The FREE Cybersecurity Glossary by Thor Pedersen!

Audit Risk: The risk that an auditor may issue an incorrect opinion on financial statements due to not detecting material misstatements or errors. It consists of inherent risk, control risk, and detection risk, and effectively managing audit risk is crucial for the credibility of the audit report.

Audit sampling: The process of selecting a subset of data or transactions for review during an audit. It is used to reduce the amount of information that needs to be examined in order to provide a reasonable assurance of the accuracy and reliability of the data. For example, an auditor may select a random sample of transactions from a company's sales records to test for accuracy and completeness.

Audit Subject Matter Risk: The risk related to the specific area or aspect being audited, which may affect the auditor's ability to obtain accurate and complete information. Factors like the complexity of the subject matter, susceptibility to misstatement or fraud, and changes in the operational environment can influence the level of this risk.

Audit trails: The documentation of the steps taken during an audit, including the evidence gathered and the conclusions reached. It is used to provide a record of the audit process and to support the auditor's findings and recommendations. For example, an audit trail may include a list of the documents reviewed, the questions asked, and the observations made during the audit.

Audit universe: This encompasses all the potential areas, functions, processes, or units within an organization that could be subjected to audit. It is a comprehensive list of auditable entities and can include systems, departments, business units, or physical locations, among others. The audit universe serves as the basis for developing the audit plan and deciding where to allocate audit resources.

Authenticate: This refers to the process of verifying the identity of a user, device, or transaction. It is used to confirm that the user or device has the right to access the information or perform the action being requested. For example, a user may be asked to enter a password or provide a biometric identifier to authenticate their identity before accessing a secure website or system.