The Following Are Key Terms in Chapter 11 That Relate

question 52

Essay

The following are key terms in Chapter 11 that relate to auditing of governmental and not-for-profit organizations:
A.Attestation engagement
B.Generally accepted auditing standards (GAAS)
C.Opinion units
D.Materiality
E.Financial audit
F.Generally accepted government auditing standards (GAGAS)
G.Nonaudit work
H.Performance audits

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Definitions:

Average Duration

The weighted average time it takes for an investor to receive all cash flows from a bond or a portfolio of bonds, factoring in the present value of those cash flows.

Perpetuity

A type of annuity that lasts forever, providing payments that continue indefinitely.

Yield

The income return on an investment, expressed as a percentage of the investment’s cost or current market value.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, often noted in years.