Auditing Chapter 11 Terms

  1. Attorney Letter
    a communication sent from the client to the attorney(s) that details a list of pendint litigation, claims, and assessments involving the client. The attorney(s) is (are) requested to comment in these matters directly to the client's auditors
  2. Audit completion date
    the date on which auditors have gathered sufficient appropriate evidence on which to base their opinions on teh financial statements and internal control over financial reporting, this evidence includes the review of audit documentation, prepartion of the financial statements and related disclosures, and management's assertion that they assume responsibility for the financial statements and disclosures
  3. Audit report release date
    The date on which auditors allow the client to use auditor's reports in conjunction with the financial statements, this is also the date on which the client's financial statements are issued
  4. contingency
    An existing condition, situation, or set of circumstances involving uncertainty as to possible gain ("gain contingency") or loss ("Loss contingency") to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur
  5. dual date
    to provide two dates by which auditors limit the responsibility beyond the audit completion date to a specific subsequent event identified in the report
  6. engagement quality review
    A review of audit documentation by an additional person (normally, a partner or equivalent with the firm) who has not been involved with the audit; its purpose is to ensure that the quality of the audit work and reporting is consistent with the quality standards of the public accounting firm
  7. individuals charged with governance
    Person(s) responsible for overseeing the client's financial reporting process, including the internal control over financial reporting. While this phrase can include the client's management and full board of directors, for public entities, it would typically be the audit committee of the board of directors
  8. iron curtain method
    When evaluating the effect of uncorrected misstatements, this method considers the aggregate effect of current and prior misstatements in the entity's balance sheet
  9. management letter
    A summary of recommendations made by auditors resulting from the audit engagement that allow the client to improve the effectiveness and efficiency of its operations
  10. management representation
    Written assertions provided by management to auditors on matters such as the fairness of the organization's financial statements, availability of all financial records and related data, internal control over financial reporting, and other important matters
  11. Omitted procedures
    Situation in which a necessary audit procedure is inadvertantly not performed by auditors prior to the audit report release date
  12. pro forma financial data
    The presentation of financial statemens "as if" some important subsequent event had occurred at the balance sheet date
  13. rollover method
    When evaluating the effect of uncorrected misstatements, this method only considers the current period income effect(s) of the potential adjustment
  14. subsequent discovery of facts
    A situation in which auditors become aware of facts (unknown prior to the report release date) after the audit report release date
  15. Subsequent event
    Time period between the balance sheet date and the audit report release daate
  16. subsequent period
    Time period between the balance sheet date and the audit report release date
  17. Type I subsequent event
    A subsequent event that provides new information about a condition that existed (and could have been disclosed in the financial statements) at the balance sheet date
  18. Type II subsequent event
    An event that did not exist (and was not disclosed in the financial statements) at the balance sheet date but occurred prior to the audit report release date
  19. Unasserted claim
    A representation that no formal lawsuit or claim has been filed or threatened on behalf of others but that circumstances such as a catastrophe, accident, or other physical occurence could result in a suit or claim being filed in the future
  20. uncorrected misstatement
    A misstatement that the auditor has identified and accumulated during the audit that has not been corrected (or adjusted) by the client
Card Set
Auditing Chapter 11 Terms
Chapter 11 terms - Completing the Audit