| Word | Meaning | Example |
|---|---|---|
| goal | the state of affairs that a plan is intended to achieve and that (when achieved) terminates behavior intended to achieve it | The goal of a financial statement audit is for the auditor to form an opinion regarding whether those statements are or aren’t free from error. |
| opinion | a personal belief or judgment that is not founded on proof or certainty | It was the auditor's opinion that the accounting records showed assets that, in fact, did not exist. |
| judgment | the act of judging or assessing a person or situation or event | To do so, you use your best professional judgment when assessing your client’s information and assertions. |
| assertion | a declaration that is made emphatically (as if no supporting evidence were necessary) | It was the company's assertion that the assets in question where indeed real. |
| vary | become different in some particular way, without permanently losing one's or its former characteristics or essence | Although every company is different, and each audit you work on will vary, you can follow some common procedures. |
| procedure | a particular course of action intended to achieve a result | Recording sales that were, in fact, only internal trades within the same corporation had become a common procedure. |
| accomplish | to gain with effort | Here are a few of the tasks you want to accomplish while conducting your audits. |
| relevance | the relation of something to the matter at hand | Evaluate relevance and reliability |
| reliability | the quality of being dependable or reliable | The reliability of that accounting company is known the world over. |
| competent | properly or sufficiently qualified or capable or efficient | You can’t issue an audit opinion unless you have sufficient, competent evidential matter |
| evidence | your basis for belief or disbelief; knowledge on which to base belief | Relevance and reliability are two hallmarks of good evidence. |
| substantiate | establish or strengthen as with new evidence or facts | When questioned, the company substantiated its claims with 3,500 pages of documents. |
| responsibility | the social force that binds you to the courses of action demanded by that force | It’s your responsibility to realize when GAAP aren’t being uniformly applied and to inform the client of that fact so it can correct the error. |
| inform | impart knowledge of some fact, state or affairs, or event to | It’s your responsibility to realize when GAAP aren’t being uniformly applied and to inform the client of that fact so it can correct the error. |
| generic | applicable to an entire class or group | To help you get your feet wet, here are generic descriptions for various management assertions. |
| delivery | the act of delivering or distributing something (as goods or mail) | For example, if the client records a sale of $5,000, you make sure a delivery of a good or service to a real-live customer actually happened. |
| current | occurring in or belonging to the present time | For example, if the audit client has a calendar year-end of December 31, only sales taking place prior to close of business on December 31 are recorded on the current financial statements. |
| obligation | the state of being obligated to do or pay something | It is the company's obligation to provide the government with five years' worth of accounting records. |
| process | a particular course of action intended to achieve a result | After all the hard work you do during the auditing process, your firm is the expert that gives its professional opinion about how much reliance users can place on the audit topic at hand. |
| reliance | the state of relying on something | The client's trust in and reliance on KPMG paid dividends down the road. |
Exercise
Open the exercise to begin the activity. Follow the instructions in the document.