• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/30

Click to flip

30 Cards in this Set

  • Front
  • Back
Business Risk
the risk an entity will fail to meet its objectives.
4 environmental conditions increase user demand for relevan, reliable information
a) transactions that are numerous and complex; b) users separated from accounting records by distance and time; c) financial decisions that are important to investors and users; d) decisions are time-sensitive
Information Risk
the probability that the information circulated by the company will be false or misleading
Assurance (def.)
lending of credibility to information
Attestation (def.)
When assurance is provided for specific assertions made by management.
Auditing (def.)
When assertions are embodied in a company's financial statements. Primarily the certification of financial statements.
Attestation Engagements
on historical financial statements. Practitioner is engaged to issue a report on subject matter that is the responsibility of another party (management).
Assurance Services
Independent professional services that improve the quality of information, or its context for decision makers.
4 Major elements of Assurance Services
a) Independence: preserving integrity and objectivity; b) Professional services: involves some element of judgement based on education and experience c) Improving quality of information: how the information is used in the decision-making context d) Decision makers: consumers of assurance services
Management Assertions: Existence or Occurence: Events and Transactions
Occurence
Management Assertions: Existence or Occurence: Account Balances
Existence
Management Assertions: Existence or Occurence: Presentation and Footnote Disclosures
Occurence
Management Assertions: Rights and Obligations: Events and Transactions
N/A
Management Assertions: Rights and Obligations: Account Balances
Rights and Obligations
Management Assertions: Rights and Obligations: Presentation and Footnote Disclosures
Rights and Obligations
Management Assertions: Completeness: Events and Transactions
Completeness and cutoff
Management Assertions: Completeness: Account Balances
Completeness
Management Assertions: Completeness: Presentation and Footnote Disclosures
Completeness
Management Assertions: Valuation and Allocation: Events and Transactions
Accuracy
Management Assertions: Valuation and Allocation: Account Balances
Valuation and Allocation
Management Assertions: Valuation and Allocation: Presentation and Footnote Disclosures
Accuracy Valuation and allocation
Management Assertions: Presentation and Disclosure: Events and Transactions
Classification
Management Assertions: Presentation and Disclosure: Account Balances
N/A
Management Assertions: Presentation and DisclPosure: Presentation and Footnote Disclosures
Classification and understandability
PCAOB
Public Company Accounting Oversigt Board.
AICPA
Accounting Institue of Certified Public Accountants (private)
Professional Skepticism
Auditor's tendance to NOT accept management's asserrtions without corroboration.
Operational Auditing
economic and efficient use of resources
Assurance Services Involve (3):
a) relevance as well as reliability; b) nonfinancial information as well as traditional financial statements; c) electronic databases as well as printed reports.
Internal Auditing
is made up of the Board of Directors of the client company, who do not have involvement in the day to day activities