What Is an Audit? The term audit usually refers to a financial statement audit. A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent. The audit can be conducted
What Is an Audit Committee? An audit committee is one of the major operating committees of a company’s board of directors that is in charge of overseeing financial reporting and disclosure. All U.S. publicly-traded companies must maintain a qualified audit committee in order to be listed on a stock exchange. Committee members must be made
What Is an Audit Cycle? An audit cycle is the accounting process that auditors employ in the review of a company’s financial statements and related information. An audit cycle includes the steps that an auditor takes to ensure that the company’s financial information is valid. The audit cycle can call for different tasks to be
What Is the Auditing Standards Board (ASB)? The Auditing Standards Board (ASB) issues guidelines and rule pronouncements that certified public accountants (CPAs) must adhere to in audits and attestations. Part of the American Institute of Certified Public Accountants (AIPCA), the Auditing Standards Board’s (ASB) mission is to serve the public interest by developing, updating, and communicating comprehensive standards and practice guidance
What Is an Auditor? An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws. They protect businesses from fraud, point out discrepancies in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot ways to boost operational efficiency.
What Is an Auditor’s Report? An auditor’s report is a written letter from the auditor containing their opinion on whether a company’s financial statements comply with generally accepted accounting principles (GAAP) and are free from material misstatement. The independent and external audit report is typically published with the company’s annual report. The auditor’s report is
What Is an Augmented Product? An augmented product has been enhanced by its seller with added features or services to distinguish it from the same product offered by its competitors. Augmenting a product involves including intangible benefits or add-ons that go beyond the product itself. Examples of the features used to create augmented products might
What Is Assignment of Trade (AOT)? Assignment of trade (AOT) is a transaction used primarily in the mortgage-backed securities (MBSs) to be announced (TBA) market, where the obligation to fulfill an existing forward trade is assigned by one of the counterparties to a third party. AOTs are frequently used to avoid having to make delivery of securities into, or
What Is the Assignment Method? The assignment method is a way of allocating organizational resources in which each resource is assigned to a particular task. The resource could be monetary, personnel, or technological. Understanding the Assignment Method The assignment method is used to determine what resources are assigned to which department, machine, or center of
What Is an Associate Company? An associate company, in its broadest sense, is a corporation in which a parent company possesses an ownership stake. Usually, the parent company owns only a minority stake of the associate company, as opposed to a subsidiary company, in which a majority stake is owned. The actual definition varies greatly
