Accounting Information Systems 2 Flashcards

Terms Definitions
measure of transactions per period
the nondisclosure of certain information except to another authorized person1
pick list
documents the quantities and descriptions of items ordered.
provide custom information to database users
Facts that are collected, recorded, stored, and processed by an information system
sequence code
Documents are numbered consecutively to account form them, any gaps in the sequence code indicate missing documents that should be investigated.  Examples of documents that are given sequence codes include pre numbered checks, invoices, and purchase orders.
Control Objectives for Information and related technologyIssues of control(1) business objectives(2) IT resources: people, systems, technology...(3) IT processes
An individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items.
-Data Mining:
The exploration, aggregation, and analysis of large quantities of varied data from across the organization. Used to better understand business processes, trends, and opportunities to improve efficiency and effectiveness, as well as to discover anomalies.5
procurement cards
credit cards that the organization gives to ceertain employees to make designated purchases..
packing slip
prepared by warehouse personnel lists all items included in a shipment.
Internal Controls
prevents errors and fraud.
- Adopted to safeguard assets.
- Check accuracy and reliability of its data.
- Promote operational efficiency
- Encourage adherence to prescribed managerial practices.
Application controls
used to control inputs, processing, and outputs
adverse opinion
notes that there are misstatements presented.
Balancing tests
involve a comparison of different items that are expected to have the same value, such as comparing two batches or comparing actual data against a predetermined control total.
Transaction File
file that contains records of individual transactions that occur during a fiscal year.
Define Prototyping:
Simplified working model, to reduce project risk and costs.
record of transaction or other company data such as checks, invoices, receiving reports, and purchase requisitions.
Ledgers and files provide storage of data (a collection of records)
The potential dollar loss that could result from a threat
Transaction Log
includes detailed record of all transaction data
Balance-Forward Method
customers typically pay according to the amount shown on a monthly statement
-Knowledge Management:
The process of capturing, storing, retrieving, and distributing the knowledge of the individuals in an organization for use by others in the organization to improve the quality and efficiency of decision making across the firm.5
are input devices that capture printed images or document and convert them into electronic digital signals (i.e., into binary representation of the printed image or document) that can be stored on computer media.
Legacy system
existing system often based on old technology.
Turnaround document
an output of the accounting system that can be used as an input in a different part of the accounting system.
Heading section
appears at the top of the form
Name Control Procedure to Prevent Threat of:
Making Errors in Counting Goods Received
-use bar-code/RFID technology
-Document Employee Performance
-Incentivize Accurate Counts
low-cost strategy
most efficient producer of a product or service
performance reports
a report that compares standard, or expected, performances with actual performance and also shows the variances, or differences, between the two.
Define materials requisition form?
Acquire needed raw materials (input)
interactive control system
a control tool for managers--helps them monitor changes, make changes
Limit Check
tests a numerical amount to ensure that it does not exceed a predetermined value
General Ledger:
A ledger that contains all asset, liability, and stockholder's equity accounts.
is any action being performed by an internal or external entity.4
Substantive testing
the auditor's tests of the accuracy of monetary amounts of transactions and account balances. different from testing controls. it verifies whether financial information is accurate, whereas control tests determine whether financial information is managed under a system that promotes accuracy.
Program Manipulation
occurs when a program is altered in some fashion to commit a fraud.
- salami technique
- trojan horse programs
- trap door programs
Generally accepted auditing standards
broad guidelines for an auditor's professional responsibilities. divided into 3 categories.
1) general qualifications and conduct of an auditor (general standards)
2) guidelines for performing the audit (standards of fieldwork)
3) requirements for the written report communicating the results of the audit (standards of reporting)
Define triggered exception reports:
Specified content and format, prepared only in response to abnormal conditions.
Define System study team
A It specialist, middle-level manager, operational supervisor, accountant, auditor.
turnaround documents
Records of company data sent to an external party and then returned to the system as input.  Turnaround documents are prepared in machine-readable form to facilitate their subsequents processing as input records.
What do economic events impact?
Impact a companies financial statements
Echo Check
a summary statistic such as the number of bits in the message
Batch Totals
summarize key values for a batch of input records should be calculated
Ways to avoid computer viruses?
1. Firewall2. Antivirus software3. Antivirus control proceduresa. buying SW from reputable sourcesb. avoiding illegal copyingc. not downloading suspicious filesd. deleting unknown emails before opening theme. having backups in case system crashes.
Supply Chain Management Software
The combination of processes and procedures used to ensure the delivery of goods and services to customers at the lowest cost while providing the highest value to customers2
-Maximum Cardinality:
A measure of the highest level of participation that one entity can have in another entity.5
Digital image processing system
are computerbased system for capture, storage, retrieval, and presentation of images of objects such as pictures and documents.
Disadvantages of legacy system
1) costly to maintain
2) often lack adequate supporting document
3) hardware needed to maintain may become obsolete.
4) No user friendly interface.
5) older computer language
6) difficult to modify and make user-friendly
7) difficult to integrate when companies merge.
Section 302 Sarbanes-Oxley act
The CEO, CFO, and other responsible officers of the company must submit a certified statement accompanying each annual and quarterly report.
Why would you investigate current systems?
Investigate current needs or problems.
Define System development
Process of modifying a portion or all of an IS.
Define Transaction controls?
The control that makes sure the DB system performs each transaction accurately and completely.
Economic Order Quantity (EOQ)
based on calculating an optimal order size to minimize the sum of ordering, carrying, and stockoout costs
-Executive Information Systems (EIS)/Executinve Support System
These systems, which can be considered a subset of DSS, combine information from the organization and the environment, organize and analyze the information, and present the information to the manager in a form that assists in decision making.5
System Development Life Cycle (SDLC)
process that many organizations use to select and implement IT systems. It manages the development, implementation, and use of those IT sysytems selected by the IT governance committee.
what does segregating Custodial and Authorization Functions achieve?
It Prevents Authorization of a fictitious or inaccurate transaction as a means of concealing asset thefts
What should AIS provide to top management system goals?
Long-range budget planning data, valuable control information about corporate operations, short-range operating performance.
What are the types of cost accounting systems?
Job order costingprocess costingActivity-based costingstandard costing systemproduct costing systems
Evaluated Receipt Settlement (ERS)
a two-way match of the purchase order and receiving report
Independent customer master data maintenance
this assumes that there is a segregation of duties between the personnel who create the customer record ( to authorize sales to the customer) and personnel who create the sales order ( to execute the sale) .
2 Major Responsibilities of Receiving Department:
1. Decide whether to accept a delivery
2. Verifying that the quantity and quality of goods delivered
Define Schedule feasability
How long will it take for a system to become operational.
Why is a Database so important?
1. Its valuable information... it can be seen as the MOST important data.2. The volume that a database can hold... potentially millions of customers.3. Complexity - very hard to do.4. Privacy - must be protected from unauthorized users. 5.Irreplaceable data - data is unique to the company6. Need for accuracy - complete, comprehensive and accurate. Also important in internet users - critical components for internal and external corporate web systems.
3 Basic Functions of AIS in Expenditure Cycle
1. Capture and Process data about business activities
2. Store and Organize data to support Decision Making
3. Provide Controls to ensure Reliability of Data and Safeguarding of org assets
Helping stop computer crime and fraud at the business:
1. Have management backing you up2. Increase employee awareness and education (informatal discussion, departmental meetings, memo's), (use a code of conduct.3. Survey security policies, and protect passwords.
What does data integrity Controls do?
The SW that is used to ensure that erroneous data is guarded from being entered. Making sure its accurate and correct.
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