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Accounting > AIS Test 2 > Flashcards

AIS Test 2 Flashcards

1
Q

Sabotage

A

Intentional act where the intent is to destroy a system or some of its components.

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2
Q

Cookie

A

Text file created by a website and stored on a visitor’s hard drive. Cookies store information about who the user is and what the user has done on the site.

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3
Q

Fraud

A

Any and all means a person uses to gain an unfair advantage over another person.

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4
Q

White-Collar Criminals

A

Typically, business people who commit fraud. White-collar criminals usually resort to trickery or cunning, and their crimes usually involve a violation of trust or confidence.

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5
Q

Corruption

A

Dishonest conduct by those in power which often involves actions that are illegitimate, immoral, or incompatible with ethical standards. Examples include bribery and bid rigging.

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6
Q

Investment Fraud

A

Misrepresenting or leaving out facts in order to promote an investment that promises fantastic profits with little or no risk. Examples include Ponzi schemes and securities fraud.

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7
Q

Misappropriation of Assets

A

Theft of company assets by employees.

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8
Q

Fraudulent Financial Reporting

A

Intentional or reckless conduct, whether by act or omission, that results in materially misleading financial statements.

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9
Q

Pressure

A

Person’s incentive or motivation for committing fraud.

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10
Q

Opportunity

A

Condition or situation that allows a person or organization to commit and conceal a dishonest act and covert it to personal gain.

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11
Q

Lapping

A

Concealing the theft of cash by means of a series of delays in posting collections to accounts receivable.

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12
Q

Check Kiting

A

Creating cash using the lag between the time a check is deposited and the time it clears the bank.

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13
Q

Rationalization

A

Excuse that fraud perpetrators use to justify their illegal behavior.

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14
Q

Computer Fraud

A

Any type of fraud that requires computer technology to perpetrate.

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15
Q

Time-Based Model of Security

A

Implementing a combination of preventive, detective, and corrective controls that protect information assets long enough to enable an organization to recognize that an attack is occurring and take steps to thwart it before any information is lost or compromised.

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16
Q

Defense-In-Depth

A

Employing multiple layers of controls to avoid a single point-of-failure.

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17
Q

Social Engineering

A

Using deception to obtain unauthorized access to information resources.

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18
Q

Authentication

A

Verifying the identity of the person or device attempting to access the system.

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19
Q

Biometric Identifier

A

A physical or behavioral characteristic that is used as an authentication credential.

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20
Q

Multifactor Authentication

A

Use of two or more types of authentication credentials in conjunction to achieve a greater level of security.

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21
Q

Multimodal Authentication

A

Use of multiple authentication credentials of the same type to achieve a greater level of security.

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22
Q

Authorization

A

Process of restricting access of authenticated users to specific portions of the system and limiting what actions they are permitted to perform.

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23
Q

Access Control Matrix

A

Table used to implement authorization controls.

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24
Q

Compatibility Test

A

Matching the user’s authentication credentials against the access control matrix to determine whether that employee should be allowed to access that resource and perform the requested action.

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25
Q

Penetration Test

A

Authorized attempt to break into the organization’s information system.

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26
Q

Change Control and Change Management

A

Formal process used to ensure that modifications to hardware, software, or processes do not reduce systems reliability.

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27
Q

Border Router

A

Device that connects an organization’s information system to the internet.

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28
Q

Firewall

A

Special purpose hardware device or software running a general purpose computer that controls both inbound and outbound communication between the system behind the firewall and other networks.

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29
Q

Demilitarized Zone (DMZ)

A

Separate network located outside the organization’s internal information system that permits controlled access from the internet.

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30
Q

Routers

A

Special purpose devices that are designed to read the source and destination address fields in IP packet headers to decide where to send (route) the packet next.

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31
Q

Access Control List (ACL)

A

Set of IF-THEN rules used to determine what to do with arriving packets.

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32
Q

Packet Filtering

A

Process that uses various fields in a packet’s IP and TCP headers to decide what to do with the packet.

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33
Q

Deep Packet Inspection

A

Process that examines the data in the body of a TCP packet to control traffic, rather than looking only at the information in the IP and TCP headers.

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34
Q

Intrusion Prevention Systems (IPS)

A

Software or hardware that monitors patterns int he traffic flow to identify and automatically block attacks.

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35
Q

Endpoints

A

Collective term for the workstations, servers, printers, and other devices that comprise an organization’s network.

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36
Q

Vulnerabilities

A

Flaws in programs that can be exploited to either crash the system or take control of it.

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37
Q

Vulnerability Scanners

A

Automated tools designed to identify whether a given system possesses any unused and unnecessary programs that represent potential security threats.

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38
Q

Exploit

A

Program designed to take advantage of a known vulnerability.

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39
Q

Patch

A

Code released by software developers that fixes a particular vulnerability.

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40
Q

Patch Management

A

Process of regularly applying patches and updates to software.

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41
Q

Hardening

A

Process of modifying the default configuration of endpoints to eliminate unnecessary settings and services.

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42
Q

Log Analysis

A

Process of examining logs to identify evidence of possible attacks.

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43
Q

Intrusion Detection Systems (IDS)

A

System that creates logs of all network traffic that was permitted to pass the firewall and then analyzes those logs for signs of attempted or successful intrusions.

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44
Q

Computer Incident Response Team (CIRT)

A

Team that is responsible for dealing with major security incidents.

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45
Q

Virtualization

A

Running multiple systems simultaneously on one physical computer.

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46
Q

Cloud Computing

A

Using a browser to remotely access software, data storage, hardware, and applications.

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47
Q

Threat/Event

A

Any potential adverse occurrence or unwanted event that could injure the AIS or the organization

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48
Q

Exposure/Impact

A

Potential dollar loss should a particular threat become a reality.

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49
Q

Likelihood/Risk

A

Probability that a threat will come to pass.

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50
Q

Internal Controls

A

Processes and procedures implemented to provide reasonable assurance that control objectives are met.

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51
Q

Preventive Controls

A

Controls that deter problems before they arise.

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52
Q

Detective Controls

A

Controls designed to discover control problems that were not prevented.

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53
Q

Corrective Controls

A

Controls that identify and correct problems as well as correct and recover from the resulting errors.

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54
Q

General Controls

A

Controls designed to make sure an organization’s information system and control environment is stable and well managed.

55
Q

Application Controls

A

Controls that prevent, detect, and correct transaction errors and fraud in application programs.

56
Q

Belief System

A

System that describes how a company creates value, helps employees understand management’s vision, communicates company core values, and inspires employees to live by those values.

57
Q

Boundary System

A

System that helps employees act ethically be setting boandaries on employee behavior.

58
Q

Diagnostic Control System

A

System that measures, monitors, and compares actual company progress to budgets and performance goals.

59
Q

Interactive Control System

A

System that helps managers to focus subordinates’ attention on key strategic issues and to be more involved in their decisions.

60
Q

Foreign Corrupt Practices Act (FCPA)

A

Legislation passed to prevent companies from bribing foreign officials to obtain business; also requires all publicly owned corporations maintain a system of internal accounting controls.

61
Q

Sarbanes-Oxley Act (SOX)

A

Legislation intended to prevent financial statement fraud, make financial reports more transparent, provide protection to investors, strengthen internal controls at public companies, and punish executives who perpetrate fraud.

62
Q

Public Company Accounting Oversight Board (PCAOB)

A

Board created by SOX that regulates the auditing profession; created as part of SOX.

63
Q

Control Objectives for Information and Related Technology (COBIT)

A

Security and control framework that allows (1) management to benchmark the security and control practices of IT environments, (2) users of IT services to be assured that adequate security and control exist, and (3) auditors to substantiate their internal control opinions and advise on IT security and control matters.

64
Q

Committee of Sponsoring Organizations (COSO)

A

Private-sector group consisting of the American Accounting Association, the AICPA, the Institute of Internal Auditors, the Institute of Management Accountants, and the Financial Executives Institute.

65
Q

Internal Control- Integrated Framework (IC)

A

A COSO framework that defines internal controls and provides guidance for evaluating and enhancing internal control systems.

66
Q

Enterprise Risk Management - Integrated Framework (ERM)

A

A COSO framework that improves the risk management process by expanding (adds three additional elements) COSO’s Internal Control - Integrated.

67
Q

Internal Environment

A

Company culture that is the foundation for all other ERM components, as it influences how organizations establish strategies and objectives; structure business activities; and identify, assess, and respond to risk.

68
Q

Risk Appetite

A

Amount of risk a company is willing to accept to achieve its goals and objectives. To avoid undue risk, risk appetite must be in alignment with company strategy.

69
Q

Audit Committee

A

Outside, independent board of director members responsible for financial reporting, regulatory compliance, internal control, and hiring and overseeing internal and external auditors.

70
Q

Policy and Procedures Manual

A

Document that explains proper business practices, describes needed knowledge and experience, explains document procedures, explains how to handle transactions, and lists the resources provided to carry out specific duties.

71
Q

Background Check

A

An investigation of a prospective or current employee that involves verifying their educatiional work experience, talking to references, checking for a criminal record or credit problems, and examining other publicly available information.

72
Q

Strategic Objectives

A

High-level goals that are aligned with and support the company’s mission and create shareholder value.

73
Q

Operations Objectives

A

Objectives that deal with the effectiveness and efficiency of company operations and determine how to allocate resources.

74
Q

Reporting Objectives

A

Objectives to help ensure the accuracy, completeness, and reliability of company reports; improve decision making; and monitor company activities and performance.

75
Q

Compliance Objectives

A

Objectives to help the company comply with all applicable laws and regulations.

76
Q

Event

A

Positive or negative incident or occurrence from internal or external sources that affects the implementation of strategy or the achievement of objectives.

77
Q

Inherent Risk

A

Susceptibility of a set of accounts or transactions to significant control problems in the absence of internal control.

78
Q

Residual Risk

A

Risk that remains after management implements internal controls or some other response to risk.

79
Q

Expected Loss

A

The mathematical product of the potential dollar loss that would occur should a threat become a reality (called impact or exposure) and the risk or probability that the threat will occur (called likelihood).

80
Q

Control Activities

A

Policies, procedures, and rules that provide reasonable assurance that control objectives are met and risk responses are carried out.

81
Q

Authorization

A

Establishing policies for employees to follow and then empowering them to perform certain organizational functions. Authorizations are often documented by signing, initializing, or entering an authorization code on a document or record.

82
Q

Digital Signature

A

Means of electronically signing a document with data that cannot be forged.

83
Q

Specific Authorization

A

Special approval an employee needs in order to be allowed to handle a transaction.

84
Q

General Authorization

A

The Authorization given employees to handle routine transactions without special approval.

85
Q

Segregation of Accounting Duties

A

Sepaarating the accounting functions of authorization, custody, and recording to minimize an employee’s ability to commit fraud.

86
Q

Collusion

A

Cooperation between two or more people in an effort to thrwart internal controls.

87
Q

Segregation of System Duties

A

Implementing control procedures to clearly divide authority and responsiblity within the information system function.

88
Q

System Administrator

A

Person responsible for making sure a system operates smoothly and efficiently.

89
Q

Network Manager

A

Person who ensures that the organization’s networks operate properly.

90
Q

Security Management

A

People that make sure systems are secure and protected from internal and external threats.

91
Q

Change Management

A

Process of making sure changes are made smoothly and efficiently and do not negatively affect the system.

92
Q

Users

A

People who record transactions, authorize data processing, and use system output.

93
Q

Systems Analysts

A

People who help users determine their information needs and design systems to meet those needs.

94
Q

Programmers

A

People who use the analysts’ design to create and test computer programs.

95
Q

Computer Operators

A

People who operate the company’s computers.

96
Q

Information System Library

A

Corporate databases, files, and programs stored and managed by the system librarian.

97
Q

Data Control Group

A

People who ensure that source data is approved, monitor the flow of work, reconcile input and output, handle input errors, and distribute systems output.

98
Q

Steering Committee

A

An executive level committee to plan and oversee the information systems function.

99
Q

Strategic Master Plan

A

Multiple-year plan of the projects the company must complete to achieve its long-range goals.

100
Q

Project Development Plan

A

Document that shows how a project will be completed.

101
Q

Project Milestones

A

Points where progress is reviewed and actual and estimated completion times are compared.

102
Q

Data Processing Schedule

A

Schedule that shows when each data processing task should be performed.

103
Q

System Performance Measurements

A

Ways to evaluate and assess a system.

104
Q

Throughput

A

Amount of work performed by a system during a given period of time.

105
Q

Utilization

A

Percentage of time a system is used.

106
Q

Resonse time

A

How long it takes for a system to respond.

107
Q

Postimplementation Review

A

Review, performed after a new system has been operating for a brief period, to ensure that it meets its planned objectives.

108
Q

Systems Integrator

A

An outside party hired to manage a company’s systems developmetn effort.

109
Q

Analytical Review

A

Examination of the relationships between different sets of data. Abnormal or unusual relationships and trends are investigated.

110
Q

Audit Trail

A

Path that allows a transaction to be traced through a data processing system from point of origin to output or backward from output to point of origin.

111
Q

Computer Security Officer (CSO)

A

An empoyee independent of the information system function who monitors the system, disseminates information about improper system uses and their consequences, and reports to top management.

112
Q

Chief Compliance Office (CCO)

A

Employee resonsible for all the compliance tasks associated with SOX and other laws and regulatory rulings.

113
Q

Forensic Investigators

A

Individuals who specialize in fraud, most of whom have specialized training with law enforcement agencies such as the FBI or IRS or have professional certifications such as Certified Fraud Examiner (CFE).

114
Q

Computer Forensics Specialists

A

Computer experts who discover, extract, safeguard, and document computer evidence such that its authenticity, accuracy, and integrity will not succumb to legal challenges.

115
Q

Neural Networks

A

Computing systems that imitate the brain’s learning process by using a network of interconnected processors that perform multiple operations simultaneously and interact dynamically.

116
Q

Fraud Hotline

A

Phone number employees can call to anonymously report fraud and abuse.

117
Q

Auditing

A

Objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria.

118
Q

Internal Auditing

A

Assurance and consulting activity designed to add value, improve organizational effectiveness and efficiency, and accomplish organization objectives.

119
Q

Financial Audit

A

Examination of the reliability and integrity of financial transactions, accounting records, and financial statements.

120
Q

Information Systems (Internal Control) Audit

A

Examination of the general and application controls of an IS to assess its compliance with internal control policies and procedures and its effectiveness in safeguarding assets.

121
Q

Operational Audit

A

Examination of the economical and efficient use of resources and the accomplishment of established goals and objectives.

122
Q

Compliance Audit

A

Examination of organizational compliance with apllicable laws, regulations, policies, and procedures.

123
Q

Investigative Audit

A

Examination of incidents of possible fraud, misappropriation of assets, waste and abuse, or improper governmental activities.

124
Q

Inherent Risk

A

Susceptibility to significant control problems in the absence of internal control.

125
Q

Control Risk

A

Risk that a material misstatement will get through the internal control structure and into the financial statements.

126
Q

Detection Risk

A

Risk that auditors and their audit procedures will fail to detect a material error or misstatement.

127
Q

Confirmation

A

Written communication with independent third parties to confirm the accuracy of information, such as customer account balances.

128
Q

Reperformance

A

Performing calculations again to verify quantitative information.

129
Q

Vouching

A

Comparing accounting journal and ledger entries with documentary evidence to verify that a transaction is valid, accurate, properly authorized, and correctly recorded.

130
Q

Materiality

A

Amount of an error, fraud, or omission that would affect the decisiono f a prudent user of financial information.

131
Q

Reasonable Assurance

A

obtaining complete assurance that information is correct is prohibitively expensive, so auditors accept a reasonable degree of risk that the audit conclusion is incorrect.

132
Q

Systems Review

A

Internal control evaluation step that determines if necessary control procedures are actually in place.

133
Q

Tests of Controls

A

Tests to determine whether existing controls work as intended.

134
Q

Compensating Controls

A

Control procedures that compensate for the deficiency in other controls.

Accounting (13 decks)

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