Essential terms-CH4

Audit committee—selected members of a client’s board of directors whose

responsibilities include helping auditors to remain independent of management
Confidential client information—client information that may not be disclosed
without the specific consent of the client except under authoritative professional or
legal investigation
Direct financial interest—the ownership of stock or other equity shares by members
or their immediate family
Ethical dilemma—a situation in which a decision must be made about the
appropriate behavior
Ethics—a set of moral principles or values
Independence in appearance—the auditor’s ability to maintain an unbiased
viewpoint in the eyes of others
Independence of mind—the auditor’s state of mind that enables an unbiased
viewpoint in the performance of professional services; also described as “independent
in fact”
Independent in fact—see “independence of mind”
Indirect financial interest—a close, but not direct, ownership relationship between
the auditor and the client; an example is the ownership of stock by a member’s
grandparent
Privileged information—client information that the professional cannot be legally
required to provide; information that an accountant obtains from a client is
confidential but not privileged