Commitments
agreements that the entity will hold to a fixed set of conditions, such as the purchase or sale of merchandise at a stated price, at a future date, regardless of what happens to profits or to the economy as a whole
Completing the audit checklist
a reminder to the auditor of aspects of the audit that may have been overlooked
Contingent Liability
a potential future obligation to an outside party for an unknown amount resulting from activities that have already taken place
Dual-dated audit report
the use of one audit report date for normal subsequent events and a later date for one or more subsequent events that come to the auditor;s attention after the date of the audit report
Engagement quality review
a review of the financial statements and the entire set of audit files by a completely independent reviewer to whom the audit team must justify the evidence accumulated and the conclusions reached; also referred to as "independent review
Financial statement disclosure checklist
a questionnaire that reminds the auditor of disclosure problems commonly encountered in audits and that facilitates final review of the entire audit by an independent partner
inquiry of the client's attorneys
a letter from the client requesting that legal counsel inform the auditor of pending litigation or any other information involving legal counsel that is relevant to financial statement disclosure
Letter of representation
a written communication from the client to the auditor formalizing statements that the client has made about matters pertinent to the audit
Management letter
an optional letter written by the auditor to a client's management containing the auditor's recommendations for improving any aspect of the client's business
other information included in annual reports
information that is not a part of the financial statements but is published with them; auditors must read this information for inconsistencies with the financial statements
Review for subsequent events'
the auditing procedures performed by auditors to identify and evaluate subsequent events; also known as a post-balance-sheet review
review of audit documentation
a review of the completed audit files by another member of the audit firm to ensure quality and counteract bias
subsequent discovery of facts
auditor discovery that the financial statements are materially misstated, or that the opinion on internal controls over financial reporting may not have been appropriate, after they have been issued
Subsequent events
transactions and other pertinent events that occurred after the balance sheet date that affect the fair presentation or disclosure of the statements being audited
Unadjusted misstatement audit schedule
a summary of immaterial misstatements not adjusted at the time they were found, used to help the auditor assess whether the combined amount is material; also known as a summary of possible misstatements
Unasserted claim
a potential legal claim against a client where the condition for a claim exists but no claim has been filed