What does senior management mean on the CPA exam?
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.
Defined against AU-C 260.06.
Which CPA exam sections use senior management?
Senior management appears in the AUD section of the CPA exam.
Other terms defined against AU-C 260
- audit committee: A subcommittee of the board of directors that oversees financial reporting and the external audit.
- those charged with governance: The people responsible for overseeing the entity's strategic direction and its accountability, including the financial reporting process.
Related terms
- 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.
- internal audit: An in-house function that evaluates controls and processes and reports to those charged with governance.
- significant deficiency: A deficiency, or combination of deficiencies, less severe than a material weakness but important enough to merit attention by those charged with governance.
- management override: Management using its authority to bypass controls that otherwise work.
- 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.
- service organization: A third party whose processing affects a user entity's financial reporting, such as a payroll bureau or a claims processor.