Ask Joey ™ a Question

What does the SUM mean in audit?

SUM stands for “summary of uncorrected misstatements”. The SUM is a workpaper or excel file that is reviewed at the conclusion of an audit.

Throughout the audit, management or the audit team might find a misstatement, but unless its a material misstatement, the company may choose not to adjust the financial statements.

The audit team should track all of the “uncorrected misstatements” so that the company and the audit team can make sure that the misstatements don’t result in a material misstatement when aggregated.


You might also be interested in...

  • What do accountants mean when they say revenue can be recognized under the accrual basis of accounting?

    Under U.S. GAAP, which requires the use of accrual basis accounting, a company cannot recognize revenue until their performance obligation is satisfied. The visual below illustrates that key steps to revenue recognition:

  • What is the relationship between volume and variable cost per unit?

    If the variable cost per unit remains fixed, then any increase or decrease in unit volume will result in an increase or decrease in total variable costs for a business. For example, if variable cost per unit was steady at $5, then if unit volume were to increase from 100 to 200 units, then total […]

  • How can variable sampling risk impact the efficiency or effectiveness of an audit?

    Audit risk is comprised of inherent risk, control risk, and detection risk. The level of substantive testing that the audit performs is based on detection risk, which is set after the audit team assesses inherent risk and control risk. Variable Sampling – Substantive Testing When the audit team is performing substantive testing, they will use […]