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Chapter 16: General Ledger and Reporting System Flashcards

1
Q

General Ledger and Reporting System 4 steps

A
  1. Update GL
  2. Posting Adjusting Entries
  3. Prepare financial statements
  4. Produce managerial Reports
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2
Q

General Ledger and Reporting System 4 steps

A
  1. Update GL
  2. Posting Adjusting Entries
  3. Prepare financial statements
  4. Produce managerial Reports
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3
Q

General Ledger and Reporting System 4 steps

A
  1. Update GL
  2. Posting Adjusting Entries
  3. Prepare financial statements
  4. Produce managerial Reports
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4
Q
  1. Inaccurate or invalid general ledger data
A
  1. data processing integrity controls
  2. restriction of access to general ledger, only authorized employees. Use multi factor authentication
  3. review of all changes to general ledger data
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5
Q

Unauthorized disclosure of financial statement

A
  1. access controls

2. encryption

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6
Q

Loss or Destruction of data

A

backup and disaster recover procedures

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7
Q

UPdating consists of posting journal entries that originate from two sources:

A
  1. Accounting subsystems

2. treasurer

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8
Q

Journal Voucher File

A

individual journal entries to update the general. Debits equal credits, senior level review and approval.

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9
Q

Inaccurate updating of general ledger

A
  1. data entry processing integrity controls
  2. reconciliations and control reports
  3. audit trail creation and review
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10
Q

Unauthorized Journal Entires

A
  1. access controls
  2. reconciliation and control reports
  3. audit trail and creation and review
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11
Q

editing and processing controls needed for treasurer journal entries

A
  1. validity check to ensure that general ledger accounts exist for each account number referenced in the journal entry
  2. field checks to ensure that the amount field in the journal entry contains only numeric data
  3. zero balance check to verify that total debits equal total credits in a journal entry
  4. completeness test to ensure that all pertinent data are entered, especially the source of the journal entry
  5. closed loo verification: matching account numbers with account descriptions to ensure that the correct general ledger account is being accessed
  6. sign check of the general ledger account balance, once updating is completed, to verify that the balance is of the appropriate nature (Debit or credit)
  7. calculating run to run totals to verify the accuracy of journal voucher batch processing.
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12
Q

Trail Balance

A

a report that lists the balances for all general ledger accounts.

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13
Q

Audit Trail

A

a traceable path that shows how a transaction flows through the information system to affect general ledger account balances - detective control

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14
Q

Audit trail provides the ability to

A
  1. trace any transactions from its original source document to the journal entry that update the general ledger and to any report or document using the data
  2. trace any item appearing in the report back through the general ledger to its original source document.
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15
Q

Inaccurate adjusting entries

A
  1. data entry processing integrity controls
  2. spreadsheet error protection controls
  3. standard adjusting entries
  4. reconciliations and control reports
  5. audit trails
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16
Q

adjusting entries fall into 5 categories:

A
  1. accruals
  2. deferrals
  3. estimates
  4. revaluations
  5. corrections
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17
Q

Inaccurate adjusting entries

A
  1. data entry processing integrity controls
  2. spreadsheet error protection controls
  3. standard adjusting entries
  4. reconciliations and control reports
  5. audit trails
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18
Q
  1. Inaccurate or invalid general ledger data
A
  1. data processing integrity controls
  2. restriction of access to general ledger, only authorized employees. Use multi factor authentication
  3. review of all changes to general ledger data
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19
Q

Unauthorized disclosure of financial statement

A
  1. access controls

2. encryption

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20
Q

Loss or Destruction of data

A

backup and disaster recover procedures

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21
Q

UPdating consists of posting journal entries that originate from two sources:

A
  1. Accounting subsystems

2. treasurer

22
Q

Journal Voucher File

A

individual journal entries to update the general. Debits equal credits, senior level review and approval.

23
Q

Inaccurate updating of general ledger

A
  1. data entry processing integrity controls
  2. reconciliations and control reports
  3. audit trail creation and review
24
Q

Unauthorized Journal Entires

A
  1. access controls
  2. reconciliation and control reports
  3. audit trail and creation and review
25
Q

editing and processing controls needed for treasurer journal entries

A
  1. validity check to ensure that general ledger accounts exist for each account number referenced in the journal entry
  2. field checks to ensure that the amount field in the journal entry contains only numeric data
  3. zero balance check to verify that total debits equal total credits in a journal entry
  4. completeness test to ensure that all pertinent data are entered, especially the source of the journal entry
  5. closed loo verification: matching account numbers with account descriptions to ensure that the correct general ledger account is being accessed
  6. sign check of the general ledger account balance, once updating is completed, to verify that the balance is of the appropriate nature (Debit or credit)
  7. calculating run to run totals to verify the accuracy of journal voucher batch processing.
26
Q

Trail Balance

A

a report that lists the balances for all general ledger accounts.

27
Q

Audit Trail

A

a traceable path that shows how a transaction flows through the information system to affect general ledger account balances - detective control

28
Q

Audit trail provides the ability to

A
  1. trace any transactions from its original source document to the journal entry that update the general ledger and to any report or document using the data
  2. trace any item appearing in the report back through the general ledger to its original source document.
29
Q

Where do adjusting entries originate from

A

controller’s office, after the initial trail balance has been prepared.

30
Q

adjusting entries fall into 5 categories:

A
  1. accruals
  2. deferrals
  3. estimates
  4. revaluations
  5. corrections
31
Q

Inaccurate adjusting entries

A
  1. data entry processing integrity controls
  2. spreadsheet error protection controls
  3. standard adjusting entries
  4. reconciliations and control reports
  5. audit trails
32
Q
  1. Inaccurate or invalid general ledger data
A
  1. data processing integrity controls
  2. restriction of access to general ledger, only authorized employees. Use multi factor authentication
  3. review of all changes to general ledger data
33
Q

Unauthorized disclosure of financial statement

A
  1. access controls

2. encryption

34
Q

Loss or Destruction of data

A

backup and disaster recover procedures

35
Q

UPdating consists of posting journal entries that originate from two sources:

A
  1. Accounting subsystems

2. treasurer

36
Q

Journal Voucher File

A

individual journal entries to update the general. Debits equal credits, senior level review and approval.

37
Q

Inaccurate updating of general ledger

A
  1. data entry processing integrity controls
  2. reconciliations and control reports
  3. audit trail creation and review
38
Q

Unauthorized Journal Entires

A
  1. access controls
  2. reconciliation and control reports
  3. audit trail and creation and review
39
Q

editing and processing controls needed for treasurer journal entries

A
  1. validity check to ensure that general ledger accounts exist for each account number referenced in the journal entry
  2. field checks to ensure that the amount field in the journal entry contains only numeric data
  3. zero balance check to verify that total debits equal total credits in a journal entry
  4. completeness test to ensure that all pertinent data are entered, especially the source of the journal entry
  5. closed loo verification: matching account numbers with account descriptions to ensure that the correct general ledger account is being accessed
  6. sign check of the general ledger account balance, once updating is completed, to verify that the balance is of the appropriate nature (Debit or credit)
  7. calculating run to run totals to verify the accuracy of journal voucher batch processing.
40
Q

Trail Balance

A

a report that lists the balances for all general ledger accounts.

41
Q

Audit Trail

A

a traceable path that shows how a transaction flows through the information system to affect general ledger account balances - detective control

42
Q

Audit trail provides the ability to

A
  1. trace any transactions from its original source document to the journal entry that update the general ledger and to any report or document using the data
  2. trace any item appearing in the report back through the general ledger to its original source document.
43
Q

Where do adjusting entries originate from

A

controller’s office, after the initial trail balance has been prepared.

44
Q

adjusting entries fall into 5 categories:

A
  1. accruals
  2. deferrals
  3. estimates
  4. revaluations
  5. corrections
45
Q

Inaccurate adjusting entries

A
  1. data entry processing integrity controls
  2. spreadsheet error protection controls
  3. standard adjusting entries
  4. reconciliations and control reports
  5. audit trails
46
Q

how are financial statements prepared (GAAP, IFRS or Local GAAP??)

A

subsidiary - local gaap

consolidated financial - IFRS or US GAAP

47
Q

Consolidation of subsidiaries

A

eliminate inter-company transactions and convert to parent company currency

48
Q

COSO’s framework

A

proper tone at the top

adequate system of internal controls

49
Q

Controls to financial statement fraud

A
  1. Independent board of directors
  2. COSO framework is followed
  3. packaged software with strong IT controls
  4. Internal and External Audits
50
Q

XBRL

A

Extensive Business Reporting Language

AIS (14 decks)

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