What does information and communication mean on the CPA exam?
Information and communication. One of the five components of internal control: how an entity obtains the information it needs and gets it to the people who have to act on it.
Defined against AU-C 315.21.
Which CPA exam sections use information and communication?
Information and communication appears in the AUD section of the CPA exam.
Other terms defined against AU-C 315
- application controls: Controls built into one business process or system, such as a validity check on an input field or a three-way match.
- assessed risk: The auditor's judgment about the risk of material misstatement at the assertion level, combining inherent and control risk.
- control environment: The governance and management functions and the attitudes, awareness, and actions of those charged with governance and management concerning the entity's system of internal control.
- general controls: Controls over the IT environment as a whole -- access, change management, operations -- that everything else depends on.
- general IT control: A control over the entity's IT processes that supports the continued effective functioning of information-processing controls and the integrity of information.
- information-processing control: A control over processing in an IT application or a manual information process that directly addresses a risk to the integrity of information.
- rights and obligations: The assertion that the entity genuinely owns the assets it reports and genuinely owes the liabilities.
- risk assessment procedures: The audit procedures designed and performed to identify and assess the risks of material misstatement at the financial statement and assertion levels.
Related terms
- COSO Internal Control - Integrated Framework: The reference model for internal control: five components and seventeen principles, all of which must be present and functioning for control to be effective.
- business combination: A transaction in which one entity obtains control of a business.
- senior management: The people who direct and control the entity day to day, as distinct from those charged with governance, whose job is to oversee them.
- change in accounting estimate: A revision to an estimate because new information arrived, applied prospectively in the period of change and later periods, never by restating prior statements.
- other information: Financial and non-financial information included in the annual report outside the audited statements.