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ais_cybertext_chap10_notes - Accounting Information Systems...

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Accounting Information Systems Introduction to AIS: Chapter 10: provide a definition of controls Controls are mechanisms or procedures designed to prevent, detect or correct errors and irregularities. A procedure is a series of steps undertaken to accomplish a particular task. Errors are unintentional mistakes while irregularities are intentional mistakes. explain the concepts of risk, exposure and reasonable assurance as they relate to controls The likelihood that an information system will experience errors or irregularities are referred to as risk . In the next section we will explore the various kinds of risks associated with computer-based systems. The dollar amount of loss that could occur if the risk is realized, i.e., if errors actually occur, is referred to as an exposure . Without effective control mechanisms, the organization could likely be "exposed" to any one of a number of very disagreeable outcomes. Since the cost of implementing controls to protect against every conceivable risk would be prohibitive, controls are designed only to provide reasonable assurance , rather than absolute assurance, that accounting data are error free. explain the difference between preventive, detective, and corrective controls as categories of controls Controls can be categorized as preventive , detective or corrective . Preventive controls aim to prevent the occurrence of errors or unwanted acts. Detective controls aim to detect errors or unwanted acts once they have occurred. Corrective controls assist in both the investigation and correction of errors or unwanted acts after they have been detected describe and discuss a number of risks that could be found in computer based systems Errors in data By far the most common risk is that of data being incorrectly input into, updated in, or deleted from an organization's data repository. Errors are unintentional mistakes arising mainly from invalid data entry. Irregularities in data Irregularities are intentional alterations or misstatements of data. Intentional alteration or misstatements of data in information systems may be performed by management in an
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