Term
|
Definition
| one party (e.g., audit client) has more information than another party (e.g., investors) about something important |
|
|
Term
|
Definition
| the risk that information provided is false or misleading |
|
|
Term
|
Definition
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.
|
|
|
Term
|
Definition
| Attest services apply when “a practitioner…is engaged to issue…[a] report on subject matter, or an assertion about the subject matter…that is the responsibility of another party |
|
|
Term
|
Definition
| Independent professional services that improve the quality of information, or its context, for decision makers |
|
|
Term
|
Definition
| magnitude of an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement |
|
|
Term
|
Definition
| The evidence will actually help the auditor test a given management assertion |
|
|
Term
|
Definition
| The evidence is from a source with some credibility and can be relied upon to test a given assertion |
|
|
Term
|
Definition
Public Company Accounting Oversight Board
Created to stop profession's era of self regulation and enforces and sees all auditing standards |
|
|
Term
|
Definition
| the transactions included actually took place |
|
|
Term
|
Definition
| all the transactions that took place are included |
|
|
Term
|
Definition
| transactions are recorded at the right price, quantity, etc |
|
|
Term
|
Definition
| transactions are recorded in the correct period |
|
|
Term
|
Definition
| transactions are recorded in the right accounts |
|
|
Term
|
Definition
| the items making up a balance actually exist |
|
|
Term
|
Definition
| all the items that exist are included in the account balance |
|
|
Term
|
Definition
| company does own the assets included in the financials and does have the obligation for the liabilities in the financials |
|
|
Term
|
Definition
| accounts are recorded at the appropriate amounts and are adjusted correctly, if necessary |
|
|
Term
| Occurrence/Rights & Obligations |
|
Definition
| items included in the financials actually happened and are the business of the company |
|
|
Term
|
Definition
| all issues or events that should be disclosed are disclosed in the financials |
|
|
Term
| Classification/Understandability |
|
Definition
| Items in the financials have been classified appropriately and financials are presented in an understandable manner |
|
|
Term
|
Definition
| financial and other information is presented at the correct amount |
|
|
Term
|
Definition
Generally Accepted Auditing Standards
- General
- adequate training & proficiency
- independence
- due professional care
- Fieldwork
- adequtly planned, understanding of controlsl competent evidential matter
- Reporting
|
|
|
Term
|
Definition
Audit Risk= IR x CR x DR
IR= inherent risk
possibillity of a material misstatement without regard to controls
CR- Control Risk
controls will not detect/prevent a material misstatement
DR=Direction Risk
risk that auditor will not detect misstatements |
|
|
Term
|
Definition
1. fatigue
2. Incorrect Judgment
3. Carelessness
4. Ignorance |
|
|
Term
|
Definition
1. Incentives and pressures
2. Opportunities
3. Attitude that allows Justification |
|
|
Term
|
Definition
Misappropriation of Assets
Finical Reporting |
|
|
Term
| Incentive or Pressure that can lead to fraud |
|
Definition
1. Excessive pressure for managment to meet 3rd party expectations
2. Finical Stability threatened
3. Managements personal Financial Situation |
|
|
Term
|
Definition
1. Complex or unstabel organizational structure
2. Ineffective monitoring of Managment
3. Ineffective internal Controls
4. |
|
|
Term
| Attitude/Rationalization Risk Factors |
|
Definition
1. Use of inappropriate accounting based on materiality
2. Failure to correct known reportable conditions
3. Poor Communication
4. Weak Ethical Standards |
|
|
Term
| Materiality Level for Financial Statements |
|
Definition
3 to 5 % profit from NETIBT
.5% expenses or total revenure for Non-profits
|
|
|
Term
| Tolerable Misstatement (TM) |
|
Definition
| Allocation of Material at individual account/class of transaction level |
|
|
Term
|
Definition
| A set of audit procedures prepared to test assertions for a component of the financial statements |
|
|
Term
|
Definition
Measure of Quantity of Audit Evidence
Greater risk require higher quantity
higher quality evidence results in Lower quantity |
|
|
Term
|
Definition
A Measure of Quality of Audit Evidence
|
|
|
Term
| Factors that determine Appropriateness of Audit Evidence |
|
Definition
1. Competent/Independent source
2. Strong Internal Controls
3. Auditors Own Performance
5. Documentary Evidence
4. originals over copies
|
|
|
Term
| GAAS for General Standards focus on |
|
Definition
- General
- adequate training & proficiency
- independence
- due professional care
|
|
|
