Chapter 1: Auditing and Assurance Services Flashcards
assurance
The lending of credibility to information.
assurance services
The independent professional functions that improve the quality of information, or its context, for decision makers.
attestation
An accounting service resulting in a report on subject matter or an assertion about subject matter that is the responsibility of another party.
attestation engagement
The provision of an opinion on subject matter or an assertion about the subject matter that is the responsibility of another party.
auditing
The systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users.
business risks
Those factors, events, and conditions that could prevent the organization from achieving its business objectives.
completeness
Management assertion that all of the transactions, events, assets, liabilities, equity interests, and other disclosers that should have been recored in the financial statements have been recorded.
cutoff
Management assertion that refers to accounting for revenue, expense, and other transactions in the proper period. The cutoff date generally refers to the audit client’s year-end balance sheet date.
existence
Management assertion that all assets, liabilities, and equity interest do actually exist.
financial reporting
Process of providing statements of financial position (balance sheets), results of operations (income statements, statements of shareholders’ equity, and statements of comprehensive income), changes in cash flows (statements of cash flows). and accompanying disclosure to outside decision makers who do not have access to management’s internal sources of information; a company’s accountants, under the direction of its management, perform this function.
information risk
The probability that the information circulated by an entity will be false or misleading.
internal auditing
An examination service provided to a company to assist the company to meet its corporate goals and objectives by evaluating and recommending risk management, control, and governance processes.
occurrence
Management assertion that all of the transactions and events have been recorded are valid, pertain to the entity, and have actually taken place.
operational auditing
An examination designed to evaluate the processes and procedures of an organization or an area within an organization to ensure the process or area is operating efficiently and effectively.
presentation and disclosure
Management assertion that all transactions and events have been presented correctly and that all relevant information has been disclosed to financial statement users, usually in the footnotes to the financial statements.
