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unstructured decision making
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nonrecurring and nonroutine
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Expenditure processes
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Type of Business process.
-purchasing processes
-cash disbursement processes
-payroll processes
-fixed asset processes
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Input methods
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- source documents
-bar coding
- point of sale systems
- EDI
-E-business
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Operational audits
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assess operating policies and procedures for efficiency and effectiveness.
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MAP CONTROL ACTIVITY INTO MANAGEMENT'S TRANSACTION ASSERTIONS:
Monthly Reconciliation of Subsidiary Records by Independent Perosn
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Accuracy
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synergy
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the entire system of organizational activities is greater than the sum of each individual part
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coding
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1) the systematic assignment of numbers or letters to items to classify and organize them.
2) Writing program instructions that direct a computer to perform a specific data processing task.
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Credit Limit
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maximum allowable account balance based on the customer's past credit history and ability to pay
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-Top-down Partitioning:
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The successive subdivided, or “exploding,” of logical DFDs that, when performed leads to a set of balanced DFD’s.4
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-Cardinality:
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A characteristic in each relationship that shows the degree to which each entity 5
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backbone provider
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an organization which supplies access to high-speed transmission lines that make up the main network lines of the internet.
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Revenue processes
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Type of Business process.
- sales processes
-sales returm processes
-cash collection processes
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Operational database
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contains data that are continually updated as transactions are processed.
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Debit Memo
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Used to record adjustment being requested for errors in shipments or billing from suppliers.
- One copy sent to supplier (who creates and returns credit memo in acknowledgment)
-A/P dept is notified and adjust acct bal owed to supplier (send copy?)
-One copy of debit memo accompanies goods to shipping dept to authorize return to supplier
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Cash Budget
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Shows projected cash inflows and outflows. Useful for projecting short-term borrowing.
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What does planning/investigating mean
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What do we need?
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genreal ledger
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Contains summary-level data for every asset, liability, equity, revenue, and expense account of hte organization
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Define Financial Statement information?
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inventory and COGS (output)
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Primary Key
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An attribute that uniquely identifies a record. (Customer #, employee #, product #, SS#)
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Internal control
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Process implemented by board of directors and management used to try to reasonably assure that control objectives are achieved
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Just-in-Time (JIT)
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minimize or totally eliminate carrying inventory
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Purhcase Requistion
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document, or electronic form, that indentifies the requisitioner with loaction, item numbers, descriptions,
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Timeliness
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Info available to a decision maker before it loses its capacity to influence a decision1
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Enterprise Systems
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Integrate the business process and information from all of an organizations functional areas, such as marketing and sales, cash receipt, purchasing, cash disbursemnts, human resources, production and logistics, and business reporting2
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Economic feasibility
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assessment of the costs and benefits associated with the proposed IT system.
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document flowchart
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shows the flow of documents and information among departments or units within an organization
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fixed asset processes
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include the policies and procedures involved in purchasing property; capturing and maintaining relevant data about the assets; expenses; and accounting for gains or losses.
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Purchase Order
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formally requests supplier to sell and deliver specified products at designated price.
- also a promise to pay, becomes contract when supplier accepts
-Include: name of supplier, purchasing agent, order and requested delivery dates, location for delivery, shipping method, info about items ordered.
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value chain
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the linking together of all the primary and support activities in a business
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What is conversion:
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Going from old to new system.
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source documents
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Contain the initial record of a traction that takes place. Examples of source documents, which are usually recorded on reprinted forms, include sales invoices, purchase orders, and employee time cards.
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Examples of events
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Sales orders, sales, purchase order, purchase, receive goods, hire employees
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Nonvoucher System
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each approved invoice is posted to individual supplier records in the accounts payable file and is then stored in an open-invoice file
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Backup
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an exact copy of the most current version of a database, file, or software program
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management process
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A man made system consisting of people, authority, organization, policies and procedures who's objective is to plan and control the ooperations of the organization1
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Decision Making
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The process of making choices; the central activity of management1
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Relevance
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a quality when info is capable of making a difference in a decision-making situation by reducing uncertainty or increasing knowledge for that particular decision1
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data flow diagram
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used by system professionals to show the logical design of a system
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Section 201 Sarbanes-Oxley act
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Auditors of public companies are prohibited from providing nonaudit services to their audit clients.
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Auditing around the computer
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does not require evaluation of computer controls. does not require detailed knowledge of the computer programs. uses and tests output of the computer system in the same manner as the audit would be conducted if the information had been generated manually.
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Property sheet window
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used to make individual settings for control objects
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Name Control Procedure to Prevent Threat of: stockouts and/or excess inventory
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-Inventory control systems
-Perpetual Inventory records
-Bar-code and RFID technology
-Periodic counts of inventory
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Technical feasability
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Can the planned system be created with todays technology
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group code
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Two or more subgroups of digits that are used to code an item. A group code is often used in conjunction with a block code.
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Define Manufacturing status reports
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Provide managers with information on various job statuses. (output)
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Cross-Footing Balance Test
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compares the results produced by each method to verify accuracy
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Define Salami technique:
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Steal small amounts of money and transfer this to a dummy account.
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Reliability of Info
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Probability that a product or process will perform satisfactorily over a period of time under specified operating conditions1
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-Internal Entity:
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Is an entity from within this system that transform data. Accounting clerks, departments, and computers.4
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Packing slip
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is inserted into the package (a copy may be attached to the outside of a package) and identifies the customer, the shipment destination, and the contents of the package.
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phase-in conversion
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a method in which the system is broken into modules, or parts, which are phased in incrementally and over a longer period. it is a low risk approach but more time consuming.
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6 Objectives Controls Must Meet
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1. All Transactions are properly AUTHORIZED
2. All recorded transactions are VALID (actually occurred)
3. All VALID, AUTHORIZED transactions are recored (COMPLETENESS)
4. All transactions are recorded ACCURATELY
5. Assets (cash, inventory, data) are SAFEGUARDED from loss or theft
6. Business activities are performed EFFICIENTLY and EFFECTIVELY
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support activities of a value chain:
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firm infrastructure, human resources, technology activities, and purchasing activities
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Define System planning:
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subsystems in the IS that need extra development. Used to find areas that need improvement now or in the future.
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Define Job time card
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Shows the distribution of labor costs to specific jobs or production orders. (input)
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Direct access file
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Preceding data does not need to be scanned to locate the desired results.
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Define lock-out system
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disconnects user after a set number of unsuccessful logins
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Bill of lading
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is used, which is a contract between the shipper and the carrier in which the carrier agrees to transport goods to shipper’s customer
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Four types of Data Processing
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CRUDC - creatingR - ReadingU - UpdatingD - Deleting
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Define work distribution analysis:
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focuses on a particular job and looks at efficiency rather than an employee
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Why are databases necessary?
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There is a large number of master files and this creates problems, each department would maintain separate and independent files and this would cause the same data to be stored and duplicated. This is not an efficient use of storage, because of DATA DUPLICATION AND REDUNDANCY
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What are two additional password safeguards?
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Lock out system, and dialback system
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Public company accounting oversight board (PCAOB)
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organized in 2003 for the purpose of establishing auditing standards for public companies.
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Deciding whether to accept delivery is based off of information received from....
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Purchasing function. Must have VALID Purchase Order to indicate that delivery should be accepted
-acceptance of unordered goods is wasted time, space, storage, handling, etc.
-must VERIFY the quantity of goods delivered to ensure company PAYS ONLY FOR USABLE GOODS ACTUALLY RECEIVED AND INVENTORY RECORDS ARE ACCURATELY UPDATED
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What are the two principle objectives of the cost accounting system?
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1. Provide accurate cost data2. Provide information for planning, controlling, and evaluating the performance of production process.
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Why is computer crime important to Accountants?
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1. Because accounts are responsible for looking over the financial resources of a company they are usually targeted. 2. Because they are responsible for the design, implementation and monitoring of the controls of the AIS3. Because millions of dollars a year are lost because of viruses, denial of service, or unauthorized access.
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What are the four major systems in system analysis?
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1. Understanding the system goals2. System surveys3. Data analysis4. Evaluating system feasability
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What are the form steps for creating forms?
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1. Enter the appropriate settings in the form wizard dialog boxes.
2.Customize the form
3. Refine your design
4.Reset the Tab order
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What does AIS provide accurate and timely cost accounting information for?
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1. Product Mix - what and how many2. Product Pricing - Price the company has set3. Resource allocation and planning - whether to make or buy product4. Cost management
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