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BEC IV > 7. Processing Integrity > Flashcards

7. Processing Integrity Flashcards

1
Q

What does SPLMS stand for?

A

Source Program Library Management System.

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2
Q

SPLMS: What is this essential for?

A

Change control.

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3
Q

SPLMS: what is this?

A

Software AND instruction for people.

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4
Q

SPLMS: what does it manage?

A

For new or changed program, it manages migration from application development test environment to production library.

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5
Q

SPLMS: what does it do?

A

Controls and validates program changes by comparing new to old code.

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6
Q

SPLMS: what are 4 functions?

A
  1. Store programs in the SPL (source program library)
  2. Retrieve program for updating and maintenance
  3. Detele obsolete programs
  4. Audit trails: document program changes
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7
Q

SPLMS: is this a part of a system?

A

May be a part of operating system or purchased separately.

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8
Q

Why must accounting systems be documented?

A

Required;

  1. By law: e.g. Foreign Corrupt Practices Act, SOX, SEC regulations
  2. To build and evaluate complex systems
  3. For training
  4. For creating sustainable/survivable systems
  5. For auditing (internal and external)
  6. For process (re)engineering
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9
Q

What are 4 types of documentation?

A

System, program (also called “technical” by programmers), operator, user.

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10
Q

What is system documentation?

A

Overview of program, data files, processing logic, interactions with other programs and systems.
May include requirements, architecture and design.

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11
Q

What is program documentation?

A

Detailed description of inputs, logic, and outputs.

Includes program flowcharts, source code listings, record layouts.

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12
Q

What is operator documentation?

A

Also called “run manual.”
How to load and execute programs and data.
Includes needed equipment, files, supplies, commands, error messages.

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13
Q

What type of control is documentation: general/application? Preventative/corrective?

A

General and preventative.

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14
Q

Doc retention/destruction: what must an organization have?

A

Organizational policy and plan that dictate retention and destruction.

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15
Q

Doc retention/destruction: what must an organization follow?

A

Applicable laws and regulations (health care, criminal, credit check records etc).

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16
Q

Doc retention/destruction: what is control risk?

A

Failure to properly retain or destroy electronic documents.

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17
Q

What is SPL?

A

Source program library;

  • The library of source code computer programs
  • Secure and separate these programs from live programs
  • Critical to the internal control system and to change management
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18
Q

Define SPLMS.

A

Functions include storing, retrieving, and deleting programs and documenting by whom, when, where, and how programs are changed.

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19
Q

What are forms of documentation?

A
  • Questionnaires: ask specifics
  • Narratives: describe processes
  • Data flow Diagram (DFD): flows of data
  • Flowcharts:
  • E-R (entity-relationship) diagram: model relationships between entities and data in accounting systems
  • Decision tables: logical relationships in a processing system by identifying decision points and alternatives
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20
Q

What do input and origination controls do?

A
  • Ensure reliability of application program data and processes
  • Understanding enables auditor to assess risks if absent or weak
  • Some may function as input or processing controls (e.g. control totals)
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21
Q

Input and origination controls: what is often the best input control?

A

To automate data entry (to not have manual input by people) - hence, growing use of term origination to replace input.

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22
Q

Origination: what is growing trend to replace human entry? Goals?

A

Scanning.

Accuracy, completeness, efficiency.

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23
Q

What are 4 audit (control) input goals (EVAC)?

A

Validity (V), Completeness (C), Accuracy (A), Efficiency (E).

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24
Q

What is the definition of validity? Examples?

A

Input data are approved and represent actual economic events and objects.

  • Input data represent an actual (not fictitious) transactions
  • Only receipts supported by an actual check are input
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25
Q

What is the definition of completeness? Example?

A

All valid events are entered.

*All customer pmts are input.

26
Q

What is the definition of accuracy? Example?

A

Valid events are correctly entered.

*Customer and invoice information are entered correctly.

27
Q

What is the definition of efficiency? Example?

A

Input is done using minimal resources.

*Scan instead of hand enter.

28
Q

What is OLRT (online real-time) systems control? Goals?

A

Closed loop verification.

  • Use entered data to display additional (so that users can confirm data)
  • C (all data entered), A (entered data accurate), E
29
Q

Application controls: Input: Where are examples mostly found in batch system?

A
  • Batch control total: Financial total (add inv amounts), Hash total (totals of a field for which the total has no logical meaning: e.g. add inv numbers. Usually for an account code field)
  • Record count: count # of inv - goal = C,A
30
Q

Application controls: Input: Where are examples mostly found in both Batch and OLRT systems?

A
  • Automated data capture
  • Check digit (goal = A)
  • Sequence check
  • Key verification
  • Missing data check
  • Field check (data type/data format check)
  • Limit test (1. Range tests 2. Sign tests)
  • Valid code test (validity test)
  • Reasonableness check (logic test)
  • Preprinted forms and preformatted screens)
  • Default values
31
Q

Application controls: Input: what is sequence check? Goals?

A

Confirm numerical sequence (of check or inv #s).

  • Usually automated but may be manual
  • Goal: C (all valid are included), V (no invalid are included)
32
Q

Application controls: Input: what is key verification? Goals?

A

Re-key (re-enter) and compare critical data.

  • Ex: require password entry twice
  • Goal: Validity
33
Q

Application controls: Input: what is completeness or missing data check? Goals?

A

Confirm if al data are entered in field - can’t continue until entered.
Goal: Completeness.

34
Q

Application controls: Input: what is field check (data type/data format check)? Goals?

A

*Verify if data is of correct format: e.g. entering State, zip code, etc - if not in the right format, it will not let you enter.
*For both numeric and letters
Goal: Accuracy.

35
Q

Application controls: Input: what is limit tests? Goals?

A

Numeric field with specified values: e.g. may not be able to enter if entered the number above 5 etc.
Goals: Validity and accuracy.

36
Q

Application controls: Input: what is range test? Goals?

A

*For numeric
*Validate upper and lower limit: e.g. price per gallon of gas $2 < x < $10
Goals: A, V

37
Q

Application controls: Input: what is sign test? Goals?

A 
# has correct sign (+ or -): e.g. # purchased must be > 0.
Goals: A, V.
38
Q

Application controls: Input: what is valid code test (validity test)? What is this also called in database? Goals?

A

Verify if the entered account # exist: e.g. can’t enter an order unless the customer has an existing account #.
Called referential integrity.
Goals: V, A

39
Q

Application controls: Input: what is reasonableness check (logic test)? Goals?

A

Verify if 2 or more fields agree: e.g. don’t allow pay rate = “$3,500” and pay period = “hourly”
Goals: validity and accuracy.

40
Q

Application controls: Input: what are goals for preprinted forms and reformatted screens?

A

Reduce data entry errors, speed data entry.

Goals: A, C, E

41
Q

Application controls: Input: what is default values? Goals?

A

Pre-supplied data values for fields: e.g. sales order data = current data.
Goals: A, E.

42
Q

What are 4 types of application controls?

A
  1. Input controls
  2. Processing controls
  3. File controls
  4. Output controls
43
Q

Application controls: Processing: Goals?

A

Efficiency:

  • Accurate and complete master file updates
  • Detect unauthorized transactions
  • Maintain data integrity
44
Q

Application controls: Processing (and Input): what is the control used in Batch processing?

A

Run-to-run controls: monitor the number of units in a batch as it moves from one programmed procedure (run) to another). Use Batch totals to agree the batch from one procedure (run) to another.

  • Batch control total: financial total and hash total
  • Record count
45
Q

Application controls: Processing: what is a control mostly used in OLRT?

A

Audit trail control.

*Transaction log = electronic audit trail

46
Q

Application controls: Processing: Transaction logs (processing and output): what may it include? Why is it important?

A

May include data values, time, terminal number, IP address, user name.
Importance:
*Goals: Accuracy, completeness, validity
*Backup and recovery: essential to checkpoint and restart, and rollback and recovery systems

47
Q

What are 4 types of files?

A
  1. Master files: updated by postings to transaction files
  2. Standing files: rarely changed master files
  3. Transaction files: used to update master files
  4. System control parameter files: determine the workings of system runs
48
Q

What are 4 examples of hardware controls?

A
  1. Check digit (also called parity bit or parity check or self-checking digit)
  2. Read after write check
  3. Echo check
  4. Boundary protection
49
Q

Hardware controls: What is parity check?

A

*Designed to detect errors in data transmission
1 or 1 included in byte to indicate if sum bits are odd or even.
Example: parity bit = 0 (added) if sum is odd. parity bit = 1 if sum is even.
7 bits: 0011010 - add 0 as the 8th bit because sum is 3 (odd) and complete byte is 00110100
7 bits: 1011010 - add 1 as the 8th bit because sum is 4 (even) and compete byte is 10110101

50
Q

Hardware controls: what is read after write check?

A
  • Verifies that data was correctly written to disk by comparing to source
  • Mostly used in local file operations
51
Q

Hardware controls: what is echo check?

A

Verify transmission by “echoing back” received transmission to sender.
*Primary use = telecommunications systems

52
Q

Hardware controls: what is boundary protection?

A
  • With multiple programs and/or simultaneous users

* Prevents one program from overwriting data and instructions of another program

53
Q

Hardware controls: what are internal/external labels?

A

Internal labels: read by system (for removable storage).

External labels: read by humans.

54
Q

Hardware controls: what is version controls?

A

Protocols for ensuring use of the correct file version.

55
Q

Hardware controls: what is file access and updating controls?

A

Procedures to restrict file updates and access to authorized users.

56
Q

Application controls: what kind of control is it? What item is often used?

A

Output controls.

  • Often use transaction logs or printed output (built into most systems).
  • Access to sensitive reports through permissions and access controls: e.g. authorization matrix
57
Q

Application controls: Output: what is spooling (print queue) controls?

A

Job sent to a printer but can’t be printed immediately (e.g. require user enter his code/password).
For sensitive output (e.g. sensitive product sales data).

58
Q

What is an electronic audit trail?

A

Transactions are written to a transaction log as they are processed. The transactions logs are an electronic audit trail.

59
Q

What is hardware controls?

A

Controls built into the computer equipment to ensure that data are transmitted and processed accurately.

60
Q

Define parity check (parity bit).

A

It’s an example of a check digit. It consists of a 0 or 1 included in a byte of info that makes the sum of bits either odd or even.

BEC IV (12 decks)

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