Term
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Definition
| Risk that business will fail to meet its objectives |
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Term
| 4 evironmental conditions that increase demand for information |
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Definition
1. Complexity of advanced transactions
2. Remoteness between decision makers and day to day officers
3. Time-sensitivity
4. Consequences |
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Term
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Definition
| Probability company has misleading information |
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Term
Assurance
&
Assurance Provided |
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Definition
Assurance-lending credibility of information provided
Assurance provided=attestation |
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Term
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Definition
When attestation is embodied in the financial statements
a systematic process of
- obtaining and evaluating evidence
- evidence to prove management's assetations about economic events
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Term
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Definition
| analyzation of any kind of engagement expanding from financial statements |
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Term
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Definition
| Improves quality of information by using non-financial measures as well as financial |
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Term
| 4 major elements of auditing, assurance, and attestation |
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Definition
1. Independence
2. Professional services
3. Improving quality of information
4. Decision makers |
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Term
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Definition
Existence/Occurrence
Rights and Obligations
Completeness/cutoff
Valuation/Allocation
Presentation and Disclosure |
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Term
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Definition
Occurance-did the event occur
existence-does the balance represent correct events
Tests: Checking cash |
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Term
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Definition
obtain evidence about owning and owing
Auditor must ensure the details of obligations are disclosed |
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Term
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Definition
Completeness-all transactions disclosed?
cutoff-accounting for rev, exp etc in proper period |
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Term
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Definition
| Events have been recorded accurately and account balance is correct |
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Term
| Presentation and Disclosure |
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Definition
All Transactions presented correctly
Components:
1.Disclosures must be relevant and reliable
2. Transactions must be classified in correct accounts
3. Info must be understandable |
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Term
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Definition
tenency to not accept management assertions without proof
listen to management explanation
Gather evidence
uncover all implications
arrive at conclusion |
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Term
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Definition
| study of effectiveness and efficiency of a company's operations |
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Term
| Auditing Profession before 2003 |
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Definition
no governement oversight, self-regulated
peer review by big 4
developed their own auditing standards
worldcom and enron and wastemanagement gave rise to SarBox |
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