices, techniques, and
procedures designed to identify and expose undesirable events
that elude preventive controls.
existence or occurrence - ANSWER it is assertion affirms
with all assets and equities contained in the balance sheet exist
and that all transactions in the income statement actually
occurred.
Foreign Corrupt Practices Act of 1977 (FCPA) - ANSWER
The act that requires publicly owned U.S. corporations to
maintain systems of internal control that meet certain
minimum standards.
ACCT 527 MIDTERM QUESTIONS WITH 100% VERIFIED
ANSWERS
Access Controls - ANSWER controls that ensure that only
authorized personnel have access to the firm's assets
Accounting record - ANSWER The documents, journals, and
ledgers used in transaction cycles.
advisory services - ANSWER they are professional services
offered by public accounting firms to improve their client
organizations' operational efficiency and effectiveness
application controls - ANSWER they are designed to be
application-specific. They ensure the validity, completeness,
and accuracy of financial transactions
attest services - ANSWER an engagement in which a
practitioner is engaged to issue, or does issue, a written
communication that expresses a conclusion about the
reliability of a written assertion that is the responsibility of
another party.
,2 | Page
audit objective - ANSWER Audit goals derived from
management assertions that lead to the development of audit
procedures.
audit opinion - ANSWER Opinion of auditor regarding the
presentation of financial statements.
audit planning - ANSWER Stage at which the auditor
identifies the financially significant applications and attempts
to understand the controls over the primary transactions that
are processed by these applications.
audit procedure - ANSWER Tasks performed by auditors to
gather evidence that supports or refutes management
assertions.
audit risk - ANSWER Probability that the auditor will render
unqualified opinions on financial statements that are, in fact,
materially misstated.
auditing - ANSWER a form of independent attestation
performed by an expert who expresses an opinion about the
fairness of a company's financial statements
,3 | Page
completness - ANSWER the idea that no piece of information
essential to a decision or task should be missing
Computer-Assisted Audit Tools and Techniques (CAATTs) -
ANSWER the test that performs traditional substantive tests
and other data analysis and reporting tasks
control activities - ANSWER policies and procedures used to
ensure that appropriate actions are taken to deal with the
organization's risks
control environment - ANSWER the foundation of internal
control
computer fraud - ANSWER the use of a computer to commit
fraud
control risk - ANSWER likelihood that the control structure is
flawed because controls are either absent or inadequate to
prevent or detect errors in the account
corrective controls - ANSWER actions taken to reverse the
effects of errors detected in the previous step
, 4 | Page
Committee of Sponsoring Organizations (COSO) - ANSWER
The committee that decides to focus on an effective model for
internal controls from a management perspective.
data processing - ANSWER a method that manages the
computer resources used to perform the day-to-day processing
of transaction
detection risk - ANSWER risk that auditors are willing to take
that errors not detected or prevented by the control structure
will also not be detected by the auditor
detective controls - ANSWER Devices, techniques, and
procedures designed to identify and expose undesirable events
that elude preventive controls.
existence or occurrence - ANSWER it is assertion affirms
with all assets and equities contained in the balance sheet exist
and that all transactions in the income statement actually
occurred.
Foreign Corrupt Practices Act of 1977 (FCPA) - ANSWER
The act that requires publicly owned U.S. corporations to
maintain systems of internal control that meet certain
minimum standards.
