Auditing Theory and Practice
Assurance services ✔✔professional services that enhance the quality of information, or its
context, for decision-makers; many involve some form of attestation.
Attestation (attest) engagement ✔✔an examination, review, or agreed-upon procedures
engagement performed under the standards related to subject matter or an assertion that is the
responsibility of another party.
Assertion ✔✔a representation or declaration made by the responsible party, typically
management of the entity.
Suitable criteria ✔✔the standards or benchmarks used to measure and present the subject matter
and against which the CPA evaluates the subject matter; established or developed by groups
composed of experts that follow due process procedures, including exposure of the proposed
criteria for public comment; must have each of the following attributes: objectivity,
measurability, completeness, and relevance.
Financial reporting framework ✔✔a set of criteria used to determine measurement, recognition,
presentation, and disclosure of all material items appearing in the financial statements.
Generally accepted accounting principles (GAAP) ✔✔concepts or standards established by such
authoritative bodies as the FASB and the GASB and accepted by the accounting profession as
essential to proper financial reporting.
Applicable financial reporting framework ✔✔the financial reporting framework adopted by
management and, where appropriate, those charged with governance in the preparation of the
financial statements that are acceptable in view of the nature of the entity and the objectives of
the financial statements, or that is required by law or regulation.
Examination ✔✔ an attest engagement designed to provide the highest level of assurance that
CPAs provide on subject matter; ___ of financial statements is referred to as an audit.
Review ✔✔an engagement designed to express limited assurance relating to subject matter or an
assertion.
