Accounting AIS Flashcards

Terms Definitions
Meaningful data is...
relevant---reliable---timely---accurate---complete
Business Transaction 5 phases
Planning---Identification---Negotiation---Actualization---post-actualization
COSO
Committee of Sponsoring Organizations (1992) - issued report on internal controls (considered the authority on it)
Activity rates in activity-based costing are computed by dividing costs from the first-state allocations by the activity measure for each activity cost poolTrue or False
True
Expert System Benifits
Scarce human expertise---releases human experts formore difficult cases---improved accuracy of judgements---greater consistency and consensus---training of novices---preserves expertise within a firm
continuous auditing
real time financial reporting; involves constantly analyzing audit evidence and provide assurance on the related financial information as soon as it occurs or shortly thereafter
Red Flags
MUST RECOGNIZE THEM: financial pressure, personality changes, poor money management, living beyond means, outside business interests, poor internal control (involving counting and review of liquid assets), rising business costs, too much trust in key employees (he would never do that), failure to pre-screen employees (background check); AND TAKE ACTION!
Biometrics
The highest level of authentication for system. May be used to provide greater access control
Just-in-time manufacturing
Inventory methodology that allows companies to minimize inventory while still having product on hand when needed to fulfull sales orders.
rework
refers to the additional procedures necessary to bring a product up to its required specifications
The following data pertain to activity and costs for two recent months: Oct NovAct Lvl in Unts 5K 10KVariable costs 10K 20KFixed Costs 30K ?Mixed Costs 20K ?Total Costs 60K 75KAssuming that these activity levels
25,000
Name the outside entity associated with the revenue cycle
Customer
Data Processing Cycle
Data Input--- Data preparation---Data processing----File maintenance---Information Output
assurance services
accounting services that improve the quality of information
sampling
when auditors choose and test a limited number of items or transactions and then draw conclusions about the balance as a whole on the basis of the results
COSO's Information System
should provide accurate and high-quality (detailed) information about all business events for use by management; must be reliable data
Scorecarding
Using color codes to monitor metrics on a dashboard
IT governance
Refers to the leadership and organization structures and processes that ensure that the organization's IT sustains and extends the organization's strategies and objectives
Knowledge discovery
The statistical analysis of large pools of historical data looking for correlations, trends, and patterns that may have escaped unnoticed.
production schedule
outlines the specific timing required for a sales order, including the dates and times designated for the production run
logistics
is the logical, systematic flow of resources throughout the organization
All costs incurred in a merchandising firm are considered to be period costs.True or False
False
Anaconda Mining COmpany shipped 9,000 tons of copper concentrate for $450,000 in March and 11,000 tons for $549,000 in April. Shipping costs for 12,000 tons to be shipped in May would be expected to beA. 548,780B. 549, 020C. 594,000
D. 595,500
Business Transaction
A predefined set of activities and processes which is initiated by a person to accomplish an explicitly shared business goal and terminated upon recognition ofone of the agreed conclusions by all the involved persons although some recognition might be explicit. that was long wasnt it?
IT outsourcing
creates a challenge for auditors who must gain an adequate understanding of internal controls that are located at an independent service center; external independent computer service centers to handle all or part of IT needs
test of controls
involve audit procedures designed to evaluate both general controls and application controls
processing controls
close loop verification ( real time checking against existing data)
Lead time
The time that elapses between placing an order and actually receiving it
Business Intelligence (BI)
An interactive process for exploring and analyzing structured, domain-specific, information to discern trends or patters, thereby deriving insights and drawing conclusions.
Workforce Analytics
allows the organization to measure the effectiveness of their HR strategies and programs and measure their workforce's contributions to the bottom line
Move order
transfers the standard cost of raw materials to the plant and updates WIP
quality control
a follow-up to production where the products are inspected for quality before they are moved to the warehouse or shipping area
A cost that is obtainable in large chunks and that increases or decreases only in response to fairly wide changes in the activity level is known as a step-variable cost.True or False
True
Prime cost consists of direct materials combined with:A. direct laborB. manufacturing overhead.C. indirect materialsD. cost of goods manufactured.
A. Direct Labor.
Advantages of Database Accounting Systems
Reduce data storage costs---Eliminate data redundancy---eliminate data inconsistencies---avoid duplicate processing---facilitate add, delete, and update maintenece tasks---make data independant applications---centralize data management---centralize data security
substantive testing
the auditors tests of the accuracy of monetary amounts of transactions and account balances
auditing through the computer
involves directly testing the internal controls within the IT system
Controls for Business Process Risks
procedural controls PLUS effective querying of an effective information system with adequate data controls
SAS 70 Type II
Includes not only the service organization's description of controls, but also includes detailed testing of the service organization's controls over a minimum six month period
operations
is the term commonly used to refer to the major business activity in which a company engages; synonymous with production and manufacturing
Given the cost formula Y= $17,500 +$4X, at what level of activity will total cost be $42,500.A. 10,625 unitsB. 4,375 unitsC. 6,250 unitsD. 5,250 units
C. 6,250 units
Name the INTERNAL systems associated with the production cycle
AIS and Other systems
integrated test facility (ITF)
may be used to test application controls without disrupting the clients operations
Supply Chain management(SCM)
Considered a bolt-on to core ERP, as well as the technologies that support an efficient and smooth flow of materials to and from the enterprise
For a manufacturing company, which of the following is an example of a period rather than a product cost?A. Depreciation of factory equipment.B. Wages of salespersons.C. Wages of machine operators.D. Insurance on factory equipment
B. Wages of Salespersons.
What is a mnemonic code?
gives visible clues concerning the objects they represent
Radio Frequency Identification Data (RFID)
Tiny computer chips or tags embedded in products and packaging that allows them to be tracked over wireless networks using wireless technology
The following data pertains to activity and utility costs for two recent years:Acvty lvl 12K 8KUtil costs 15K 12KUsing the high-low method, the cost formula for utilities is:A. 1.50 per unitB. 8,000 plus $.50 per unitC
D. $6,000 plus .75 per unit
Name 5 primary value chain activities that are aided by AIS
Inbound Logistics (receiving and storing); Operations (manufacturing); outbound logistics (distribution and shipping), Marketing and selling; service (repairing)
"Second Most Important Slide Ever" Implementing the Design
1. Create the access tables required by the design, 2. Designate the primary keys, 3. Establish relationships between the tables, 4. Create forms to maintain the tables for each resource and agent, 5. Create (multi-table) forms for event recording processes, 6. Create queries to generate desired information, 7. Develop report formats for the desired reports, 8. Build a custom menu system
Managerial accounting:A. has its primary emphasis on the future.B. is required by regulatory bodies such as the SEC.C. focuses on the organization as a whole, rather than on the organization's segments.D. Reponses a, b, and c, are
A. has its primary emphasis on the future.
Ten Commandments of Computer Ethics
1. Thou shall not use a computer to harm others--- 2. Thou shall not interfere with other peoples computer work--- 3. Thou shall not snoop around in other peoples computer files--- 4. use the computer to steal--- 5. Thou shall not use a computer to bear false witness---6. Thou shall not copy or use proprietary software for which you have not paid---7. Thou shall not use other peoples computer resources without authorization or proper compensation---8. Thou shall not appropriate other peoples intellectual output--- 9. Thou shall think about social consequences of the program you are writing or the system you are designing--- 10. Thou shall always use a computer in ways that ensure consideration and respect for fellow humans
Name the depts of a firm that are supported by AIS
Accounting, Finance, Legal, General admin, HR, IT, Purchasing
general audit software (GAS) or data analysis software (DAS)
are used to perform audit tests on electronic data files taken from commonly used database systems
What are the three goals of AIS?
1 Collect and store data about an organization. 2. Transform data into information that is useful for making decisions. 3 Provide adequate controls to safeguard the organization's assets
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