examen final auditoria: 16,17

Subsequent Event

an event occurring between the date of the financial statements and the date of the auditor’s report

Date of the financial statements

The date of the end of the latest period covered by the financial statements

Report release date

The date the auditors grant the client permission to use the audit report in connection with the financial statements

Emphasis-of-matter

A section included in the nonpublic company auditor’s report that is required by GAAS or is included at the auditors discretion, and that refers to a matter appropriately presented or such importance that is fundamental to users understanding of the financial statements

General risk contingency

An element of the business environment that involves some risk of future loss. Not disclosed in financial statements

Representation letter

A single letter or separate letters prepared by officers of the client company at the auditor’s request setting forth certain representations about the company’s financial position or operations

Minutes

A formal record of the issues discussed and actions taken in meetings of stockholders and board of directors

Loss contingency

A possible loss, stemming from past events, that will be resolved as to existence and amount by some future event. Should be disclosed in notes to the financial statements if there is reasonable possibility that loss has been incurred. Considered probable and can be reasonably estimated, they should be accrued in the accounts.

Contingent liability

A possible liability, stemming form past events, that will be resolved as to existence and amount by some future event

Letter of inquiry (of the client’s lawyer)

A letter sent by auditors to a client’s legal counsel requesting a description and evaluation of pending or threatened litigation, unasserted claims, and other loss contingencies.

Unssarted claim

A possible legal claim of which no potential claimant has exhibited an awareness

Commitment

A contractual obligation to carry out a transaction at specified terms in the future. Material commitments should be disclosed in the financial statements

Conservatism

An accounting doctrine for asset valuation in which the lower of two alternative acceptable asset valuation is chosen

Misstatements

Difference between the amount, classification, presentation, or disclosure of reported financial statement items and the amount, classification, presentation, or disclosure that is required for the items to be presented fairly in accordance with the applicable financial reporting framework. Arise from fraud or error

Factual misstatments

misstatements about which there is no doubt

Judgmental misstatements

Differences arising from the judgments of management concerning accounting estimates that the auditor considers unreasonable or the selection or application of accounting policies that the auditor considers inappropriate.

Projected misstatements

The auditor’s best estimates of the misstatements in populations involving the projection of misstatements identified in audit samples to entire populations from which the samples were drawn

Identified misstatements

Misstatements found by the auditor during their audit. These misstatements may or may not be corrected by management.

Uncorrected misstatements

Misstatements that have not been reflected in the financial statements, Ordinarily these are misstatements the auditors have identified and for which proposed adjusting entries have not been recorded

Rollover approach

An approach to making materiality judgments that quantifies the total likely misstatements as of the current-year end based on effects of reflecting misstatements only during the current year

Iron curtain approach

An approach to making judgments that quantifies the total likely misstatements as of the current year-end based on the effects of reflecting all misstatements existing in the balance sheet at the end of the current year, irrespective of whether the misstatements occurred in the current year or previous years

Other information

Financial and nonfinancial information included in an entity’s annual report

Required supplementary information

information that a designated accounting standards setter requires to accompany an entity’s basic financial statements. Differs form other types of information outside the basic financial statements because a designated accounting standards setter considers the information an essential part of the financial reporting of certain entities and because authoritative guidelines for the measurement and presentation of the information have been established

Supplementary information

Information presented outside the basic financial statements, excluding required supplementary information, that is not considered necessary for the financial statements to be fairly presented in accordance with the applicable financial framework.

Disclosure checklists

A list of specific disclosures required by the FASB, the GASB, the FASAC, and the SEC that is used to evaluate the adequacy of the disclosures in a set of financial statements

General-purpose financial reporting framework

A financial reporting framework designed to meet the common financial information needs of a wide range of users

Comparative financial statements

A complete set of financial statements for one or more prior periods included for comparison with the financial statements of the current period

Key audit matter

As included in the AICPA and international auditing standards, matters that, in the auditor’s professional judgment were of most significance in the audit of the financial statements of the current period. Selected form matters communicated to those charged with governance

Critical Audit matter

As included in the PCAOB auditing standards, a matter arising form the audit of the financial statements that was communicated or required to be communicated to the audit committee and that related to accounts or disclosures that are material tot he financial statements and involved especially challenging, subjective, or complex auditor judgment

Significant Risks

Identified and assessed risks of material misstatements that, in the auditor’s judgment, require special audit consideration

Form AP

The PCOAB form that requires the name of the engagement partner; the names, locations, and extent of participation or other accounting firms that took part in the audit if their work constituted 5 percent or more of total audit hours, and the number and aggregate extent of participation of other accounting firs that took part in the audit

Unmodified opinion

For nonpublic companies, the opinion expressed by the auditors when they concluded that the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework

Unqualified opinion

For public companies, the opinion expressed when they conclude that the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework

Qualified opinion

A modification of the auditor’s opinion employing a clause such as except for to limit the auditor’s opinion on the financial statements. Indicates that, except for the effects of some limitation of the scope of the audit or some departure from generally accepted accounting principles, the financial statements are fairly presented

Adverse opinion

An opinion that the financial statements do not fairly present financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Departures from GAAP are both material and persuasive

Disclaimer opinion

A form of report in which the auditors state that they do not express an opinion of the financial statements

Change in accounting principle

Changes in accounting principles and reporting entities result in an emphasis-of-matter paragraph being added to the auditor’s report

Scope limitation

A restriction that prevents the auditors from being able to apply all of the audit procedures that they consider necessary in the circumstances. May be client imposed or may be imposed by other circumstances

Material

Being of substantial importance. Significant enough to affect evaluations or decisions by users of financial statements. Information that should be disclosed in order for the financial statements. Information that should be disclosed in order for the financial statements to constitute a fair presentation Determining what is involves quantitative and qualitative criteria

Persuasive

A term used, in the context of misstatements, to describe the effects on the financial statements of misstatements or possible effects on the financial statements of misstatements, if any, that are undetected due to an inability to obtain sufficient appropriate audit evidence.

Substantial doubt

When relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued

Emphasis of a matter paragraph

Inserted in an audit report issued under PCOAB standards to describe certain circumstances that the auditors believe should be emphasized

Other matter paragraph

This term is used in nonpublic auditing standards for a paragraph included in the auditor’s report that is required by GAAS, or is included at the auditor’s discretion and that refers to a matter other than those presented or disclosed in the financial statements

Explanatory paragraph

A paragraph inserted in an auditor’s report issued under PCOAB standards to describe a matter relating to the financial statements or to the audit.

Emphasis of matter paragraph and other matter paragraphs

a paragraph included in the auditor’s report that is required by GAAS or is included at the auditor’s discretion, and that refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor’s judgment, is of such importance that is fundamental to users understanding of the financial statements

Reasonable period of time

the period of time required by the applicable financial reporting framework or, if no requirement exists, within one year after the date the financial statements are issued

Component

an entity or business activity for which group or component management prepare financial information that is required by the applicable financial reporting framework to be included in group financial statements

Group audit

the audit of the financial statements of a company composed of more than one component

Component auditors

Under AICPA standards, auditors who perform work on the financial information of a component that will be used as audit evidence for the group audit.

Group auditors

For nonpublic companies, the firm responsible for issuing the audit report on a group of companies

Shared responsibility opinion

An auditor’s report in which the principal auditors decide to share responsibility with other auditors who have audited some segment of the client’s business. The sharing of responsibility is done by making reference to the other auditors.