ACCT 411

kyleparkinson184's version from 2015-04-28 20:39


Question Answer
AuditingThe accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria
Audit ReportThe communication of audit findings to users
AccountingThe recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making
Assurance ServiceAn independent professional service that improves the quality of information for decision makers
Attestation serviceA type of assurance service in which the CPA firm issues a report about a subject matter or assertion that is the responsibility of another party
Audit of historical financial statementsA form of attestation service in which the auditor issues a written report stating whether the financial statements are in material conformity with accounting standards.
Compliance AuditReview organizations financial records conform to GAAP and follows regulations from federal government
CPAPerson who has met the CPA requirements. main responsibility is to audit published financial historical statements
EvidenceAny information used by the auditor to determine whether the information being audited is stated correctly
Financial statement auditAn audic conducted to determine whether the overall financial statements of an entity are stated in accordance with specified criteria
Government Accountability Office AuditorAn auditor working for the Government accountability office. Reports to congress
Independent auditorsCPA or accounting firms that perform audits of financial entities
Information riskThe risk that information upon which a decision made is inaccurate
Internal control over financial reportingAn engagement in which auditor report on effectiveness of internal control. Required by sec 404 of the sarbanes oxley act
Internal auditorsAuditors employed by a company to audit for board of directors/managements
IRA agentAuditors who work for IRS and conduct examination of tax returns
Operational auditA review of any part of an organizations operating procedures for the purpose of efficiency and effectiveness.
Review of historical financial statementsA form of attestation in which a CPA forms issues a written report that provide less assurance than an audit as to if there is material misstatements
Sarbanes-oxley actpassed into 2002 issues by the Public company accounting oversight board and requires larger public companies to audit the effectiveness of internal controls and financial reporting.
AICPAAmerican Institute of Certified Public Accountants. Volunteers that publish accounting, auditing, consulting, and tax services.
Adverse OpinionA report issued when the auditor believes the financial statements are materially misstated or misleading. The do not present fairly the entity's financial position.
Analytically proceduresEvaluations of financial information through analysis of plausible relationships among financial and non financial data.
Balance related objectives8 audit objectives that must be met before the auditor can conclude that any account balance is fairly stated.
eight audit objectivesExistence, completeness, accuracy, classification, cutoff, detail, realizable value, rights/obligations
Cycle approachA method of dividing an audit by keeping closely related types of transactions and accounting balances in the same segment
Combined report on financial statements and internal control over financial reportingAudit report on the financial statements and the effectiveness of internal control over financial reporting required for larger public companies
Disclaimer of opinionA report issued when the auditor is not able to become satisfied that the overall financial statements are fairly presented or the auditor is not independent
ErrorAn unintentional misstatement of the financial statements
FraudAn intentional misstatement of the financial statements
Fraudulent financial reporting Intentional misstatements or omissions of amounts or disclosures in financial statements to deceive users. (Management fraud)
Generally accepted auditing standardsDeveloped and issues by SAS. Auditing standards
International standards on AuditingStatements issued by the international auditing and assurance standards board. International acceptance of auditing standards.
Misappropriation of assetsA fraud involving the theft of an entity's assets. (Defalcation)
Material misstatementA misstatement in the financial statements, knowledge of which would affect a decision of a reasonable user of the statements.
Management assertionsImplied or expressed representations by management about classes of transactions, related account balances and presentation and disclosures of financial statements.
Noncompliance with laws and regulationsfailure to comply with applicable laws and regulations
PrinciplesFramework helpful in understanding and explaining an audit; provide a structure for the codification of statements on auditing standards.
Phases of the audit processPlan and Design, Perform test of controls and test of transactions, perform analytical procedures and test of details balances, complete and issue audit report
Public company accounting oversight board(PCAOB)Board created by Sarbanes Oxley to oversee auditors of public companies. Establishes auditing and quality control standards and performs inspections of accounting firms.
Presentation and disclosure-related audit objectives4 audit objectives that must be met before the auditor can conclude that things are fairly stated
Four presentation and disclosure-related audit objectivesRights/obligation, completeness, accuracy/valuation, classification/understandability
Qualified opinionA report issued when auditor believes that the overall financial statements are fairly stated. However, audit was limited or the financial data indicated a failure to follow GAAP
Relevant assertionsAssertions that have a meaningful bearing on whether an account is fairly stated and used to assess the risk of material misstatement and the design and performance of audit procedures
Substantive test of transactionsAudit procedures testing for monetary misstatements to determine whether the six transaction related audit objectives have been satisfied for each class of transaction.
Standard/unqualified reportthe report given when all auditing conditions have been met. There seems to be no significant misstatements.
Statements on Auditing StandardsAICPA interpretation of the GAAS
SECregulation of information being sent to investors/banks/other institutions
Separate report on internal control over financial reportingAudit report on the effectiveness of internal control over financial reporting. Required for large companies.
Test of details of balancesAudit procedures testing for monetary misstatements to determine whether the eight balance-related audit objectives have been satisfied for each significant account balance
Test of controlsAudit procedure to test the effectiveness of controls in support of a reduced assessed control risk
transaction related audit objectivessix audit objectives must be met before the auditor can conclude the total for any given class of transaction is fairly stated
6 Audit objectivesOccurrence, Completeness, Accuracy, Classification, Timing, posting and summarization
Unqualified audit report with explanatory paragraph or modified wordingAn unqualified report in which the financial statements are faily presented. But auditor believes it is important or required to provide additional information

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