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Accounting > ACC321 Exam 2 > Flashcards

ACC321 Exam 2 Flashcards

1
Q

Expenditure cycle

A

A recurring set of business activites and related information processing operations associated with the purchase of and payment for goods and services

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2
Q

Objectives of the expenditure cycle

A

Tracking purchases of goods and or services from vendors, tracking amounts owed, maintaining vendor records, controlling inventory, making timely and accurate vendor payments, forecasting purchases and cash outflows

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3
Q

Included in the expenditure cycle

A

Request goods, order goods, recieve goods, approve invoices, pay for goods, returns

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4
Q

Purchase requisition

A

Documents the need to purchase goods for supplies. What how when to purchase, not whi

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5
Q

Request goods opportunites for using info tech

A

Electronic purchase requition, automatic reordering

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6
Q

Purchase order

A

Formally request a vendor to sell and deliver specified products at specified prices also a promise to pay

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7
Q

Order goods opportunites for using info tech

A

Electronic data interchage to reduce costs, linking edi to point of sales, vendor managed inventory, on line ordering

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8
Q

Order goods threats and controls

A

Stockouts/excess inventory, ordering unnecessary items, purchasing goods at inflated prices, purching bad quality, purchasing from unautorized suppliers, kickbacks

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9
Q

Receiving report

A

Documents the details of each delivery

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10
Q

Recieve goods IT

A

Bar coding, rfid, gps locating of shipments

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11
Q

Recieve goods threats/controls

A

Recieving unordered goods, errors in counting recieved foods, stealing inventory

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12
Q

Disbursements voucher

A

Summarizes the info in a set of vendor invoices-authorized payment

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13
Q

Risk and controls cash disbursement process

A

Authorization of transactions, segregation of duties, three way match, business process reengineering

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14
Q

Three way match

A

Matching of a purchase order to the related recieving report and invoice

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15
Q

Business process reengineering

A

Computer based matching and checking of purchasing documents

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16
Q

Approve invoices IT

A

Edi invoicing, matching edi invoice to computer supporting documents, eliminating invoices entirely, procurment cards and company cards

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17
Q

Pay for goods IT

A

Electronic funds transfer for paying vendors

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18
Q

Approve/pay threats and control

A

Failing to catch errors in invoice, paying for goods not recieved, failing to take available discounts, pauong the same invoice twice, recording and posting errors in ap, misappropriation of moneh

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19
Q

Outputs of the purchasing process

A

Financial statement info, vendor checks, check register

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20
Q

Continuous processing

A

Creates a homogeneous product through a continuous series of standard procedures

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21
Q

Batch processing

A

Produce descrete groups of products. Each item in the batch is similar

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22
Q

Make to order processing

A

Involves the fabrication of discrete products in accordance with customer specifications

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23
Q

The production cycle

A

A recurring set of business activites and related info processing operaions associatd with convering raw inputs to outputs

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24
Q

Production cycle includes

A

Product design, planning and scheduling, production operations, cost accounting

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25
Q

Product design

A

Determing how to make a product

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26
Q

Bill of materials

A

Specifies the materials needed to make the product. Contains part number, raw material number, quantity

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27
Q

Operations list

A

Specifies the machine and labor requirements needed to make the product also call routing sheet

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28
Q

Product design threats

A

Poor product design resulting in excess costs

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29
Q

Product design controls

A

Accountig analysis of cost arising from product design choices, analysis of warranty and repair costs

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30
Q

Push planning

A

Build to inventory and try to sell

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31
Q

Pull planning (lean)

A

Build based on customer order

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32
Q

Master production schedule

A

Uses info about orderrs forcast and inventory levels to schedule production

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33
Q

Production order

A

Authorizes the manufacture of a specific quantity of a specific product

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34
Q

Planning and scheduling threats

A

Over or underproduction

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35
Q

Planning and scheduling controls

A

Production planning systems, review and approval of production schedules and orders, restriction of access to prodiction orders and prodiction schedules

36
Q

Production operations threats

A

Theft of inventory, theft of fixed assets, poor performance, loss of inventory/assets to disaster, disruption of operations

37
Q

Cost accounting

A

Providing info for planning controling evauation of production operations provide accurate cost dats about products for use in pricing and product mix decisions

38
Q

Cost accounting systems

A

Records the financial transactions of the events occuring in thr production process, initiated bu the production order, create a new cost record for the new batch and trigger wip, records are updated as material useds, receipt of last move ticket signals completions

39
Q

Whats wrong with traditional accounting info

A

Inaccurate cost allocations, and promoted non lean behavior

40
Q

Activity based costing

A

Provides managers with info about activities and cost objects. Assumes that products create a demand for activities and activites cause cost

41
Q

Advantages abc

A

More accurate costing of products and services, identifying the most and least profitbale products, accuratly tracking cost, drive continuous imprivements, better market mix, itentify waste

42
Q

Disadvantages to abc

A

Time consuming and conflict with lean thinking

43
Q

4 Vs of analytics

A

Volume, velocity, variety, veracity

44
Q

Volume

A

Data at rest. Existing data to process

45
Q

Velocity

A

Data in motion. Streaming data, milliseconds to seconds to respond

46
Q

Variety

A

Data in many forms. Structured, unstructured, text, multimedia

47
Q

Veracity

A

Data in doubt. Uncertainty due to data inconsistency and incompleteness, ambiguities, latency, deception, model approximations

48
Q

Types of internet of things

A

Rfid tags, gps location data, wearable tech, machine sensor data, situatiobal awareness sensor data

49
Q

Revenue assurance analytics

A

To reduce leakage from order to cash process. Predicting credit risk, deductions and disputes on trade funds, pricing discounts and terms of trade

50
Q

Analysis of expenses

A

To help reduce wastage. Payable analytics, spend analytics, contract compliance

51
Q

Control analytics

A

To help enhance. Process and financial risk analytics, financial statement quality, ethical fraud, fraud evidence reviews

52
Q

Working capital analytics

A

To help improve cashflow. Logistics inventory, days payables outstanding, days sales outstanding

53
Q

Continuous monitoring

A

Payroll, SSN test, setting criteria for percent change from run to run, accounts payable, duplicate payments, unclaimed credits

54
Q

Continuous auditing

A

Systems such as approva or those you build yourslef can identify unusual transactions that might avoid a fraudulent payment, look for a series of split transactions, avoiding the dollar cutoff for either no receipt or no approval required

55
Q

Unsupervised learning

A

Can be used to model behavior and discover anomalies. When several occur they can be grounds for suspicion

56
Q

Supervised learning

A

Can be used to label and classify known exceptions for certain fraud schemes and map these scheme models to new dafs and infer new exceptions

57
Q

IT auditing objectives

A

Confidentiality, integrity, availablilitu

58
Q

Confidentiality

A

Preserving authorized restrictions on information access and disclosure

59
Q

Integrity

A

Gaurding against improper information modification or destruction

60
Q

Availability

A

Ensuring timely and reliable access to and use of information

61
Q

Short term audit planning

A

What do we need to audit this year

62
Q

Long term audit planning

A

What should we plan to audit in the future

63
Q

Auditing around the computer

A

The processing portion is ignored

64
Q

Auditing through the computer

A

Verification of controls in a computer system. General controls and application controls

65
Q

Substantive testing

A

Computer controls are weak or nonexistent. These are detailed tests of transactions and account balances

66
Q

Compliance testing

A

Is performed to ensure that the controls are in place and working

67
Q

Objective one

A

Overall security

68
Q

Security errors and fraud include

A

Accidental or intentional damage to a system, unautorized access disclousure or modification of data and programs, theft, interruption of business activities

69
Q

Control procedures to minimize security errors and fraud

A

Developing an info security plan, restricing physical and logical access, encryping, protect against viruses, firewalls

70
Q

One way to test logical access controls is to

A

Try to break into a system

71
Q

Objective 2

A

Program development and aquisition

72
Q

Objective 3

A

Program modification

73
Q

Objective 2,3 errors and fraud

A

Errors due to careless programming or misunderstood specifications, deliberate insertion of unauthorized instructions into programs

74
Q

Objective 2,3 control procedures

A

Management and user authorization and approval, thorough testing, proper documentation

75
Q

Source code comparision

A

Compare the current version of the program with the original source code

76
Q

Reprocessing

A

Surprise the auditor uses a verified copy of the source code to reprocess dats and compare

77
Q

Parallel simulation

A

Auditor writes own program and compares

78
Q

Objective 4

A

Computer processing

79
Q

Objective 4 errors and fraud

A

Fail to detect erroneous input, process erroneous input, improperlu distribute or disclose output

80
Q

Objective 4 compensating controls

A

Processing of test data, analyzing program logic

81
Q

Processig test data

A

Testing a program by procesing hypothetical valid and invalid transactions

82
Q

Objective 5

A

Source data

83
Q

Objective 5 erros and fraud

A

Inaccurate sorce data and unautorized source data

84
Q

Input data validation checks

A

Sequence check, limit check, range check, validity check, completeness check, reasonableness check

85
Q

Objective 6

A

Data files

86
Q

Objectice 6 erros and fraud

A

Destruction of stored data and unautorized modification or disclousire of stored data

Accounting (30 decks)

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