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CPA BEC 1 > BEC 7 > Flashcards

BEC 7 Flashcards

1
Q

Types of Computer Systems

A
  1. Transaction Processing System (TPS) - older 2. Management Reporting Systems – more recent
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2
Q

Management Information System (MIS)

A
  • form of management reporting system - organized assembly of resources & procedures required to collect, process, & distribute data for use in decision-making process
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3
Q

Decision Support System (DSS)

A
  • form of management reporting system - INTERACTIVE system that provides the user with easy access to decision models & data, to support semi-structures decision-making tasks
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4
Q

Expert System

A
  • form of management reporting system - A.I. Development - has built in hierarchy of rules which are acquired from human experts in the field - with a provided input, the ES should be able to define the nature of the problem and provide recommendations to solve the problem
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5
Q

Executive Support Information System

A
  • form of management reporting system - supports executive work: non-routine decisions, helps answer questions regarding competitors, ID new acquisitions
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6
Q

Analytical Processing System

A
  • form of management reporting system - enables user to ask (query) the system, retrieve data, & conduct analysis
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7
Q

Systems Development Life Cycle Approach (SDLC) Steps

A
  1. Feasibility Study 2. Requirements Definition 3. Software Selection & Acquisition (purchased) / Software Design (in-house) 4. Configuration (purchased) / Development (in-house) 5. Final Testing & Implementation 6. Post-Implementation 7. Maintenance Phase
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8
Q

Feasibility Study

A
  • 1st Step of SDLC - determine strategic benefits of the system (gains or cost avoidance) - Estimate Payback schedule - Readiness of the organization’s users - maturity of the organization’s processes
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9
Q

Requirements Definition

A
  • 2nd step of SDLC - define the problem/need that requires resolution - define the functional/qualitative requirements of the selection - use in house or purchase but must entail a defined & documented acquisition process - user needs to be actively involved
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10
Q

Software Selection & Acquisition Or Software Designs

A
  • 3rd step of SDLC - Purchased: request for proposal, consider operational, support, tech requirements, & financial viability (escrow) - In-house: baseline, specifications, implementation with hardware software, program/database specs, security considerations, formal control process
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11
Q

Configuration Or Development

A
  • 4th step of SDLC - Purchased: tailor system to requirements (via settings NOT coding), may beed to build interface for implementation with existing system - In-House: program & develop supporting operation processes, testing to verify/validate, iterations of user acceptance testing
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12
Q

Final Testing & Implementation

A
  • 5th step of SDLC - establish actual operation of the new system - final iteration of user acceptance & user sign-off - may go through certification or accreditation process to assess effectiveness of business application in mitigating risk to appropriate level - providing management accountability over effectiveness of the system in meeting it goals - establish appropriate level of internal control
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13
Q

Post Implementation

A
  • 6th step of SDLC - formal process that assess the adequacy of the system & projected cost-benefit or ROI measurements in relation to feasibility stage (step 1) - provide lessons learned and/or plans for addressing system deficiencies - recommendations for future projects regarding systems development & project management processes followed
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14
Q

Maintenance Phase

A
  • 7th step of SDLC (not included in other interpretations) - monitor & support of the new system - training, help desk resources, & permissions system for changes (authorizations & tested) to system
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15
Q

Transaction Processing System (TPS) 2 ways

A
  1. Online Transaction Processing (OLTP), Real-Time (OLRT) 2. Batch Processing
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16
Q

Online Transaction Processing

A
  • database updated as soon as transaction is received (immediate) - up to date at being keyed/transmitted - Issue: computers continually running & accessible at all points of transaction - Good for retail businesses
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17
Q

Batch Processing

A
  • gathering information & entering transaction or groups periodically - greater control over input process (verify, authorize before input) - Problem: delay between transaction & input (accounting records may not always accurately reflect current)
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18
Q

Centralized vs Distributed Processing

A
  • Centralized is 1 computer for whole firm that could be addressed by multiple people through remote terminals - Distributed is virtually 1 computer per employee at different locations (network used to connect)
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19
Q

LANs

A
  • within specific georgraphical area - each computer does its own processing & manages some of its data - file server acts like a remote disk drive - good management control: access code and passwords
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20
Q

WANs

A
  • different remote locations
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21
Q

VANs

A
  • links computer files of different companies together - increased security (prevent access to inappropriate data information)
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22
Q

Problem with WLAN’s

A
  • unauthorized access (both ENCRYPTION of data and PASSWORDS to connect are critical)
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23
Q

Bus (topology)

A
  • common path in a communications network
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24
Q

Star (topology)

A
  • there is one computer (central hub) to which all computers connect - all data is first received by the hub and then sent by the hub (email systems)
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25
Q

Ring (topology)

A
  • each computer is connected to 2 closest neighbors in a closed loop (relay info) - 2 directions because 1 interruptions won’t bring down the network
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26
Q

Tree (topology)

A
  • groups of star-configured networks are organized in branches with 1 computer at the base - if within a branch, don’t have to to go the root computer - if in a different branch, may have to go through the root computer
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27
Q

Mesh (topology)

A
  • connected to many redundant interconnections between network nodes
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28
Q

Intranet

A

network limited to the computers of 1 company

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29
Q

Extranet

A

similar to intranet but select customers and vendors are able to participate as well

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30
Q

Client/Server Computing

A

networks for operating another computer - users of the client computer will be bale to access a server computer or even operating programs running on the server

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31
Q

Enterprise Resource Planning (ERP)

A
  • packaged business software that allows an organization to automate & integrate the majority of its business practices, processes, and share common data across the entire organization - produce & access information in a real-time environment
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32
Q

Transmission Control Protocol and Internet Protocol

A

TCP/IP: communication protocol designed to network dissimilar systems

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33
Q

Electronic Data Interchange (EDI)

A

extranets set up as VANs to enable process of communication between suppliers & customers

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34
Q

EDI Special Considerations

A
  1. Strict Standards (completeness & accuracy) 2. Translation Software (mapping) 3. Unauthorized Access (encryption, firewall, EFT concern)
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35
Q

Encryption

A

application control that make stole data unreadable to someone without knowing the coding method

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36
Q

Advantages of EDI

A
  • eliminates need for human intervention - can be more efficient that other systems - when inventory is ordered @ reorder point, EDI eliminates gaps & shortens the cycle - payments are made & received automatically (reduces AR float)
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37
Q

Risks of E-Commerce

A
  1. Confidentiality 2. Integrity 3. Availability (system failures) 4. Authentication & Non-repudation 5. Power shift to customers
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38
Q

Controls for E Commerce

A
  1. Security mechanism & procedures 2. firewalls 3. process where participants are identified positively and uniquely 4. Routing Verification procedures 5. Message acknowledgement procedures
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39
Q

Network Firewall

A

for company computers - easier & cheaper to set up - huge risk if penetrated

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40
Q

Application Firewall

A
  • for individual program protection - also allows user authentication
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41
Q

List Computers (most to least in size)

A
  1. Supercomputers 2. Mainframe Computers 3. Minicomputers 4. Microcomputers (PCs) 5. Personal Digital Assistants
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42
Q

Magnetic tape vs Magnetic discks

A
  • Tape is used mainly for back up & only sequential access to data is possible - Disks: random access to data and used inside computers
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43
Q

System Software

A

run system and direct operations (OS & Utility applications)

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44
Q

Utility Programs

A

for sorts, merges, & other routine functions to maintain & improve efficiency of computer

45
Q

Algorithms

A

instruction sets used in programs to define and control processes

46
Q

Heuristic

A

software that can learn and modify its operations (ie spell checking)

47
Q

Source Program

A

written in the language by the programmer

48
Q

Object Program

A

form the machine understands (1s & 0s)

49
Q

Compiler

A

converts source programs into machine language

50
Q

Protocol

A

rules determine the required format & methods for transmission of data

51
Q

A Query Program

A

application that counts, sums, & retrieves items from a database based on user criteria

52
Q

Fourth Generation Programming Language (4GL)

A
  • commonly used in the development of business applications - distinguished by their use of “natural language” commands making them self-documenting
53
Q

2 Popular Programming Language

A

C++ & Java

54
Q

Data Structure List

A
  1. Bit 2. Byte 3. Character 4. Alphanumeric 5. Field 6. Record (Primary & Secondary) 7. File (Master & Detail) 8. Database 9. Table 10 Data Detention File (describes)
55
Q

Database Management System (DBMS)

A
  • software system that controls the organization, storage, & retrieval of data in a database - organized & efficient manner to track information - program & database should be independent of each other (multiple access & control access) - goal: data normalization
56
Q

Data Mining

A

analysis of data which looks for trends or anomalies WITHOUT advanced knowledge of the meaning of data

57
Q

Data Normalization

A

to minimize the repetition & redundancy in the database (efficiency & remove danger of inconsistent data storage)

58
Q

Systems Analyst

A
  • prepares specifications for application programmers - middle man between users and programmers - designs IS using flowcharts (documenting, procedures, isolate control weaknesses)
59
Q

Application Programmers

A
  • writes, tests, & Debugs programs that will be used in the system - develops instructions for operations to follow
60
Q

Database Administrator

A
  • responsible for the security & information classification of shared data stored on the DB - design, definition, & maintenance of DB
61
Q

Computer Operator

A

operate computer in data center - command the OS, mount disks/tapes, & placing paper in the printer - may also wirte in JCL – Job Control Language

62
Q

Systems Programmer

A

Tech Support - updates and maintains the OS

63
Q

Systems Development & Maintenance (Personnel)

A
  1. Systems Analyst 2. Application Programmers 3. Database Administrator
64
Q

Operations in an IT function (personnel)

A

Input 1. Data Entry 2. Computer Operator Output 3. Data Control Clerk 4. Data Control Department 5. Librarians

65
Q

Major Security Risk when an employee leaves a client

A

failure to remove user accounts

66
Q

Parity Check

A

odd parity computer uses a dummy bit to check total # of bits ON (if odd = OK, if even = malfunction)

67
Q

Microcomputers Controls

A
  1. inventory lists 2. keyboard locks 3. secured to desk 4. periodic PW change 5. periodic data backup 6. sensitive info in offline storage
68
Q

ICE RACE

A

7 Principles of Information Criteria in COBIT I – Integrity C – Confidential E – Efficient R – Reliable A – Availability C – Compliance E – Effective

69
Q

Control Risks for Microcomputers

A
  • portable/small (steal or damage) - data & software accessible (easily access unauthorized records, Modify/copy/delete)
70
Q

Which objective are applications controls for?

A

the financial reporting objective

71
Q

What is included in Application controls?

A
  1. Preventive Controls (errors & fraud) 2. Detective Controls & Automated Controls (error & fraud – credit log review) 3. User Controls & Corrective Controls – individuals to follow up and detect errors/fraud
72
Q

What do Application controls relate to in an IT environment?

A
  • data input, data processing, & data output
73
Q

Contingency Planning

A

controls for accidental or intentional destruction or alteration

74
Q

Field Checks

A

validated by characters, length, & format accepted

75
Q

Limit Test

A

AKA “reasonable tests” Numbers are compared to limits that have been set for acceptance (i.e. wages)

76
Q

Validity Checks

A

Data is compared to a list of acceptable entries to be sure it matches with one of them (ie. CA for state vs IX for state)

77
Q

Check Digits

A

numbers or letters with not obvious meaning but is part of a formula - computer applies the formula to entered digits to verify as acceptable or not

78
Q

Edit Checks

A

on Batch Processing data (input control) - verify each individual entry is appropriate - if not, generates list of rejected transaction for review by the control clerk

79
Q

Types of Processing Controls

A
  1. Systems & Software Documentation 2. Computer programs tested (language) 3. Test Data 4. System testing (interacting properly)
80
Q

Output Controls (Data Processing)

A
  • concerned with detecting errors (opposed to preventing) - reasonable assurance that ONLY AUTHORIZED persons receive output for review
81
Q

Benefit of XBLR

A
  • reduces chance of error when generating reports - can handle data in different languages & accounting standards
82
Q

Risks of IT (auditing)

A
  1. Over-reliance 2. Access 3. Changes in Programs 4. Failure to Change
83
Q

2 Major Risks (IT & auditor)

A
  1. Unauthorized Access – Distributed computing can cause more harm than centralized 2. Audit Trail
84
Q

What can an Auditor do when client provides a program to verify that is not actually used by the client?

A

Include TEST DATA in a INTEGRATED TESTING FACILITY (simulated + actual data during a program run)

85
Q

If Integrated Testing Facility is not practical, what approach should an Auditor use?

A

controlled reprocessing approach

86
Q

Controlled Reprocessing approach

A

used when integrated testing facility is not practical - auditor supervises the entry of actual client data into the client program to reproduce results of a previous program run by the client - if results are identical, then program is the actual one used

87
Q

Generalized Audit Software Package may include

A
  1. Programs to access client files 2. Source Code Comparison 3. Parallel simulation 4. Spreadsheets for working trial balances and similar audit needs
88
Q

Trust Services Main Principles for SSAE

A

Meet one or more of SAC PO 1. Security 2. Availability 3. Confidentiality 4. Processing Integrity 5. Online Privacy

89
Q

Trust Services Sub-Principles

A
  1. Policies 2. Communications 3. Procedures 4. Monitoring
90
Q

Webtrust (assurance)

A

Websites 1. company existence 2. reliability of key business information placed on its website

91
Q

Systrust Service

A

Information Systems assurance SAC – PO

92
Q

COBIT Principles

A
  1. Meeting Stakeholders Needs 2. End to End Applications 3. Development of a Single Integrated Framework 4. Enabling a Holistic Approach 5. Separating Governance from Management
93
Q

Steering Committee

A
  • plan and oversee the IS function (systems development and acquisition) - address the complexities created by function and divisional boundaries
94
Q

COBIT Definition

A

framework provides managers, auditors, and IT users with a set of measure, indicators, processes, and best practices to maximize the benefit of IT

95
Q

COBIT Business Objectives

A
  1. Effective Decision Support 2. Efficient Transaction processing 3. Compliance
96
Q

COBIT Governance Objectives

A
  1. Strategic Alignment 2. Value Delivery (cost/benefit) 3. Resource Management (optimize knowledge/infrastructure) 4. Risk Management 5. Performance Measurement
97
Q

COBIT Information Criteria

A

ICE RACE mnemonic

98
Q

COBIT IT Resources

A
  1. Applications 2. Information 3. Infrastructure 4. People
99
Q

COBIT Domains and Processes

A

PO AIDS ME 1. Plan & Organize 2. Acquire & Implement 3. Deliver & Support 4. Monitor & Evaluate

100
Q

General Controls for IT

A

ensure that control environment is stable and well managed 1. Systems Development Standards 2. Security Management Controls 3. Change Management Procedures 4. Software acquisition, dev., operations, & maint. Controls

101
Q

Header (IT)

A

use to ID records on an accounting system file - located at the beginning of each file and contains the file name, expiration date, and orther ID data

102
Q

High-Level Statements

A

provide guidance to works who must make present and future decisions (IT Security)+

103
Q

Program Level Policy

A

the mission statement for IT security program

104
Q

Program-Framework Policy

A

IT security strategy (overall approach)

105
Q

EDI Controls

A
  1. Activity logs of failed transactions 2. Network and sender/receipt acknowledgements
106
Q

Supply Chain Management

A
  1. What: goods received = goods order 2. When: goods delivered on/before date promised 3. Where: delivered to location requested 4. How much: COGS low as possible
107
Q

Supply Chain Management Objectives

A
  1. Planning 2. Sourcing 3. Making 4. Delivery
108
Q

Customer Relationship Management Systems (CRM)

A

provide sales force automation and customer services in an attempt to manage customer relationships - objective is to increase customer satisfaction (profit & revenue)

CPA BEC 1 (16 decks)

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