Accounting Unit 10: Vocabulary

To pass this unit, please study the 15 vocabulary words below.
abnormality
something which is not typical or appearing to be right
Several abnormalities were discovered during the audit, which resulted in the company being taken to court.
act on
do something as a reaction
The board decided to act on the performance auditor's recommendations and instituted new purchasing procedures.
adhere to
follow or obey
Each company should adhere to the accounting standards of the country that they operate in.
audit
an examination of records or financial accounts to check their correctness
The IRS audit will take place next week, so make sure all documentation is ready by then.
control
a standard of comparison for checking or verifying the results
The company has several control systems in place to ensure theft does not happen.
defraud
illegally take money from someone by using deceit
Mr Franks was convicted of defrauding the company out of millions.
itemization
to place individual items as a list
Itemization of expenses helps in identifying areas of high cost.
objectivity
the state of being uninfluenced by emotions or personal prejudices
Audits are often performed by external auditors to maintain objectivity.
outcome
the end result
The outcome of the meeting was the decision to relocate to Brazil.
sloppy
untidy or with mistakes
James was fired for being too sloppy in his work, after it was noticed that he had made several serious mistakes.
sound
having a firm basis
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.
statistical sampling
the process of checking an entity based on a small amount of data taken at random
The auditor chose one month at random for statistical sampling.
transparency
the state of providing clear visible information to all involved in an activity
Increased transparency in the accounting department has increased shareholder faith in the company.
validity
being correct and valid
The validity of the accounts was questioned by the IRS and an audit was performed.
verify
prove the truth of by presentation of evidence or testimony
The accounts manage must verify all payments over $10,000.
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