3 Terms
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Auditing
The systematic review and examination of an individual's or organization’s accounting records to verify their accuracy.
Industry: Accounting
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Auditing
Management representation letter
Accounting; Auditing
A letter addressed to the auditor, signed by the client's chief executive office and chief financial officer. During an audit, management makes many representations to the auditor. Written ...
Material
Accounting; Auditing
Information important enough to change an investor's decision. Insignificant information has no effect on decisions, so there is no need to report it. Materiality includes the absolute value and ...
Material weakness
Accounting; Auditing
A condition in which internal controls do not reduce to a relatively low level the risk that material errors or fraud may occur and not be detected in a timely period by employees in the normal ...
Memos
Accounting; Auditing
Written records supporting journal entries. Credit memos support credits, while debit memos support debit entries.
Negative assurance
Accounting; Auditing
A statement of what the CPA does not know as opposed to what the CPA believes (positive assurance). A statement that the CPA was "not aware of material modifications that should be made to financial ...
Negative confirmation request
Accounting; Auditing
The negative form of accounts receivable confirmation asks the client's customer to respond only if the customer disagrees with the balance determined by the client. The positive form asks the ...
