Audit Risk
The risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated — the product of the risk of material misstatement and detection risk.
Related terms
- Audit Evidence
Information an auditor uses to support a conclusion — documents, confirmations, recomputation, observation. The standard of evidence is that it be sufficient and appropriate, not merely present.
- Audit Opinion
The auditor's formal conclusion on whether the financial statements give a true and fair view, expressed as unmodified, qualified, adverse or a disclaimer.
- Audit Sampling
Selecting less than 100% of a population to test, and projecting the result to the whole. Distinct from full-population testing, where every transaction is tested and nothing is projected.
- Audit Trail
A record of who did what, when, in a system or a file — including what a value was changed from and to. Also the name of a specific Companies Act compliance requirement for accounting software to log edit history.
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