Test 1 Vocab

Question 1

Audit Risk

Answer 1

Risk of giving a clean opinion when there are actually material misst. present

Question 2

Inherent Risk

Answer 2

susceptibility of an assertion to a misst before consideration of controls

Question 3

Control Risk

Answer 3

Risk that a misst will not be prevent, or detected and corrected on time by IC

Question 4

Detection Risk

Answer 4

Risk that auditor won’t detect misstatement that could be material

Question 5

Planning Materiality

Answer 5

The maximum amount by which the auditor believes the financial statements could be misstated and still not affect the decision of users.

Question 6

Material Weakness

Answer 6

Signif Deficiency or combinatior of them in ICFR that there is at least a REASONABLE POSSIBILITY that a mater. misst. will not be prevented or detected

Question 7

Significant Deficiency

Answer 7

a control definiciency in ICFR that is less severe that a material weakness, yet impt enough to merit attn from governance