Concepts of Audit HW 1 Terms

SEC

A government agency authorized to regular companies seeking approval for sale of securities

Assertion

Representation or declaration made by the responsible party, typically management of the entity

Statement of Auditing Standards

Series of statements issued by the by the Auditing Standards Board of the AICPA, accepted auditing standards are issued in the form of these statements

Financial Reporting Framework

A set of criteria used to determine measurement, recognition, presentation and disclosure of all material items in the financial statements.

PCAOB

Five-member board established to adopt rules for auditing, quality management, ethics, independence, or other standards related to the preparation of audit reports

AICPA

The national professional organization of CPAs engaged in promoting high professional standards to ensure that CPAs serve the public interest

Suitable Criteria

The standards or benchmarks used to measure and present the subject matter.

Clients Management

Party primarily responsible for the fairness of the representations made in the F/S

Agreed-upon procedure engagement

An attest engagement in which the CPAs agree to preform procedures for a specified party and issue a report that is restricted to use by that party

Review

An engagement designed to express limited assurance to subject matter or an assertion

Attest Engagement

An engagement in which the CPAs issue an examination, a review, or an agreed upon procedures report on subject matter or an assertion about subject matter that is the responsibility of another party

Audit of F/S

An examination to provide an opinion that is the CPAs highest level of assurance that the F/S follow GAAP

Integrated Audit

Required by Sarbanes-Oxley and the PCAOB, an audit that includes providing assurance on both the F/S and IC over financial reporting

Assurance Services

Professional services that enhance the quality of information, or its context, for decision makers

Examination

An attest engagement designed to provide the highest level of assurance that CPAs provide on an assertion

Operational Audit

Measures effectiveness and efficiency of a unit of an organization