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36 Cards in this Set
- Front
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commission |
A percentage fee cahted for porfessional servies in connection with executing a transaction or performin some other business activiy |
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contignet fee |
a type of coempensation estalishd for the perfomacne of any service in an arrangemtn in which no amount will be charged unless a specific finding or result is atained or the fe fee otherwise depsend on the result |
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breach of contract |
a claim that accounting or auditng servies were not performed in the manner described in the contract |
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causation defense |
an argument availble to auditors who can show that a plaintiffs economic loss was caused by a factor other than the auditos failre to exercise the appropriate level of professional care or breach of contract |
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class action |
a sitation in which a group of plaintiff comes toghether in a legal caiton aginast anotehr party |
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comfort leter |
a letter issued by auditors to undersirters of securities that provieds an opinion on the fariness of the issuers finaical statemsnt |
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common law |
the liability for injires that is vased on reasons other than vilation of a written law or statue. under common law, legal precedent is used in assessing the degree or responsiblity or fualr of the parties; auditors have comon law liablity to clients and nonshareholder third parties |
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constructive fraud |
a failure to provide ant are in fulfilling a duty owed to another including a reckless diesregard for the turth(similar to gross negligence) |
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contributory negligence |
a legal degense theory inwhich the plaintiff own failure to perform with apprpirate level of professional care bars recovery form auditors |
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deep pockets theory |
the conept that lawsuits may be brought agaisnt auditors not because they are necessarily at fault but eacue thay are the only party with resouces agiasnt which revoery can be made |
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expectation gap |
the differecne between the actual work and asusrace required by FAAS and the epection of that owrk by the genral public |
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Financial Reporting Releases (FRRs) |
repost prepared by SEC staff that express new rules and policies about disclousre |
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foreseable party |
the individuals or orgniaiotns whose decisons normally rely on audited finaical staemtns and opiions on those finaical staemtns |
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foreseen party |
a limited class of indicidulas or orfnaizaoitns that could be reasonably expected to rely on auditors work |
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form 8-k |
the current evnets report filed periodically at the occurrenec of major ecents, such as earnigs relasese, major asset sales, aquisistions, and auditor changes |
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form 10-k |
the fomr to use for annual filing of finaicl staemtsn and ralted disclusres by public compnies with the SEC |
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form 10-Q |
the form to use for quarterly filing of finaicl staemtsn and related disclusres by public companies with the SEC |
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Fraud |
the misrepresenation of facts taht the individual knows to be false with the intnetion to deceive |
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gross neglignece |
the breach of duty owed to another party beacsue of a lack of miniaml care |
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initila public offering |
the inital issuance of securites by a registrant entity to the investing public through a market tha tis subject to the provision sof the securities act of 1933 |
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joint and several liability |
the legal doctinre that when multiple defendants are named the full amount of a damge award may be collected from any of the defendants named in the lawsuit even though they may only be partially at fault |
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limited liability partnerhsip |
a from of orgnaizaiton adopted by most large accouting firms that combines the adavntages of a traditonal partnership with the liablity protection afforeded to coporations |
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ordinary negilgence |
the unitneironal breach of duty owed to naother as a reuslt of a lack of reasonable care |
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plantiff |
the person or orfgnaaiotn that initaites a lawsuit |
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primary benficiary |
a peron known by name to to the auditor for whose primart venfit the audit or toher accoutnig serice is perfomred |
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privity of contract |
a stitauiton in which parties have a contractual relationship |
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proporitonate liability |
the legal doctirne that payment of a shre of the courts damge award be based on the extent of fault exhibited by a oncvicted dfendant |
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prospectrus |
a leal document offering securities for sale; includes significant info avout the issing entity inclding its historical finaical staemtns and other ncessart disclosures |
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registration statment |
a set of documents incdluing a prosectus that a comapny files with the SEV propor to an inital publi offersin |
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Reugaliton S-K |
the SEC requirements realitng to all usienss analyrical and supplementary financial disclosures other than finacial staemtns themselves |
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regulation S-X |
the SEC accouting requiremtns for annual and interim finaicla staemetns filed under both the securities act and the scurities exchange act |
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scienter |
a mental state embracing the intent to decieve, manipulate, or defruad, prior to committing those acitons(for example auditors knowledge of amisstatemnt in the finaicial sstemtns and ht eintneirion fialrue to discloe this misstatement in thier report.) |
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Staff accountin Bullitens SABs |
the unofficial but important inteprretations of reuglaiton S-X and regualitns S-K by SEC staff |
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statutory law |
the legal rules affecing liability based on vilations of writen laws or statues aduotrs have staturory liablity to third party invesotrs under the securities act |
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tort |
a civil compaint charing that the action of oner perosn caused injury(personal or financial) to antoehr; such acion agisnt auditors is normally initaited by users of financial staemtns |
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