Latest Terms

National Income Accounting

National income accounting represent the process of working out measures of a country’s income and production such as gross domestic product (GDP), gross national income (GNI), net national product (NNP), disposable personal income, etc.

Gross National Income

Gross national income (GNI) is a measure of income earned by a country’s nationals/residents anywhere in the world. It equals gross domestic product (GDP) plus net factor income from abroad.

Circular Flow Diagram

Circular flow diagram shows how income flows in an economy between households, firms and government in product markets, factors of production markets and financial markets.

Core Inflation

Core inflation is a measure of changes in prices of goods and services that offer a long-run view of purchasing power by excluding volatile commodities such as food and energy items.

Nominal GDP vs Real GDP

Nominal GDP tells about the current market value of final goods and services produced in an economy. Real GDP, on the other hand, is a measure of total production at constant prices. Change in real GDP over the period is a measure of growth.

Detection Risk

Detection risk is the risk that an auditor fails to detect material misstatement in the financial statements being audited. There is always some amount of detection risk in an audit engagement due to limitations of the audit process. However, ...

GDP Deflator

GDP deflator (also called implicit price deflator for GDP) is a measure of price level of domestically-produced goods and services in an economy. It is calculated by dividing nominal GDP by real GDP multiplied by 100.

Inventory Investment

Inventory investment, also referred to as change in private inventories (CIPI) by the BEA, is a component of gross private investment of GDP that represents the difference between production and sales during the period.

Gross Domestic Product

Gross domestic product (GDP) is a measure of national income which equals the market value of all final goods and services produced in the geographical boundaries of a country in a given time period.

Audit Risk Model

Audit risk model is a tool used by auditors to understand the relationship between various risks arising from an audit engagement enabling them to manage the overall audit risk. Audit risk model suggests that overall audit risk of an engagement is the product of the following three component risks ...