國際審計準則詞匯表

2007年國際審計準則詞匯表

GLOSSARYOFTERMS1

(December2006)

Accesscontrols—Proceduresdesignedtorestrictaccesstoon-lineterminaldevices,

programsanddata.Accesscontrolsconsistof“userauthentication”and“user

authorization.”“Userauthentication”typicallyattemptstoidentifyauserthrough

uniquelogonidentifications,passwords,accesscardsorbiometricdata.“User

authorization”consistsofaccessrulestodeterminethecomputerresourceseachuser

mayaccess.Specifically,suchproceduresaredesignedtopreventordetect:

(a)Unauthorizedaccesstoon-lineterminaldevices,programsanddata;

(b)Entryofunauthorizedtransactions;

(c)Unauthorizedchangestodatafiles;

(d)Theuseofcomputerprogramsbyunauthorizedpersonnel;and

(e)Theuseofcomputerprogramsthathavenotbeenauthorized.

Accountingestimate—Anapproximationoftheamountofanitemintheabsenceofa

precisemeansofmeasurement.

Accountingrecords—Generallyincludetherecordsofinitialentriesandsupporting

records,suchaschecksandrecordsofelectronicfundtransfers;invoices;contracts;the

generalandsubsidiaryledgers;journalentriesandotheradjustmentstothefinancial

statementsthatarenotreflectedinformaljournalentries;andrecordssuchaswork

sheetsandspreadsheetssupportingcostallocations,computations,reconciliationsand

disclosures.

Adverseopinion—(seeModifiedauditor’sreport)

Agreed-uponproceduresengagement—Anengagementinwhichanauditorisengaged

tocarryoutthoseproceduresofanauditnaturetowhichtheauditorandtheentityand

anyappropriatethirdpartieshaveagreedandtoreportonfactualfindings.The

recipientsofthereportformtheirownconclusionsfromthereportbytheauditor.The

reportisrestrictedtothosepartiesthathaveagreedtotheprocedurestobeperformed

sinceothers,unawareofthereasonsfortheproceduresmaymisinterprettheresults.

Analyticalprocedures—Evaluationsoffinancialinformationmadebyastudyof

plausiblerelationshipsamongbothfinancialandnon-financialdata.Analytical

proceduresalsoencompasstheinvestigationofidentifiedfluctuationsandrelationships

1Inthecaseofpublicsectorengagements,thetermsinthisglossaryshouldbereadasreferringtotheir

publicsectorequivalents.

WhereaccountingtermshavenotbeendefinedinthepronouncementsoftheInternationalAuditingand

AssuranceStandardsBoard,referenceshouldbemadetotheGlossaryofTermspublishedbythe

InternationalAccountingStandardsBoard.

GLOSSARYOFTERMS

139GLOSSARY

GLOSSARY

thatareinconsistentwithotherrelevantinformationordeviatesignificantlyfrom

predictedamounts.

Annualreport—Adocumentissuedbyanentity,ordinarilyonanannualbasis,which

includesitsfinancialstatementstogetherwiththeauditor’sreportthereon.

Anomalouserror—(seeAuditsampling)

Applicablefinancialreportingframework—Thefinancialreportingframeworkadopted

bymanagementinpreparingthefinancialstatementsthattheauditorhasdeterminedis

acceptableinviewofthenatureoftheentityandtheobjectiveofthefinancial

statements,orthatisrequiredbylaworregulations.

Applicationcontrolsininformationtechnology—Manualorautomatedproceduresthat

typicallyoperateatabusinessprocesslevel.Applicationcontrolscanbepreventativeor

detectiveinnatureandaredesignedtoensuretheintegrityoftheaccountingrecords.

Accordingly,applicationcontrolsrelatetoproceduresusedtoinitiate,record,process

andreporttransactionsorotherfinancialdata.

Appropriateness—Themeasureofthequalityofevidence,thatis,itsrelevanceand

reliabilityinprovidingsupportfor,ordetectingmisstatementsin,theclassesof

transactions,accountbalances,anddisclosuresandrelatedassertions.

Assertions—Representationsbymanagement,explicitorotherwise,thatareembodied

inthefinancialstatements.

Assess—Analyzeidentifiedrisksoftoconcludeontheirsignificance.“Assess,”by

convention,isusedonlyinrelationtorisk.(alsoseeEvaluate)

Assistants—Personnelinvolvedinanindividualauditotherthantheauditor.

Association—(seeAuditorassociationwithfinancialinformation)

Assurance—(seeReasonableassurance)

Assuranceengagement—Anengagementinwhichapractitionerexpressesaconclusion

designedtoenhancethedegreeofconfidenceoftheintendedusersotherthanthe

responsiblepartyabouttheoutcomeoftheevaluationormeasurementofasubject

matteragainstcriteria.Theoutcomeoftheevaluationormeasurementofasubject

matteristheinformationthatresultsfromapplyingthecriteria(alsoseeSubjectmatter

information).Underthe“InternationalFrameworkforAssuranceEngagements”there

aretwotypesofassuranceengagementapractitionerispermittedtoperform:a

reasonableassuranceengagementandalimitedassuranceengagement.

Reasonableassuranceengagement—Theobjectiveofareasonableassurance

engagementisareductioninassuranceengagementrisktoanacceptablylowlevel

inthecircumstancesoftheengagementasthebasisforapositiveformof

expressionofthepractitioner’sconclusion.

Limitedassuranceengagement—Theobjectiveofalimitedassuranceengagement

isareductioninassuranceengagementrisktoalevelthatisacceptableinthe

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circumstancesoftheengagement,butwherethatriskisgreaterthanfora

reasonableassuranceengagement,asthebasisforanegativeformofexpressionof

thepractitioner’sconclusion.

Assuranceengagementrisk—Theriskthatthepractitionerexpressesaninappropriate

conclusionwhenthesubjectmatterinformationismateriallymisstated.

Attendance—Beingpresentduringallorpartofaprocessbeingperformedbyothers;

forexample,attendingphysicalinventorytakingwillenabletheauditortoinspect

inventory,toobservecomplianceofmanagement’sprocedurestocountquantitiesand

recordsuchcountsandtotest-countquantities.

Auditdocumentation—Therecordofauditproceduresperformed,2relevantaudit

evidenceobtained,andconclusionstheauditorreached(termssuchas“workingpapers”

or“workpapers”arealsosometimesused).

Auditevidence—Alloftheinformationusedbytheauditorinarrivingattheconclusions

onwhichtheauditopinionisbased.Auditevidenceincludestheinformationcontained

intheaccountingrecordsunderlyingthefinancialstatementsandotherinformation.

Auditfirm—(seeFirm)

Auditmattersofgovernanceinterest—Thosemattersthatarisefromtheauditof

financialstatementsand,intheopinionoftheauditor,arebothimportantandrelevantto

thosechargedwithgovernanceinoverseeingthefinancialreportinganddisclosure

process.Auditmattersofgovernanceinterestincludeonlythosemattersthathavecome

totheattentionoftheauditorasaresultoftheperformanceoftheaudit.

Auditoffinancialstatements—Theobjectiveofanauditoffinancialstatementsisto

enabletheauditortoexpressanopinionwhetherthefinancialstatementsareprepared,

inallmaterialrespects,inaccordancewithanapplicablefinancialreportingframework.

Anauditoffinancialstatementsisanassuranceengagement(seeAssurance

engagement).

Auditopinion—(seeOpinion)

Auditrisk—Auditriskistheriskthattheauditorexpressesaninappropriateaudit

opinionwhenthefinancialstatementsaremateriallymisstated.Auditriskisafunction

oftheriskofmaterialmisstatement(orsimply,the“riskofmaterialmisstatement”)(i.e.,

theriskthatthefinancialstatementsaremateriallymisstatedpriortoaudit)andtherisk

thattheauditorwillnotdetectsuchmisstatement(“detectionrisk”).Theriskofmaterial

misstatementhastwocomponents:inherentriskandcontrolrisk(asdescribedatthe

assertionlevelbelow).Detectionriskistheriskthattheauditor’sprocedureswillnot

detectamisstatementthatexistsinanassertionthatcouldbematerial,individuallyor

whenaggregatedwithothermisstatements.

2Auditproceduresperformedincludeauditplanning,asaddressedinISA300,“PlanninganAuditof

FinancialStatements.”

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141GLOSSARY

GLOSSARY

Inherentrisk—Inherentriskisthesusceptibilityofanassertiontoamisstatement,

thatcouldbematerial,individuallyorwhenaggregatedwithothermisstatements

assumingthattherewerenorelatedinternalcontrols.

Controlrisk—Controlriskistheriskthatamisstatementthatcouldoccurinan

assertionandthatcouldbematerial,individuallyorwhenaggregatedwithother

misstatements,willnotbepreventedordetectedandcorrectedonatimelybasisby

theentity’sinternalcontrol.

Auditsampling—Theapplicationofauditprocedurestolessthan100%ofitemswithin

anaccountbalanceorclassoftransactionssuchthatallsamplingunitshaveachanceof

selection.Thiswillenabletheauditortoobtainandevaluateauditevidenceaboutsome

characteristicoftheitemsselectedinordertoformorassistinformingaconclusion

concerningthepopulationfromwhichthesampleisdrawn.Auditsamplingcanuse

eitherastatisticaloranon-statisticalapproach.

Anomalouserror—Anerrorthatarisesfromanisolatedeventthathasnotrecurred

otherthanonspecificallyidentifiableoccasionsandisthereforenotrepresentative

oferrorsinthepopulation.

Confidencelevels—Themathematicalcomplementsofsamplingrisk.

Expectederror—Theerrorthattheauditorexpectstobepresentinthepopulation.

Non-samplingrisk—Arisesfromfactorsthatcausetheauditortoreachanerroneous

conclusionforanyreasonnotrelatedtothesizeofthesample.Forexample,most

auditevidenceispersuasiveratherthanconclusive,theauditormightuse

inappropriateprocedures,ortheauditormightmisinterpretevidenceandfailto

recognizeanerror.

Non-statisticalsampling—Anysamplingapproachthatdoesnothavethe

characteristicsofstatisticalsampling.

Population—Theentiresetofdatafromwhichasampleisselectedandabout

whichtheauditorwishestodrawconclusions.Apopulationmaybedividedinto

strata,orsub-populations,witheachstratumbeingexaminedseparately.Theterm

populationisusedtoincludethetermstratum.

Samplingrisk—Arisesfromthepossibilitythattheauditor’sconclusion,basedona

samplemaybedifferentfromtheconclusionreachediftheentirepopulationwere

subjectedtothesameauditprocedure.

Samplingunit—Theindividualitemsconstitutingapopulation,forexamplechecks

listedondepositslips,creditentriesonbankstatements,salesinvoicesordebtors’

balances,oramonetaryunit.

Statisticalsampling—Anyapproachtosamplingthathasthefollowing

characteristics:

(a)Randomselectionofasample;and

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(b)Useofprobabilitytheorytoevaluatesampleresults,includingmeasurement

ofsamplingrisk.

Stratification—Theprocessofdividingapopulationintosubpopulations,eachof

whichisagroupofsamplingunitswhichhavesimilarcharacteristics(often

monetaryvalue).

Tolerableerror—Themaximumerrorinapopulationthattheauditoriswillingto

accept.

Totalerror—Eithertherateofdeviationortotalmisstatement.

Auditor—Theengagementpartner.Theterm“auditor”isusedtodescribeeitherthe

engagementpartnerortheauditfirm.Whereitappliestotheengagementpartner,it

describestheobligationsorresponsibilitiesoftheengagementpartner.Suchobligations

orresponsibilitiesmaybefulfilledbyeithertheengagementpartneroramemberofthe

auditteam.Whereitisexpresslyintendedthattheobligationorresponsibilitybe

fulfilledbytheengagementpartner,theterm“engagementpartner”ratherthan“auditor”

isused.(Theterm“auditor”maybeusedwhendescribingrelatedservicesand

assuranceengagementsotherthanaudits.Suchreferenceisnotintendedtoimplythata

personperformingarelatedserviceorassuranceengagementotherthananauditneed

necessarilybetheauditoroftheentity’sfinancialstatements.)

Existingauditor—Theauditorofthefinancialstatementsofthecurrentperiod.

Externalauditor—Whereappropriatetheterm“externalauditor”isusedto

distinguishtheexternalauditorfromaninternalauditor.

Incomingauditor—Theauditorofthefinancialstatementsofthecurrentperiod,

whereeitherthefinancialstatementsofthepriorperiodhavebeenauditedby

anotherauditor(inthiscasetheincomingauditoralsoknownasasuccessor

auditor),ortheauditisaninitialauditengagement.

Internalauditor—Apersonperforminganinternalaudit.

Otherauditor—Anauditor,otherthantheprincipalauditor,withresponsibilityfor

reportingonthefinancialinformationofacomponent,whichisincludedinthe

financialstatementsauditedbytheprincipalauditor.Otherauditorsinclude

affiliatedfirms,whetherusingthesamenameornot,andcorrespondents,aswellas

unrelatedauditors.

Predecessorauditor—Theauditorwhowaspreviouslytheauditorofanentityand

whohasbeenreplacedbyanincomingauditor.

Principalauditor—Theauditorwithresponsibilityforreportingonthefinancial

statementsofanentitywhenthosefinancialstatementsincludefinancial

informationofoneormorecomponentsauditedbyanotherauditor.

Proposedauditor—Anauditorwhoisaskedtoreplaceanexistingauditor.

GLOSSARYOFTERMS

143GLOSSARY

GLOSSARY

Successorauditor—Anauditorreplacinganexistingauditor(alsoknownasan

incomingauditor).

Auditorassociationwithfinancialinformation—Anauditorisassociatedwithfinancial

informationwhentheauditorattachesareporttothatinformationorconsentstotheuse

oftheauditor’snameinaprofessionalconnection.

Comparatives—Comparativesinfinancialstatements,maypresentamounts(suchas

financialposition,resultsofoperations,cashflows)andappropriatedisclosuresofan

entityformorethanoneperiod,dependingontheframework.Theframeworksand

methodsofpresentationareasfollows:

(a)Correspondingfigureswhereamountsandotherdisclosuresforthepreceding

periodareincludedaspartofthecurrentperiodfinancialstatements,andare

intendedtobereadinrelationtotheamountsandotherdisclosuresrelatingtothe

currentperiod(referredtoas“currentperiodfigures”).Thesecorresponding

figuresarenotpresentedascompletefinancialstatementscapableofstanding

alone,butareanintegralpartofthecurrentperiodfinancialstatementsintended

tobereadonlyinrelationshiptothecurrentperiodfigures.

(b)Comparativefinancialstatementswhereamountsandotherdisclosuresforthe

precedingperiodareincludedforcomparisonwiththefinancialstatementsofthe

currentperiod,butdonotformpartofthecurrentperiodfinancialstatements.

Comparativefinancialstatements—(seeComparatives)

Compilationengagement—Anengagementinwhichaccountingexpertise,asopposed

toauditingexpertise,isusedtocollect,classifyandsummarizefinancialinformation.

Component—Adivision,branch,subsidiary,jointventure,associatedcompanyorother

entitywhosefinancialinformationisincludedinfinancialstatementsauditedbythe

principalauditor.

Componentofacompletesetoffinancialstatements—Theapplicablefinancialreporting

frameworkadoptedinpreparingthefinancialstatementsdetermineswhatconstitutesa

completesetoffinancialstatements.Componentsofacompletesetoffinancial

statementsinclude:asinglefinancialstatement,specifiedaccounts,elementsof

accountsoritemsinafinancialstatement.

Comprehensivebasisofaccounting—Acomprehensivebasisofaccountingcomprisesa

setofcriteriausedinpreparingfinancialstatementswhichappliestoallmaterialitems

andwhichhassubstantialsupport.

Computer-assistedaudittechniques—Applicationsofauditingproceduresusingthe

computerasanaudittool(alsoknownasCAATs).

Computerinformationsystems(CIS)environment—Existswhenacomputerofanytype

orsizeisinvolvedintheprocessingbytheentityoffinancialinformationof

significancetotheaudit,whetherthatcomputerisoperatedbytheentityorbyathird

party.

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GLOSSARY144

Confidencelevels—(seeAuditsampling)

Confirmation—Aspecifictypeofinquirythatistheprocessofobtaininga

representationofinformationorofanexistingconditiondirectlyfromathirdparty.

Continuingauditor—(seeAuditor)

Controlactivities—Thosepoliciesandproceduresthathelpensurethatmanagement

directivesarecarriedout.Controlactivitiesareacomponentofinternalcontrol.

Controlenvironment—Includesthegovernanceandmanagementfunctionsandthe

attitudes,awarenessandactionsofthosechargedwithgovernanceandmanagement

concerningtheentity’sinternalcontrolanditsimportanceintheentity.Thecontrol

environmentisacomponentofinternalcontrol.

Controlrisk—(seeAuditrisk)

Corporategovernance—(seeGovernance)

Correspondingfigures—(seeComparatives)

Criteria—Thebenchmarksusedtoevaluateormeasurethesubjectmatterincluding,

whererelevant,benchmarksforpresentationanddisclosure.Criteriacanbeformalor

lessformal.Therecanbedifferentcriteriaforthesamesubjectmatter.Suitablecriteria

arerequiredforreasonablyconsistentevaluationormeasurementofasubjectmatter

withinthecontextofprofessionaljudgment.

Suitablecriteria—Exhibitthefollowingcharacteristics:

(a)Relevance:relevantcriteriacontributetoconclusionsthatassistdecisionmaking

bytheintendedusers.

(b)Completeness:criteriaaresufficientlycompletewhenrelevantfactorsthat

couldaffecttheconclusionsinthecontextoftheengagementcircumstances

arenotomitted.Completecriteriainclude,whererelevant,benchmarksfor

presentationanddisclosure.

(c)Reliability:reliablecriteriaallowreasonablyconsistentevaluationor

measurementofthesubjectmatterincluding,whererelevant,presentation

anddisclosure,whenusedinsimilarcircumstancesbysimilarlyqualified

practitioners.

(d)Neutrality:neutralcriteriacontributetoconclusionsthatarefreefrombias.

(e)Understandability:understandablecriteriacontributetoconclusionsthatare

clear,comprehensive,andnotsubjecttosignificantlydifferent

interpretations.

Currentperiodfigures—Amountsandotherdisclosuresrelatingtothecurrentperiod.

Database—Acollectionofdatathatissharedandusedbyanumberofdifferentusers

fordifferentpurposes.

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145GLOSSARY

GLOSSARY

Dateofthefinancialstatements—Thedateoftheendofthelatestperiodcoveredbythe

financialstatements,whichisnormallythedateofthemostrecentbalancesheetinthe

financialstatementssubjecttoaudit.

Dateofapprovalofthefinancialstatements—Thedateonwhichthosewiththe

recognizedauthorityassertthattheyhavepreparedtheentity’scompletesetoffinancial

statements,includingtherelatednotes,andthattheyhavetakenresponsibilityforthem.

Insomejurisdictions,thelaworregulationidentifiestheindividualsorbodies(for

example,thedirectors)thatareresponsibleforconcludingthatacompletesetof

financialstatementshasbeenprepared,andspecifiesthenecessaryapprovalprocess.In

otherjurisdictions,theapprovalprocessisnotprescribedinlaworregulationandthe

entityfollowsitsownproceduresinpreparingandfinalizingitsfinancialstatementsin

viewofitsmanagementandgovernancestructures.Insomejurisdictions,finalapproval

ofthefinancialstatementsbyshareholdersisrequiredbeforethefinancialstatements

areissuedpublicly.Inthesejurisdictions,finalapprovalbyshareholdersisnot

necessaryfortheauditortoconcludethatsufficientappropriateauditevidencehasbeen

obtained.ThedateofapprovalofthefinancialstatementsforpurposesoftheISAsis

theearlierdateonwhichthosewiththerecognizedauthoritydeterminethatacomplete

setoffinancialstatementshasbeenprepared.

Dateoftheauditor’sreport—Thedateselectedbytheauditortodatethereportonthe

financialstatements.Theauditor’sreportisnotdatedearlierthanthedateonwhichthe

auditorhasobtainedsufficientappropriateauditevidenceonwhichtobasetheopinion

onthefinancialstatements.3Sufficientappropriateauditevidenceincludesevidencethat

theentity’scompletesetoffinancialstatementshasbeenpreparedandthatthosewith

therecognizedauthorityhaveassertedthattheyhavetakenresponsibilityforthem.

Datethefinancialstatementsareissued—Thedatethattheauditor’sreportandaudited

financialstatementsaremadeavailabletothirdparties,whichmaybe,inmany

circumstances,thedatethattheyarefiledwitharegulatoryauthority.

Detectionrisk—(seeAuditrisk)

Disclaimerofopinion—(seeModifiedauditor’sreport)

ElectronicDataInterchange(EDI)—Theelectronictransmissionofdocumentsbetween

organizationsinamachine-readableform.

Emphasisofmatterparagraph(s)—(seeModifiedauditor’sreport)

Employeefraud—Fraudinvolvingonlyemployeesoftheentitysubjecttotheaudit.

Encryption(cryptography)—Theprocessoftransformingprogramsandinformationinto

aformthatcannotbeunderstoodwithoutaccesstospecificdecodingalgorithms

(cryptographickeys).Forexample,theconfidentialpersonaldatainapayrollsystem

maybeencryptedagainstunauthorizeddisclosureormodification.Encryptioncan

3Inrarecircumstances,laworregulationalsoidentifiesthepointinthefinancialstatementreporting

processatwhichtheauditisexpectedtobecomplete.

GLOSSARYOFTERMS

GLOSSARY146

provideaneffectivecontrolforprotectingconfidentialorsensitiveprogramsand

informationfromunauthorizedaccessormodification.However,effectivesecurity

dependsuponpropercontrolsoveraccesstothecryptographickeys.

Engagementdocumentation—Therecordofworkperformed,resultsobtained,and

conclusionsthepractitionerreached(termssuchas“workingpapers”or“workpapers”

aresometimesused).Thedocumentationforaspecificengagementisassembledinan

engagementfile.

Engagementpartner—Thepartnerorotherpersoninthefirmwhoisresponsibleforthe

engagementanditsperformance,andforthereportthatisissuedonbehalfofthefirm,

andwho,whererequired,hastheappropriateauthorityfromaprofessional,legalor

regulatorybody.

Engagementletter—Anengagementletterdocumentsandconfirmstheauditor’s

acceptanceoftheappointment,theobjectiveandscopeoftheaudit,theextentofthe

auditor’sresponsibilitiestotheclientandtheformofanyreports.

Engagementqualitycontrolreview—Aprocessdesignedtoprovideanobjective

evaluation,beforethereportisissued,ofthesignificantjudgmentstheengagementteam

madeandtheconclusionstheyreachedinformulatingthereport.

Engagementqualitycontrolreviewer—Apartner,otherpersoninthefirm,suitably

qualifiedexternalperson,orateammadeupofsuchindividuals,withsufficientand

appropriateexperienceandauthoritytoobjectivelyevaluate,beforethereportisissued,

thesignificantjudgmentstheengagementteammadeandtheconclusionstheyreached

informulatingthereport.

Engagementteam—Allpersonnelperforminganengagement,includinganyexperts

contractedbythefirminconnectionwiththatengagement.

Entity’sriskassessmentprocess—Acomponentofinternalcontrolthatistheentity’s

processforidentifyingbusinessrisksrelevanttofinancialreportingobjectivesand

decidingaboutactionstoaddressthoserisks,andtheresultsthereof.

Environmentalmatters—

(a)Initiativestoprevent,abate,orremedydamagetotheenvironment,ortodeal

withconservationofrenewableandnon-renewableresources(suchinitiatives

mayberequiredbyenvironmentallawsandregulationsorbycontract,orthey

maybeundertakenvoluntarily);

(b)Consequencesofviolatingenvironmentallawsandregulations;

(c)Consequencesofenvironmentaldamagedonetoothersortonaturalresources;

and

(d)Consequencesofvicariousliabilityimposedbylaw(forexample,liabilityfor

damagescausedbypreviousowners).

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147GLOSSARY

GLOSSARY

Environmentalperformancereport—Areport,separatefromthefinancialstatements,in

whichanentityprovidesthirdpartieswithqualitativeinformationontheentity’s

commitmentstowardstheenvironmentalaspectsofthebusiness,itspoliciesandtargets

inthatfield,itsachievementinmanagingtherelationshipbetweenitsbusinessprocesses

andenvironmentalrisk,andquantitativeinformationonitsenvironmentalperformance.

Environmentalrisk—Incertaincircumstances,factorsrelevanttotheassessmentof

inherentriskforthedevelopmentoftheoverallauditplanmayincludetheriskof

materialmisstatementofthefinancialstatementsduetoenvironmentalmatters.

Error—Anunintentionalmisstatementinfinancialstatements,includingtheomissionof

anamountoradisclosure.

Evaluate—Identifyandanalyzetherelevantissues,includingperformingfurther

proceduresasnecessary,tocometoaspecificconclusiononamatter.“Evaluation,”by

convention,isusedonlyinrelationtoarangeofmatters,includingevidence,theresults

ofproceduresandtheeffectivenessofmanagement’sresponsetoarisk.(alsosee

Assess)

Existingauditor—(seeAuditor)

Expectederror—(seeAuditsampling)

Experiencedauditor—Anindividual(whetherinternalorexternaltothefirm)whohasa

reasonableunderstandingof(a)auditprocesses,(b)ISAsandapplicablelegaland

regulatoryrequirements,(c)thebusinessenvironmentinwhichtheentityoperates,and

(d)auditingandfinancialreportingissuesrelevanttotheentity’sindustry.

Expert—Apersonorfirmpossessingspecialskill,knowledgeandexperienceina

particularfieldotherthanaccountingandauditing.

Externalaudit—Anauditperformedbyanexternalauditor.

Externalauditor—(seeAuditor)

Externalconfirmation—Theprocessofobtainingandevaluatingauditevidencethrough

adirectcommunicationfromathirdpartyinresponsetoarequestforinformationabout

aparticularitemaffectingassertionsmadebymanagementinthefinancialstatements.

Fairvalue—Theamountforwhichanassetcouldbeexchanged,oraliabilitysettled,

betweenknowledgeable,willingpartiesinanarm’slengthtransaction.

Financialstatements—Astructuredrepresentationofthefinancialinformation,which

ordinarilyincludesaccompanyingnotes,derivedfromaccountingrecordsandintended

tocommunicateanentity’seconomicresourcesorobligationsatapointintimeorthe

changesthereinforaperiodoftimeinaccordancewithafinancialreportingframework.

Thetermcanrefertoacompletesetoffinancialstatements,b