Consolidation Assessment 2 - Accounting, Ethics, and Internal Controls

These flashcards cover key vocabulary related to ethics, accounting principles, internal controls, and auditing practices.

Internal Controls

Policies and procedures designed to protect the assets of a business.

GAAP

Generally Accepted Accounting Principles, which are the standard framework of guidelines for financial accounting.

King Code

A code of governance aimed at promoting ethical and responsible business practices in South Africa.

Auditing

The examination of a business's financial records by an independent accountant.

Ethics

Moral principles that govern a person's behavior or the conducting of an activity.

Accountant

A professional responsible for managing financial accounts and records.

Disciplinary Procedures

Processes taken by an organization to address unacceptable behavior by employees.

Professional Bodies

Organizations that regulate professionals, ensuring adherence to standards and ethics.

Audit Evidence

Information collected by auditors to form an opinion on the fairness of the financial statements.

Audit Sampling

The process of examining a subset of a population to draw conclusions about the entire group.

Stock Losses

The reduction in the available inventory due to theft, damage, or mismanagement.

Credit Terms

Conditions under which a seller extends credit to buyers, including payment due dates.

Accountability

The obligation of an individual to report and explain their actions.

Transparency

Openness in communication and operations, ensuring that stakeholders are aware of business processes.

Sustainability

Business practices that meet present needs without compromising the ability of future generations.

Bias

An inclination or prejudice towards or against one person or group, often unfair.

Financial Statements

Formal records of the financial activities of a business, providing a summary of its financial position.

Management

The process of dealing with or controlling things or people within an organization.

External Auditors

Independent accountants who assess financial records and provide assurance on accuracy.

Internal Audit

An evaluation of a company's internal controls, risk management, and governance processes.

Full Disclosure

The principle of providing all information necessary for making informed decisions regarding financial statements.

Qualified Opinion

An auditor’s opinion indicating that the financial statements present an accurate portrayal, except for specific issues.

Unqualified Opinion

An auditor’s opinion that the financial statements are free of material misstatements.

Disclaimer of Opinion

An auditor's statement that no opinion is expressed regarding the financial statements.

Fraud Detection

The process of identifying deceitful financial practices that can harm an organization.

Code of Ethics

A set of guidelines that outline the ethical norms and responsibilities of professionals.

Risk Management

The identification and evaluation of risks followed by actions to minimize them.