Accounting Glossary:
A–Z Terminology
A quick reference for key audit and accounting terms in the UAE.
Abu Dhabi Global Market (ADGM)
Abu Dhabi Global Market (ADGM) is an international financial free zone located in Abu Dhabi, the capital of the United Arab Emirates (UAE). It provides a business-friendly ecosystem with strong regulatory frameworks to support global financial services, attract investments, and drive economic growth.
Agreed-Upon Procedures (AUP)
Agreed-Upon Procedures (AUPs) are engagements where auditors perform specific, pre-agreed procedures to provide factual findings on a subject. These tailored procedures help businesses evaluate processes without assurance or opinion, supporting informed decision-making among involved parties.
Accounting Estimate
An accounting estimate approximates financial values when exact data is unavailable, using management’s judgment to anticipate probable events. Estimates enhance financial statements and may be revised as new information emerges, affecting current and future periods only.
Accounting Policy
An accounting policy is a set of rules a company follows to record and report its financial activities. It includes how to measure values, recognize transactions, and make estimates, ensuring consistency in financial statements.
Accounting Reference Date
An Accounting Reference Date (ARD) is the end date of a company’s financial year. It’s when the company prepares its annual financial statements, usually marking a 12-month period for reporting income, expenses, and other financial activities.
Accuracy Assertion
This ensures that financial information, like numbers in a report, is correct and free from errors, providing confidence in its reliability.
Allocation Assertion
This confirms that financial transactions are correctly recorded in the appropriate accounts or periods, ensuring accurate financial statements.
Anti-money Laundering (AML)
A set of laws and practices designed to detect and prevent money laundering, ensuring financial systems are not used to hide illegal money.
Assertion
A declaration made by management regarding the accuracy and completeness of financial statements, covering areas like existence, rights, and accuracy of financial information.
Association of Chartered Certified Accountants (ACCA)
A global professional body that certifies accountants. An individual with ACCA certification is recognized for their expertise in accounting and auditing, meeting international standards in the field.
Attestation
A formal declaration confirming the accuracy and validity of financial statements or other information. For example, an auditor issues an attestation report confirming that a company’s financial statements accurately reflect its financial position.
Audit Cycle
The sequence of stages in an audit, from planning to reporting, ensuring systematic evaluation of a company's financial statements and related information. It includes tasks like inventory counts and account receivable determinations, performed at different times for accuracy.
Audit Documentation
Records that support the audit process, including evidence, findings, and conclusions, with the quantity and content determined by the auditor's professional judgment.
Audit Engagement
An agreement between an auditor and a client outlining the scope, objectives, terms, and responsibilities of the audit. It defines the audit procedures, timeframe, and deliverables, ensuring mutual understanding and clear expectations throughout the audit process.
Audit Evidence
Information used by auditors to support their audit findings and conclusions. This can include documents, records and testimonies to ensure accuracy and reliability in assessing a company’s financial statements.
Audit Planning
The process of defining the scope, strategy, and required resources for an audit, ensuring that the audit is conducted efficiently and effectively.
Audit Report
A formal document presenting an auditor's findings, opinions, and recommendations. It may include financial analysis, compliance checks, operational insights, and improvement suggestions for internal processes.
Audit Risk
The chance of errors in financial statements going unnoticed during an audit. It includes risks from complex transactions (inherent risk), weak internal controls (control risk), and missed issues by the auditor (detection risk).
Audit Sampling
Selecting part of the data during an audit to assess the accuracy of the entire dataset. Types include statistical sampling (random selection) and non-statistical sampling (based on the auditor’s judgment).
Auditee
The individual, organization, or entity being audited, responsible for providing relevant documentation, access to records, and clarifications during the audit process.