Ch 10 Flashcards
The Processing Integrity principle of the Trust Services Framework states that
that a reliable system is one that produces information that is accurate, complete, timely, and valid.
if bad, then bad information, then bad decisions. garbage in garbage out
what is a turnaround document
a record of company data sent to an external party and then returned by the external party for subsequent input to the system. Can also be sued to update the other account(s)
What is the significnace of prenumbering?
Prenumbering improves control by making it possible to verify that no documents are missing.
The input control of Forms Design is entailed as
Source documents and other forms should be designed to minimize the
chances for errors and omissions. Two particularly important forms design controls involve
sequentially prenumbering source documents and using turnaround documents.
Why should source documents be cancelled?
so they cannot be inadvertently or fraudulently
reentered into the system/ coounted twice.
Note: Cancellation does not mean disposal. Original source documents (or their electronic images) should be retained for as long as needed to
satisfy legal and regulatory requirements and provide an audit trail.
What is a range check?
●A range check tests whether a numerical amount falls between predetermined lower and
upper limits. For example, a marketing promotion might be directed only to prospects
with incomes between $50,000 and $99,999.
What is a limit check?
tests a numerical amount against a fixed value. For example, the
regular hours-worked field in weekly payroll input must be less than or equal to
40 hours. Similarly, the hourly wage field should be greater than or equal to the
minimum wage.
What is the completeness check?
an
edit check that verifies that all
data required have been entered. Requireed field on Access, for example
size check?
an edit check that
ensures the input data will fit
into the assigned field. specify the field length - field size on access
What is a sign check
determines whether the data in a field have the appropriate arithmetic sign.
For example, the quantity-ordered field should never be negative. Validation rules also
What is a validity check?
an edit test that compares the Id code or account number in transaction data with similar data in the master file to verify that the account exists. For example, if product number 65432 is entered on a sales order, the computer must verify that there is indeed a product 65432 in the inventory database. An example os when one is checking to see id numbers or check numbers are correct according to documents. Also validity rules
What is a reasonableness test?
●A reasonableness test determines the correctness of the logical relationship between
two data items. For example, overtime hours should be zero for someone who has not
worked the maximum number of regular hours in a pay period.
which control involves
recalculating the check digit to identify data entry errors.
check digit verification
Example of hash total vs financial total (batch totals)
- in excel - sum of cells - financial totals
- hash - Same as above but something else - like employee ID NUMBERS - THEN ADD UP TO SEE IF match up with others. If off, maybe you pay someone twice. lookup
What is promption?
●Prompting, in which the system requests each input data item and waits for an acceptable response, ensures that all necessary data are entered (i.e., prompting is an online
completeness check).
Eg - requring one to type in a value before leaving
What are batch totals?
●Batch totals summarize numeric values for a batch of input records. The following are
three commonly used batch totals:
1. A financial total sums a field that contains monetary values, such as the total dollar
amount of all sales for a batch of sales transactions.
2. A hash total sums a nonfinancial numeric field, such as the total of the quantity-ordered field in a batch of sales transactions.
3. A record count is the number of records in a batch.
In addition to user review of output and periodic reconciliation preocedures on balances/inventory, External Data Reconciliation is another output control. What is it?
●External data reconciliation. Database totals should periodically be reconciled with
data maintained outside the system. For example, the number of employee records in the payroll file can be compared with the total number of employees in the human resources database to detect attempts to add fictitious employees to the payroll database. Similarly,
inventory on hand should be physically counted and compared to the quantity on hand recorded in the database.
make sure your list and HR’s list, for eg, match. Finds ghost emplyoees. Also a surprise audit would confirm