Term
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Definition
| Evaluations of financial information made through analysis of plausible relationships among both financial and nonfinancial data. |
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Term
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Definition
| Expressed or implied representations by management that are reflected in the financial statement components, and organized into three categories relating to transactions, balances, and disclosures. |
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Term
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Definition
| Short-term, highly liquid investments that are readily convertible to cash or so near their maturity that there is little risk of change in their value (e.g., money market funds, Treasury bills). |
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Term
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Definition
| The process of obtaining and evaluating direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions. |
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Term
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Definition
| The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. |
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Term
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Definition
| A bank account containing a stipulated amount of money used for limited purposes (e.g., frequently used for disbursing payroll and dividend checks). |
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Term
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Definition
| A technique used to reconcile the cash receipts and disbursements recorded on the client's books with the cash deposited into and disbursed from the client's bank account for a specific time period. |
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Term
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Definition
| The auditor's decision to rely on the entity's controls, test those controls, and reduce the direct tests of the financial statement accounts. |
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Term
| Substantive Tests of Transactions |
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Definition
| Tests to detect errors or fraud in individual transactions. |
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Term
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Definition
| Audit procedures performed to test the operating effectiveness of controls in preventing or detecting and correcting material misstatements at the relevant assertion level. |
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Term
| Tests of Details of Account Balance and Disclosures |
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Definition
| Substantive tests that concentrate on the details of items contained in the account balance and disclosure. |
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