Some have not been superseded by pronouncements of the Financial Accounting Standards Board.Those old pronouncements still qualify as generally accepted accounting principles.adjusting entries are accounting entries made at the end of an accounting period to allocate items between accounting periods.adverse An audit opinion that the financial statements as a whole are not in conformity with U. GAAP.advisory services are a consulting service in which the CPA develops the findings, conclusions, and recommendations presented for client decision-making.The level of control risk determined by the auditor, based on tests of controls, is the assessed level of control risk.assurance The level of confidence one has.assurance engagement is an engagement in which an accountant issues a report designed to enhance the degree of confidence of third parties and management about the outcome of an evaluation or measurement of financial statements (subject matter) against an applicable financial reporting framework (criteria).attest (attestation) report In an attest engagement, a practitioner issues a written conclusion about the reliability of a written assertion that is the responsibility of another.attestation risk is the risk the CPA may unknowingly fail to modify the report on management’s assertion.
The estimate can be found by multiplying a reasonable interest rate times the average balance of interest bearing debt outstanding during the year (the auditor’s expectation).
The allowance balance is the estimated total of uncollectible accounts included in accounts receivable.allowance for sampling risk The difference between a sample estimate and the projected population characteristic at a specified sampling risk.
This allowance is also the difference between the expected error rate and the tolerable deviation rate.analytical procedure A comparison of financial statement amounts with an auditor’s expectation.
It is the auditor’s primary means to corroborate information furnished by management about litigation, claims, and assessments.attribute sampling The characteristic tested is a property that has only two possible values (an error exists or it does not).audit adjustment is a correction of a financial information misstatement identified by the auditor, whether recorded or not.audit committee A committee of the board of directors responsible for oversight of the financial reporting process, selection of the independent auditor, and receipt of audit results.audit documentation (working papers) are records kept by the auditor of procedures applied, tests performed, information obtained, and pertinent conclusions reached in the engagement.
The documentation provides the principal support for the auditor’s report.audit evidence is information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based.audit objective In obtaining evidence in support of financial statement assertions, the auditor develops specific audit objectives in light of those assertions.