assurance
independent professional services that improve the quality of information, or its context, for decision makers
Attest
A form of consulting service where a CPA provides a written report providing assurance regarding a subject matter that is the responsibility of someone else
Audit Failure
A situation where an auditor reports to users of the financial statements that those statements are free of material misstatements when they are in fact materially misstated
Auditing
A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to inter
Big 4
Deloitte, PwC, Ernst & Young, KPMG
COSO
Committee of Sponsoring Organizations of the Treadway Commission
compilation
A service in which a CPA uses client data to assemble a set of financial statements for the client
Established Criteria
The standard of comparison used in the conduct of an audit.
External Auditor
Used interchangeably with the term 'independent auditor,' this term refers to the public accountant who is engaged to perform the audit of the client's financial statements.
Independent Auditor
The public accountant who is engaged to perform the audit of the client's financial statements.
information asymmetry
A condition where one party to a transaction has more relevant or otherwise superior information than the other party.
Information risk
The risk that information provided or relied upon is materially inaccurate
Material
Relevant to the decision. A misstatement is this if it alters the total mix of information available to new investors in a way that might influence their investment decision
Moral Hazzard
The situation where a party makes risky decision because they are sheltered from consequences of their behavior
Non-audit services
Professional services - other than the audit - provided by public accounting firms. Examples of non-audit services include tax services, information systems design and implementation, internal audit outsourcing, and valuation services.
Objectivity
A state of mind, a quality that imposes obligation to be impartial, intellectually honest, and free of conflicts of interest
Professional Skepticism
an attitude that includes a questioning mind and a critical assessment of audit evidence
Public Accounting Firm
An organization that provides professional auditing, tax, and other consulting services to companies. The name "public accountant" referred to the auditors responsibility to represent and protect the public's interest when performing his service.
Public Companies
A company that sells ownership interests to members of the general public through public exchange markets.
Public company
A company that sells shares of ownership to members of the public in stock exchange markets (New York stock exchange)
Reasonable assurance
A high level of, but not absolute, certainty that the conclusion reached by the auditor is correct.
reviews
Services in which the CPA performs procedures to provide limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting fra