Chap 1 - ACCT information system and the Accountant Flashcards
Accounting Information Systems (AISs)
a collection of data and processing procedures that creates needed information for its users
Activity Based Costing (ABC) systems
Page 10 - Assigning overhead costs based on the resources, rather than only direct labor
Audit trail
P15 - the path that data follow as they flow through an AIS.
balanced scorecard
P10 - measures business performance in four categories:
- Financial Performance
- Customer Knowledge
- Internal Business Processes
- Learning and Growth
Big data
a) cloud computing can be used to support data analytics projects
b) a combination of large, complex data sets
c) the definition depends on the capabilities of the organization that manages the data
Certified Fraud Examiner (CFE)
P3 - A certification acquired by an accountant by meeting the qualifications of the Association of Certified Fraud Examiners (ACFE)
Certified Information System Auditors (CISA)
P5 - A certification given to professional information system auditors by the Information Systems Audit and Control Association (ISACA)
Certified Information Technology Professional (CITP)
P2 - A new designation developed by AICPA, can be earned by accountants with business experience and if they pass an examination -> this certification signifies superior knowledge in IT, information system , and specialized information management systems.
Cloud computing
P19 - is a way of using business applications over the internet. it is a way to increase IT capacity or add capabilities without investing in new infrastructure, training new people, or licensing new software
Cloud computing
P19 - is a way of using business applications over the internet. it is a way to increase IT capacity or add capabilities without investing in new infrastructure, training new people, or licensing new software.
Corporate Responsibility Reporting
also called Sustainability Reporting
P20 - voluntary and focuses on non-financial environmental and social measures that might impact an organization’s income, value or future performance.
Cost accounting
P9 - part of managerial accounting, assists management in measuring and controlling the costs associated with an organization’s various acquisition, processing, distribution, and selling activities.
CPA Trust Services
P12 - a set of professional service areas built around a set of common principles and criteria related to the risks and opportunities presented by IT environments.
dashboard
P11 - is a summary screen of key performance metrics typically used by managers
data
P15 -
- raw facts about events that have little organization or meaning.
- To be useful or meaningful, most data must be processed into useful information
- not always have to be processed to be meaningful
- mark the starting point of an audit trail.
e-business
P18 - Conducting business over the Internet. Increased importance and growth
e-commerce
P18 - Subset of e-business. Buying and selling transactions
Enterprise Resource Planning (ERP) Systems
Application software that integrates the accounting, production, marketing, human resources, and similar functions of an organization in one large application. It enables businesses and government agencies to transmit and manipulate financial data on an organization-wide basis.
Extensible Business Reporting Language (XBRL)
P9 - a language for interactive data. The SEC requires public companies to file their financial reports using this format.
- A language for creating, transforming, and communicating financial information
interactive data
P8 - data that can be reused and carried seamlessly among a variety of applications or reports
financial accounting information system
P6 - component of AIS where major objective is to provide relevant information to users outside the organization, i.e. investors, federal and state tax agencies, creditors.
forensic accounting
P22 -
- Combines skills of investigation, accounting, and auditing
- Provides evidence of criminal activity
Examples of AIS Uses in Forensic Accounting
- Identifying and denying financial aid to terrorists
- Tracing arms and chemical orders to final destination
- Planning for catastrophic events
- Controlling cyber terrorism
- Detecting money laundering and illegal transfers
information
Processed data
Meaningful to users
information age
P18 - fewer workers actually make products while more of them produce, analyze, manipulate and distribute information about business activities.
Information Systems Audit and Control Association (ISACA)
the professional association of information technology auditors
Information Technology (IT) auditors
P4 - assess risks associated with automated AIS.
Key performance indicator (KPI)
- measure and evaluate activities in each quadrant of the balanced scorecard
- a key productivity report
knowledge worker
individuals who produce, analyze, manipulate, and distribute information about business activities
penetration testing
assessing risk by trying to breach the system
Ponzi scheme
Pyramid fraud which new investment funds are used to pay returns to current investors. The fraud relies on new money continuously entering the system so that investors believe their money is actually earning returns. The problem is that when new money stops flowing, the pyramid collapses.
predictive analytics
take advantage of data stored in data warehouse and make useful business prediction for clients.
responsibility accounting system
- Trace unfavorable performance to responsible department or individuals
- Immediate corrective action by managers
suspicious activity reporting (SAR)
- Laws that require accountants to report questionable financial transactions to the US Treasury Department.
- Examples of such transactions are money laundering, bribes, or wire transfers to terrorist organizations
- Federally-mandated reporting of suspicious accounting activities
systems consultant
- Designing systems and reengineering processes
- Selecting software and hardware
- Becoming value-added resellers (VARs)
value-added resellers (VARs)
P3 - special types of system consultants who are licensed to sell particular software packages and provide organizations with consulting services related to those packages
Sarbanes-Oxley Act
- includes a provision that prohibits corporations from making personal loans to executives
- prohibits companies from using the same auditing firms for performing both auditing and management consulting services
- It costs some companies over $1 million to comply with the requirements of the Sarbanes-Oxley Act
- As a result of corporate bankruptcies in 2002, some of the largest public accounting firms are no longer engaged in any consulting work
The purpose of CPA Trust Service
to provide assurance that a company engaged in electronic commerce can provide the goods or services it promises.
The CISA is an acronym for a professional accounting certification
True.
Which of the following captures the same idea as the term “GIGO?”
a) Computers cannot turn straw into gold
b) Too much information is the same as garbage
c) Great investments lead to great returns
d) Too many cooks spoil the broth
A
Which of the following best describes a data warehouse?
a) A repository of historical information from one accounting application
b) A repository of historical information from a set of accounting applications
c) A repository of information from many business applications—some not accounting
d) A repository of information from many businesses in the same industry
c.
Many accountants feel that the most important part of the Sarbanes-Oxley Act is:
a) Its anti-terrorist provisions
b) Its provisions requiring the reporting of suspicious activities
c) Section 404 on internal controls
d) Section 505 on money laundering
C
The U.S. Patriot act:
a) Requires banks to monitor their accounts in foreign institutions for fraud
b) Prohibits companies from lending money to corporate executives
c) Only applies to publicly-traded companies
d) all of these are correct
A
A good performance measurement system should evaluate:
a) Profitability only
b) Customer satisfaction only
c) Those aspects of a unit’s performance that are subject to its control
d) Those aspects of a unit’s performance whether controllable or not
C
For performance reports to achieve their control objectives, they must:
a) Include relevant information so that necessary action may be taken to accomplish organizational goals
b) Be timely so that minimal time elapses between an activity’s occurrence and the feedback reflecting the activity’s efficient or inefficient performance
c) Provide subsystem managers with suggestions as to how they can operate their subsystems more efficiently
d) all of the above
e) a and b only
A
An example of an assurance service for a company engaged in electronic commerce is:
a) XBRL
b) Trust US
c) CITP
d) CPA Trust Services
D
Information systems auditors are:
a) Auditors who are concerned with analyzing risks associated with computerized information systems
b) Individuals who often work closely with financial auditors
c) Auditors who have a lot of technical expertise related to information technology
d) all of the above
D
Which of these is a certification that accountants can earn that focuses on proficiency in information technology?
a) CPA
b) CMA
c) CISA
d) CITP
CITP (certified information technology professional)
The designation for a licensed information systems audit professional is:
a) CPA
b) CMA
c) CIA
d) CISA
CISA (certified information system auditor)
The certified information systems auditor (CISA) certification is sponsored by:
a) ISACA
b) AICPA
c) IMA
d) none of these
ISACA (Information Systems Audit and Control Association)
ISACA
- Information system audit and control association
- A professional auditing organization
REA
An important database design approach.
A certification that requires individuals to meet certain qualification set by the Association of Certified Fraud Examiner
CFE (certified fraud examiner)
Name some business activities that do not require traditional journal entries.
obtaining a line of credit, issuing purchase requisitions or purchase orders, signing contracts, hiring a new executive, and sending financial information to investors or bank loan personnel.
HIPAA
- Health Insurance Portability and Accountability Act
- a law involving health assurance and privacy.
A certification for information professionals.
CITP (certified information technology professionals)
Give three reasons why XBRL formatted documents are useful
they make financial data more searchable, comparable, informative, and therefore useful, it enables companies to use standard tags to identify specific accounting values, the language itself imposes a greater degree of standardization in the informational content of the reports, and XBRL also helps government agencies gather financial data that are more consistent, easier to understand, self-checking, and more quickly communicated.
