MONITORING Definition

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MONITORING is the evaluation of the firm’s system of quality control to provide reasonable assurance that it is designed appropriately and operating effectively.

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BOOT is money received during an exchange to equalize values, e.g. if a person sells his business for an assumption of liabilities and for some cash the cash is boot.

RULES-BASED ACCOUNTING is where specific accounting rules are set forth and must be followed in order to comply with GAAP. For example, if an airline company leases a jet, the company must follow specific GAAP rules to determine if the transaction is an operating lease or a capital lease. The main difference being that a capital lease would have to appear on the balance sheet of the airline. Therefore, two virtually identical lease transactions could be classified entirely differently based upon how they follow the GAAP leasing rules. See also PRINCIPLES-BASED ACCOUNTING.

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