Ch09-IM7ed - Chapter Nine Controlling Information Systems:...

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Chapter Nine Controlling Information Systems: Business Process and Application Controls LEARNING OBJECTIVES After reading this chapter you should be able to: Complete the steps in the control framework and prepare a control matrix. Write explanations that describe how the business process and application controls introduced in this chapter accomplish control goals. Describe the importance of business process and application controls to organizations with enterprise systems and those engaging in e-Business. KEY TERMS INTRODUCED IN CHAPTER NINE document design mathematical accuracy checks turnaround documents written approvals check digit verification key verification electronic approvals confirm input acceptance sequence check preformatted screens automated data entry batch sequence check online prompting enter data close to the originating sourced cumulative sequence check populate input screens with master data digital signature manual reconciliation of batch totals compare input data with master data exception and summary report computer agreement of batch totals procedures for rejected inputs batch control plans agree run-to-run totals programmed edit checks document/record counts tickler file reasonableness checks item or line counts one-for-one checking limit checks dollar totals data encryption document/record hash totals hash totals CHAPTER SYNOPSIS This chapter presents a conceptual framework for the analysis of controls in business systems. We apply the control framework by describing business process and application controls that may be found in any information system. These controls will help us to prevent (or detect or correct ) the data quality issues plaguing organizations throughout the world.
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Many of the controls described in this chapter provide assurance about the quality of the data entry process. Such controls take on increased importance with enterprise systems because they prevent erroneous data from entering the system and negatively impacting the many tightly connected processes that follow initial entry of the data. For example, good controls over the entry of customer orders will help us to perform the activities that follow the recording of that order, including the shipment, update to the inventory balance, customer invoicing, general ledger entries for sales, accounts receivable, inventory, and costs of goods sold, and the inventory replenishment process. Good data entry controls also are important for those engaging in e-Business . For example, if we receive customer orders electronically, our systems must have sufficient controls within them so that they accept only authorized and accurate order data. If we don’t have these controls, we may make inaccurate shipments or shipments to those who have no intention of paying for the goods being shipped. DISCUSSION GUIDE
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This note was uploaded on 02/10/2011 for the course ACCT 2102 taught by Professor Mrwang during the Fall '10 term at Central Arizona College.

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Ch09-IM7ed - Chapter Nine Controlling Information Systems:...

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