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NOTES
50 Important Keywords
Auditing and Ethics
Chapter - 2

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 AUDIT AND ETHICS

CH-2

AUDIT STRATEGY, AUDIT PLANNING AND AUDIT PROGRAMME

Here are 50 additional important keywords and brief explanations from the auditing
chapter content:

1. Engagement letter - Formal agreement between auditor and client.

2. Audit committee - Oversees financial reporting and audit process.

3. Audit planning - Developing overall audit strategy.

4. Audit strategy - Description of audit scope, timing and resources.

5. Audit risk assessment - Process of identifying and assessing risks.

6. Materiality - Magnitude of misstatement affecting users.

7. Performance materiality - Materiality for purposes of audit procedures.

8. Planning materiality - Materiality when planning audit.

9. Misstatement - Difference between reported and actual amounts.

10. Fraud risk factors - Events or conditions indicating fraud risk.

11. Internal control - Policies and procedures of the entity.

12. Control activities - Actions to achieve control objectives.

13. Control risk - Risk controls fail to prevent or detect misstatements.

14. Significant risk - Risk requiring special audit consideration.

15. Responding to assessed risks - Designing procedures based on risk assessment.

16. Further audit procedures - Designed responses to assessed risks.

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17. Substantive procedures - Tests of details of transactions and balances.

18. Tests of controls - Evaluating operating effectiveness of controls.

19. Audit sampling - Selecting items for testing.

20. Audit evidence - Information used by auditor in forming conclusions.

21. External confirmations - Audit evidence from third parties.

22. Written representations - Representations obtained in writing from management.

23. Going concern - Ability of entity to continue operations.

24. Emphasis of matter - Drawing attention to certain matters.

25. Other information - Information other than financial statements.

26. Group audit - Audit of group financial statements.

27. Component - Entity or business activity within the group.

28. Significant component - Component requiring audit procedures.

29. Analytical procedures - Evaluating data by analysis of relationships.

30. Management bias -Intentional or unintentional misstatement.

31. Professional skepticism - Critical assessment of audit evidence.

32. Audit documentation - Records of audit evidence and procedures.

33. Audit evidence - Sufficiency and appropriateness.

34. Audit sampling - Selecting items for testing.

35. Non-sampling risk - Risk not sampling related.

36. Audit opinion - Auditor's conclusion on financial statements.

37. Qualified opinion - Opinion with exceptions.

38. Adverse opinion - Statements misleading or incomplete.

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39. Disclaimer of opinion - Unable to obtain sufficient evidence.

40. Modified opinion - Qualified, adverse or disclaimer opinion.

41. Going concern - Disclosing material uncertainty.

42. Key audit matters - Matters of most significance in the audit.

43. Comparatives - Corresponding figures for preceding period.

44. Consistency - Consistent application of accounting policies.

45. Modified report - Modified opinion or emphasis of matter paragraph.

46. Communication - Communicating key matters with those charged with governance.

47. Those charged with governance - Responsible for oversight of reporting process.

48. Audit committee - Subcommittee of those charged with governance.

49. Management representations - Representations obtained from management.

50. Written representations - Representations obtained in writing.

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