analytical procedures
evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data
audit procedures
specific acts performed by the auditor in gathering evidence to determine if specific assertations are being met
audit risk
the risk that the auditor may fail to modify the opinion on materially misstated financial statements
business risks
risks resulting from significant conditions, events, circumstances, and actions or inactions that could adversely affect management's ability to execute its strategies and to achieve its objectives, or through the setting of inappropriate objectives or st
closest reasonable estimate
a range of acceptable amounts or a precisely determined point estimate for an estimate (e.g. uncollectible receivables), if that is a better estimate than any other amount
control risk
the risk that material misstatements that could occur will not be prevented or detected by internal controls
detection risk
the risk that the auditor will not detect a material misstatement that exists in the financial statements
engagement risk
the risk that the auditor's exposure to loss or injury to professional practice from litigation, adverse publicity, or other events arising in connection with financial statements audited and reported on
errors
unintentional misstatements or omissions of amounts or disclosures
fraud
intentional misstatements that can be classified as fraudulent financial reporting and misappropriation of assets
inherent risk
the susceptibility of an assertion to material misstatement, assuming no related controls
materiality
the magnitude of an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced
professional skepticism
an attitude that includes a questioning mind and a critical assessment of audit evidence. the auditor should not assume that management is either honest or dishonest
risk assessment
the identification, analysis, and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP
risk of material misstatement
the auditor's combined assessment of inherent risk and control risk
scope of the audit
refers to the nature, timing, and extent fo audit procedures, where nature refers to the type of evidence; timing refers to when the evidence will be gathered; and extent refers to how much of the type of evidence will be evaluated
significant risk
a risk of material misstatement that is imporatant enough to require special audit consideration
tolerable misstatement
the amount of the planning materiality that is allocated to a financial statement account