Authentication of identity

Authentication of identity is

"[t]he process whereby an organization establishes that a party it is dealing with is:
 * A previously known real-world entity (in which case, it can associate transactions with an existing record in the relevant information system).
 * A previously unknown real-world entity (in which case, it may be appropriate to create a new record in the relevant information system and perhaps also to create an organizational identifier for that party)."

Source
U.S. Department of Justice, Privacy and Civil Liberties Policy Development Guide and Implementation Templates, App. E, Glossary of Terms and Definitions (Feb. 2008).