It is the auditor’s primary means to corroborate information furnished by management about litigation, claims, and assessments.attribute sampling The characteristic tested is a property that has only two possible values (an error exists or it does not).audit adjustment is a correction of a financial information misstatement identified by the auditor, whether recorded or not.audit committee A committee of the board of directors responsible for oversight of the financial reporting process, selection of the independent auditor, and receipt of audit results.audit documentation (working papers) are records kept by the auditor of procedures applied, tests performed, information obtained, and pertinent conclusions reached in the engagement.
The documentation provides the principal support for the auditor’s report.audit evidence is information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based.audit objective In obtaining evidence in support of financial statement assertions, the auditor develops specific audit objectives in light of those assertions.
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Each course should include dictionaries like this.acceptance sampling is sampling to determine whether internal control compliance is greater than or less than the tolerable deviation rate.accounting and review services are governed by official pronouncements covering compilation and review engagements.
The estimate can be found by multiplying a reasonable interest rate times the average balance of interest bearing debt outstanding during the year (the auditor’s expectation).
For example, an objective related to the completeness assertion for inventory balances is that inventory quantities include all products, materials, and supplies on hand.audit planning is developing an overall strategy for the audit.
The nature, extent, and timing of planning varies with size and complexity of the entity, experience with the entity, and knowledge of the entity’s business.audit risk A combination of the risk that material errors will occur in the accounting process and the risk the errors will not be discovered by audit tests.
The person establishing the trust also gives up the right to information regarding the assets.business risks are risks that could adversely affect an entity’s ability to achieve its objectives and execute its strategies or from the setting of inappropriate objectives and strategies.cancel supporting documents To mark supporting documents as having been used to support a transaction so the same documents can’t be used to support another transaction.
An example is stamping vouchers “paid.”capitalized Recorded as an asset.
If you buy or sell something to a close relative, you might give better terms than to an unrelated party, so the price might not represent the true market value of the goods or services.ascertain An audit procedure to determine or to discover with certainty.