Unit 10: Vocabulary

Please study the 15 vocabulary terms below. Then press the Mark Complete button to continue.
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abnormality
something which is not typical or appearing to be right
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Several abnormalities were discovered during the audit, which resulted in the company being taken to court.
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act on
do something as a reaction
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The board decided to act on the performance auditor's recommendations and instituted new purchasing procedures.
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adhere to
follow or obey
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Each company should adhere to the accounting standards of the country that they operate in.
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audit
an examination of records or financial accounts to check their correctness
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The IRS audit will take place next week, so make sure all documentation is ready by then.
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control
a standard of comparison for checking or verifying the results
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The company has several control systems in place to make sure theft does not happen.
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defraud
illegally take money from someone by using deceit
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Mr Franks was convicted of defrauding the company out of millions.
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itemization
the act of itemizing, to list as an item or separate part, to give the particulars of
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Itemization of expenses helps in identifying areas of high cost.
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objectivity
the state of being uninfluenced by emotions or personal prejudices
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Audits are often performed by external auditors to maintain objectivity.
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outcome
the end result
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The outcome of the meeting was the decision to relocate to Brazil.
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sloppy
untidy or with mistakes
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James was fired for being too sloppy in his work, after it was noticed that he had made several serious mistakes.
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sound
having a firm basis
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John has a sound knowledge of financial matters, but he has never dealt with an IRS audit, so the CFO insisted on being present during the audit.
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statistical sampling
the process of checking an entity based on a small amount of data taken at random
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The auditor chose one month at random for statistical sampling.
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transparency
the state of providing clear visible information to all involved in an activity
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Increased transparency in the accounting department has increased shareholder faith in the company.
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validity
being correct and valid
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The validity of the accounts was questioned by the IRS and an audit was performed.
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verify
prove the truth of by presentation of evidence or testimony
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The accounts manager must verify all payments over $10,000.
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