ALPHABET C:
Compliance audit:
- a review of an organization’s financial records performed to determine whether the organization is following specific procedures, rules, or regulations set by some higher authority
- an audit performed to determine whether an entity that receives financial assistance from the government has complied with specific laws and regulations.
Confidential client information:
- client information that may not be disclosed without the specific consent of the client except under authoritative professional or legal investigation.
Contributory negligence:
- an auditor’s legal defense under which the auditor claims that the client failed to perform certain obligations and that it is the client’s failure to perform those obligations that brought about the claimed damages
Criminal liability for accountants:
- defrauding a person through knowing involvement with false financial statements.
Cycle approach:
- a method of dividing an audit by keeping closely related types of transactions and account balances in the same segment.
Confirmation:
- the auditor’s receipt of a written or oral response from an independent third party verifying the accuracy of information requested.
Current files:
- all audit files applicable to the year under audit.
Client business risk:
- the risk that the clint will fail to achieve its objectives related to (1) reliability of financial reporting, (2) effectiveness and efficiency of operations and (3) compliance with laws and regulations
Control risk:
- a measure of the auditor’s assessment of the likelihood that misstatements exceedig a tolerable amount in segment will not be prevented or detected by the client’s internal controls.
Chart of accounts:
- a listing of all the entity’s accounts, which classifies transactons into individual balance sheet and income statement accounts
Collusion:
- a cooperative effort among employees to steal assets or misstate records.
Control activities:
- policies and procedures in addition to those included in the other four components of internal control, that help ensure that necessary actions are taken to address risks in the achievement of the entity’s objectivs; they typically include the following five specific control activities: (1) adequate separation of duties, (2) proper Authorization of transactions and activities, (3) adequate documents and records, (4) physical control over assets and records and (5) independent checks on performance.
Control deficiency:
- a deficiency in the design or operation of controls that does not permit company personel to prevent or detect mistatements on a timely basis.
Control environment:
- the actions, policies, and procedures that reflect the overall attitudes of top management, directors and owners of an entity about internal control and its importance to the entity.
Control risk matrix:
- a methodology used to help the auditor assess control risk by matching key internal controls and internal control deficiencies with transaction-related audit objectives
Computed upper exception rate(CUER):
- the upper limit of the probable population exception rate; the highest exception rate in the population at a given ARACR ( acceptable risk of assessing control risk to low)
Cutoff misstatements:
- misstatements that take place as a result of current period transactions being recorded in a subsequent period, or subsequent period transactions being recorded in the current period.
Cutoff tests:
- tests to determine whether transactions recorded a few days before and after the balance sheet date are included in the correct period.
Cost accounting controls:
- controls over physical inventory and the related costs from the point at which raw materials are requisitioned to the point at which the manufactured product is completed and transferred to storage.
Cost accounting records:
- the accounting records concerned with the manufacture and processing of the goods and storing finished goods.
Capital acquisition and repayment cycle:
- the transaction cycle that involves the acquisition of capital resources in the form of interest-bearing debt and owners’ equity and the repayment of the capital.
Cash equivalents:
- excess cash invested in short-term, highly liquid investments such as time deposits, certificates of deposit and money market funds.
Cut-off bank statement:
- a partial-period bank statement and the related cancelled checks, duplicat deposit slips and other documents included in bank statements, mailed by the bank directly to the auditor; the auditor uses it to verify reconciling items on the client’s year-end bank reconciliation.
Committments:
- agreements that the entity will hold to a fixed set of conditions such as the purchase or sale of merchandise at a stated price, at a future date, regardless of what happens to profits or to the economy as a whole.
Completing the engagement checklist:
- a reminder to the auditor of aspects of the audit that may have bee overlooked
Contingent liability:
- a potential future obligation to an outside party for an unknown amount resulting from activities that have already taken place.
Compilation service:
- a non-audit engageent in which the accountant undertakes to present, in the form of financial statements, information that is the representation of management, without undertaking to express any assurance on the statements.