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MATERIAL WEAI~TESS. A reportable condi- tion that may result in an error that could have the effect of changing a reader's assessment of the government's finances. Copyright 2002 by the Government Finance Officers Association of the United States and Canada 203 North LaSalle Street Suite 2700 Chicago, Illinois 60601-1210 ISBN 0-89125-261-4 Library of Congress Control Number 2002107251 All rights reserved. Printed in the United States of America. NONAUDIT SERVICES. Consulting services performed by the independent auditor. OMB. U.S. Office of Management and Budget. OPERATIONAL AUDITS. Aprivate-sector term used to describe performance audits. PERFORMANCE AUDITS. Audits designed to determine whether government programs and activities are meeting stated goals and objec- tives, and to determine if governments are per- forming their duties in the most economic and efficient manner possible. QUALIFIED OPINION. An opinion in which the independent auditor expresses reservations about the fair presentation of financial state- ments. QUALITATIVE MATERIALITx. The charac- teristic of a potential error in the financial state- ments that could cause it to have the effect of changing a reader's assessment of the govern- ment's finances regardless of the size of the er- ror. QUANTITATIVE MATERIALITY. The charac- teristic of a potential error in the financial state- ments that could cause it to have the effect of changing a reader's assessment of the govern- ment's finances because of its size. QUESTIONED COSTS. Grant-related charges that an auditor has determined could be disal- lowed by the grantor because the charges do not meet all of the grantor's requirements. REASONABLE ASSURANCE. The notion that a financial audit is designed to determine only whether financial statements are free of material misstatement. TO AUDITING 59