Accounting 261 - Accounting Terms Chap 1-5

Front 1

accounting system

Back 1

The personnel, procedures, devices,
and records used by an organization to develop accounting
information and communicate that information to decision
makers.

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American Accounting Association

Back 2

A professional
accounting organization consisting primarily of accounting
educators that is dedicated to improving accounting education,
research, and practice.

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American Institute of CPA's

Back 3

An professional accounting organization of certified public accountants that engages in a variety of professional activities, including establishing auditing standards for private companies, conducting research, and establishing industry-specific reporting standards.

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Audit

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An investigation of financial statements designed to determine their fairness in relation to GAAP.

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Balance Sheet

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A position statement that shows where the company stands in financial terms at a specific date.

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Cash Flow Prospects

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The likelihood that an enterprise
will be able to provide an investor with both a return on the
investor’s investment and the return of that investment.

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Certified Internal Auditor

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A professional designation
issued by the Institute of Internal Auditors signifying expertise
in internal auditing.

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Certified Management Accountant

Back 8

A professional
designation issued by the Institute of Management Accountants
signifying expertise in management accounting.

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Certified Public Accountant

Back 9

An accountant who is
licensed by a state after meeting rigorous education, experience,
and examination requirements.

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Control Activities

Back 10

Policies and procedures that
management puts in place to address the risks identified during
the risk assessment process.

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Control Environment

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The foundation for all the other
elements of internal control, setting the overall tone for the organization.

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Corporate Governance

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Includes the corporate
structures and processes for overseeing a company’s affairs,
for example, the board of directors and the company’s internal
control processes.

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External Users

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Individuals and other enterprises that
have a financial interest in the reporting enterprise but that are not involved in the day-to-day operations of that enterprise (e.g.,
owners, creditors, labor unions, suppliers, customers).

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Financial Accounting

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Providing information about the
financial resources, obligations, and activities of an economic
entity that is intended for use primarily by external decision
makers—investors and creditors.

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FASB (Financial Accounting Standards Board

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A private-sector organization that is responsible for determining generally accepted accounting principles in the United States.

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Financial Statement

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A monetary declaration of what is
believed to be true about an enterprise.

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GAAP

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Principles that provide the framework for determining what
information is to be included in financial statements and how
that information is to be presented.

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Government Accountability Office

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A federal
government agency that audits many other agencies of the
federal government and other organizations that do business
with the federal government and reports its findings to Congress.

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Income Statement

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An activity statement that shows
details and results of the company’s profit-related activities for
a period of time.

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Institute of Internal Auditors

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A professional
accounting organization that is dedicated to the promotion and
development of the practice of internal auditing.

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Institute of Management Accountants

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A professional
accounting organization that intends to influence the concepts
and ethical practice of management accounting and financial
management.

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Internal Control

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A process designed to provide
reasonable assurance that the organization produces reliable
financial reports, complies with applicable laws and regulations,
and conducts its operations in an efficient and effective manner.

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IRS

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A government organization
that handles millions of income tax returns filed by individuals
and businesses and performs audit functions to verify the data
contained in those returns.

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IASB (International Accounting Standards Board)

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The group responsible for creating and promoting International
Financial Reporting Standards (IFRSs).

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PCAOB (Public Company Accounting Oversight Board)

Back 25

A quasi-governmental body charged with oversight
of the public accounting profession. The PCAOB sets auditing
standards for audits of publicly traded companies.

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Risk Assessment

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A process of identifying, analyzing,
and managing those risks that pose a threat to the achievement
of the organization’s objectives.

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Sarbanes-Oxley Act

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A landmark piece of securities
law, designed to improve the effectiveness of corporate financial
reporting through enhanced accountability of auditors, boards of
directors, and management.

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SEC (Securities and Exchange Commission

Back 28

A
governmental organization that has the legal power to establish
accounting principles and financial reporting requirements for
publicly held companies in the United States.

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Statement of Cash Flows

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An activity statement that
shows the details of the company’s activities involving cash
during a period of time.