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Audit Modules A-C-D > Audit Vocab > Flashcards

Audit Vocab Flashcards

1
Q

Agreed upon procedures

A

An engagement in which users participate in determining the scope of procedures performed by the accountants

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2
Q

Assurance services

A

Professional services aimed at improving the quality of information for decision makers; include a variety of financial and nonfinancial information

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3
Q

Attestation

A

Professional services resulting in a report on subject matter on an assertion about subject matter that is the responsibility of another party

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4
Q

Cash basis

A

A special purpose framework that includes no accruals

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5
Q

Compilation

A

An accounting service in which the practitioner assists in assembling information that is the representation of management but provides no assurance

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6
Q

Examination

A

An attestation engagement similar in nature to an audit

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7
Q

eXtensible Business Reporting Language (XBRL)

A

An SEC-required format for reporting financial information that provides a computer-readable identifying tag for each individual item of data

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8
Q

Financial forecast

A

Prospective financial information reflecting an entity’s estimates of what is likely to occur in a future period

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9
Q

Financial projection

A

Prospective financial information reflecting a transaction or event that may occur in the future

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10
Q

Interim financial information

A

Financial information or statements covering a period that ends on a date other than the entity’s fiscal year-end

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11
Q

Management’s discussion and analysis

A

A required section of financial reports of public companies that analyzes the results of operations and cash flows for the periods presented

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12
Q

Modified cash basis

A

A special purpose framework that provides limited accruals for items such as fixed assets and/or inventories and long-term debt

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13
Q

Pro forma

A

Financial information reflecting historical data as if a certain transaction has occurred

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14
Q

Review

A

An engagement whereby a practitioner provides a limited assurance about financial information

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15
Q

Service organization

A

An organization or segment of an organization that provides services to user entities’ internal control as it relates to financial reporting

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16
Q

Special purpose framework (SPF)

A

A coherent accounting treatment in which substantially all important financial measurements are governed by criteria other than GAAP

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17
Q

SysTrust Services

A

An assurance services that reviews an entity’s computer system to provide assurance to business partners and customers concerning the security, privacy, and confidentiality of information in addition to system availability and processing integrity

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18
Q

Trust services

A

A set of professional attestation and advisory services based on a core set of principles and criteria that addresses the risks and opportunities of IT-enabled systems and privacy programs

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19
Q

WebTrust services

A

An assurance services designed to reduce the concerns of Internet users regarding the existence of a company and the reliability of key business information placed on its Web site

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20
Q

Breach of contract

A

A claim that a party to the contract did not perform in the manner described in the contract

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21
Q

Causation defense

A

A defense available to auditors who can show that a plaintiff’s economic loss was caused by a factor other than failure to exercise the appropriate level of professional care of breach of contract

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22
Q

Class action

A

A group of plaintiffs that come together in a legal action

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23
Q

Comfort letter

A

A letter issued by auditors to underwriters of securities that provides an opinion on the fairness of the issuers’ financial statements

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24
Q

Common law

A

Liability for injuries that is based on reasons other than violation of a written law or statute; legal precedent is used in assessing the degree of responsibility or fault of the parties

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25
Constructive fraud
A failure to provide any care in fulfilling a duty owed to another including a reckless disregard for the truth
26
Contributory negligence
A legal defense theory in which the plaintiff's own failure to perform with the appropriate level of professional care bars recovery from auditors
27
"Deep pockets" theory
Situations in which lawsuits may be brought against auditors not because they are necessarily at fault, but because they are the only party with resources again which recovery can be made
28
Expectation gap
The difference between the actual work and assurance required by GAAS and the expectation of that work by the general public
29
Financial Reporting Releases (FRRs)
SEC staff reports that express new rules and policies about disclosure
30
Forseeable party
A wide range of individuals or organization that might rely on auditors' work
31
Foreseen party
A limited class of individuals or organizations that could be reasonably expected to rely on auditors' work
32
Form 8-K
"Current events" report that is filed periodically upon the occurrence of major events, such as major asset sales, acquisitions, and auditor changes
33
Form 10-K
Financial statements and related disclosures provided by public companies on an annual basis under the securities act
34
Form 10-Q
Financial statements and related disclosures provided by public companies on a quarterly basis under the securities act
35
Fraud
Misrepresentations of fact that an individual knows to be false
36
Gross negligence
Breach of duty owed to another party due to lack of minimal care (similar to constructive fraud)
37
Initial public offering (IPO)
The initial issuance of securities by a registrant entity to the investing public through a market; subject to provisions of the Securities Act of 1933
38
Joint and several liability
The legal doctrine that when multiple defendants are named, the full amount of a damage award may be collected from any of the defendants named in the lawsuit, even though they may be only partially at fault
39
Limited liability partnership
A form of organization adopted by most large accounting firms that combines the advantages of a traditional partnership with the liability of protection afforded to corporations
40
Ordinary negligence
Unintentional breaches of duty owed to another due to a lack of reasonable care
41
Plaintiff
The person or organization that initiates a lawsuit; with respect to auditors' liability, the plaintiff may be the client or third-party lender or investor
42
Primary beneficiary
A person named in a contract for whom the services provided are intended who is known to the auditors by name
43
Privity of contract
Situations in which parties have a contractual relationship
44
Proportionate liability
Payment of a share of the court's damage award based on the extent (or proportion) of fault exhibited by a convicted defendant
45
Prospectus
A legal document offering securities for sale and includes significant information about the company, including its historical financial statements and other necessary disclosures of the issuing company
46
Registration statement
A set of documents filed with the SEC prior to the offering of securities
47
Regulation S-K
Contains requirements relating to all business, analytical, and supplementary financial disclosures other than financial statements themselves
48
Regulation S-X
Contains accounting requirements for annual and interim financial statements filed under both the Securities Act and the Securities Exchange Act
49
Scienter
Intent or knowledge of inappropriate actions prior to committing those actions
50
Staff Accounting Bulletins (SABs)
Unofficial but important interpretations of Regulation S-X and Regulation S-K by SEC staff
51
Statutory law
Liability that is based on violations of written laws or statutes
52
Tort
Civil complaint that the action of one person caused injury (personal or financial) to another; action against auditors is normally initiated by users of financial statements
53
Compliance audit
Audit designed to ensure that an organization is following applicable laws, regulations and management directives; usually performed by internal auditors but may be performed by governmental or external auditors
54
Environmental audit
Audit designed to ensure that an organization is following environmental standards established by laws, regulations, and management directives; may recommend methods of reducing environmental problems by reducing or reusing waste or by-products of an organization's processes
55
Exit conference
Meeting that occurs at the end of an internal audit between the auditors and management of the organization being audited; required part of an internal audit
56
Follow-up
Internal auditors are required to ensure that significant audit findings have been addressed by the auditee in accordance with the agreement between the auditor and management
57
Forensic accounting
Application of accounting and auditing evidence to resolve legal issues in civil and criminal law
58
Governance audits
Audits designed to provide management with information required to make governance decisions or toe ensure that high-quality information is provided for these decisions
59
Internal auditing
An audit service provided to a company to assist a company to meet the corporate goals and objectives through evaluation and recommendation concerning risk management, control, and governance processes
60
Operational audits
Audits designed to evaluate the processes and procedures of an organization or an area within an organization to ensure the process or area is operating effectively and efficiently
61
Performance audits
Audits designed to ensure that the resources of an organization are being used appropriately and the objectives of an organization are being met
62
Predication
A suspicion that a fraud may have occurred
63
Quality audit
Audit designed to ensure that an organization is meeting its quality control standards; usually involves determining that personnel responsible for performing quality control are meeting the goals and objectives established and that quality information is being reported to appropriate members of management
64
Single audit
Government auditing standard that allows an entity to receive on audit of its financial statement, compliance with laws and regulations, and internal control that will be utilized by multiple agencies granting money to the entity
65
Yellow Book
Common name used to refer to the GAGAS

Audit Modules A-C-D (1 decks)

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