_TERMINE_RELATIVO_VERIFICA_CONTI_E_REVISIONE_BILANCI_(INGLESE)
_SPIEGAZIONE_DEL_TERMINE_(INGLESE)
ACCEPTANCE SAMPLING
SAMPLING TO DETERMINE WHETHER INTERNAL CONTROL COMPLIANCE IS GREATER THAN OR LESS THAN THE TOLERABLE DEVIATION RATE. 
ACCOUNTING AND REVIEW SERVICES
ARE OFFICIAL PRONOUNCEMENTS COVERING COMPILATION AND REVIEW ENGAGEMENTS. COMPILATION OF FINANCIAL STATEMENTS IS PRESENTING IN THE FORM OF FINANCIAL STATEMENTS INFORMATION THAT IS THE REPRESENTATION OF MANAGEMENT (OWNERS) WITHOUT UNDERTAKING TO EXPRESS ASSURANCE ON THE STATEMENTS. REVIEW OF FINANCIAL STATEMENTS IS INQUIRY AND ANALYTICAL PROCEDURES THAT PROVIDE THE ACCOUNTANT WITH A BASIS FOR EXPRESSING LIMITED ASSURANCE THAT THERE ARE NO MATERIAL MODIFICATIONS THAT SHOULD BE MADE TO THE STATEMENTS FOR THEM TO BE IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR, IF APPLICABLE, ANOTHER COMPREHENSIVE BASIS OF ACCOUNTING. 
ACCOUNTING DATA
INCLUDES GENERAL AND SUBSIDIARY LEDGERS AND OTHER RECORDS SUCH AS WORKSHEETS AND SPREADSHEETS THAT SUPPORT FINANCIAL STATEMENTS. IT MAY BE IN COMPUTER READABLE FORM OR ON PAPER. 
ACCOUNTING ESTIMATE
AN APPROXIMATION OF A FINANCIAL STATEMENT ELEMENT, ITEM, OR ACCOUNT. ACCOUNTING ESTIMATES ARE OFTEN INCLUDED IN HISTORICAL FINANCIAL STATEMENTS BECAUSE THE MEASUREMENT OF SOME AMOUNTS OR THE VALUATION OF SOME ACCOUNTS IS UNCERTAIN PENDING OUTCOME OF FUTURE EVENTS AND RELEVANT DATA CONCERNING EVENTS THAT HAVE ALREADY OCCURRED CANNOT BE ACCUMULATED ON A TIMELY, COST-EFFECTIVE BASIS. 
ACCOUNTING PRINCIPLES
ARE ALTERNATIVE WAYS OF REPORTING AND DISCLOSING INFORMATION IN FINANCIAL STATEMENTS AND RELATED FOOTNOTES. 
ACCOUNTS RECEIVABLE
DEBTS DUE FROM CUSTOMERS FROM SALES OF PRODUCTS AND SERVICES. NORMALLY REPORTED AS A CURRENT ASSET. 
ADJUSTING ENTRY(IES)
ACCOUNTING ENTRIES MADE AT THE END OF AN ACCOUNTING PERIOD TO ALLOCATE ITEMS BETWEEN ACCOUNTING PERIODS. 
ADVERSE
AN AUDIT OPINION THAT THE FINANCIAL STATEMENTS TAKEN AS A WHOLE ARE NOT PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. 
ADVISORY
SERVICES ARE A TYPE OF CONSULTING SERVICE IN WHICH THE CPA DEVELOPS THE FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS PRESENTED FOR CLIENT CONSIDERATION AND DECISION MAKING. THIS DIFFERS FROM ATTESTATION SERVICES WHERE THE CPA EXPRESSES A CONCLUSION ABOUT THE RELIABILITY OF A WRITTEN ASSERTION THAT IS THE RESPONSIBILITY OF ANOTHER. 
AGGREGATE (AGGREGATED)
CONSTITUTING THE WHOLE. AGGREGATE EXPENSES INCLUDE EXPENSES OF ALL DIVISIONS COMBINED FOR THE ENTIRE YEAR. 
AGREED-UPON PROCEDURES
AN ENGAGEMENT IN WHICH THE CLIENT SPECIFIES PROCEDURES AND THE ACCOUNTANT AGREES TO PERFORM THOSE PROCEDURES. AN ACCOUNTANT MAY ACCEPT AN ENGAGEMENT LIMITED TO APPLYING AGREED-UPON PROCEDURES TO FINANCIAL STATEMENT ELEMENTS, WHERE THE SCOPE OF THE ENGAGEMENT IS NOT SUFFICIENT TO EXPRESS AN OPINION ON THE ELEMENTS, IF THE USERS ASSUME RESPONSIBILITY FOR SUFFICIENCY OF THE PROCEDURES, AND USE OF THE REPORT IS RESTRICTED TO SPECIFIED USERS. THE GENERAL STANDARDS AND THE FIRST FIELDWORK STANDARD RELATED TO PLANNING AND SUPERVISION APPLY TO SUCH ENGAGEMENTS. THE OTHER FIELDWORK STANDARDS AND THE REPORTING STANDARDS DO NOT APPLY. 
AICPA
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE PROFESSIONAL ORGANIZATION OF CPAS IN THE U.S. IT IS A PRIVATE ORGANIZATION OF CPAS, NOT AN ARM OF THE GOVERNMENT. EACH STATE ISSUES CPA CERTIFICATES, NOT THE AICPA. SINCE EACH STATE MAKES ITS OWN LAWS, EACH STATE COULD PREPARE AND GRADE THEIR OWN CPA EXAMINATION. HOWEVER, EACH OF THE STATES DOES USE THE UNIFORM CPA EXAMINATION WHICH IS PREPARED AND GRADED BY THE AICPA. 
ALLOCATION
DISTRIBUTION ACCORDING TO A PLAN. DEPRECIATION, AMORTIZATION, AND DEPLETION ARE ALL METHODS OF ALLOCATING A COST TO THE PERIODS BENEFITED. 
ALLOWANCE FOR DOUBTFUL ACCOUNTS
A CONTRA ASSET ACCOUNT WITH A CREDIT BALANCE USED TO REDUCE THE CARRYING AMOUNT (REPORTED VALUE) OF ACCOUNTS RECEIVABLE TO NET REALIZABLE VALUE. THE ALLOWANCE BALANCE IS THE ESTIMATED TOTAL OF UNCOLLECTIBLE ACCOUNTS INCLUDED IN ACCOUNTS RECEIVABLE. 
ALLOWANCE FOR SAMPLING RISK
THE DIFFERENCE BETWEEN A SAMPLE ESTIMATE AND THE PROJECTED POPULATION CHARACTERISTIC AT A SPECIFIED SAMPLING RISK. THIS ALLOWANCE IS ALSO THE DIFFERENCE BETWEEN THE EXPECTED ERROR RATE AND THE TOLERABLE DEVIATION RATE. 
ANALYTICAL PROCEDURE
A COMPARISON OF FINANCIAL STATEMENT AMOUNTS WITH THE AUDITOR'S EXPECTATIONS. AN EXAMPLE IS THE COMPARISON OF ACTUAL INTEREST EXPENSE FOR THE YEAR (A FINANCIAL STATEMENT AMOUNT) WITH AN ESTIMATE OF WHAT THAT INTEREST EXPENSE SHOULD BE. THE ESTIMATE CAN BE FOUND BY MULTIPLYING A REASONABLE INTEREST RATE TIMES THE AVERAGE BALANCE OF INTEREST BEARING DEBT OUTSTANDING DURING THE YEAR (THE AUDITOR'S EXPECTATION). IF THE ACTUAL INTEREST EXPENSE DIFFERS SIGNIFICANTLY FROM THE EXPECTATION THE AUDITOR SHOULD DETERMINE THE REASON FOR THE DIFFERENCE AND INCLUDE THE EXPLANATION IN THE AUDIT WORKING PAPERS. 
ANALYZE
IDENTIFY AND CLASSIFY ITEMS FOR FURTHER STUDY. 
ANTICIPATED
EXPECTED. 
APPLICATION CONTROL
PROGRAMMED PROCEDURES IN APPLICATION SOFTWARE DESIGNED TO ENSURE COMPLETENESS AND ACCURACY OF INFORMATION. 
APPROVE (APPROVING)
TO AUTHORIZE. A MANAGER AUTHORIZES A TRANSACTION BY SIGNING A VOUCHER PROVIDING APPROVAL FOR THE DISBURSEMENT. 
ASCERTAIN
AS AN AUDITING PROCEDURE, TO DETERMINE OR TO DISCOVER WITH CERTAINTY. FOR EXAMPLE, TO ASCERTAIN THE DATE AT WHICH AN INVESTMENT WAS PURCHASED BY EXAMINING SOURCE DOCUMENTS. 
ASSERTION
MANAGEMENT ASSERTS THAT FINANCIAL STATEMENTS ARE CORRECT WITH REGARD TO EXISTENCE OR OCCURRENCE OF ASSETS, LIABILITIES OR TRANSACTIONS, COMPLETENESS OF INFORMATION IN THE FINANCIAL STATEMENTS, RIGHTS AND OBLIGATIONS AT A POINT IN TIME, APPROPRIATE VALUATION OR ALLOCATION, PRESENTATION AND DISCLOSURE OF CLASSIFICATIONS AND SUMMARIZATIONS. 
ASSESS (ASSESSES) (ASSESSING)
TO DETERMINE THE VALUE, SIGNIFICANCE, OR EXTENT OF. 
ASSESSED
DETERMINED. THE LEVEL OF CONTROL RISK DETERMINED BY THE AUDITOR TO EXIST, BASED ON TESTS OF CONTROLS, IS THE ASSESSED LEVEL OF CONTROL RISK. 
ASSURANCE
THE LEVEL OF CONFIDENCE ONE HAS IN A PROPOSITION. 
ATTEST (ATTESTATION) REPORT
AN ATTEST ENGAGEMENT IS ONE IN WHICH A PRACTITIONER IS ENGAGED TO ISSUE A WRITTEN COMMUNICATION EXPRESSING A CONCLUSION ABOUT THE RELIABILITY OF A WRITTEN ASSERTION THAT IS THE RESPONSIBILITY OF ANOTHER PARTY. A FINANCIAL STATEMENT AUDIT IS ONE TYPE OF ATTESTATION ENGAGEMENT. 
ATTORNEY'S LETTER
AN ATTORNEY'S LETTER IS SIGNED BY THE CLIENT'S LAWYER AND ADDRESSED TO THE AUDITOR. IT IS THE AUDITOR'S PRIMARY MEANS OF OBTAINING CORROBORATION OF THE INFORMATION FURNISHED BY MANAGEMENT CONCERNING LITIGATION, CLAIMS, AND ASSESSMENTS. 
ATTRIBUTE SAMPLING
THE CHARACTERISTIC TESTED IS A PROPERTY THAT HAS ONLY TWO POSSIBLE VALUES (AN ERROR EXISTS OR IT DOES NOT). 
AUDIT ADJUSTMENT
AN AUDIT ADJUSTMENT, WHETHER OR NOT RECORDED BY THE ENTITY, IS A PROPOSED CORRECTION OF THE FINANCIAL STATEMENTS THAT MAY NOT HAVE BEEN DETECTED EXCEPT THROUGH THE AUDITING PROCEDURES PERFORMED. 
AUDIT COMMITTEE
A COMMITTEE OF THE BOARD OF DIRECTORS RESPONSIBLE FOR OVERSIGHT OF THE FINANCIAL REPORTING PROCESS, SELECTION OF THE INDEPENDENT AUDITOR, AND RECEIPT OF AUDIT RESULTS. 
AUDIT OBJECTIVE
IN OBTAINING EVIDENTIAL MATTER IN SUPPORT OF FINANCIAL STATEMENT ASSERTIONS, THE AUDITOR DEVELOPS SPECIFIC AUDIT OBJECTIVES IN THE LIGHT OF THOSE ASSERTIONS. IN DEVELOPING THE AUDIT OBJECTIVES OF A PARTICULAR ENGAGEMENT, THE AUDITOR SHOULD CONSIDER THE SPECIFIC CIRCUMSTANCES OF THE ENTITY, INCLUDING THE NATURE OF ITS ECONOMIC ACTIVITY AND ACCOUNTING PRACTICES UNIQUE TO ITS INDUSTRY. FOR EXAMPLE, ONE AUDIT OBJECTIVE RELATED TO THE COMPLETENESS ASSERTION THAT AN AUDITOR MIGHT DEVELOP FOR INVENTORY BALANCES IS THAT INVENTORY QUANTITIES INCLUDE ALL PRODUCTS, MATERIALS, AND SUPPLIES ON HAND. 
AUDIT PLAN
AUDIT PLANNING INVOLVES DEVELOPING AN OVERALL STRATEGY FOR THE EXPECTED CONDUCT AND SCOPE OF THE AUDIT. THE NATURE, EXTENT, AND TIMING OF PLANNING VARIES WITH THE SIZE AND COMPLEXITY OF THE ENTITY, EXPERIENCE WITH THE ENTITY, AND KNOWLEDGE OF THE ENTITY'S BUSINESS. 
AUDIT RISK
A COMBINATION OF THE RISK THAT MATERIAL ERRORS WILL OCCUR IN THE ACCOUNTING PROCESS AND THE RISK THAT THE ERRORS WOULD NOT BE DISCOVERED BY AUDIT TESTS. AUDIT RISK INCLUDES UNCERTAINTIES DUE TO SAMPLING (SAMPLING RISK) AND DUE TO OTHER FACTORS (NONSAMPLING RISK). 
AUDITING STANDARDS BOARD
STATEMENTS ON AUDITING STANDARDS ARE ISSUED BY THE AUDITING STANDARDS BOARD, THE SENIOR TECHNICAL BODY OF THE AICPA DESIGNATED TO ISSUE AUDITING PRONOUNCEMENTS. 
AUTHORIZE (AUTHORIZATION)
TO GIVE PERMISSION FOR. A MANAGER AUTHORIZES A TRANSACTION BY SIGNING A VOUCHER PROVIDING AUTHORIZATION FOR THE DISBURSEMENT.
BACKUP
A COPY OF A COMPUTER PROGRAM OR FILE THAT IS STORED SEPARATELY FROM THE ORIGINAL. 
BATCH
A SET OF COMPUTER DATA OR JOBS TO BE PROCESSED IN A SINGLE PROGRAM RUN. 
BILL OF LADING
A DOCUMENT ISSUED BY A CARRIER TO A SHIPPER, LISTING AND ACKNOWLEDGING RECEIPT OF GOODS FOR TRANSPORT AND SPECIFYING TERMS OF DELIVERY. 
BLIND TRUST
A FINANCIAL ARRANGEMENT IN WHICH A PERSON AVOIDS POSSIBLE CONFLICT OF INTEREST BY TRANSFERRING FINANCIAL AFFAIRS TO A FIDUCIARY WHO HAS SOLE DISCRETION AS TO ASSET MANAGEMENT. THE PERSON CHOOSING THE TRUST ALSO GIVES UP THE RIGHT TO INFORMATION REGARDING STATUS OF THE ASSETS.
CANCEL SUPPORTING DOCUMENTS
TO MARK SUPPORTING DOCUMENTS AS HAVING ALREADY BEEN USED TO SUPPORT A TRANSACTION. THE PURPOSE IS SO THE SAME DOCUMENTS CAN'T BE USED AS SUPPORT FOR A SECOND TRANSACTION. AN EXAMPLE IS STAMPING VOUCHERS "PAID" AND MARKING THEM WITH THE CHECK NUMBER. 
CAPITALIZED
RECORDED AS AN ASSET. A CAPITALIZED LEASE IS IN SUBSTANCE A PURCHASE TO THE LESSEE. AN ASSET IS RECORDED EQUAL TO THE PRESENT VALUE OF THE LEASE PAYMENTS, WHICH IS ALSO RECORDED AS A LIABILITY. PAYMENTS, PARTLY INTEREST AND PARTLY PRINCIPAL, ARE MADE ON THE LEASE LIABILITY. THE LEASE ASSET IS DEPRECIATED BY THE LESSEE AS THOUGH IT WERE LEGALLY OWNED BY THE LESSEE. 
CAVEAT
A WARNING OR CAUTION. 
CHECK DIGIT
A REDUNDANT DIGIT ADDED TO A CODE TO CHECK THE ACCURACY OF OTHER CHARACTERS IN THE CODE. 
CHECK REGISTER
A LISTING OF CHECKS ISSUED, NORMALLY IN NUMERIC SEQUENCE AND IN ORDER BY DATE ISSUED. 
CLASSIFICATION
ARRANGEMENT OR GROUPING. ASSETS AND LIABILITIES ARE NORMALLY CLASSIFIED AS CURRENT OR NONCURRENT. 
COLLATERALIZE
TO PLEDGE PROPERTY AS SECURITY (COLLATERAL) FOR A DEBT. 
COLLUSION
A SECRET AGREEMENT BETWEEN TWO OR MORE PARTIES FOR FRAUD OR DECEIT. 
COMFORT LETTER
A LETTER WRITTEN BY THE AUDITOR ADDRESSED TO AN UNDERWRITER OF SECURITIES WHICH EXPRESSES AN OPINION ABOUT WHETHER THE AUDITED FINANCIAL STATEMENTS AND SCHEDULES IN THE REGISTRATION STATEMENT COMPLY AS TO FORM WITH APPLICABLE ACCOUNTING REQUIREMENTS OF THE ACT AND RELATED RULES AND REGULATIONS ADOPTED BY THE SEC. THE PROCEDURES TO BE PERFORMED ARE SPECIFIED BY THE UNDERWRITER. 
COMPARABILITY
USERS EVALUATE ACCOUNTING INFORMATION BY COMPARISON. SIMILAR COMPANIES ACCOUNT FOR SIMILAR TRANSACTIONS IN SIMILAR WAYS. ANOTHER GOAL IS COMPARISON OF ONE COMPANY'S INFORMATION FROM ONE PERIOD TO THE NEXT (CONSISTENCY). OPERATING TRENDS SHOULD NOT BE DISGUISED BY CHANGING ACCOUNTING METHODS. 
COMPARATIVE
FINANCIAL STATEMENTS OF A PRIOR PERIOD SHOWN WITH THOSE OF THE CURRENT PERIOD TO AID IN COMPARISONS BETWEEN PERIODS. 
COMPARE (COMPARISON)
AN AUDIT PROCEDURE. THE AUDITOR OBSERVES SIMILARITIES AND DIFFERENCES AMONG SIMILAR ITEMS SUCH AS AN ACCOUNT FROM ONE YEAR TO THE NEXT. 
COMPENSATING BALANCE
AN OFFSETTING BALANCE. A REQUIREMENT BY SOME BANKS THAT A BORROWER MAINTAIN A MINIMUM BALANCE IN A CHECKING OR SAVINGS ACCOUNT AS A CONDITION OF GRANTING A LOAN. THE OFFSETTING BALANCE INCREASES THE EFFECTIVE INTEREST RATE TO THE BANK SINCE THE NET AMOUNT LOANED IS REDUCED BUT THE INTEREST PAID IS UNCHANGED. 
COMPETENCE (COMPETENCY) (COMPETENT)
THE COMPETENCE OF AN INTERNAL AUDIT STAFF IS A FUNCTION OF QUALIFICATIONS, INCLUDING EDUCATION, CERTIFICATION, AND SUPERVISION. COMPETENT AUDIT EVIDENCE MEANS THAT THE EVIDENCE IS VALID AND RELIABLE. 
COMPILE (COMPILATION)
A COMPILATION OF FINANCIAL STATEMENTS IS PRESENTING IN THE FORM OF FINANCIAL STATEMENTS INFORMATION THAT IS THE REPRESENTATION OF MANAGEMENT WITHOUT UNDERTAKING TO EXPRESS ANY ASSURANCE. A COMPILATION OF A FINANCIAL PROJECTION IS ASSEMBLING PROSPECTIVE STATEMENTS BASED ON THE ASSUMPTIONS OF A RESPONSIBLE PARTY, READING THE STATEMENTS, CONSIDERING THE APPROPRIATENESS OF PRESENTATION, AND ISSUING A COMPILATION REPORT. NO ASSURANCE IS PROVIDED ON THE STATEMENTS OR UNDERLYING ASSUMPTIONS. THE ACCOUNTANT NEED NOT BE INDEPENDENT. 
COMPLETENESS
ASSERTIONS ABOUT COMPLETENESS DEAL WITH WHETHER ALL TRANSACTIONS AND ACCOUNTS THAT SHOULD BE PRESENTED IN THE FINANCIAL STATEMENTS ARE INCLUDED. FOR EXAMPLE, MANAGEMENT ASSERTS THAT ALL PURCHASES OF GOODS AND SERVICES ARE RECORDED AND INCLUDED IN THE FINANCIAL STATEMENTS. SIMILARLY, MANAGEMENT ASSERTS THAT NOTES PAYABLE IN THE BALANCE SHEET INCLUDE ALL SUCH OBLIGATIONS OF THE ENTITY. 
COMPLIANCE
FOLLOWING APPLICABLE RULES OR LAWS. 
COMPREHENSIVE BASIS OF ACCOUNTING
A COMPLETE SET OF RULES OTHER THAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED TO ALL ITEMS IN A SET OF FINANCIAL STATEMENTS. EXAMPLES INCLUDE A BASIS OF ACCOUNTING REQUIRED BY A GOVERNMENT REGULATORY AGENCY, A BASIS OF ACCOUNTING THE ENTITY USES FOR ITS INCOME TAX RETURN AND THE CASH RECEIPTS AND DISBURSEMENTS BASIS. 
COMPUTER CONTROLS
INTERNAL CONTROLS PERFORMED BY COMPUTER (SOFTWARE CONTROLS) AS OPPOSED TO MANUAL CONTROLS. ALSO MEANS GENERAL AND APPLICATION CONTROLS OVER THE COMPUTER PROCESSING OF DATA. 
CONDENSED FINANCIAL STATEMENTS
ARE PRESENTED IN CONSIDERABLY LESS DETAIL THAN COMPLETE FINANCIAL STATEMENTS. 
CONFIRM (CONFIRMATION)
COMMUNICATION WITH OUTSIDE PARTIES TO AUTHENTICATE INTERNAL EVIDENCE. 
CONSIGNMENT
TRANSFER OF POSSESSION BUT NOT TITLE TO GOODS. TITLE STAYS WITH THE CONSIGNOR, WHILE THE CONSIGNEE HAS POSSESSION. 
CONSISTENCY
TO ACHIEVE COMPARABILITY OF INFORMATION OVER TIME, THE SAME ACCOUNTING METHODS MUST BE FOLLOWED. IF ACCOUNTING METHODS ARE CHANGED FROM PERIOD TO PERIOD, THE EFFECTS MUST BE DISCLOSED. 
CONSULTED
SOUGHT ADVICE OR INFORMATION. 
CONSULTING
SERVICES PERFORMED BY CPAS INCLUDE CONSULTATIONS, ADVISORY SERVICES, IMPLEMENTATION SERVICES, PRODUCT SERVICES, TRANSACTION SERVICES, AND STAFF AND SUPPORT SERVICES. 
CONTINGENT (CONTINGENCY)
A CONTINGENCY IS AN EXISTING CONDITION INVOLVING UNCERTAINTY AS TO POSSIBLE GAIN (GAIN CONTINGENCY) OR LOSS (LOSS CONTINGENCY) THAT WILL BE RESOLVED BY FUTURE EVENTS. ESTIMATES, SUCH AS THE USEFUL LIFE OF AN ASSET, ARE NOT CONTINGENCIES. EVENTUAL EXPIRATION OF THE ASSET'S UTILITY IS NOT UNCERTAIN. 
CONTINUING
A CONTINUING AUDITOR IS THE AUDITOR OF THE CURRENT YEAR WHO ALSO AUDITED THE FINANCIAL STATEMENTS OF THE CLIENT FOR THE PREVIOUS YEAR. 
CONTINUING ACCOUNTING SIGNIFICANCE
MATTERS OF CONTINUING ACCOUNTING SIGNIFICANCE ARE THOSE NORMALLY INCLUDED IN THE PERMANENT AUDIT WORKING PAPER FILE, SUCH AS THE ANALYSIS OF BALANCE SHEET ACCOUNTS, AND THOSE RELATING TO CONTINGENCIES. SUCH INFORMATION FROM A PRIOR YEAR IS USED BY THE AUDITOR IN THE CURRENT YEAR'S AUDIT AND IS UPDATED EACH YEAR. 
CONTROL
A POLICY OR PROCEDURE THAT IS PART OF INTERNAL CONTROL. 
CONTROL ENVIRONMENT
THE CONTROL ENVIRONMENT IS THE ATTITUDE, AWARENESS, AND ACTIONS OF THE BOARD OF DIRECTORS, MANAGEMENT, OWNERS, AND OTHERS ABOUT THE IMPORTANCE OF CONTROL. THIS INCLUDES INTEGRITY AND ETHICAL RULES, COMMITMENT TO COMPETENCE, BOARD OR AUDIT COMMITTEE PARTICIPATION, ORGANIZATIONAL STRUCTURE, ASSIGNMENT OF AUTHORITY AND RESPONSIBILITY, AND HUMAN RESOURCE POLICIES AND PRACTICES. 
CONTROL POLICIES AND PROCEDURES
CONTROL ACTIVITIES ARE THE POLICIES AND PROCEDURES THAT HELP ENSURE THAT MANAGEMENT DIRECTIVES ARE CARRIED OUT. THOSE PERTINENT TO AN AUDIT INCLUDE PERFORMANCE REVIEWS, INFORMATION PROCESSING, PHYSICAL CONTROLS AND SEGREGATION OF DUTIES. 
CONTROL RISK
THE RISK THAT MATERIAL ERROR IN AN ACCOUNT BALANCE OR CLASS OF TRANSACTIONS WILL NOT BE PREVENTED OR DETECTED ON A TIMELY BASIS BY INTERNAL CONTROLS. 
CONTROLLER
AN OFFICER WHO SUPERVISES THE FINANCIAL AFFAIRS OF AN ENTITY. IN INTERNAL CONTROL THE CONTROLLER IS OFTEN THE PERSON WITH RECORDKEEPING (GENERAL LEDGER) RESPONSIBILITIES, AS CONTRASTED WITH ASSET CUSTODY, MANAGEMENT DECISION MAKING, AND INTERNAL AUDIT FUNCTIONS. 
CORROBORATE (CORROBORATING) (CORROBORATION) (CORROBORATIVE)
TO STRENGTHEN WITH OTHER EVIDENCE, TO MAKE MORE CERTAIN. 
COUNT
ENUMERATE SOME CHARACTERISTIC SUCH AS THE NUMBER OF ITEMS IN INVENTORY. 
CUMULATIVE EFFECT
THE CUMULATIVE EFFECT OF CHANGING TO A NEW ACCOUNTING PRINCIPLE IS THE EFFECT ON RETAINED EARNINGS AT THE BEGINNING OF THE CURRENT PERIOD. IT IS INCLUDED IN NET INCOME AFTER EXTRAORDINARY ITEMS. ONLY THE DIRECT EFFECT (NET OF INCOME TAX EFFECT) IS CONSIDERED. 
CURRENT RATIO
TOTAL CURRENT ASSETS DIVIDED BY TOTAL CURRENT LIABILITIES. 
CUSTODIAN
ONE THAT HAS POSSESSION OR IS IN CHARGE OF SOMETHING. SOME ENTITIES ENTRUST MARKETABLE INVESTMENT SECURITIES TO A BANK AS TRUSTEE WHO IS THE CUSTODIAN OF THE COMPANY'S SECURITIES. 
CUSTODY
POSSESSION. 
CUTOFF (CUT-OFF)
DESIGNATING A POINT OF TERMINATION. AN AUDITOR USES TESTS OF CUTOFF TO OBTAIN EVIDENCE THAT TRANSACTIONS FOR EACH YEAR ARE INCLUDED IN THE FINANCIAL STATEMENTS OF THE APPROPRIATE YEAR.
DEFALCATION
TO MISUSE OR TO EMBEZZLE FUNDS. 
DEFICIENCY
AN INTERNAL CONTROL SHORTCOMING OR OPPORTUNITY TO STRENGTHEN THE INTERNAL CONTROL SYSTEM. 
DETECTION RISK
THE RISK THAT AN AUDITOR'S PROCEDURES WILL LEAD TO A CONCLUSION THAT MATERIAL ERROR DOES NOT EXIST WHEN IN FACT SUCH ERROR DOES EXIST. 
DETECTIVE CONTROL
A CONTROL DESIGNED TO DISCOVER AN UNINTENDED EVENT OR RESULT. 
DEVIATION
A DEPARTURE FROM A PRESCRIBED INTERNAL CONTROL. OFTEN EXPRESSED IN AUDITING AS A RATE AT WHICH THE DEPARTURE OCCURS. 
DISCLAIMER (DISCLAIM) (DISCLAIMS) (DISCLAIMED)
A STATEMENT THAT THE AUDITOR IS UNABLE TO EXPRESS AN OPINION AS TO THE PRESENTATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. 
DISCLOSURE
REVEALING INFORMATION. FINANCIAL STATEMENT FOOTNOTES ARE ONE WAY OF PROVIDING NECESSARY DISCLOSURES. 
DISCOVERY SAMPLING
ACCEPTANCE SAMPLING WHEN THE EXPECTED OCCURRENCE RATE OF THE ATTRIBUTE IS ZERO. 
DOCUMENT(DOCUMENTARY) (DOCUMENTATION)
WRITTEN OR PRINTED PAPER THAT BEARS INFORMATION THAT CAN BE USED TO FURNISH DECISIVE EVIDENCE. COULD ALSO BE A RECORDING, COMPUTER READABLE INFORMATION, OR A PHOTOGRAPH. 
DUAL DATE(D)
IF A MAJOR EVENT COMES TO THE AUDITOR'S ATTENTION BETWEEN THE REPORT DATE AND ISSUANCE OF THE REPORT, THE FINANCIAL STATEMENTS INCLUDE THE EVENT AS AN ADJUSTMENT OR DISCLOSURE. THE AUDITOR DUAL DATES THE AUDIT REPORT (AS OF THE END OF FIELDWORK, EXCEPT FOOTNOTE XX, WHICH IS DATED LATER). 
DUAL-PURPOSE TEST
AUDIT PROCEDURES ARE OFTEN CLASSIFIED AS EITHER SUBSTANTIVE TESTS OR TESTS OF CONTROLS. IF A PROCEDURE PROVIDES BOTH TYPES OF EVIDENCE IT IS A DUAL-PURPOSE TEST.
EDI 
ELECTRONIC DATA INTERCHANGE, OR EDI, IS THE USE OF COMMUNICATION LINKS BETWEEN AN ENTITY AND ITS CUSTOMERS OR SUPPLIERS TO TRANSACT BUSINESS ELECTRONICALLY. PURCHASE, SHIPPING, BILLING, CASH RECEIPT, AND CASH DISBURSEMENT TRANSACTIONS CAN BE CONSUMMATED ENTIRELY BY EXCHANGING ELECTRONIC MESSAGES. 
EDIT CHECK
REASONABLENESS, VALIDITY, LIMIT, AND COMPLETENESS TESTS THAT ARE PROGRAMMED ROUTINES DESIGNED TO CHECK INPUT DATA AND PROCESSING RESULTS FOR COMPLETENESS, ACCURACY AND REASONABLENESS. 
EDP
"ELECTRONIC DATA PROCESSING". PROCESSING OF INFORMATION BY COMPUTER AS OPPOSED TO HANDWRITTEN RECORDS. 
EFFECTIVE INCOME TAX RATE
THE INCOME TAX PROVISION (EXPENSE) SHOWN ON AN INCOME STATEMENT DIVIDED BY THE PRETAX INCOME. THIS DIFFERS FROM THE STATUTORY RATE BECAUSE OF DEDUCTIONS, CREDITS, AND EXCLUSIONS. 
EFFECTIVE INTERNAL CONTROL
REASONABLE ASSURANCE THAT THE ENTITY'S OPERATIONS OBJECTIVES ARE BEING ACHIEVED, THAT PUBLISHED FINANCIAL STATEMENTS ARE BEING PREPARED RELIABLY, AND APPLICABLE LAWS AND REGULATIONS ARE COMPLIED WITH. 
EFFECTIVENESS
PRODUCING A DESIRED OUTCOME. AN AUDIT PROCEDURE IS EFFECTIVE IF THE EVIDENCE SUPPORTS A CORRECT CONCLUSION. 
EFFICIENCY
THE RATIO OF THE AUDIT EVIDENCE PRODUCED TO AUDIT RESOURCES USED. 
EMBEDDED CONTROL PERFORMANCE
DEALS WITH UNEXPECTED CHANGES TO THE DATA. 
EMBEZZLEMENT
TO TAKE ASSETS IN VIOLATION OF TRUST. 
ENCRYPTION
IS THE SCRAMBLING OF DATA SO IT IS MEANINGLESS TO ANYONE BUT THE INTENDED RECIPIENT, WHO HAS THE KEY TO UNSCRAMBLE THE DATA. 
ENGAGEMENT LETTER
A LETTER THAT REPRESENTS THE UNDERSTANDING CONCERNING THE ENGAGEMENT BETWEEN THE CLIENT AND THE CPA. THE LETTER NORMALLY IDENTIFIES THE FINANCIAL STATEMENTS AND DESCRIBES THE NATURE OF PROCEDURES TO BE PERFORMED. IT INCLUDES A GENERAL DESCRIPTION OF THE PROCEDURES, AN EXPLANATION OF THE OBJECTIVES OF THE PROCEDURES, AN EXPLANATION THAT THE FINANCIAL INFORMATION IS THE RESPONSIBILITY OF THE COMPANY'S MANAGEMENT, AND A DESCRIPTION OF THE FORM OF REPORT, IF ANY. 
ENVIRONMENT
THE CONTROL ENVIRONMENT IS THE ATTITUDE, AWARENESS, AND ACTIONS OF THE BOARD OF DIRECTORS, MANAGEMENT, OWNERS, AND OTHERS ABOUT THE IMPORTANCE OF CONTROL. THIS INCLUDES INTEGRITY AND ETHICAL RULES, COMMITMENT TO COMPETENCE, BOARD OR AUDIT COMMITTEE PARTICIPATION, ORGANIZATIONAL STRUCTURE, ASSIGNMENT OF AUTHORITY AND RESPONSIBILITY, AND HUMAN RESOURCE POLICIES AND PRACTICES. 
ERROR
UNINTENTIONAL MISSTATEMENTS OR OMISSIONS OF AMOUNTS OR DISCLOSURES IN FINANCIAL STATEMENTS. ERRORS MAY INVOLVE MISTAKES IN GATHERING OR PROCESSING ACCOUNTING DATA FROM WHICH FINANCIAL STATEMENTS ARE PREPARED, INCORRECT ESTIMATES ARISING FROM OVERSIGHT OR MISINTERPRETATION OF FACTS, AND MISTAKES IN APPLICATION OF ACCOUNTING PRINCIPLES RELATING TO AMOUNT, CLASSIFICATION, MANNER OF PRESENTATION, OR DISCLOSURE. 
ESTIMATION SAMPLING
SAMPLING TO ESTIMATE THE ACTUAL VALUE OF A POPULATION CHARACTERISTIC WITHIN A RANGE OF TOLERABLE MISSTATEMENT. 
EVIDENCE (EVIDENTIAL MATTER)
INCLUDES BOTH WRITTEN AND ELECTRONIC INFORMATION (SUCH AS CHECKS, RECORDS OF ELECTRONIC FUND TRANSFERS, INVOICES, CONTRACTS, AND INFORMATION DEVELOPED BY OR AVAILABLE TO THE AUDITOR) THAT PERMITS HIM OR HER TO REACH CONCLUSIONS THROUGH VALID REASONING. 
EXAMINATION
AN EXAMINATION OF PROSPECTIVE FINANCIAL STATEMENTS IS EVALUATION OF PREPARATION OF THE PROSPECTIVE STATEMENTS, SUPPORT UNDERLYING ASSUMPTIONS, AND PRESENTATION. THE ACCOUNTANT REPORTS WHETHER, IN HIS OR HER OPINION, THE STATEMENTS ARE PRESENTED IN CONFORMITY WITH AICPA GUIDELINES AND THE ASSUMPTIONS PROVIDE A REASONABLE BASIS FOR THE RESPONSIBLE PARTY'S FORECAST. THE ACCOUNTANT SHOULD BE INDEPENDENT, PROFICIENT, ADEQUATELY PLAN THE ENGAGEMENT AND SUPERVISE ASSISTANTS, AND OBTAIN SUFFICIENT EVIDENCE TO PROVIDE A REASONABLE BASIS FOR THE REPORT. 
EXAMINE (EXAMINING)
AS AN AUDIT PROCEDURE, TO EXAMINE SOMETHING IS TO LOOK AT IT CRITICALLY. 
EXCEPT FOR
A QUALIFIED OPINION. AN AUDITOR CAN QUALIFY THE AUDIT OPINION FOR BOTH DEPARTURES FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE FINANCIAL STATEMENTS AND FOR RESTRICTIONS ON THE SCOPE OF THE AUDIT. THE OPINION PARAGRAPH OF THE QUALIFIED REPORT IS WORDED "IN OUR OPINION, EXCEPT FOR...." 
EXECUTE (EXECUTED) (EXECUTION)
TO CARRY OUT AN INTERNAL CONTROL PROCEDURE, SUCH AS TO SIGN AND MAIL A CHECK AFTER INSPECTING SUPPORTING DOCUMENTS. 
EXISTENCE
ASSERTIONS ABOUT EXISTENCE DEAL WITH WHETHER ASSETS OR LIABILITIES EXIST AT A GIVEN DATE. FOR EXAMPLE, MANAGEMENT ASSERTS THAT FINISHED GOODS INVENTORIES IN THE BALANCE SHEET ARE AVAILABLE FOR SALE. 
EXPENDITURE
CASH PAID OR LIABILITY INCURRED. 
EXPLANATORY
A PARAGRAPH ADDED TO AN AUDIT REPORT TO EXPLAIN SOMETHING, SUCH AS THE REASON FOR A QUALIFIED OR ADVERSE OPINION. 
EXPLICITLY
FULLY AND CLEARLY EXPRESSED, LEAVING NOTHING IMPLIED. 
EXTEND
MEANS TO MULTIPLY ONE NUMBER BY ANOTHER (TO TEST EXTENSIONS IS TO TEST THE ACCURACY OF MULTIPLICATION DONE BY THE CLIENT). TO EXTEND AUDITING PROCEDURES MEANS TO APPLY ADDITIONAL AUDITING PROCEDURES TO OBTAIN MORE EVIDENCE.
FASB
FINANCIAL ACCOUNTING STANDARDS BOARD. A NONGOVERNMENT PRIVATE ORGANIZATION THAT SETS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES. 
FIELD WORK
THE PERFORMANCE OF AUDIT PROCEDURES OUTSIDE THE CPA'S OFFICES. MUCH FIELD WORK, BUT NOT ALL, IS DONE IN THE CLIENT'S OFFICES AFTER THE BALANCE SHEET DATE. 
FIFO
"FIRST IN FIRST OUT" INVENTORY COST FLOW ASSUMPTION. 
FINANCIAL FORECAST
A FINANCIAL FORECAST PRESENTS EXPECTED FUTURE FINANCIAL POSITION, RESULTS OF OPERATIONS, AND CASH FLOWS BASED ON EXPECTED CONDITIONS. 
FINANCIAL INSTITUTION CONFIRMATION REQUEST
A CONFIRMATION SENT TO THE CLIENT'S BANK OR OTHER FINANCIAL INSTITUTION ASKING THE BANK TO CONFIRM DIRECT TO THE AUDITOR INFORMATION ABOUT ACCOUNT BALANCES AT A PARTICULAR DATE. 
FLOWCHART
A SCHEMATIC REPRESENTATION OF A SEQUENCE OF OPERATIONS IN AN ACCOUNTING SYSTEM OR COMPUTER PROGRAM. ALSO CALLED A FLOW DIAGRAM, FLOW SHEET. 
FOOT
TO FOOT A COLUMN IS TO ADD A COLUMN OF NUMBERS. 
FRAUD
A DELIBERATE DECEPTION IN ORDER TO SECURE UNFAIR OR UNLAWFUL GAIN. FALSE REPRESENTATION INTENDED TO DECEIVE RELIED ON BY ANOTHER TO THAT PERSON'S INJURY. FRAUD INCLUDE FRAUDULENT FINANCIAL REPORTING UNDERTAKEN TO RENDER FINANCIAL STATEMENTS MISLEADING, SOMETIMES CALLED MANAGEMENT FRAUD, AND MISAPPROPRIATION OF ASSETS, SOMETIMES CALLED DEFALCATIONS.
GAAP
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES." ACCORDING TO RULE 203 OF THE AICPA CODE OF PROFESSIONAL CONDUCT, GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR NONGOVERNMENT ENTITIES INCLUDE (IF THERE IS A CONFLICT THE SOURCE EARLIER IN THE LIST PREVAILS): 1. FASB STATEMENTS AND INTERPRETATIONS, APB OPINIONS, ARBS. 2. FASB TECHNICAL BULLETINS, AICPA GUIDES AND AICPA STATEMENTS OF POSITION. 3. POSITIONS OF THE FASB EMERGING ISSUES TASK FORCE AND AICPA PRACTICE BULLETINS. 4. AICPA ACCOUNTING INTERPRETATIONS, FASB STAFF "QS AND AS", AND WIDELY RECOGNIZED INDUSTRY PRACTICES. 5. OTHER ACCOUNTING LITERATURE, SUCH AS FASB CONCEPTS STATEMENTS, TEXTBOOKS, ARTICLES. 
GAAS
"GENERALLY ACCEPTED AUDITING STANDARDS." THE TEN AUDITING STANDARDS ADOPTED BY THE MEMBERSHIP OF THE AICPA. AUDITING STANDARDS DIFFER FROM AUDITING PROCEDURES IN THAT "PROCEDURES" RELATE TO ACTS TO BE PERFORMED, WHEREAS "STANDARDS" DEAL WITH MEASURES OF THE QUALITY OF THE PERFORMANCE OF THOSE ACTS AND THE OBJECTIVES TO BE ATTAINED BY USE OF THE PROCEDURES UNDERTAKEN. AUDITING STANDARDS AS DISTINCT FROM AUDITING PROCEDURES CONCERN THEMSELVES NOT ONLY WITH THE AUDITOR'S PROFESSIONAL QUALITIES BUT ALSO WITH THE JUDGMENT EXERCISED IN THE AUDIT. 
GASB
"GOVERNMENT ACCOUNTING STANDARDS BOARD." ACCORDING TO RULE 203 OF THE AICPA CODE OF PROFESSIONAL CONDUCT, GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR GOVERNMENT ENTITIES INCLUDE (IF THERE IS A CONFLICT THE SOURCE EARLIER IN THE LIST PREVAILS): 1. GASB STATEMENTS AND INTERPRETATIONS, AICPA AND FASB PRONOUNCEMENTS IF MADE APPLICABLE TO GOVERNMENTS BY GASB. 2. GASB TECHNICAL BULLETINS, AICPA GUIDES AND AICPA STATEMENTS OF POSITION IF MADE APPLICABLE TO GOVERNMENTS BY THE AICPA. 3. POSITIONS OF THE GASB EMERGING ISSUES TASK FORCE AND AICPA PRACTICE BULLETINS IF MADE APPLICABLE TO GOVERNMENTS BY THE AICPA. 4. GASB STAFF "QS AND AS", AND WIDELY RECOGNIZED INDUSTRY PRACTICES. 5. OTHER ACCOUNTING LITERATURE, SUCH AS GASB CONCEPTS STATEMENTS, TEXTBOOKS, ARTICLES. 
GENERAL CONTROLS
POLICIES AND PROCEDURES TO ASSURE PROPER OPERATIONS OF COMPUTER SYSTEMS, INCLUDING CONTROLS OVER DATA CENTER OPERATIONS, SOFTWARE ACQUISITION AND MAINTENANCE, AND ACCESS SECURITY. 
GENERAL JOURNAL
A BOOK OF ORIGINAL ENTRY IN A DOUBLE-ENTRY SYSTEM. THE JOURNAL LISTS TRANSACTIONS AND INDICATES ACCOUNTS TO WHICH THEY ARE POSTED. THE GENERAL JOURNAL INCLUDES ALL TRANSACTIONS WHICH AREN'T INCLUDED IN SPECIALIZED JOURNALS USED FOR CASH RECEIPTS, CASH DISBURSEMENTS, AND OTHER COMMON TRANSACTIONS. 
GENERAL LEDGER
A BOOK IN WHICH MONETARY TRANSACTIONS OF A BUSINESS ARE POSTED (IN THE FORM OF DEBITS AND CREDITS) FROM A JOURNAL. IT IS THE FINAL RECORD FROM WHICH FINANCIAL STATEMENTS ARE PREPARED. THE GENERAL LEDGER ACCOUNTS ARE OFTEN CONTROL ACCOUNTS WHICH REPORT TOTALS OF DETAILS INCLUDED IN SUBSIDIARY LEDGERS. 
GENERAL STANDARD
WITHIN THE TEN GENERALLY ACCEPTED AUDITING STANDARDS THERE ARE THREE GENERAL STANDARDS: 1. THE EXAMINATION IS TO BE PERFORMED BY A PERSON OR PERSONS HAVING ADEQUATE TECHNICAL TRAINING AND PROFICIENCY AS AN AUDITOR. 2. IN ALL MATTERS RELATING TO THE ASSIGNMENT, AN INDEPENDENCE IN MENTAL ATTITUDE IS TO BE MAINTAINED BY THE AUDITOR. 3. DUE PROFESSIONAL CARE IS TO BE EXERCISED IN THE PERFORMANCE OF THE EXAMINATION AND PREPARATION OF THE REPORT. 
GENERALIZED AUDIT SOFTWARE
PACKAGED COMPUTER PROGRAMS USED ON A VARIETY OF COMPUTERS DURING AUDIT FIELD WORK TO PERFORM DATA PROCESSING FUNCTIONS INCLUDING READING COMPUTER FILES, SELECTING INFORMATION, PERFORMING CALCULATIONS, CREATING DATA FILES AND PRINTING REPORTS IN A FORMAT SPECIFIED BY THE AUDITOR. 
GOING CONCERN
THE GOING CONCERN ASSUMPTION ASSUMES THE COMPANY WILL CONTINUE IN OPERATION LONG ENOUGH TO REALIZE ITS INVESTMENT IN ASSETS THROUGH OPERATIONS (AS OPPOSED TO SALE). PRESENTING ASSETS AT HISTORICAL COST IS JUSTIFIED BY ASSUMING PRODUCTIVE ASSETS WILL BE USED RATHER THAN SOLD. THIS MAKES MARKET VALUES IRRELEVANT AND SUPPORTS ACCOUNTING METHODS WHICH MATCH THE ACTUAL COST OF AN ASSET TO PERIODS BENEFITED. 
GOVERNMENT AUDITING STANDARDS
A BOOK ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES, SOMETIMES CALLED THE "YELLOW BOOK." GOVERNMENT AUDITING STANDARDS CONTAINS STANDARDS FOR AUDITS OF GOVERNMENT ORGANIZATIONS, PROGRAMS, ACTIVITIES, AND FUNCTIONS AND OF GOVERNMENT ASSISTANCE RECEIVED BY CONTRACTORS, NOT-FOR-PROFIT ORGANIZATIONS, AND OTHER NONGOVERNMENT ORGANIZATIONS. THESE STANDARDS, WHICH INCLUDE DESIGNING THE AUDIT TO PROVIDE REASONABLE ASSURANCE OF DETECTING MATERIAL MISSTATEMENTS RESULTING FROM NONCOMPLIANCE WITH PROVISIONS OF CONTRACTS OR GRANT AGREEMENTS THAT HAVE A DIRECT AND MATERIAL EFFECT ON DETERMINATION OF FINANCIAL STATEMENT AMOUNTS, ARE TO BE FOLLOWED WHEN REQUIRED BY LAW, REGULATION, AGREEMENT, CONTRACT, OR POLICY. FOR FINANCIAL AUDITS, GOVERNMENT AUDITING STANDARDS PRESCRIBES FIELDWORK AND REPORTING STANDARDS BEYOND THOSE REQUIRED BY GAAS. THE GENERAL STANDARDS OF GOVERNMENT AUDITING STANDARDS RELATE TO QUALIFICATIONS OF THE STAFF, INDEPENDENCE, DUE PROFESSIONAL CARE, AND QUALITY CONTROL. 
GROSS MARGIN PERCENTAGE
THE GROSS MARGIN FROM AN INCOME STATEMENT DIVIDED BY NET SALES REVENUE.
HARD COPY
A PRINTED COPY OF INFORMATION AS OPPOSED TO INFORMATION STORED IN COMPUTER READABLE FORM. 
HARDWARE
A COMPUTER AND ASSOCIATED PHYSICAL EQUIPMENT INVOLVED IN THE PERFORMANCE OF DATA-PROCESSING OR COMMUNICATIONS FUNCTIONS AS OPPOSED TO SOFTWARE OR COMPUTER PROGRAMS THAT PROVIDE INSTRUCTIONS THE COMPUTER FOLLOWS. 
HARDWARE CONTROL
COMPUTER CONTROLS BUILT INTO PHYSICAL EQUIPMENT BY THE MANUFACTURER. 
HASH TOTAL
A CONTROL TOTAL WHICH HAS NO MEANING IN ITSELF OTHER THAN FOR CONTROL, E.G., TOTAL SOCIAL SECURITY NUMBERS OF EMPLOYEES PAID.
IMAGE PROCESSING SYSTEMS
USE SCANNING TO CONVERT DOCUMENTS INTO ELECTRONIC IMAGES TO FACILITATE STORAGE. REFERENCE AND SOURCE DOCUMENTS MAY NOT BE RETAINED AFTER CONVERSION. ELECTRONIC EVIDENCE MAY EXIST AT A PARTICULAR POINT IN TIME BUT MAY NOT BE RETRIEVABLE LATER IF FILES ARE CHANGED AND BACKUP FILES DO NOT EXIST. 
IMMATERIAL
OF NO IMPORTANCE. SOMETHING IN FINANCIAL STATEMENTS THAT WOULD NOT CHANGE DECISIONS OF INVESTORS WHO RELY ON THOSE STATEMENTS. 
IMPLICITLY
IMPLIED OR UNDERSTOOD EVEN THOUGH NOT DIRECTLY EXPRESSED. 
IMPLIED CONTROL PERFORMANCE
DEALS WITH EXPECTED CHANGES TO THE DATA. 
INCOMPATIBLE DUTIES
INTERNAL CONTROL SYSTEMS RELY ON SEPARATION OF CERTAIN DUTIES TO REDUCE THE CHANCE OF ERRORS OR FRAUD. DUTIES ARE INCOMPATIBLE IF THEY SHOULD BE SEPARATED FOR CONTROL. FOR EXAMPLE, ONE PERSON SHOULD NOT BE IN A POSITION TO BOTH EMBEZZLE FUNDS AND TO HIDE THE EMBEZZLEMENT BY CHANGING THE RECORDED ACCOUNTABILITY. 
INCORRECT ACCEPTANCE
THE RISK OF INCORRECT ACCEPTANCE IS THE RISK THE SAMPLE SUPPORTS THE CONCLUSION THAT THE RECORDED ACCOUNT BALANCE IS NOT MATERIALLY MISSTATED WHEN IT IS MATERIALLY MISSTATED. 
INCORRECT REJECTION
THE RISK OF INCORRECT REJECTION IS THE RISK THE SAMPLE SUPPORTS THE CONCLUSION THAT THE RECORDED ACCOUNT BALANCE IS MATERIALLY MISSTATED WHEN IT IS NOT MATERIALLY MISSTATED. 
INDEPENDENT (INDEPENDENCE)
IN ALL MATTERS RELATING TO THE ASSIGNMENT, AN INDEPENDENCE IN MENTAL ATTITUDE IS TO BE MAINTAINED BY THE AUDITORS. INDEPENDENCE MEANS FREEDOM FROM BIAS, WHICH IS POSSIBLE EVEN WHEN AUDITING ONE'S OWN BUSINESS (INDEPENDENCE IN FACT). HOWEVER, IT IS EQUALLY IMPORTANT THAT THE AUDITOR BE INDEPENDENT IN APPEARANCE (THAT OTHERS BELIEVE THE AUDITOR IS INDEPENDENT). 
INHERENT LIMITATION
THE POTENTIAL EFFECTIVENESS OF AN ENTITY'S INTERNAL CONTROL IS SUBJECT TO INHERENT LIMITATIONS. HUMAN FALLIBILITY, COLLUSION, AND MANAGEMENT OVERRIDE ARE EXAMPLES. 
INHERENT RISK
THE SUSCEPTIBILITY OF AN ACCOUNT BALANCE OR CLASS OF TRANSACTIONS TO ERROR THAT COULD BE MATERIAL, WHEN AGGREGATED WITH OTHER ERRORS, ASSUMING THERE WERE NO RELATED INTERNAL CONTROLS. 
INPUT CONTROL
COMPUTER CONTROLS DESIGNED TO PROVIDE REASONABLE ASSURANCE THAT TRANSACTIONS ARE PROPERLY AUTHORIZED BEFORE BEING PROCESSED BY THE COMPUTER, ACCURATELY CONVERTED INTO MACHINE READABLE FORM AND RECORDED IN THE COMPUTER, THAT DATA FILES AND TRANSACTIONS ARE NOT LOST, ADDED, DUPLICATED OR IMPROPERLY CHANGED, AND THAT INCORRECT TRANSACTIONS ARE REJECTED, CORRECTED AND, IF NECESSARY, RESUBMITTED ON A TIMELY BASIS. 
INQUIRE (INQUIRY)
ASK QUESTIONS OF CLIENT PERSONNEL. 
INSPECT (INSPECTION) (INSPECTING)
AS AN AUDIT PROCEDURE, TO SCRUTINIZE OR CRITICALLY EXAMINE A DOCUMENT. AS PART OF A CPA FIRM'S QUALITY CONTROL SYSTEM, TO MONITOR THE EFFECTIVENESS OF THE FIRM'S QUALITY CONTROL SYSTEM. 
INTEGRATED TEST FACILITY
A "DUMMY" UNIT (E.G., A DEPARTMENT OR EMPLOYEE) IS ESTABLISHED. TEST (FICTITIOUS) TRANSACTIONS ARE POSTED TO THE DUMMY UNIT DURING THE NORMAL PROCESSING CYCLE. IF THE TEST TRANSACTIONS ARE PROCESSED CORRECTLY THAT PROVIDES THE AUDITOR WITH EVIDENCE THAT TRANSACTIONS OF OTHER UNITS ARE BEING PROCESSED CORRECTLY AS WELL. 
INTEGRITY
CONSISTENT ADHERENCE TO AN ETHICAL CODE. IF MANAGEMENT OF A CLIENT LACKS INTEGRITY THE AUDITOR MUST BE EVEN MORE SKEPTICAL THAN USUAL. 
INTERIM
FINANCIAL INFORMATION MEANS THE FINANCIAL STATEMENTS OF A TIME PERIOD OF LESS THAN A FULL YEAR. INTERIM AUDIT PROCEDURES ARE PROCEDURES DONE DURING THE YEAR UNDER AUDIT, BEFORE YEAR END. 
INTERNAL
AUDITORS ARE EMPLOYEES OF THE CLIENT. THEY ARE RESPONSIBLE FOR PROVIDING ANALYSES, EVALUATIONS, ASSURANCES, RECOMMENDATIONS, AND OTHER INFORMATION TO THE ENTITY'S MANAGEMENT AND BOARD. AN IMPORTANT RESPONSIBILITY OF THE INTERNAL AUDIT FUNCTION IS TO MONITOR THE PERFORMANCE OF AN ENTITY'S CONTROLS. 
INTERNAL CONTROL
POLICIES AND PROCEDURES DESIGNED TO PROVIDE REASONABLE ASSURANCE THAT SPECIFIC ENTITY OBJECTIVES WILL BE ACHIEVED. IT CONSISTS OF: THE CONTROL ENVIRONMENT, RISK ASSESSMENT, CONTROL ACTIVITIES, INFORMATION AND COMMUNICATIONS, AND MONITORING. 
INTERNAL CONTROL QUESTIONNAIRE
A LIST OF QUESTIONS ABOUT THE INTERNAL CONTROL SYSTEM TO BE ANSWERED (WITH ANSWERS SUCH AS YES, NO, OR NOT APPLICABLE) DURING AUDIT FIELD WORK. THE QUESTIONNAIRE BECOMES PART OF THE AUDIT WORKING PAPERS AND IS USED TO DOCUMENT THE AUDITOR'S UNDERSTANDING OF THE CLIENT'S INTERNAL CONTROLS. 
INTERNAL CONTROL WEAKNESS
A DEFECT IN THE DESIGN OR OPERATION OF INTERNAL CONTROLS. A MATERIAL WEAKNESS IS A REPORTABLE CONDITION WHICH DOES NOT REDUCE TO A RELATIVELY LOW LEVEL THE RISK THAT MATERIAL ERRORS OR FRAUD WOULD NOT BE DETECTED IN A TIMELY MANNER BY EMPLOYEES IN THE NORMAL COURSE OF THEIR DUTIES. 
INTRODUCTORY PARAGRAPH
THE FIRST PARAGRAPH OF THE AUDITOR'S STANDARD REPORT WHICH IDENTIFIES THE FINANCIAL STATEMENTS AUDITED, INCLUDES A STATEMENT THAT THE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANY'S MANAGEMENT AND THAT THE AUDITOR'S RESPONSIBILITY IS TO EXPRESS AN OPINION ON THE FINANCIAL STATEMENTS BASED ON THE AUDIT. 
INVENTORY TAG
A TAG ATTACHED TO INVENTORY ITEMS THAT IDENTIFIES THE INVENTORY ITEMS TO FACILITATE THE COUNTING OF PHYSICAL INVENTORY. 
INVERSE
THE OPPOSITE OR REVERSE. AN INVERSE RELATIONSHIP BETWEEN TWO VARIABLES MEANS THAT WHEN ONE INCREASES THE OTHER DECREASES. 
INVESTEE
THE COMPANY IN WHICH AN INVESTMENT IS HELD. OFTEN USED TO DESCRIBE AN EQUITY METHOD INVESTMENT, IN WHICH THE INVESTOR REPORTS A SHARE OF THE INVESTEE'S NET INCOME. 
INVOICE
AN ITEMIZED LIST OF GOODS SHIPPED OR SERVICES RENDERED WITH COSTS.
JOURNAL
A BOOK OF ORIGINAL ENTRY IN A DOUBLE-ENTRY SYSTEM. THE JOURNAL LISTS ALL TRANSACTIONS AND INDICATES THE ACCOUNTS TO WHICH THEY ARE POSTED. 
JUST-IN-TIME
AN INVENTORY SYSTEM THAT ATTEMPTS TO MINIMIZE INVENTORY COSTS THAT DO NOT ADD VALUE FOR THE CUSTOMER. IT ARRANGES FOR SUPPLIERS TO DELIVER SMALL QUANTITIES OF RAW MATERIALS JUST BEFORE THOSE UNITS ARE NEEDED IN PRODUCTION. STORING, INSURING, AND HANDLING RAW MATERIALS ARE COSTS THAT ADD NO VALUE TO THE PRODUCT, AND SO ARE MINIMIZED IN A JUST IN TIME SYSTEM. 
KITING
DRAWING A BANK CHECK ON INSUFFICIENT FUNDS TO TAKE ADVANTAGE OF THE TIME INTERVAL REQUIRED FOR COLLECTION. 
LAPPING
A SCHEME TO COVER AN EMBEZZLEMENT BY USING PAYMENTS MADE BY ONE CUSTOMER TO REDUCE THE RECEIVABLES BALANCE OF ANOTHER CUSTOMER. 
LEAD SCHEDULE
THE SCHEDULE THAT IS AT THE BEGINNING OF A SECTION OF AUDIT WORKING PAPERS AND SUMMARIZES THE DETAILED SCHEDULES. 
LIFO
"LAST IN FIRST OUT" INVENTORY COST FLOW ASSUMPTION. 
LIMIT TEST (LIMIT CHECK)
A COMPUTER PROGRAM STEP THAT COMPARES DATA WITH PREDETERMINED LIMITS AS A REASONABLENESS TEST (HOURS WORKED OVER 60 PER WEEK). 
LIQUIDITY
THE AVAILABILITY OF CASH OR ABILITY TO OBTAIN IT QUICKLY. DEBT PAYING ABILITY. 
LOCKBOX
ALSO CALLED A BANK LOCKBOX. A SYSTEM USED TO SPEED THE AVAILABILITY OF FUNDS FROM CASH COLLECTIONS BY REDUCING THE TIME FROM THE CUSTOMER MAILING THE CHECK UNTIL THE FUNDS ARE AVAILABLE TO SPEND. REMITTANCES ARE SENT TO A BANK NEAR THE CUSTOMER AND THE BANK DEPOSITS FUNDS SPEEDILY TO THE PAYEE'S ACCOUNT.
MANAGEMENT CONTROLS
CONTROLS PERFORMED BY ONE OR MORE MANAGERS. 
MANAGEMENT REPRESENTATION LETTER
A LETTER ADDRESSED TO THE AUDITOR, NORMALLY SIGNED BY THE CLIENT'S CHIEF EXECUTIVE OFFICE AND CHIEF FINANCIAL OFFICER. DURING AN AUDIT, MANAGEMENT MAKES MANY REPRESENTATIONS TO THE AUDITOR, BOTH ORAL AND WRITTEN, IN RESPONSE TO SPECIFIC INQUIRIES OR THROUGH THE FINANCIAL STATEMENTS. WRITTEN REPRESENTATIONS FROM MANAGEMENT IN THE LETTER CONFIRM ORAL REPRESENTATIONS GIVEN TO THE AUDITOR, DOCUMENT THE CONTINUING APPROPRIATENESS OF SUCH REPRESENTATIONS, AND REDUCE THE POSSIBILITY OF MISUNDERSTANDING CONCERNING MATTERS THAT ARE THE SUBJECT OF THE REPRESENTATIONS. 
MANUAL CONTROLS
CONTROLS PERFORMED MANUALLY, NOT BY COMPUTER. 
MATERIAL (MATERIALITY)
INFORMATION IMPORTANT ENOUGH TO MAKE A DIFFERENCE IN AN INVESTOR'S DECISION. IF INFORMATION IS INSIGNIFICANT IT HAS NO EFFECT ON DECISIONS, SO THERE IS NO NEED TO REPORT THAT INFORMATION. MATERIALITY INCLUDES BOTH THE ABSOLUTE VALUE AND RELATIONSHIP OF AN AMOUNT TO OTHER ACCOUNTING INFORMATION. 
MATERIAL WEAKNESS
A CONDITION IN WHICH THE DESIGN OR OPERATION OF ONE OR MORE INTERNAL CONTROLS DOES NOT REDUCE TO A RELATIVELY LOW LEVEL THE RISK THAT ERRORS OR FRAUD IN AMOUNTS THAT WOULD BE MATERIAL IN RELATION TO THE FINANCIAL STATEMENTS MAY OCCUR AND NOT BE DETECTED WITHIN A TIMELY PERIOD BY EMPLOYEES IN THE NORMAL COURSE OF PERFORMING ASSIGNED FUNCTIONS. 
MEMOS
WRITTEN RECORDS SUPPORTING JOURNAL ENTRIES. CREDIT MEMOS SUPPORT CREDITS, WHILE DEBIT MEMOS SUPPORT DEBIT ENTRIES. 
MISAPPROPRIATE
TO EMBEZZLE OR APPROPRIATE DISHONESTLY FOR ONE'S OWN USE. 
MISSTATEMENT
STATED WRONGLY OR FALSELY. UNTRUE FINANCIAL STATEMENT INFORMATION. 
MITIGATING
MODERATING OR ALLEVIATING IN FORCE OR INTENSITY.
NARRATIVE
A WRITTEN DESCRIPTION OF AN INTERNAL CONTROL SYSTEM. 
NEGATIVE ASSURANCE
A STATEMENT OF WHAT THE CPA DOES NOT KNOW AS OPPOSED TO A STATEMENT AS TO WHAT THE CPA BELIEVES (POSITIVE ASSURANCE). A STATEMENT THAT THE CPA "WAS NOT AWARE OF ANY MATERIAL MODIFICATIONS THAT SHOULD BE MADE TO FINANCIAL STATEMENTS FOR THEM TO BE IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" IS NEGATIVE ASSURANCE AND IS USED IN REVIEW REPORTS. 
NEGATIVE CONFIRMATION REQUEST
THE NEGATIVE FORM OF ACCOUNTS RECEIVABLE CONFIRMATION ASKS THE CLIENT'S CUSTOMER TO RESPOND ONLY IF THE CUSTOMER DISAGREES WITH THE BALANCE DETERMINED BY THE CLIENT. THE POSITIVE FORM ASKS THE CUSTOMER TO RESPOND WHETHER THE CUSTOMER AGREES OR DISAGREES WITH THE CLIENT'S RECEIVABLE BALANCE. THE NEGATIVE FORM IS USED WHEN CONTROLS OVER RECEIVABLES ARE STRONG AND ACCOUNTS RECEIVABLE CONSISTS OF MANY ACCOUNTS WITH SMALL BALANCES. THE POSITIVE FORM IS USED WHEN CONTROLS ARE WEAK OR THERE ARE FEWER, BUT LARGER, ACCOUNTS. 
NONSAMPLING
RISK (OR ERRORS) INCLUDES ALL ASPECTS OF AUDIT RISK NOT DUE TO SAMPLING. AN AUDITOR MAY APPLY A PROCEDURE TO ALL TRANSACTIONS OR BALANCES AND STILL FAIL TO DETECT A MATERIAL MISSTATEMENT. NONSAMPLING RISK INCLUDES THE POSSIBILITY OF SELECTING AUDIT PROCEDURES THAT ARE NOT APPROPRIATE TO ACHIEVE SPECIFIC OBJECTIVE. FOR EXAMPLE, CONFIRMING RECORDED RECEIVABLES CANNOT BE RELIED ON TO REVEAL UNRECORDED RECEIVABLES. NONSAMPLING RISK ALSO ARISES BECAUSE THE AUDITOR MAY FAIL TO RECOGNIZE MISSTATEMENTS INCLUDED IN DOCUMENTS EXAMINED, WHICH WOULD MAKE THAT PROCEDURE INEFFECTIVE EVEN IF ALL ITEMS WERE EXAMINED. NONSAMPLING RISK CAN BE REDUCED TO A NEGLIGIBLE LEVEL THROUGH ADEQUATE PLANNING AND SUPERVISION.
OBJECTIVE
AN OBJECTIVE IS A GOAL. 
OBJECTIVITY
THE INTERNAL AUDITORS' OBJECTIVITY DEPENDS ON THE ORGANIZATIONAL STATUS OF THE INTERNAL AUDITOR RESPONSIBLE FOR THE INTERNAL AUDIT FUNCTION, WHETHER THE INTERNAL AUDITOR REPORTS TO AN OFFICER OF SUFFICIENT STATUS, WHETHER THE INTERNAL AUDITOR HAS DIRECT ACCESS AND REPORTS REGULARLY TO THE BOARD, THE AUDIT COMMITTEE, OR THE OWNER-MANAGER, AND WHETHER THE BOARD, THE AUDIT COMMITTEE, OR THE OWNER-MANAGER OVERSEES EMPLOYMENT DECISIONS RELATED TO THE INTERNAL AUDITOR. 
OBLIGATIONS
ASSERTIONS ABOUT OBLIGATIONS DEAL WITH WHETHER LIABILITIES ARE OBLIGATIONS OF THE ENTITY AT A GIVEN DATE. FOR EXAMPLE, MANAGEMENT ASSERTS THAT AMOUNTS CAPITALIZED FOR LEASES IN THE BALANCE SHEET REPRESENT THE COST OF THE ENTITY'S RIGHTS TO LEASED PROPERTY AND THAT THE CORRESPONDING LEASE LIABILITY REPRESENTS AN OBLIGATION OF THE ENTITY. 
OBLITERATE
TO DO AWAY WITH SOMETHING SO AS TO LEAVE NO TRACE. 
OBSERVE (OBSERVATION)
WATCH AND TEST A CLIENT ACTION (SUCH AS TAKING INVENTORY). 
OCCURRENCE
ASSERTIONS ABOUT OCCURRENCE DEAL WITH WHETHER RECORDED TRANSACTIONS HAVE OCCURRED DURING A GIVEN PERIOD. FOR EXAMPLE, MANAGEMENT ASSERTS THAT SALES IN THE INCOME STATEMENT REPRESENT THE EXCHANGE OF GOODS OR SERVICES WITH CUSTOMERS FOR CASH OR OTHER CONSIDERATION. 
ONLINE
ACCESS TO A COMPUTER FOR PROCESSING IMMEDIATELY WITHOUT HAVING TO WAIT FOR A BATCH OF TRANSACTIONS TO BE PROCESSED AT A LATER TIME. 
OPERATING EFFECTIVENESS
HOW AN INTERNAL CONTROL POLICY, PROCEDURE, OR RECORD WAS APPLIED, THE CONSISTENCY WITH WHICH IT WAS APPLIED, AND BY WHOM. 
OPERATING INCOME
FROM CONTINUING OPERATIONS IS REPORTED ON AN INCOME STATEMENT. 
OPINION
A CPA'S CONCLUSION HELD WITH CONFIDENCE BUT NOT SUBSTANTIATED BY POSITIVE KNOWLEDGE OR PROOF. 
OPINION PARAGRAPH
THE PARAGRAPH IN THE AUDIT REPORT THAT EXPRESSES THE AUDITOR'S CONCLUSIONS. THE WORDING OF THE STANDARD, UNQUALIFIED OPINION PARAGRAPH IS: "IN OUR OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF XYZ COMPANY AT DECEMBER 31, 19A, AND THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE YEAR THEN ENDED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES." 
OVERALL REVIEW
THE OBJECTIVE OF THE OVERALL REVIEW STAGE OF THE AUDIT IS TO ASSIST THE AUDITOR IN ASSESSING CONCLUSIONS REACHED AND IN EVALUATION OF THE OVERALL FINANCIAL STATEMENT PRESENTATION. THE OVERALL REVIEW INCLUDES READING THE FINANCIAL STATEMENTS AND NOTES AND CONSIDERING THE ADEQUACY OF EVIDENCE GATHERED IN RESPONSE TO UNUSUAL OR UNEXPECTED BALANCES. RESULTS OF AN OVERALL REVIEW MAY INDICATE THE NEED FOR ADDITIONAL EVIDENCE.
PARALLEL PROCESSING
IS THE SIMULTANEOUS PERFORMANCE OF MULTIPLE OPERATIONS, USUALLY IN REFERENCE TO COMPUTER SYSTEMS. 
PARITY BIT
AN EXTRA BIT ADDED TO A STRING OF BITS. IT IS A CONTROL OVER THE ACCURACY OF DATA TRANSMISSION. 
PASSWORD
A SEQUENCE OF CHARACTERS REQUIRED TO GAIN ACCESS TO A COMPUTER SYSTEM. PASSWORDS ARE USED TO RESTRICT ACCESS TO COMPUTER SYSTEMS TO ONLY AUTHORIZED PERSONS. 
PAYROLL
DEPARTMENT THAT DETERMINES AMOUNTS OF WAGE OR SALARY DUE TO EACH EMPLOYEE. 
PEER REVIEW
A PRACTICE MONITORING PROGRAM IN WHICH THE WORKING PAPERS OF ONE CPA FIRM ARE PERIODICALLY REVIEWED BY INDEPENDENT PARTNERS OF OTHER FIRMS TO DETERMINE THAT THE WORKING PAPERS CONFORM TO THE STANDARDS OF THE PROFESSION. 
PENDING
LEGAL PROCEEDINGS NOT YET DECIDED OR SETTLED. 
PER DIEM
AN ALLOWANCE FOR DAILY EXPENSES. OFTEN USED TO REIMBURSE EMPLOYEES FOR ESTIMATED LIVING EXPENSES WHILE AWAY FROM HOME ON BUSINESS AS OPPOSED TO REQUIRING AN ACCOUNTING FOR EACH SMALL COMPONENT OF THE LIVING EXPENSES. 
PERMANENT
THE PERMANENT AUDIT WORKING PAPER FILE INCLUDES THOSE WORKING PAPERS RELATED TO MATTERS OF CONTINUING ACCOUNTING SIGNIFICANCE, SUCH AS THE ANALYSIS OF BALANCE SHEET ACCOUNTS, AND THOSE RELATING TO CONTINGENCIES. SUCH INFORMATION FROM A PRIOR YEAR IS USED BY THE AUDITOR IN THE CURRENT YEAR'S AUDIT AND IS UPDATED EACH YEAR. SOMETIMES REFERRED TO AS THE CONTINUING FILE. 
PERPETRATE
CARRY OUT AN ACTION SUCH AS A CRIME. 
PERPETUAL
AN INVENTORY ACCOUNTING SYSTEM UPDATED FOR EACH ADDITION TO INVENTORY AND EACH ISSUANCE FROM INVENTORY SO THAT THE RECORDS INDICATE THE EXACT QUANTITY ON HAND AT ANY MOMENT. THE ALTERNATIVE IS A PERIODIC INVENTORY SYSTEM WHERE ACTUAL INVENTORY ON HAND IS DETERMINED ONLY ONCE A YEAR. 
PERSONAL FINANCIAL STATEMENTS
OF INDIVIDUALS PRESENT ASSETS AND LIABILITIES AT ESTIMATED CURRENT VALUE ON AN INDIVIDUAL'S BALANCE SHEET (STATEMENT OF FINANCIAL CONDITION). A STATEMENT OF CHANGES IN NET WORTH PRESENTS THE MAJOR CHANGES IN NET WORTH DURING A PERIOD. THE ACCRUAL BASIS IS USED FOR ASSETS AND LIABILITIES WHICH ARE PRESENTED IN ORDER OF LIQUIDITY AND MATURITY, WITHOUT CLASSIFICATION AS TO CURRENT AND NONCURRENT. THE CASH VALUE OF LIFE INSURANCE LESS THE AMOUNT OF ANY LOANS AGAINST IT IS PRESENTED AS AN ASSET. THE DEFERRED INCOME TAX ON THE DIFFERENCE BETWEEN THE INCOME TAX BASIS AND ESTIMATED CURRENT VALUES IS PRESENTED BETWEEN LIABILITIES AND EQUITY. 
PERSONNEL
THE DEPARTMENT CONCERNED WITH PERSONS EMPLOYED BY THE ENTITY AND CHARGED WITH MAINTAINING RECORDS OF EACH INDIVIDUAL'S EMPLOYMENT. 
PERSUASIVE
HAVING THE POWER TO INFLUENCE. MOST AUDIT EVIDENCE IS PERSUASIVE, BUT NOT CONCLUSIVE IN ITSELF. 
PERVASIVE
HAVING THE ABILITY TO PERMEATE. AN ERROR IS PERVASIVE IF IT IS MATERIAL TO MORE THAN ONE OF THE PRIMARY FINANCIAL STATEMENTS. 
PIECEMEAL OPINION
EXPRESSIONS OF OPINION AS TO ITEMS WITHIN FINANCIAL STATEMENTS SHOULD NOT BE EXPRESSED AS PART OF A DISCLAIMER OR AN ADVERSE OPINION ON THE FINANCIAL STATEMENTS TAKEN AS A WHOLE BECAUSE PIECEMEAL OPINIONS TEND TO OVERSHADOW OR CONTRADICT A DISCLAIMER OF OPINION OR AN ADVERSE OPINION. 
PLAN (PLANNED)
AUDIT PLANNING INVOLVES DEVELOPING AN OVERALL STRATEGY FOR THE EXPECTED CONDUCT AND SCOPE OF THE AUDIT. THE NATURE, EXTENT, AND TIMING OF PLANNING VARY WITH THE SIZE AND COMPLEXITY OF THE ENTITY, EXPERIENCE WITH THE ENTITY, AND KNOWLEDGE OF THE ENTITY'S BUSINESS. IN PLANNING THE AUDIT, THE AUDITOR SHOULD CONSIDER THE ENTITY'S BUSINESS AND THE INDUSTRY IN WHICH IT OPERATES, ITS ACCOUNTING POLICIES AND PROCEDURES, METHODS USED BY THE ENTITY TO PROCESS SIGNIFICANT ACCOUNTING INFORMATION, THE PLANNED ASSESSED LEVEL OF CONTROL RISK, AND THE AUDITOR'S PRELIMINARY JUDGMENT ABOUT AUDIT MATERIALITY LEVELS. 
PLEDGE
SOMETHING GIVEN AS SECURITY TO GUARANTEE PAYMENT OF A DEBT. 
POPULATION SIZE
THE NUMBER OF ITEMS IN THE POPULATION FROM WHICH A SAMPLE IS DRAWN. 
POSITIVE ASSURANCE
A STATEMENT AS WHAT THE CPA BELIEVES IS POSITIVE ASSURANCE. AN EXAMPLE IS AN OPINION THAT THE FINANCIAL STATEMENTS ARE PRESENTED FAIRLY IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE OPPOSITE IS NEGATIVE ASSURANCE, WHICH IS A STATEMENT ABOUT WHAT THE CPA DOES NOT KNOW. A STATEMENT THAT THE CPA "WAS NOT AWARE OF ANY MATERIAL MODIFICATIONS THAT SHOULD BE MADE TO FINANCIAL STATEMENTS FOR THEM TO BE IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" IS NEGATIVE ASSURANCE AND IS USED IN REVIEW REPORTS. 
POSITIVE CONFIRMATION (POSITIVE REQUEST)
THE POSITIVE FORM OF RECEIVABLES CONFIRMATION ASKS THE CUSTOMER TO RESPOND WHETHER THE CUSTOMER AGREES OR DISAGREES WITH THE CLIENT'S REPORTED RECEIVABLE BALANCE. THE NEGATIVE FORM OF ACCOUNTS RECEIVABLE CONFIRMATION ASKS THE CLIENT'S CUSTOMER TO RESPOND ONLY IF THE CUSTOMER DISAGREES WITH THE BALANCE DETERMINED BY THE CLIENT. THE NEGATIVE FORM IS USED WHEN CONTROLS OVER RECEIVABLES ARE STRONG AND ACCOUNTS RECEIVABLE CONSISTS OF MANY ACCOUNTS WITH SMALL BALANCES. THE POSITIVE FORM IS USED WHEN CONTROLS ARE WEAK OR THERE ARE FEWER, BUT LARGER, ACCOUNTS. 
PREDECESSOR AUDITOR
THE AUDITOR OF A CLIENT FOR A PRIOR YEAR WHO IS NO LONGER THE AUDITOR OF THAT CLIENT. 
PRESENTATION
ASSERTIONS ABOUT PRESENTATION DEAL WITH WHETHER PARTICULAR COMPONENTS OF THE FINANCIAL STATEMENTS ARE PROPERLY CLASSIFIED AND DESCRIBED. FOR EXAMPLE, MANAGEMENT ASSERTS THAT LONG-TERM LIABILITIES IN THE BALANCE SHEET WILL NOT MATURE WITHIN ONE YEAR. SIMILARLY, MANAGEMENT ASSERTS THAT EXTRAORDINARY ITEMS IN THE INCOME STATEMENT ARE PROPERLY CLASSIFIED AND DESCRIBED. 
PREVENTATIVE CONTROL
A CONTROL DESIGNED TO AVOID AN UNINTENDED EVENT. 
PRINCIPAL AUDITOR
THE AUDITOR RESPONSIBLE FOR THE GREATER PORTION OF FINANCIAL STATEMENTS. THE PRINCIPAL AUDITOR MAY ASSUME RESPONSIBILITY FOR THE WORK OF THE OTHER AUDITOR OR DIVIDE RESPONSIBILITY WITH THE OTHER AUDITOR. THE AUDITOR CONSIDERING WHETHER HE OR SHE MAY SERVE AS PRINCIPAL AUDITOR MUST DECIDE WHETHER HIS OWN PARTICIPATION IS SUFFICIENT TO ENABLE HIM TO SERVE AS PRINCIPAL AUDITOR. IN DECIDING, THE AUDITOR SHOULD CONSIDER THE MATERIALITY OF THE PORTION OF THE FINANCIAL STATEMENTS HE OR SHE AUDITED IN COMPARISON WITH THE PORTION AUDITED BY OTHER AUDITORS, KNOWLEDGE OF THE OVERALL FINANCIAL STATEMENTS, AND THE IMPORTANCE OF THE COMPONENTS HE OR SHE AUDITED IN RELATION TO THE ENTERPRISE AS A WHOLE. 
PRO FORMA
THE OBJECTIVE OF PRO FORMA FINANCIAL INFORMATION IS TO SHOW SIGNIFICANT EFFECTS ON HISTORICAL FINANCIAL INFORMATION HAD A CONSUMMATED OR PROPOSED TRANSACTION (OR EVENT) OCCURRED AT AN EARLIER DATE. 
PROBABILITY PROPORTIONAL TO SIZE SAMPLING (PPS)
A SAMPLING PLAN THAT BASES THE LIKELIHOOD OF SELECTING A PARTICULAR ACCOUNT ON THE RELATIVE SIZE OF THAT ACCOUNT SO THAT LARGER ACCOUNTS HAVE A GREATER PROBABILITY OF INCLUSION IN THE SAMPLE THAN DO SMALLER ACCOUNTS. 
PROBABLE
A CONTINGENT LOSS IS PROBABLE IF IT IS UNCERTAIN BUT LIKELY TO HAPPEN. 
PROCEDURE
AN ACTION, SUCH AS A STEP PERFORMED AS PART OF AN AUDIT PROGRAM OR AS PART OF THE CLIENT'S INTERNAL CONTROLS. 
PROCESSING
A PROCESSING CONTROL IS AN INTERNAL CONTROL INCLUDED IN COMPUTER SOFTWARE WHICH IS DESIGNED TO ASSURE THAT ALL TRANSACTIONS ARE HANDLED AS AUTHORIZED AND NONE OMITTED OR ADDED. 
PRODUCTION CYCLE
THE PORTION OF AN ENTITY THAT ACQUIRES RESOURCES AND CONVERTS THOSE RESOURCES INTO THE PRODUCT OR SERVICE FOR CUSTOMERS. 
PRODUCTION ORDER
A DOCUMENT THAT INITIATES THE MANUFACTURING PROCESS. 
PROFICIENCY
THE ATTAINMENT OF PROFICIENCY AS AN AUDITOR BEGINS WITH THE AUDITOR'S FORMAL EDUCATION AND EXTENDS TO SUBSEQUENT EXPERIENCE. THE INDEPENDENT AUDITOR MUST UNDERGO TRAINING ADEQUATE TO MEET THE REQUIREMENTS OF A PROFESSIONAL. THIS TRAINING MUST BE ADEQUATE IN TECHNICAL SCOPE AND INCLUDE A COMMENSURATE MEASURE OF GENERAL EDUCATION. THE JUNIOR ASSISTANT, JUST ENTERING AN AUDITING CAREER, MUST OBTAIN PROFESSIONAL EXPERIENCE WITH PROPER SUPERVISION AND REVIEW OF HIS OR HER WORK BY A MORE EXPERIENCED SUPERIOR. 
PROGRAM
AN AUDIT PROGRAM IS A LISTING OF AUDIT PROCEDURES TO BE PERFORMED IN COMPLETING THE AUDIT. A COMPUTER PROGRAM (SOFTWARE) IS A LISTING OF STEPS TO BE PERFORMED IN PROCESSING THE DATA. 
PROGRAMMED
CONTROLS BUILT INTO COMPUTER SOFTWARE WHICH INCLUDE REASONABLENESS TESTS, CONTROL TOTALS, AND SEQUENCE CHECKS. 
PROJECTION
FINANCIAL PROJECTIONS ARE PROSPECTIVE FINANCIAL STATEMENTS THAT PRESENT, TO THE BEST OF THE RESPONSIBLE PARTY'S KNOWLEDGE, GIVEN ONE OR MORE HYPOTHETICAL ASSUMPTIONS, AN ENTITY'S EXPECTED FINANCIAL POSITION, RESULTS OF OPERATIONS, AND CHANGES IN FINANCIAL POSITION. A FINANCIAL PROJECTION IS SOMETIMES PREPARED TO PRESENT ONE OR MORE HYPOTHETICAL COURSES OF ACTION FOR EVALUATION. 
PRONOUNCEMENTS
OF THE FASB AND GASB, ARE RULES THAT DETERMINE THE PRINCIPLES FOR EXTERNAL FINANCIAL REPORTING AND DISCLOSURES. 
PROSPECTIVE
FINANCIAL STATEMENTS ARE EITHER FINANCIAL FORECASTS OR FINANCIAL PROJECTIONS INCLUDING SUMMARIES OF SIGNIFICANT ASSUMPTIONS AND ACCOUNTING POLICIES. ALTHOUGH PROSPECTIVE FINANCIAL STATEMENTS MAY COVER A PERIOD THAT HAS PARTIALLY EXPIRED, STATEMENTS FOR PERIODS THAT HAVE COMPLETELY EXPIRED ARE NOT PROSPECTIVE FINANCIAL STATEMENTS. PRO FORMA FINANCIAL STATEMENTS AND PARTIAL PRESENTATIONS ARE NOT PROSPECTIVE FINANCIAL STATEMENTS. 
PROSPECTUS
A REGISTRATION STATEMENT FILED WITH THE SEC INCLUDES AUDITED FINANCIAL STATEMENTS (BALANCE SHEET, INCOME STATEMENT, AND STATEMENT OF CASH FLOWS) FOR THE PREVIOUS THREE YEARS. A PROSPECTUS CONTAINS THE SAME INFORMATION AND MUST BE SUPPLIED TO ALL PARTIES TO WHOM OFFERS ARE MADE. THERE IS A TWENTY DAY WAITING PERIOD BETWEEN THE FILING OF THE REGISTRATION STATEMENT AND THE FIRST SALE OF THOSE SECURITIES. DURING THIS PERIOD, PRELIMINARY ADS AND A "RED HERRING" PROSPECTUS CAN BE PROVIDED TO OFFEREES BUT THESE MUST BE CLEARLY MARKED AS PRELIMINARY. 
PROXY
A POWER OF ATTORNEY GRANTING A THIRD PARTY THE RIGHT TO A STOCKHOLDER'S VOTE. WHEN MANAGEMENT OR ANOTHER PARTY SOLICITS PROXIES FROM STOCKHOLDERS, A COPY OF THE PROXY STATEMENT MUST BE FILED WITH THE SEC TEN DAYS BEFORE MAILING THE SOLICITATION. THE PROXY STATEMENT MUST INCLUDE ALL INFORMATION RELEVANT TO THE MATTER VOTED ON. 
PURCHASE ORDER
A DOCUMENT SENT BY A BUYER TO A SELLER PLACING AN ORDER AND PROVIDING QUANTITIES AND SPECIFICATIONS. 
PURPORT
INTENDING TO PRESENT.
QUALIFIED (QUALIFY)
AN AUDIT OPINION THAT THE FINANCIAL STATEMENTS TAKEN AS A WHOLE ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, WITH THE EXCEPTIONS NOTED. 
QUALITATIVE
RELATING TO THE QUALITY OF A TRAIT, AS OPPOSED TO QUANTITATIVE, WHICH MEANS EXPRESSED AS A NUMBER. 
QUALITY CONTROL
A SYSTEM OF QUALITY CONTROL PROVIDES A CPA FIRM WITH REASONABLE ASSURANCE THAT PERSONNEL COMPLY WITH APPLICABLE PROFESSIONAL STANDARDS AND THE FIRM'S STANDARDS OF QUALITY, INDEPENDENCE, INTEGRITY, AND OBJECTIVITY. IT COVERS PERSONNEL MANAGEMENT, ACCEPTANCE AND CONTINUANCE OF CLIENTS AND ENGAGEMENTS, ENGAGEMENT PERFORMANCE, AND MONITORING TO ASSURE POLICIES ARE SUITABLY DESIGNED AND EFFECTIVELY APPLIED. 
QUANTITATIVE (QUANTITATIVELY)
EXPRESSED AS A NUMBER, AS OPPOSED TO QUALITATIVE MEASUREMENT. 
QUESTIONNAIRE
AN INTERNAL CONTROL QUESTIONNAIRE IS A LIST OF QUESTIONS ABOUT THE INTERNAL CONTROL SYSTEM TO BE ANSWERED (WITH ANSWERS SUCH AS YES, NO, OR NOT APPLICABLE) DURING AUDIT FIELD WORK. THE QUESTIONNAIRE BECOMES PART OF THE AUDIT WORKING PAPERS AND IS USED TO DOCUMENT THE AUDITOR'S UNDERSTANDING OF THE DESIGN OF THE CLIENT'S INTERNAL CONTROLS. 
QUICK RATIO
QUICK ASSETS DIVIDED BY CURRENT LIABILITIES. QUICK ASSETS ARE CURRENT ASSETS LESS INVENTORIES AND PREPAID EXPENSES.
RANDOM SAMPLE (RANDOM-NUMBER SAMPLING)
IDENTICAL PROBABILITY OF EACH POPULATION ITEM BEING SELECTED FOR A SAMPLE. ALSO REFERS TO THE USE OF A TABLE OF RANDOM NUMBERS TO SELECT A RANDOM SAMPLE FROM A POPULATION. 
RATIO ESTIMATION
IN AUDIT SAMPLING A RATIO BASED ON PROPORTION OF ERRORS IN THE SAMPLE CAN BE APPLIED TO THE POPULATION VALUE TO ESTIMATE TOTAL ERROR. 
RATIO
THE RELATION BETWEEN TWO QUANTITIES EXPRESSED AS THE QUOTIENT OF ONE DIVIDED BY THE OTHER. THE RATIO OF 8 TO 2 IS WRITTEN 8/2 AND EQUALS FOUR. FINANCIAL STATEMENT RATIOS ARE USED IN ANALYTICAL PROCEDURES IN AUDITS. 
REASONABLE ASSURANCE (IN AUDIT REPORT)
AN AUDITOR TYPICALLY WORKS WITHIN ECONOMIC LIMITS. THE AUDIT OPINION, TO BE ECONOMICALLY USEFUL, MUST BE FORMED IN A REASONABLE TIME AND AT REASONABLE COST. THE AUDITOR MUST DECIDE, EXERCISING PROFESSIONAL JUDGMENT, WHETHER EVIDENCE AVAILABLE WITHIN LIMITS OF TIME AND COST IS SUFFICIENT TO JUSTIFY AN OPINION. THERE SHOULD BE A RATIONAL RELATIONSHIP BETWEEN THE COST OF OBTAINING EVIDENCE AND THE USEFULNESS OF THE INFORMATION OBTAINED. THE DIFFICULTY AND EXPENSE INVOLVED IN TESTING A PARTICULAR ITEM IS NOT IN ITSELF A VALID BASIS FOR OMITTING THE TEST. 
REASONABLE ASSURANCE (IN INTERNAL CONTROL)
AN INTERNAL CONTROL, NO MATTER HOW WELL DESIGNED AND OPERATED, CAN NOT GUARANTEE THAT AN ENTITY'S OBJECTIVES WILL BE MET BECAUSE OF INHERENT LIMITATIONS IN ALL INTERNAL CONTROLS SYSTEMS. 
REAUDIT
WHEN AN AUDITOR IS ASKED TO AUDIT AND REPORT ON FINANCIAL STATEMENTS THAT HAVE BEEN PREVIOUSLY AUDITED AND REPORTED ON. 
RECALCULATE
PERFORM PROCEDURES AGAIN AND COMPARE TO ORIGINAL RESULTS. 
RECEIVING REPORT
A DOCUMENT NORMALLY COMPLETED IN THE RECEIVING DEPARTMENT WHICH IDENTIFIES THE PURCHASE ORDER THAT INITIATED THE PURCHASE, AND THE DATE, QUANTITY, AND CONDITION OF GOODS RECEIVED. 
RECOMPUTATION
PERFORM PROCEDURES AGAIN AND COMPARE TO ORIGINAL RESULTS. 
RECONCILE (RECONCILIATION)
A SCHEDULE ESTABLISHING AGREEMENT BETWEEN SEPARATE SOURCES OF INFORMATION, SUCH AS ACCOUNTING RECORDS RECONCILED WITH THE FINANCIAL STATEMENTS. 
REGISTRATION STATEMENT
A STATEMENT SUBMITTED TO OFFICIALLY PROVIDE THE SEC WITH INFORMATION ABOUT AN OFFERING OF SECURITIES. A REGISTRATION STATEMENT INCLUDES AUDITED FINANCIAL STATEMENTS (BALANCE SHEET, INCOME STATEMENT, AND STATEMENT OF CASH FLOWS) FOR THE PREVIOUS THREE YEARS. 
REGRESSION ANALYSIS
A STATISTICAL METHOD FOR FINDING THE RELATIONSHIP BETWEEN TWO OR MORE VARIABLES. ALSO CALLED LEAST SQUARES OR LINEAR REGRESSION. 
REGULATION S-X
IS A REGULATION OF THE SEC THAT EXPLAINS THE FORMAT OF INFORMATION TO BE SUBMITTED TO THE SEC. IT IS ENTITLED "FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT COMPANY ACT OF 1940, AND ENERGY POLICY AND CONSERVATION ACT OF 1975." 
RELATED PARTY
RELATED PARTIES ARE THOSE WITH WHOM THE CLIENT HAS A RELATIONSHIP WHICH MIGHT DESTROY THE SELF-INTEREST OF ONE OF THE PARTIES (ACCOUNTING IS BASED ON MEASUREMENT OF ARM'S LENGTH TRANSACTIONS). RELATED PARTIES INCLUDE AFFILIATES OF THE CLIENT (DIRECT OR INDIRECT CONTROL THROUGH OWNERSHIP OR OTHERWISE), PRINCIPLE OWNERS (MORE THAN 10% OF THE VOTING OWNERSHIP), MANAGEMENT (DECISION MAKERS WHO CONTROL BUSINESS POLICY) AND MEMBERS OF THEIR IMMEDIATE FAMILIES. ORDINARY BUSINESS TRANSACTIONS BETWEEN MANAGEMENT AND THE BUSINESS SUCH AS COMPENSATION AND EXPENSE ACCOUNTS ARE EXCLUDED. 
RELIABLE (RELIABILITY)
DIFFERENT TYPES OF AUDIT EVIDENCE PROVIDE DIFFERENT DEGREES OF ASSURANCE TO THE AUDITOR. WHEN EVIDENTIAL MATTER CAN BE OBTAINED FROM INDEPENDENT SOURCES OUTSIDE AN ENTITY, IT PROVIDES GREATER ASSURANCE OF RELIABILITY FOR AN INDEPENDENT AUDIT THAN THAT SECURED SOLELY WITHIN THE ENTITY. MORE EFFECTIVE INTERNAL CONTROLS PROVIDE MORE ASSURANCE ABOUT RELIABILITY OF THE ACCOUNTING DATA AND FINANCIAL STATEMENTS. THE INDEPENDENT AUDITOR'S DIRECT PERSONAL KNOWLEDGE, OBTAINED THROUGH PHYSICAL EXAMINATION, OBSERVATION, COMPUTATION, AND INSPECTION, IS MORE PERSUASIVE THAN INFORMATION OBTAINED INDIRECTLY. 
REMITTANCE
A REMITTANCE IS SENDING MONEY TO SOMEONE AT A DISTANCE. A REMITTANCE ADVICE IS A PAPER RECORD OF THE AMOUNT SENT, PURPOSE OF THE PAYMENT, AND ASSOCIATED ACCOUNT IDENTIFICATION. 
REMOTE
A CONTINGENCY WITH ONLY A SLIGHT CHANCE OF OCCURRING. IN COMPUTER PROCESSING OF INFORMATION, A DISTANT COMPUTER. 
REPERFORMANCE
THE REPEATING BY THE AUDITOR OF A COMPUTATION MADE BY THE CLIENT TO CHECK ITS ACCURACY. 
REPORTABLE CONDITION
MATTERS COMING TO THE AUDITOR'S ATTENTION THAT, IN HIS OR HER JUDGMENT, SHOULD BE COMMUNICATED TO THE AUDIT COMMITTEE BECAUSE THEY REPRESENT SIGNIFICANT DEFICIENCIES IN INTERNAL CONTROL, WHICH COULD ADVERSELY AFFECT THE ORGANIZATION'S ABILITY TO RECORD, PROCESS, SUMMARIZE, AND REPORT FINANCIAL DATA CONSISTENT WITH ASSERTIONS OF MANAGEMENT IN THE FINANCIAL STATEMENTS. 
REPRESENTATION
A LETTER FROM MANAGEMENT TO THE AUDITOR REPRESENTING THAT THE FINANCIAL STATEMENTS ARE FAIRLY PRESENTED. THE LETTER IS ADDRESSED TO THE INDEPENDENT AUDITOR, AND DATED AT THE DATE OF THE AUDITOR'S REPORT. IT IS SIGNED BY MEMBERS OF MANAGEMENT WHOM THE AUDITOR BELIEVES ARE RESPONSIBLE FOR, AND KNOWLEDGEABLE ABOUT, MATTERS COVERED, NORMALLY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER. 
REQUISITION
A FORMAL WRITTEN REQUEST FOR SOMETHING NEEDED. A PURCHASE BY A COMPANY IS OFTEN INITIATED INTERNALLY BY A REQUISITION, WHICH RESULTS IN THE ISSUANCE OF A PURCHASE ORDER TO THE OUTSIDE SUPPLIER. 
REVENUE CYCLE
THE PORTION OF A COMPANY THAT FILLS CUSTOMER ORDERS, ACCOUNTS FOR RECEIVABLES, AND COLLECTS THOSE RECEIVABLES. 
REVIEW
TO EXAMINE AGAIN. THE OVERALL REVIEW OF AUDIT WORKING PAPERS IS COMPLETED AFTER FIELD WORK. A PEER REVIEW IS A PRACTICE MONITORING PROGRAM IN WHICH THE WORKING PAPERS OF ONE CPA FIRM ARE PERIODICALLY REVIEWED BY INDEPENDENT PARTNERS OF OTHER FIRMS TO DETERMINE THAT THE WORKING PAPERS CONFORM TO THE STANDARDS OF THE PROFESSION. AN ANALYTICAL REVIEW IS A TYPE OF SUBSTANTIVE AUDITING PROCEDURE. A REVIEW OF THE FINANCIAL STATEMENTS OF A NONPUBLIC COMPANY IS AN ENGAGEMENT THAT RESULTS IN THE EXPRESSION OF LESS ASSURANCE THAN AN AUDIT, BUT MORE THAN IN A COMPILATION. A REVIEW OF THE INTERIM FINANCIAL STATEMENTS OF A PUBLIC COMPANY CONSISTS OF ANALYTICAL PROCEDURES AND INQUIRIES. 
RIGHTS
ASSERTIONS ABOUT RIGHTS DEAL WITH WHETHER THE ENTITY HAS RIGHTS TO THE ASSET AT A GIVEN DATE. FOR EXAMPLE, MANAGEMENT ASSERTS THAT AMOUNTS CAPITALIZED FOR LEASES IN THE BALANCE SHEET REPRESENT THE COST OF THE ENTITY'S RIGHTS TO LEASED PROPERTY. 
RISK ANALYSIS
AN ANALYSIS OF THE POSSIBILITY OF SUFFERING LOSS.
SAMPLE SIZE
THE NUMBER OF POPULATION ITEMS SELECTED WHEN A SAMPLE IS DRAWN FROM A POPULATION. 
SAMPLING ERROR
UNLESS THE AUDITOR EXAMINES 100% OF THE POPULATION, THERE IS ALWAYS SOME CHANCE THAT THE SAMPLE RESULTS WILL MISLEAD THE AUDITOR. THIS RISK IS SAMPLING ERROR. THE LARGER THE SAMPLE, THE LESS CHANCE OF SAMPLING ERROR AND THE GREATER THE RELIABILITY OF THE RESULTS. 
SAMPLING RISK
THE POSSIBILITY THAT CONCLUSIONS DRAWN FROM THE SAMPLE MAY NOT REPRESENT CORRECT CONCLUSIONS FOR THE ENTIRE POPULATION. 
SCOPE PARAGRAPH
THE PARAGRAPH IN THE AUDIT REPORT THAT EXPLAINS THE SCOPE OF THE ENGAGEMENT. THE WORDING OF THE STANDARD SCOPE PARAGRAPH IS: "WE CONDUCTED OUR AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS. AN AUDIT ALSO INCLUDES ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING THE OVERALL FINANCIAL STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDIT PROVIDES A REASONABLE BASIS FOR OUR OPINION." 
SCOPE
THE AREAS COVERED BY THE ENGAGEMENT. THE SCOPE OF AN ENGAGEMENT MIGHT BE A REVIEW, AN AUDIT, OR A COMPILATION. A SCOPE LIMITATION IS A RESTRICTION ON THE EVIDENCE THE AUDITOR CAN GATHER. 
SEC
THE SECURITIES AND EXCHANGE COMMISSION IS AN AGENCY THAT ADMINISTERS FEDERAL SECURITIES LAWS. THESE LAWS REQUIRE DISCLOSURE OF INFORMATION CONCERNING PUBLICLY TRADED SECURITIES. THE SEC REQUIRES THAT BUSINESSES DISCLOSE FACTS AND INVESTIGATES SECURITIES FRAUD. IT REGULATES SECURITIES EXCHANGES AND BROKERS. 
SECOND REQUEST
WHEN AN AUDITOR CONFIRMS RECEIVABLES SOME CUSTOMERS OF THE CLIENT FAIL TO RESPOND TO THE FIRST CONFIRMATION REQUEST. ANOTHER REQUEST SENT TO THE SAME CUSTOMERS IS THE SECOND REQUEST. 
SECURED TRANSACTION
RIGHT TO REPOSSESS GOODS AS SECURITY FOR PAYMENT OF A DEBT. 
SEGREGATION OF DUTIES
SEGREGATION OF DUTIES MEANS ASSIGNING DIFFERENT PEOPLE THE RESPONSIBILITIES OF AUTHORIZING TRANSACTIONS, RECORDING TRANSACTIONS, AND MAINTAINING CUSTODY OF ASSETS. SEGREGATION OF DUTIES REDUCES THE OPPORTUNITIES FOR ANY ONE PERSON TO BOTH PERPETRATE AND CONCEAL ERRORS OR FRAUD IN THE NORMAL COURSE OF HIS OR HER DUTIES. 
SELF-CHECKING DIGIT
AN EXTRA DIGIT IS ADDED TO A NUMBER. THE EXTRA DIGIT IS COMPUTED FROM THE OTHER DIGITS IN THE NUMBER. THE COMPUTER PROGRAM CAN THEN CHECK INPUT BY RECOMPUTING AND COMPARING THE CHECK DIGIT . THIS IS A USEFUL CONTROL OVER THE INPUT OF ACCOUNT NUMBERS. 
SERVICE AUDITOR
THE AUDITOR OF AN ORGANIZATION THAT PROVIDES SERVICES SUCH AS DATA PROCESSING OR PENSION TRUST ADMINISTRATION TO OTHER ORGANIZATIONS (THE USERS). AUDITORS OF THE USERS (USER AUDITORS) SOMETIMES RELY ON A REPORT FROM THE SERVICE AUDITOR ABOUT CONTROLS IN THE SERVICE ORGANIZATION THAT APPLY TO THE FINANCIAL STATEMENTS OF THE USER ORGANIZATION THEY ARE AUDITING. 
SHIPPING DOCUMENT
A DOCUMENT PREPARED WHEN GOODS ARE SHIPPED. IT IDENTIFIES THE DATE SHIPPED, THE CUSTOMER, THE METHOD OF SHIPMENT, AND THE QUANTITY AND SPECIFICATIONS OF GOODS SHIPPED. 
SIMULATION
REPRESENTATION OF THE OPERATION OR FEATURES OF ONE PROCESS OR SYSTEM THROUGH THE USE OF ANOTHER. COMPUTER SIMULATION OF WAITING LINES CAN AID IN DETERMINING THE NUMBER OF EMPLOYEES NEEDED TO SERVE CUSTOMERS AT A PARTICULAR TIME OF DAY. 
SINGLE AUDIT ACT
THIS FEDERAL LEGISLATION REQUIRES THAT STATE AND LOCAL GOVERNMENTS THAT RECEIVE FEDERAL AID OF $300,000 OR MORE IN A FISCAL YEAR HAVE AN AUDIT UNDER THE ACT. A GOVERNMENT THAT RECEIVES FROM $25,000 TO $300,000 HAS THE OPTION OF AN AUDIT UNDER THE ACT OR WITH SPECIFIC FEDERAL LAWS AND REGULATIONS OF PROGRAMS IN WHICH THE GOVERNMENT PARTICIPATES. STATE AND LOCAL GOVERNMENTS RECEIVING LESS THAN $25,000 IN FEDERAL AID NEED NOT HAVE AN AUDIT. UNDER THE SINGLE AUDIT ACT, AUDITORS REPORT WHETHER THE AUDITED ENTITY HAS FOLLOWED LAWS AND REGULATIONS THAT MAY HAVE A MATERIAL EFFECT ON EACH MAJOR FEDERAL AID PROGRAM. 
SOFTWARE
PROGRAMS AND LANGUAGES THAT CONTROL COMPUTER HARDWARE. 
SPECIALIST
AN EXPERT AT ACTIVITIES NOT USUALLY DONE BY AUDITORS (SUCH AS APPRAISERS FOR VALUATION). 
SSARS
STATEMENTS ON STANDARDS FOR ACCOUNTING AND REVIEW SERVICES (SSARS) ARE ISSUED BY THE AICPA ACCOUNTING AND REVIEW SERVICES COMMITTEE. IT IS THE SENIOR TECHNICAL COMMITTEE OF THE INSTITUTE DESIGNATED TO ISSUE PRONOUNCEMENTS CONCERNING UNAUDITED FINANCIAL INFORMATION OF A NONPUBLIC ENTITY. 
STANDARD DEVIATION
A STATISTIC USED TO MEASURE DISPERSION EQUAL TO THE SQUARE ROOT OF THE ARITHMETIC MEAN OF THE SQUARES OF THE DEVIATIONS FROM THE ARITHMETIC MEAN. 
STATISTICAL
MAKING INFERENCES IN UNCERTAIN SITUATIONS USING APPLIED MATHEMATICS. MEASUREMENTS TAKEN FROM A SMALL GROUP, THE SAMPLE, ARE USED TO INFER THE BEHAVIOR OF A LARGER GROUP, THE POPULATION. PROBABILITY THEORY IS USED TO DETERMINE HOW WELL THE SAMPLE REPRESENTS THE POPULATION. 
STOP-OR-GO SAMPLING
TAKING A SAMPLE FROM A POPULATION AND CHECKING AFTER EACH SAMPLE ITEM IS DRAWN WHETHER THE RESULTS OF THE SAMPLE SUPPORT A DESIRED CONCLUSION. SAMPLING CEASES AS SOON AS THAT CONCLUSION IS SUPPORTED. 
STRATIFY
TO ARRANGE A POPULATION OR A SAMPLE IN DISTINCT LAYERS. STRATIFIED SAMPLING IS SOMETIMES USED IN AUDITING TO SELECT A GREATER PERCENTAGE OF ACCOUNTS WITH HIGH BALANCES THAN OF ACCOUNTS WITH LOW BALANCES. 
SUBJECT TO
YEARS AGO THERE WAS A TYPE OF QUALIFIED AUDIT OPINION THAT WAS WORDED "IN OUR OPINION, SUBJECT TO....." AUDITORS ARE NO LONGER PERMITTED TO ISSUE SUCH OPINIONS. 
SUBSEQUENT EVENT
EVENTS WHICH AFFECT THE CLIENT AND WHICH OCCUR BETWEEN THE BALANCE SHEET DATE AND ISSUANCE OF THE AUDIT REPORT ARE SUBSEQUENT EVENTS. SOME SUCH EVENTS PROVIDE ADDITIONAL EVIDENCE ABOUT CONDITIONS THAT EXISTED AT THE BALANCE SHEET DATE, SUCH AS THE BANKRUPTCY OF A CUSTOMER WITH A HISTORY OF FINANCIAL DIFFICULTY. THE FINANCIAL STATEMENTS ARE ADJUSTED TO REFLECT THIS EVIDENCE. EVIDENCE ABOUT CONDITIONS THAT DID NOT EXIST AT THE BALANCE SHEET DATE, SUCH AS FIRE THAT DESTROYED THE CLIENT'S PLANT AFTER THE BALANCE SHEET DATE, MAY BE SO SIGNIFICANT AS TO REQUIRE DISCLOSURE. GENERAL CONDITIONS, SUCH AS A WAR, DO NOT REQUIRE DISCLOSURE, EVEN IF THEY HAVE A MAJOR IMPACT ON FINANCIAL STATEMENTS. SUCH ITEMS ARE PUBLIC KNOWLEDGE. 
SUBSIDIARY LEDGER
THE DETAILED INFORMATION WHICH TOTALS TO THE BALANCE IN THE GENERAL LEDGER ACCOUNT. THE TOTAL OF ALL CUSTOMER ACCOUNTS RECEIVABLE INCLUDED IN THE SUBSIDIARY LEDGER OF ACCOUNTS RECEIVABLE IS THE BALANCE IN THE GENERAL LEDGER ACCOUNTS RECEIVABLE ACCOUNT. 
SUBSTANTIATED
SUPPORTED WITH PROOF OR EVIDENCE. 
SUBSTANTIVE
A SUBSTANTIVE AUDIT PROCEDURE IS A DIRECT TEST OF A FINANCIAL STATEMENT BALANCE. 
SUCCESSOR AUDITOR
THE AUDITOR OF A CLIENT FOR THE CURRENT YEAR WHEN THAT CLIENT HAD ANOTHER AUDITOR IN PRIOR YEARS. THE AUDITOR WHO IS NO LONGER THE AUDITOR OF THAT CLIENT IS THE PREDECESSOR AUDITOR. 
SUFFICIENCY (SUFFICIENT)
A MEASURE OF THE QUANTITY OF AUDIT EVIDENCE. THE INDEPENDENT AUDITOR'S OBJECTIVE IS TO OBTAIN SUFFICIENT COMPETENT EVIDENTIAL MATTER TO PROVIDE A REASONABLE BASIS FOR FORMING AN OPINION. THE AMOUNT AND KINDS OF EVIDENTIAL MATTER REQUIRED TO SUPPORT AN INFORMED OPINION ARE MATTERS FOR THE AUDITOR TO DETERMINE IN THE EXERCISE OF PROFESSIONAL JUDGMENT. IN THE GREAT MAJORITY OF CASES, THE AUDITOR FINDS IT NECESSARY TO RELY ON EVIDENCE THAT IS PERSUASIVE RATHER THAN CONVINCING. BOTH THE INDIVIDUAL ASSERTIONS IN FINANCIAL STATEMENTS AND THE OVERALL PROPOSITION THAT THE FINANCIAL STATEMENTS AS A WHOLE PRESENT FINANCIAL POSITION, RESULTS OF OPERATIONS, AND CASH FLOWS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, ARE OF SUCH A NATURE THAT EVEN AN EXPERIENCED AUDITOR IS SELDOM CONVINCED BEYOND ALL DOUBT WITH RESPECT TO ALL ASPECTS OF THE STATEMENTS BEING AUDITED. 
SUPERVISE
SUPERVISION INVOLVES DIRECTING THE EFFORTS OF ASSISTANTS WHO ARE INVOLVED IN ACCOMPLISHING THE OBJECTIVES OF THE AUDIT AND DETERMINING WHETHER THOSE OBJECTIVES WERE ACCOMPLISHED. ELEMENTS OF SUPERVISION INCLUDE INSTRUCTING ASSISTANTS, KEEPING INFORMED OF SIGNIFICANT PROBLEMS ENCOUNTERED, REVIEWING WORK PERFORMED, AND DEALING WITH DIFFERENCES OF OPINION AMONG FIRM PERSONNEL. THE EXTENT OF SUPERVISION APPROPRIATE IN A GIVEN INSTANCE DEPENDS ON MANY FACTORS, INCLUDING THE COMPLEXITY OF THE SUBJECT MATTER AND THE QUALIFICATIONS OF PERSONS PERFORMING THE WORK. ASSISTANTS SHOULD BE INFORMED OF THEIR RESPONSIBILITIES AND THE OBJECTIVES OF THE PROCEDURES, AS WELL AS MATTERS THAT MAY AFFECT THE NATURE, EXTENT, AND TIMING OF THOSE PROCEDURES, SUCH AS THE NATURE OF THE ENTITY'S BUSINESS, AND POSSIBLE ACCOUNTING AND AUDITING PROBLEMS. 
SUPPLIER
A COMPANY THAT PROVIDES GOODS OR SERVICES TO AN AUDITED ENTITY. SOMETIMES CALLED A VENDOR.
TEST 
A SAMPLE TAKEN FROM A POPULATION TO ESTIMATE CHARACTERISTICS OF THE POPULATION. 
TEST COUNT 
AS PART OF INVENTORY AUDIT PROCEDURES AUDITORS NORMALLY OBSERVE THE CLIENT'S EMPLOYEES COUNTING THE PHYSICAL INVENTORY. A TEST COUNT IS PHYSICAL INVENTORY COUNTED BY THE AUDITORS THEMSELVES TO CHECK THE CLIENT'S COUNT. 
TEST DATA
RUN THROUGH A COMPUTER PROGRAM TO TEST THE SOFTWARE. TEST DATA CAN BE USED TO TEST COMPLIANCE WITH CONTROLS INCLUDED IN THE SOFTWARE. 
TEST OF CONTROLS (TESTS OF THE OPERATING EFFECTIVENESS OF INTERNAL CONTROLS)
AUDITORS EVALUATE THE DESIGN OF CONTROLS, THEN DETERMINE IF THE CONTROLS HAVE BEEN PLACED IN OPERATION. IN ORDER TO RELY ON THE CONTROLS THEY MUST ALSO TEST THE CONTROLS TO OBTAIN EVIDENCE AS TO WHETHER THE CONTROLS ARE OPERATING EFFECTIVELY. 
TEST OF DETAIL
DIRECT TESTS OF FINANCIAL STATEMENT BALANCES (SUBSTANTIVE AUDIT PROCEDURES) THAT ARE NOT ANALYTICAL PROCEDURES. IF TESTS OF DETAILS ARE PERFORMED AS TESTS OF CONTROLS AS WELL AS SUBSTANTIVE TESTS THEY ARE "DUAL-PURPOSE" TESTS. 
TICK MARKS
IN AUDIT WORK PAPERS ARE FOOTNOTES REPRESENTED BY A SYMBOL INSTEAD OF BY A NUMBER. THEY INDICATE PROCEDURES THAT HAVE BEEN CARRIED OUT ON SPECIFIC ITEMS IN THE WORK PAPERS. 
TIMES INTEREST EARNED
INCOME BEFORE INTEREST AND TAXES DIVIDED BY INTEREST EXPENSE. 
TOLERABLE MISSTATEMENT
WHEN PLANNING A SAMPLE FOR A SUBSTANTIVE TEST OF DETAILS, THE AUDITOR SHOULD CONSIDER HOW MUCH MONETARY MISSTATEMENT IN THE RELATED ACCOUNT BALANCE OR CLASS OF TRANSACTIONS MAY EXIST WITHOUT CAUSING THE FINANCIAL STATEMENTS TO BE MATERIALLY MISSTATED. THIS MAXIMUM MONETARY MISSTATEMENT FOR THE BALANCE OR CLASS IS CALLED TOLERABLE MISSTATEMENT FOR THE SAMPLE. TOLERABLE MISSTATEMENT IS A PLANNING CONCEPT AND IS RELATED TO THE AUDITOR'S PRELIMINARY JUDGMENTS ABOUT MATERIALITY SO THAT TOLERABLE MISSTATEMENT, COMBINED FOR THE ENTIRE AUDIT PLAN, DOES NOT EXCEED THOSE ESTIMATES. 
TOLERABLE
THE TOLERABLE DEVIATION RATE IS THE MAXIMUM RATE OF DEVIATION FROM AN INTERNAL CONTROL THAT WILL ALLOW THE AUDITOR TO PLACE THE PLANNED RELIANCE ON THAT CONTROL. 
TRACE
FOLLOW A TRANSACTION THROUGH THE STEPS OF THE SYSTEM. 
TREASURER
THE OFFICER WHO HAS CONTROL OF THE FUNDS OF THE ENTITY. THE TREASURER NORMALLY SIGNS CHECKS AND IS RESPONSIBLE FOR CASH MANAGEMENT. 
TREASURY STOCK
STOCK OF THE CORPORATION THAT HAS BEEN ISSUED AND LATER REACQUIRED. IT IS NOT AN ASSET. IT IS A REDUCTION OF STOCKHOLDERS' EQUITY. TREASURY STOCK CAN BE RECORDED AT EITHER ITS COST OR ITS PAR VALUE. 
TREND ANALYSIS
AN ANALYSIS OF THE CHANGE IN SOMETHING OVER TIME. ANALYTICAL PROCEDURES WHICH COMPARE FINANCIAL STATEMENT RATIOS OF DIFFERENT YEARS ARE AN EXAMPLE OF TREND ANALYSIS. 
TRIAL BALANCE
A STATEMENT OF THE OPEN DEBIT AND CREDIT ACCOUNTS IN A DOUBLE-ENTRY LEDGER TO TEST THEIR EQUALITY. 
TURNOVER
INVENTORY TURNOVER IS A MEASURE OF THE TIME FROM RECEIPT OF INVENTORY TO ITS SALE. IT IS FOUND BY DIVIDING COST OF SALES BY AVERAGE INVENTORY. RECEIVABLES TURNOVER IS A MEASURE OF THE TIME IT TAKES COLLECTS TO COLLECT RECEIVABLES. IT IS FOUND BY DIVIDING NET CREDIT SALES BY AVERAGE NET RECEIVABLES. EMPLOYEE TURNOVER IS THE RATE AT WHICH NEW EMPLOYEES REPLACE OLD EMPLOYEES.
UNQUALIFIED
AN AUDIT OPINION THAT THE FINANCIAL STATEMENTS TAKEN AS A WHOLE ARE PRESENTED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. 
UPDATE (UPDATED)
IF AN AUDITOR NOTICES EVENTS THAT AFFECT FINANCIAL STATEMENTS ON WHICH AN AUDIT REPORT HAS BEEN ISSUED, THEY ARE CONSIDERED WHEN UPDATING THE REPORT ON THE PRIOR STATEMENTS. IF THOSE STATEMENTS ARE UPDATED, THE REPORT SAYS THEY HAVE BEEN RESTATED AND EXPRESSES THE APPROPRIATE OPINION. IF AN UPDATED OPINION DIFFERS FROM THE PREVIOUS OPINION, AN EXPLANATORY PARAGRAPH PRECEDING THE OPINION PARAGRAPH EXPLAINS THAT THE REPORT HAS BEEN UPDATED, DISCLOSES THE DATE AND TYPE OF OPINION PREVIOUSLY EXPRESSED, AND EVENTS THAT CAUSED THE REVISION. 
USER AUDITOR
A "SERVICE AUDITOR" IS THE AUDITOR OF AN ORGANIZATION THAT PROVIDES SERVICES SUCH AS DATA PROCESSING OR PENSION TRUST ADMINISTRATION TO OTHER ORGANIZATIONS (THE USERS). AUDITORS OF THE USERS (USER AUDITORS) SOMETIMES RELY ON A REPORT FROM THE SERVICE AUDITOR ABOUT CONTROLS IN THE SERVICE ORGANIZATION THAT APPLY TO THE FINANCIAL STATEMENTS OF THE USER ORGANIZATION THEY ARE AUDITING.
VALIDITY CHECK
A SOFTWARE CONTROL OVER THE INPUT OF DATA TO A COMPUTER SYSTEM. IN A VALIDITY CHECK, DATA IS COMPARED WITH THE TYPE OF DATA PROPERLY INCLUDED IN EACH INPUT FIELD, E.G., ONLY LETTERS IN A NAME FIELD. 
VALUATION
AN ASSERTION MADE BY MANAGEMENT THAT EACH ASSET AND LIABILITY IS RECORDED AT AN APPROPRIATE CARRYING VALUE. 
VALUE-ADDED NETWORK
A TELECOMMUNICATIONS NETWORK PROVIDING COMMUNICATION FACILITIES, WHICH ENHANCE BASIC TELECOMMUNICATIONS SERVICES. THEY ADD VALUE BY PASSING, STORING AND CONVERTING/TRANSLATING MESSAGES, AND OTHER TASKS. ALSO KNOWN AS SERVICE PROVIDERS AND EDI SERVICE PROVIDERS. MAY BE OPERATED BY A CLEARING HOUSE, AN ORGANIZATION THAT PROVIDES A MESSAGE/FILE COLLECTION, ROUTING AND DISTRIBUTION SERVICE ON BEHALF OF OTHER ORGANIZATIONS. 
VARIABLE SAMPLING
THE CHARACTERISTIC TESTED HAS MANY POSSIBLE VALUES (SUCH AS DOLLAR VALUE OF INVENTORY). 
VARIANCE
A STATISTICAL MEASURE OF DISPERSION IN A POPULATION. THE VARIANCE IS THE SQUARE OF THE STANDARD DEVIATION. THE STANDARD DEVIATION IS EQUAL TO THE SQUARE ROOT OF THE ARITHMETIC MEAN OF THE SQUARES OF THE DEVIATIONS FROM THE ARITHMETIC MEAN. 
VENDOR
A COMPANY THAT PROVIDES GOODS OR SERVICES TO AN AUDITED ENTITY. SOMETIMES CALLED A SUPPLIER. 
VERIFY (VERIFYING) (VERIFIES) (VERIFICATION)
PROVE ACCURACY OF NUMBERS OR EXISTENCE OF ASSETS. 
VOUCH (VOUCHES)
PROVE ACCURACY OF ACCOUNTING ENTRIES BY TRACING TO SUPPORTING DOCUMENTS. 
VOUCHER
A DOCUMENT CREATED IN SUPPORT OF AN EXPENDITURE. THE SIGNATURE OF AN APPROPRIATE OFFICIAL ON THE VOUCHER IS AUTHORIZATION FOR THE TREASURER TO ISSUE A CHECK IN PAYMENT OF THE OBLIGATION.
WORKING PAPERS
ARE RECORDS KEPT BY THE AUDITOR OF PROCEDURES APPLIED, TESTS PERFORMED, INFORMATION OBTAINED, AND PERTINENT CONCLUSIONS REACHED IN THE ENGAGEMENT. WORKING PAPERS PROVIDE THE PRINCIPAL SUPPORT FOR THE AUDITOR'S REPORT AND AID THE AUDITOR IN THE CONDUCT AND SUPERVISION OF THE AUDIT. 
WRITE-OFF
A CANCELLATION OF PART OR ALL OF AN ACCOUNT BALANCE. COSTS INCURRED WHICH HAVE NO FUTURE UTILITY ARE CHARGED (WRITTEN-OFF) TO AN EXPENSE OR LOSS ACCOUNT, NOT CARRIED FORWARD AS AN ASSET. 
WRITE-UP
IN DOLLAR TERMS A WRITE-UP IS AN INTENTIONAL OVER-VALUATION OF ASSETS. IN NARRATIVE TERMS A WRITE-UP IS A WRITTEN DESCRIPTION OF SOMETHING OR SOME EVENT.
