Chapter 1 Flashcards
American Accounting Association
A professional accounting organization consisting primarily of accounting educators that is dedicated to improving accounting education, research, and practice.
Accounting system
The personnel, procedure, devices and records used by an organization to develop accounting information and communicate that information to decision makers.
American Institute of CPAs
A professional accounting organization of certified public accountants that engages in a variety of professional activities, including establishing auditing standards for private companies, conducting research and preparing and grading the CPA exam.
Audit
An investigation of financial statements designed to determine their fairness in relation to generally accepted accounting principles.
Balance sheet
A position statement that shows where the finally stands in financial terms at a specific date. (Also called the statement of financial position.)
Bookkeeping
The clerical dimension of accounting that includes the routine transactions and day-to-day record keeping of an enterprise.
Cash Flow Prospects
The likelihood that an enterprise will be able to provide an investor with both a return on the investor’s investment and the return of that investment.
Certified Internal Auditor
A professional designation used the the Institute of internal Auditors signifying expertise in internal auditing.
Certified Management Accountant
A professional designation used the the Institute of Management Accountants signifying expertise in management accounting.
Certified Public Accountant
An accountant who is licensed by a state after meeting rigorous education, experience and examination requirements.
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
A voluntary private-sector organization dedicated to improving the quality it financial reporting through enterprise risk management, effective internal control and fraud deterrence.
Control Activites
Policies and procedures that management puts in place to address the risks identified during the assessment profess.
Control Environment
The foundation for all the other elements of internal control, setting the overall tone for the organization.
Corporate Governance
Includes the corporate structures and processed for overseeing a company’s affairs, for example, the board of directors and the company’s internal control processes.
External Users
Individuals and other enterprise that have a financial interest in the reporting enterprise but that are not involved in the day-to-day operations of that enterprise.
