ACC 4 Flashcards

Terms Definitions
thromb/o
clotting
 CHAPTER 11
CHAPTER 11
Standard
A professional pronouncement promulgated by the International Internal Auditing Standards Board that delineates the requirements for performing a broad range of internal audit activities and for evaluating internal audit performance
Common law- Third parties
-Negligence
-gross negligence/constructive fraud
-fraud
Auction
electronic clearinghouse - products, prices change in response to demand
Managerial Accounting
focuses on providing financial information to users inside the organization
Competency


makes IAs apply the knowledge, skills and experience needed in the performance of IA services. 
Reliability
The quality that makes accounting information dependable in representing the events that it purports to represent.
An economic obligation (a debt) payable to an individual of an organization outside the business
Liability
Budget
A detailed plan for the future, usually expressed in formal quantitative terms.
6. Audit
examination of a company's financial situation.
Inherent Risk


The combination of internal and external risk factors in their pure, uncontrolled state, or, the gross risk that exists, assuming there are no internal controls in place.
balance showed 540,000 instead of 450,000...this is an example of
transposition  
define obsolescence
Obsolescence is the catchall for situations not involving inadequacy and supersession.
4 functions of SOD
Function 1: Authorizing Events(Segregation)-approve phases of event processing
Function 2: Executing Events- physically move resources, complete source documents
*Function 3: Recording Events- record entries in books of original entry, post event summaries to general ledger
*Function 4: Safeguarding resources resulting from consummating events(custody)- physically protect resources, maintain accountability of physical evidence.
**Through the design of an appropriate organizational structure, no single employee should be in a position both to perpetrate and conceal frauds, errors, or other kinds of system failures
Financial perspective
stock price, net income, return on sales, return on investment, economic value added
Every financial statement
has a three-line heading containing the company name, title of the statement, and the date
payee
the person or business to whom a cheque is written
Compensating Control


An activity that, if key controls do not fully operate effectively, may help to reduce the related risk. A compensating control with not, by itself, reduce risk to an acceptable level.
a bond that matures in installments is...
serial bond
Physical Access Controls
Provide security ove tangible IT resouces.
A liabiltiy backed by the general reputation and credit standings of the debtor
Account payable
Direct Projection
(net misstatement in the sample/ total sample) * total recorded population value = direct projection estimate of misstatement
Gross negligence/Constructive Fraud
-occurs when the auditor acts so carelessly in the application of professional standards that it implies a reckless disregard for the standards of due care
14. T-account
summary device that is shaped like a capital "T" with debits posted on the left side of the vertical line and credits on the right side of the vertical line.
Professional Skepticism
The state of mind in which the internal auditors take nothing for granted; they continuously question what they hear and see and critically assess audit evidence.
in the equity method for long term assets should never report what...
 
 

unrealized gain

 
 
*
Which class of surgical wounds has the highest rate of infection?
 
 
class IV- dirty wound
Update Accuracy
data entered into a system must be reflected correctly in the respective master data.
Electronic Federal Tax Payment System
larger businesses deposit income tax payment by electronic funds transfer through this.
Aging of AR method
go through aging probabilities, add up probable amounts, take differnce from balance of allowance for bad debts.
Define the cost of equipment.
Costs are all expenditures incurred in acquiring the equipment and preparing it for use.
participative budgeting
a method of budget setting that uses a joint decision makig process in which all parties agree about setting the budget targets
under effective interest method of amortization, interest expense each period is calculated by...
carrying bonds multiplied by the effective interest rate for the appropriate time period
What does depreciation account for?
Depreciation is not a matter of valuation but a means of cost allocation.
numerator in the equation for rate of return on common equity...
net income minus preferred dividends
if the credit to record a payment to accounts payable was not posted
cash will be over stated
How should contributions be valued and recorded?
The fair value of the asset should be used to establish its value, and should be recognized as revenues in the period received.
Asset turnover (efficiency)
sales
÷
assets
Debit to Prepaid Rent
Cash
labor-intensive business
characteristic of HB industry

Surgical instruments should be soaked in sterile saline within the sterile field to facilitate later removal of bioburden from the instruments.
 
True or false?
 
 
False
debt ratio
Total Liabilities / Total Assets
White-Collar Criminal
Typically businesspeople who commit fraud.
accounting equation
assets=liabilities + stock holder equity
The process of transferring amounts from a journal to the ledger accounts.
Posting
Belief Systems
articulate the mission, purpose and core values of a company. they describe the accepted norms and patterns of behavior expected of all managers and employees with respect to one another, shareholders, customers and communities
14. Plant assets
long-lived tangible assets-such as land, buildings, and equipment-used in the operation of a business.
Performance Standards


describe the nature of internal audit services and the criteria against which the performance of these services can be assessed.
an expenditure that increases an asset's capacity or extends its useful is called...
capital expentidure 
What are special assessments?
Property improvements installed, maintained, and replaced by the local government body, such as pavements, street lights, sewers, and drainage systems.
Biometric Identification Systems
identify authorized personnel through some unique physical trait such as fingers, hands, voice, eyes, face, writing dynamics, and the like. Most common read fingerprints
Ending Retained Earnings
B.RE + NI - Dividends Declared
Earning Management Defined (McKee)
Reasonable and legal management decision marking and reporting intended to achieve stable and predictable financial results
16. Expenses
decrease in equity that occurs from using assets or increasing liabilities in the course of delivering goods or services to customers.
Knowledge and Skills to Be Developed


Expertise, Technology, Communication, Analytical thinking. 
shipping more to customers than what they ordered is called...
channel stuffing
Data Warehouse
Very large databases that contain both detailed and summarized data for a number of years and that are used for analysis rather than transaction processing.
An event occurring entirely within an entity
Internal Event
Programmed Edit Checks
an edit that is automatically performed by data entry programs upon entry of the input data
*The edits identify erroneous or suspect data and reduce input errors.
Selling Cost
All costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.
11. Depreciation
allocation of a plant asset's cost to expense over its useful life.
The Code of Ethics


contains principles relevant to the profession and practice of internal auditior and Rules of Conduct that describe behavior expected of internal auditors.
COGS =
= [BI + P = CGAS] - EI
Recoverability test
Used to determine whether or not an impairment has occurred (may not be able to recover carrying amount of the asset)1. Estimate future net cash flows expectedfrom the use of that asset and its eventual disposition- if the sum of the expected future net cash flows is less than the carrying amount of the asset, it is considered impaired- If it is greater, no impairment has occurred
Segregation of Duties
separating the four basic functions of event processing
Enron Impact on SOX reform
-Prohibits internal audit services for Audit cients
-Off-Balance sheet financial must be disclosed
-related party transactions require disclcosure
-stronger corporate governance
Risk Appetite
The amount of risk, on a broad level, an organization is willing to accept in pursuit of its business objectives. Risk appetite takes into consideration the amount of risk that management consciously accepts after balancing the cost and benefit of implementing controls
Impairment of goodwill
Adjust carrying value only when it is impairedTo determine impairment, compute FV of reporting unit to its carrying amount. If FV exceeds carryimg amount, it is not impaired- If FV is less than the carrying amount, determine fair value of goodwill and compare it to recorded goodwill to measure impairment
ultimate authority to determine rules to be followed in preparing financial statements
FASB Financial Accounting Standards board
Allowance for Uncollectible Accounts
A contra asset account to the Accounts Receivable account; it reduces accounts receivable to their net realizable value. AKA Allowance for Doubtful Accounts or Allowance for Bad Debts.
What is the data and information theory?
Data consists of raw facts.Information is a collection of facts organized in such a way that they have value beyond the facts themselves.
Which statemtn is correct with respect to Continuing Professional Education (CPE) requirements of members of the AICPA?
 
(1) Only members employed by the AICPA are required to take such courses.
(2) Only members in public practice are requried to tak
(3) Members, regardless of whether they are in public practice, are required to meet such requirements.
The COSO, CoCo, and Turnball frameworks
Are used by an increasing number of organizations to evaluate the entire system of internal control, not just internal controls over financial reporting
Section 10 of Securities Exchange act of 1934
-Unlawful for a CPA to:
1. employ any device, scheme or artifice to defraud
2. make an untrue statement of material fact or omit a material fact
3. engage in any act, practice, or course of business to commit fraud or deceit in connection with the trading of the stock
/ 75
Term:
Definition:
Definition:

Leave a Comment ({[ getComments().length ]})

Comments ({[ getComments().length ]})

{[comment.username]}

{[ comment.comment ]}

View All {[ getComments().length ]} Comments
Ask a homework question - tutors are online