Chaper 2 Terms

Front 1

AMerican institute of ceritfied public accountants(AICPA)

Back 1

as related to professional auditng standars th ebodt charged with estblishing auditing standarts for the audits of nonpublic entities thorugh Statemtns on AUditing standards(SaS) issued vy the auditing standards board.

Front 2

Appropriate(audite evidence)

Back 2

characteristics realte dto the quality (relevance and relaiblity) of audit evidence

Front 3

audit plan

Back 3

a list of hte audit procedures auditros need to perform to gather sufficent appropirate evidence on which to vase their opinion on the fiancial statmetns

Front 4

audit porcudres

Back 4

the spacialiezed aciotns auditors tak to ovtian evidence in an engagemetns

Front 5

auditing standarts

Back 5

the audit quiali guides that apply to all audits

Front 6

Control risk

Back 6

the probability that a material misstatemtn (error and farud) will not be prevented or deteced on a timely basis by the entittys internal controls

Front 7

detection risk

Back 7

the risk that th eaudit team substative proceudres will fail to detect a materil misstatemnet

Front 8

Due care

Back 8

A level of performance that would be exercised by reasonable auditors in similar circumstances ; auditors are expected to possess the skills and knwledge of others in thier profession and not expected to be infallible

Front 9

engagemnts quality conrol review

Back 9

an internal evalutation of the significant judgments made bt the audit team and the conclusion reache din formualting its report of an engagment conducted by that firm

Front 10

evidence

Back 10

the informaiton used by auditors in arriving a tth eocnclusion on which the audit onino is based, which includes the inderlying accouting data and all available corrobaroting information

Front 11

financial reporting framework

Back 11

a set of criteria used to determine the meauremtnts recognition, presentaiton amd disclosure of material itmes in the financial statemtnes

Front 12

generally accpeted auditing stadanrds(GAAS)

Back 12

standarts that indentitgy necessary qulaificaiotns and charateristics of auditros an dguide the conduct of hte audit emaniaiton

Front 13

independence(in apperance)

Back 13

the extent to which others(particualry fiancial staemtns users) percieveauditors to e indepenedent

Front 14

indpeendence(in fact)

Back 14

an auditors mental attitude and imparitality iwht repsect to the clinet

Front 15

inherent risk

Back 15

the porbaiblity that a mterial misstatemnt(error of fraud) will occur in an account balance or class of tranacitons

Front 16

inspection

Back 16

an evaluaiton of an accounting fimrs audit engagmetns and systems of qulaity conol conducted by the PCAOB and reuired for any fimrs prpviding auditing services to public entities

Front 17

internal control

Back 17

the policies and proceudres impleemented by an entity to preent or detect materil accounting errors or frauds and provide for thier correction on a timely basis

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materiality

Back 18

as it related to finanial reporting, the dollar amount that would influence the lending or investing decsiosins of financial statements users

Front 19

professional judgement

Back 19

the applicaiotn of relevant training, knowledge and experince in making informed decisions about apprpriate courses of aciton during the audit engagmetns

Front 20

professional skepticism

Back 20

a state of mind that is charactierzed by appropriate questioning and a ciritilca assessment of audit evidence

Front 21

Public Comapny Accounting Oversight Board

Back 21

as realted to porfessional auditing standersm the body chated with establishing auditng standarts for the aduits of publiv entities through the issuance of auditing standards. The PCAOB is also repsonsible for instpecint firms that perfomr audits of public entities

Front 22

public entity

Back 22

an entity that offers refisteed scuctirites such as stock and bonds for sale to the general public

Front 23

reasonable assuracne

Back 23

concpets that a GAAS audit may not detect all material misstatmetns and audtors are not insuers or guranators reagaign th efairness of the entity fincial statemtns

Front 24

risk of material misstatemnts

Back 24

the combined probability that a materila misstatment(error or fraud) will occur and not be prevented or detected on a timely basis by the enttiy internal control

Front 25

substantive procedures

Back 25

proceudres used by auditrs to obtain assuracne as to the fairness of the entitys financial staemtns

Front 26

sufficeincy(audit evidence)

Back 26

the emasure of the quanity of audit evidence)the nmber of tranacitosn or compentnes evaluated

Front 27

system of quality contorl

Back 27

the policies and procedures implemented by a firms to provide with reasonable assuracne that th fimrs an d it personnel (1) comply with porfessional standards and applicable regulatory and legal requiremetns and (2) issure reports that are appropriate in the circumstances

Front 28

unmodified ( or unqualified) opinion

Back 28

an opinion which concludes that the fnancial statemsn presnt an entitys financial condiotn, resluts of operaoitns, and cahs flows in conformity with GAAP