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Flashcards in Exam 1 Deck (19)
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1
Q

Accounting

A

Recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making.

2
Q

Assurance Service

A

Independent professional service that improves the quality of information for decision makers.

3
Q

Attestation Service

A

Type of assurance service in which the CPA firm issues a report about a subject matter or assertion that is the responsibility of another party.

4
Q

Audit of Historical Financial Statements

A

Form of attestation service in which the auditor issues a written report stating whether the financial statements are in material conformity with accounting standards.

5
Q

Audit Report

A

Communication of audit findings to users.

6
Q

Auditing

A

Accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria.

7
Q

Certified Public Accountant

A

Person who has met state regulatory requirements, including passing the Uniform CPA Examination, and has thus been certified; a CPA may have as his or her primary responsibility the performance of the audit function on historical financial statements of commercial and noncommercial financial entities.

8
Q

Compliance Audit

A

(1) Review of an organization’s financial records performed to determine whether the organization is following specific procedures, rules, or regulations set by some higher authority; (2) an audit performed to determine whether an entity that receives financial assistance from the federal government has complied with specific laws and regulations..

9
Q

Evidence

A

Any information used by the auditor to determine whether the information being audited is stated in accordance with established criteria.

10
Q

Financial Statement Audit

A

Audit conducted to determine whether the overall financial statements of an entity are stated in accordance with specified criteria (usually US or international accounting standards).

11
Q

Government Accountability Office Auditor

A

Auditor working for the US Government Accountability Office (GAO); the GAO reports to and is responsible solely to Congress.

12
Q

Independent Auditors

A

Certified public accountants or accounting firms that perform audits of commercial and noncommercial entities.

13
Q

Information Risk

A

Risk that information upon which a business decision is made is inaccurate.

14
Q

Internal Auditors

A

Auditors employed by a company to audit for the company’s board of directors and management.

15
Q

Internal Control over Financial Reporting

A

Engagement in which the auditor reports on the effectiveness of internal control over financial reporting; such reports are required for accelerated filer public companies under Section 404 of the Sarbanes-Oxley Act

16
Q

Internal Revenue Agents

A

Auditors who work for the IRS and conduct examinations of taxpayers’ returns.

17
Q

Operational Audit

A

Review of any part of an organzation’s operating procedures and methods for the purpose of evaluating efficiency and effectiveness.

18
Q

Review of Historical Financial Statements

A

Form of attestation in which a CPA firm issues a written report that provides less assurance than an audit as to whether the financial statements are in material conformity with accounting standards.

19
Q

Sarbanes-Oxley Act

A

Federal securities law passed in 2002 that provides for additional regulation of public companies and their auditors; Act established the Public Company Accounting Oversight Board and also requires auditors of larger public companies to audit the effectiveness of internal control over financial reporting.