Glossary of Terms (Condensed)
| Section Name | Key Concept | Brief Description |
|---|---|---|
| Access Controls | User authentication & authorization | Procedures to restrict access to terminal devices, programs, and data. |
| Assurance Engagements | Reasonable vs. Limited; Attestation vs. Direct | Engagements where a practitioner expresses a conclusion to enhance user confidence. |
| Audit Risk & Evidence | Audit risk, detection risk, sampling | Risk of inappropriate opinion; evidence quality and quantity. |
| Financial Reporting Frameworks | Fair presentation vs. Compliance | Frameworks requiring compliance with or departure from requirements for fair presentation. |
| Internal Control & IT | Control environment, activities, IT controls | Processes designed to ensure reliable financial reporting and compliance. |
| GHG & Emissions | Scope 1, 2, 3; emissions trading | Definitions and classifications of greenhouse gas emissions and related schemes. |
| Professional Judgment & Skepticism | Application of training, knowledge, experience | Informed decision-making and critical assessment of evidence. |
| Quality Control & Monitoring | Engagement quality control review, inspection | Processes to ensure firm's quality control policies are effective. |
Access Controls & Authentication
User Authentication
Procedures to identify users through unique logon IDs, passwords, access cards, or biometric data.
User Authorization
Rules determining which computer resources each user may access.
Assurance Engagements
Reasonable vs. Limited Assurance
| Type | Risk Level | Conclusion Form |
|---|---|---|
| Reasonable | Acceptably low | Opinion on measurement/evaluation |
| Limited | Greater than reasonable | Whether anything came to attention indicating material misstatement |
Attestation vs. Direct Engagement
Attestation: Another party measures/evaluates against criteria.
Direct: Practitioner measures/evaluates and presents subject matter information.
Audit Risk & Evidence
Audit Risk Components
- Risk of material misstatement (inherent + control risk)
- Detection risk โ risk procedures fail to detect material misstatement
Audit Evidence
Information used by auditor to form opinion. Includes accounting records and other information.
Financial Reporting Frameworks
Fair Presentation Framework
Requires compliance with framework and acknowledges that additional disclosures or departures may be necessary for fair presentation.
Compliance Framework
Requires compliance but does not acknowledge the need for departures or additional disclosures.
Internal Control & IT
Control Environment
Attitudes, awareness, and actions of governance and management regarding internal control.
Control Activities
Policies and procedures ensuring management directives are carried out.
IT Controls
- General IT controls: Policies for many applications (e.g., program changes, access)
- Application controls: Manual/automated procedures at business process level (preventative/detective)
GHG & Emissions
Emissions Categories
| Scope | Description |
|---|---|
| Scope 1 (Direct) | Emissions from sources owned/controlled by entity |
| Scope 2 (Indirect) | Emissions from energy transferred to and consumed by entity |
| Scope 3 (Other indirect) | All other indirect emissions |
Emissions Trading Scheme
Market-based approach using economic incentives to reduce greenhouse gases.
Professional Judgment & Skepticism
Professional Judgment
Application of relevant training, knowledge, and experience within auditing, accounting, and ethical standards to make informed decisions.
Professional Skepticism
An attitude including a questioning mind, alertness to conditions indicating possible misstatement, and critical assessment of evidence.
Quality Control & Monitoring
Engagement Quality Control Review
Objective evaluation of significant judgments and conclusions before report date. Required for listed entity audits.
Monitoring
Ongoing consideration and evaluation of the firm's system of quality control, including periodic inspection of completed engagements.
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