CFFE Module I
Introduction to Forensic Accounting and Audit glossary
Every term this guide defines, A to Z, each with the chapter that teaches it. Open it when a word in a question is unfamiliar, and test yourself on it in the last week: cover the definition and say it in one sentence.
12 terms from the free first chapter
A
- Accrual basis
Recognises transactions when they occur economically, regardless of when cash moves, the basis most commercial and IPSAS-compliant public entities use.
Taught in Introduction to accounting
C
- Cash basis
Recognises transactions only when cash is actually received or paid, simpler but can obscure obligations and receivables that accrual accounting would reveal.
Taught in Introduction to accounting
- Consistency
The same accounting methods are applied period to period, so a sudden unexplained change can itself be a fraud indicator.
Taught in Introduction to accounting
E
- Employees
Responsible for accurate, honest recording of the transactions they handle.
Taught in Introduction to accounting
- External auditors
Responsible for independently opining on whether the statements are fairly presented, not for preparing them.
Taught in Introduction to accounting
- External users
Investors, lenders, regulators, tax authorities and the public, relying on published accounts they cannot independently verify themselves.
Taught in Introduction to accounting
G
- Going concern
Assumes the entity will continue operating for the foreseeable future.
Taught in Introduction to accounting
I
- Internal users
Management, employees, using accounting information to run and control the entity.
Taught in Introduction to accounting
M
- Management
Responsible for maintaining accurate records and preparing financial statements.
Taught in Introduction to accounting
O
- Objective
To provide reliable financial information that supports decision making and accountability.
Taught in Introduction to accounting
P
- Prudence
Caution is exercised so assets and income are not overstated, nor liabilities and expenses understated.
Taught in Introduction to accounting
T
- Those charged with governance (the board)
Responsible for oversight of the financial reporting process.
Taught in Introduction to accounting
The full glossary adds every term from the other 6 chapters, A to Z, each with the chapter that teaches it.