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11 Cards in this Set

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  • Back
Acceptable Audit Risk
A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is complete+unqual. opin.
Written records of the client's expectations for the period; a comparison of budgets with actual results may indicate whether or not misstmts. likely
The rules + procedures adopted by a corp's stockholders, including the corp's fiscal year and the duties + powers of its officers
Client Business Risk
The risk that the client will fail to achieve its objectives related to: reliability of reporting; effectiveness + eff. of ops; compliance with laws
Corporate Charter
A legal doc. granted by the state in which a Co. is inc. that recognizes a Co. as a separate entity; includes name of the the Corp, date, stock
Corporate Minutes
Official record of the meetings of a corporation's BOD and stockholders, in which corporate issues, such as the dec. of dividends + app. of contracts
Engagement Letter
An agreement between the CPA firm and the client as to the terms of the engagement for the conduct of the audit and related services
Inherent Risk
A measure of the auditor's assessment of the likelihood that there are material misstatements in a segment before considering eff. of I.C.
Initial Audit Planning
Involves deciding whether to accept or continue doing the audit for the client, idfy. the client's reasons for the audit, obt. eng. letter, select staff
Related Party
Affiliated company, principal owner of the client company, or any other party with which the client deals, where one of the parties can influence mgmt/pcy.
Related Party Transaction
Any transaction between the client and a related party