Audit Exam 1 2nd

recalculation

Checking mathematical accuracy.

reperformance

Auditor independently performs a control or procedure.

analytical procedures

Evaluating relationships among financial and nonfinancial data.

audit documentation

Record of work performed, evidence obtained, and conclusions reached.

engagement letter

Contract outlining responsibilities, objectives, and terms of the audit.

materiality

Magnitude of misstatement that would influence decisions of users.

audit plan

Detailed description of nature, timing, and extent of audit procedures.

audit risk

Risk auditor issues an inappropriate opinion

inherent risk

Susceptibility of an assertion to misstatement before considering controls.

control risk

Risk that internal controls fail to prevent or detect misstatements.

detection risk

Risk that audit procedures fail to detect misstatements.

risk of material misstatement

Combined inherent and control risk.

fraud

Intentional misstatement.

error

Unintentional misstatement.

misappropriation of assets

Theft or misuse of company assets.

fraudulent financial reporting

Intentional manipulation of financial statements.

significant risk

Risk requiring special audit consideration.

noncompliance

Violations of laws or regulations.

audit strategy memorandum

Summary of planned audit approach and key risks.