Seminar in Accounting, Chapter 15: "Communicating Assurance Engagement Outcomes and Performing Follow-Up Procedures" flash cards

Audit Report

(15.2) The final engagement communication, which is a formal way that the internal audit function communicates the results of an engagement to management and other appropriate parties relying on the engagement outcomes.

Observation

(15.3) A finding, determination, or judgment derived from the internal auditor’s test results.

Significant

(15.3) Indicates that a control has a more than remote likelihood of failing and that the impact of its failure is more than trivial.

Material

(15.3) Indicates that a control has a more than remote likelihood of failing and that the impact of its failures exceeds the materiality threshold.

Error

(15.4) An unintentional misstatement or omission of significant information in the final engagement communication.

Criteria

(15.2) What should exist.

Condition

(15.2) What does exist.

Cause

(15.2) Why there is a difference between what should exist and what does exist.

Effect

(15.2) The consequence of the difference between what should exist and what does exist.

Recommendation

(15.2) Suggested corrective actions to correct the condition.

Final Communication

(15.3) The vehicle through which the internal audit function informs interested parties of engagement outcomes.

Scope

(15.3) What is or is not included within an engagement.

Conclusion

(15.3) The internal audit function’s assessment of the design adequacy and operating effectiveness of the controls subject to audit.

Rating System

(15.3) The assignation of a numeric or descriptive appraisal of engagement results for the purpose of comparing or trending them with other engagement results.

Positive Assurance

(15.3) A rating or conclusion by the internal auditor that provides specific assurances about an engagement.

Negative Conclusion

(15.3) A rating or conclusion indicating that nothing negative has come to the auditor’s attention.

Informal Communication

(15.4) Communication regarding insignificant observations related to secondary controls that might be compromised.

Final Communication Error

(15.4) An unintentional misstatement or omission by the internal audit function of significant information in the final engagement communication.