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2012-03-07 23:27:18

Auditing Chapter 1 terms
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  1. Assurance
    the lending of credibility to information
  2. assurance services
    providing independent professional information, opinion, or report concerning the quality of information, or its context, for decision makers
  3. attest engagement
    providing an opinion on subject matter or an assertion about ht esubject matter that is the responsibility of another party
  4. attestation
    the lending of credibiilty to assertions made by a third party
  5. auditing
    a systematic process of objectively obtaining and evaluation 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
  6. business risk
    the probability an entity will fail to meet its objective and, ultimately fail
  7. cutoff (or cutoff date)
    refers to the date, normally the client's year-end balance sheet date, around which transactions should be recorded in the proper period (year)
  8. financial reporting
    Broad-based 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 (statement of cash flows and accompanying disclosure notes (footnotes) to outside decision makers who have no internal source of information
  9. information risk
    the probability that the information circulated by a company will be false or misleading
  10. internal auditing
    an assurance and consulting activity that provides management with information regarding efficient and effective operations; compliance with laws, regulations, policies, and procedures; and other organizational performace issued designed to reduce risk and add value to the organization
  11. operational auditing
    the study of business operations for the purpose of making recommendations abou the efficient use of resources, effective achievement of business objectives, and compliance with company policies
  12. professional skepticism
    an auditor's tendency not to believe management's assertions without sufficient corroboration
  13. substantial equivalency
    the process through which CPAs licensed in one state can practice in another state