Audit

Front 1

probable judgment a prudent person’s decision would be affected by the omission or misstatement of a value greater than this figure

Back 1

Materiality

Front 2

set the limit of materiality before the audit begins

Back 2

Preliminary Judgment of Materiality

Front 3

a client’s failure to meet organizational goals or objectives

Back 3

Business Risk

Front 4

the risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable misstatement
determines the amount of substantive evidence that the auditor plans to accumulate

Back 4

Planned detection Risk

Front 5

• measures the auditor's assessment of the likelihood that there are material misstatements in a segment before considering internal control

Back 5

Inherent Risk

Front 6

• measures the auditors assessment of whether the misstatements exceeding a tolerable amount in a segment will be prevented or detected on a timely basis by the client’s internal controls

Back 6

Control Risk

Front 7

• measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unqualified opinion has been issued

Back 7

Acceptable audit risk

Front 8

level of materiality allocated to an account balance

Back 8

Tolerable misstatement

Front 9

intentional misstatement or omission of amounts or disclosures with the intent to deceive users

Back 9

Fraudulent financial reporting

Front 10

•theft of an entity’s assets

Back 10

Misappropriation of assets

Front 11

Must be used in planning and completion
Field work is optional

Back 11

analytical procedure

Front 12

Procedures designed to test for dollar misstatements that directly affect the correctness of financial statements

Back 12

substantive tests

Front 13

Test of Transactions Analytical and Substantive
Test of Balances

Back 13

analytical and substantive

Front 14

test of balances

Back 14

balance sheet

Front 15

test of transactions

Back 15

income statement

Front 16

• Acquisitions of goods and services
• Cash disbursements
Purchase returns and allowances and purchase discounts

Back 16

acquisition cycle

Front 17

Used to request goods and services by an authorized employee

Back 17

purchase requisition

Front 18

A document used to order goods and services from vendors
Includes the description, quantity, and related information for goods and services and the company intends to purchase

Back 18

purchase order

Front 19

Records acquisitions, cash disbursements, and acquisition returns and allowances transactions for each vendor

Back 19

accounts payable master file

Front 20

• Listing includes the amount owed to each vendor for each invoice or voucher at a point in time

Back 20

Accounts Payable Trial Balance