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12 Cards in this Set
- Front
- Back
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Audit Risk |
The risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated. |
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Business Risks |
Risks resulting from significant conditions, events, circumstances, and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives, or through the setting of inappropriate objectives or strategies. |
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Control risk |
The risk that a misstatement that could occur in an assertion about an account or disclosure and that could be material, either individually or in combination with other misstatements, will not be prevented, or detected and corrected, on a timely basis by the entity's internal control. |
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Detection risk |
The risk that the procedures performed by the auditor will not detect a misstatement that exists and that could be material, either individually or in a combination with other misstatements. |
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Engagement Risk |
The risk that the auditor is exposed to financial loss or damage to his or her professional reputation from litigation, adverse publicity, or other events arising in connection with financial statements audited and reported on. |
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Errors |
Unintentional misstatements or omissions of amounts or disclosures |
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Fraud |
An intentional act by one or more among management, those charged with governance, employees, or third parties, involving the use of deception that results in a misstatement in the financial statements. |
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Inherent Risk |
The susceptibility of an assertion in an account or disclosure to a misstatement due to error or fraud that could be material, either individually or in combination with other misstatements, before consideration of any related controls. |
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Professional Skepticism |
An attitude that includes a questioning mind and a critical assessment of audit evidence. The auditor should not assume that management is either honest or dishonest. |
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Risk Assessment |
The identification, analysis, and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP. |
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Scope of the audit |
Refers to the nature, timing, and extent of the audit procedures, where nature refers to the type of evidence; timing refers to when the evidence will be gathered; and extent refers to how much of the type of evidence will be evaluated. |
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Significant Risk |
A risk of material misstatement that is important enough to require special audit consideration. |
