Ethics, Independence and Acceptance in Auditing

A comprehensive set of flashcards covering key vocabulary related to ethics, independence, and acceptance in the auditing field, designed to aid in exam preparation.

Ethics

Rules about how to be a good person and do what is right.

Independence

Being able to make your own choices without others telling you what to do.

External Audit

When an outside person checks to make sure a company is being honest about their money.

Audit Boundary

The rules that say what a person is allowed to check and what they are not.

Letter of Engagement

A letter that explains exactly what job needs to be done and how.

Professional Ethics

Rules that grown-ups must follow to be fair and good at their jobs.

Integrity

Being honest and always doing what you say you will do.

Objectivity

Looking at facts without picking favorites or being biased.

Confidentiality

Keeping secrets and not telling other people's private information.

Self-interest Threat

When you want something for yourself so much that you stop being fair.

Familiarity Threat

When you are such good friends with someone that you ignore their mistakes.

Intimidation Threat

When someone is mean or scary to you so you don't do the right thing.

Advocacy Threat

When you take one person's side and stop being fair to everyone else.

Self-review Threat

When you check your own work and accidentally say it's perfect even if there's a mistake.

Regulatory Framework

A big list of laws and rules that everyone has to follow.

Professional Competence

Knowing exactly how to do your job and having the right skills.

Continuing Professional Development (CPD)

Learning new things all the time, even after you finish your main school.

Code of Ethics

A book of rules that shows everyone how to behave properly.

Engagement Acceptance

Looking carefully at a job before saying "yes, I will do it."

Potential Risks

Things that might go wrong or make it hard to do the right thing.

Audit Committees

A group of people whose job is to make sure the checkers are doing their work correctly.

Audit Quality

How good and truthful a report is.

Professional Clearance

Asking the person who did the job before you if there are any problems you should know about.

Public Interest

Doing what is best for everyone in the community and the world.

Financial Reporting Council (FRC)

The big bosses who make the rules for people who check money records.

Audit Firms

Groups of people who work together to check if companies are telling the truth about money.

International Financial Reporting Standards (IFRS)

Rules about money that are the same for every country in the world.

Professional Conduct

Behaving in a polite and correct way while you are working.

Corporate Governance

The way a company is led and kept organized.

Disciplinary Committees

A group of people who provide a 'time out' or punishment if someone breaks the rules.

Ethical Dilemmas

A very hard choice where you have to think about what is fair.

Audit Engagement

The actual task of checking information for a company.

Client Due Diligence

Checking a person or company to make sure they are safe and honest to work with.

Enhanced Powers

Extra authority given to a boss to make sure everyone follows the rules.

Ethical Considerations

Thinking about what is right and wrong before you decide what to do.

Safeguards

Safety rules and steps to help prevent mistakes or bad behavior.