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INFOTECH AMY > CHAPTER 9 > Flashcards

CHAPTER 9 Flashcards

1
Q

Modern systems design embraces _______________ to
radically RESHAPE business processes and workflow. Its objective is to reduce business processing costs by identifying and eliminating non value-added tasks.

A

Reengineering

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2
Q

The sales process begins in the sales department with the receipt of a __________________ indicating the TYPE and QUANTITY of merchandise being requested.

A

Customer order

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3
Q

Captures such vital information as the NAME and ADDRESS of the customer; the customer’s account number; the name, number, and description of the items sold; the quantities and unit prices of each item sold; and other financial information such as taxes, discounts, and freight charges.

A

Sales order

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4
Q

After preparing the sales order, the sales clerk files one copy of it for FUTURE REFERENCE.
(coof)

A

Customer Open Order File

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5
Q

involves verifying the customer’s CREDITWORTHINESS.

A

Transaction Authorization

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6
Q

copy of the sales order is sent to the CREDIT department for APPROVAL.

A

Credit authorization

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7
Q

This document identifies the items of inventory that must be located and picked from the warehouse shelves.

A

Stock release (Picking ticket)

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8
Q

documents are copies of the sales orders that contain ACCURATE information about the number of units shipped and information about the carrier.

A

Keypunch / Data entry

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9
Q

are calculated for each BATCH on the file.

A

Batch Control Totals

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10
Q

is the FIRST RUN in the batch process. This program validates transactions by testing each record for the existence of clerical or logical errors.

A

Edit program

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11
Q

physically ARRANGES the sales order transaction file sequentially by Account Number, which is one of its secondary keys.

A

Sort Run

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12
Q

posts to accounts RECEIVABLE by sequentially matching the Account Number key in each sales order record with the corresponding record in the AR- SUB master file.

A

AR Update Program

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13
Q

To spread the BILLING TASK evenly over the month, some firms employ cycle billing of their customers.

A

Cycle Billing

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14
Q

play a key role in helping MANAGEMENT monitor operations to ensure that controls are in place and functioning properly.

A

Quality Management Report

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15
Q

separates the checks and remittance advices and prepares a remittance list.

A

Mailroom

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16
Q

reconciles the checks and the remittance list and prepares the deposit slips.

A

Cash Receipts Department

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17
Q

Order Entry Procedures [SWS]

A
  1. Sales Procedures
  2. Warehouse Procedures
  3. Shipping and Billing
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18
Q

An order entry procedure which SALES CLERKS receiving orders from customers and process each transaction separately as it is received

A

Sales Procedures

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19
Q

The WAREHOUSE CLERK’S terminal immediately produces a hard copy printout of the electronically transmitted stock release document.

A

Warehouse Procedures

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20
Q

The SHIPPING CLERK reconciles the goods, the stock release document, and the hard copy packing slip produced on the terminal.

A

Shipping and Billing

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21
Q

This system is a departure from TRADITIONAL accounting. A central feature of the system is the use of an events database.

A

Real-Time Processing

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22
Q

4 Advantages of Real-Time Processing

A
  1. Real-time processing greatly shortens the cash
    cycle of the firm.
  2. Real-time processing can give a firm a
    competitive advantage in the marketplace.
  3. Manual procedures tend to produce clerical
    errors, such as incorrect account numbers,
    invalid inventory numbers, and price–quantity
    extension miscalculations.
  4. Real-time processing reduces the amount of
    paper documents in a system.
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23
Q

are used extensively in GROCERY stores, department stores, and other types of retail organizations.

A

POS Systems

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24
Q

This is what the clerk SCANS on the items being purchased with a laser light scanner.

A

Universal Product Code (UPC)

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25
Q

Relationship between Management Assertions and
Revenue Cycle Audit Objectives [CEROVA PD]

A
  1. Completeness
  2. Existence or Occurrence
  3. Rights and Obligations
  4. Valuation or Allocation
  5. Presentation and Disclosure
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26
Q

VERIFY that the ACCOUNTS receivable balance
represents amounts actually owed to the
organization at the balance sheet date.

A

Existence or Occurrence

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27
Q

Determine that ALL AMOUNT owed to the
organization at the balance sheet date are
reflected in accounts receivable

A

Completeness

28
Q

Verify that revenue transactions are ACCURATELY
computed and based on current prices and
correct quantities

A

Accuracy

29
Q

Determine that the organization has a LEGAL RIGHT
to recorded accounts receivable.

A

Rights and Obligations

30
Q

Determine that the accounts receivable balance states its NET REALIZABLE VALUE

A

Valuation or Allocation

31
Q

Verify accounts receivable and revenues reported for the period are PROPERLY DESCRIBED and classified in the financial statements.

A

Presentation and Disclosure

32
Q

are designed to ensure that transactions are valid, accurate, and complete.

A

Input controls

33
Q

is to establish the CREDITWORTHINESS of the customer.

A

Credit Check

34
Q

This TEST provide evidence pertaining to the valuation/allocation audit objectives and, to a lesser extent, the accuracy objective.

A

Test Credit Procedures

35
Q

are intended to DETECT transcription errors in transaction data before they are processed.

A

Input Validation Controls

36
Q

6 General Types of Validation Tests [MNLRVC]

A
  1. Missing data checks
  2. Numeric Alphabetic data checks
  3. Limit checks
  4. Range checks
  5. Validity checks
  6. Check Digit
37
Q

are used to examine the contents of a field for the presence of BLANK
spaces.

A

Missing data checks

38
Q

determine whether the correct form of data is in a field.

A

Numeric alphabetic data checks

39
Q

determine if the value in the field exceeds an authorized LIMIT

A

Limit checks

40
Q

assign UPPER and LOWER limits to acceptable data values.

A

Range checks

41
Q

COMPARE actual values in a field against known acceptable values

A

Validity checks

42
Q

identify KEYSTROKE errors in key fields by testing their internal validity.

A

Check Digit

43
Q

is whether the validation programs in the data editing system are functioning correctly and have continued to function as intended throughout the period.

A

Central Audit Issue

44
Q

are used to manage HIGH VOLUMES of
transaction data through a system. The objective is to
reconcile output produced by the system with the input
originally entered into the system.

A

Batch Controls

45
Q

involves REVIEWING transmittal records of BATCHES processed throughout the period and reconciling them to the batch control log

A

Testing Batch Controls

46
Q

include computerized PROCEDURES for file updating and restricting access to data.

A

Process controls

47
Q

use batch control data to monitor the batch as it moves from one programmed procedure (RUN) to another.

A

Run-to-Run Controls

48
Q

prevent and detect unauthorized and illegal access to the firm’s assets.

A

Access Control

49
Q

ensures that no single individual or department processes a transaction in its entirety.

A

Segregation of Duties

50
Q

to review the work performed by others at key junctures in the process to identify and correct errors.

A

Independent verification

51
Q

are designed to ensure that information is not lost, misdirected, or corrupted and that system processes function as intended.

A

Output controls

52
Q

summary report that shows the OVERALL CHANGE change to accounts receivable from sales orders and cash receipts

A

Account Receivable Change Report

53
Q

contains address and credit information about customers.

A

Customer File

54
Q

captures sales transaction data for the period.

A

Sales Invoice File

55
Q

contains a record of every product sold.

A

Line Item File

56
Q

contains quantity, price, supplier, and warehouse location data for each item of inventory

A

Inventory File

57
Q

is a record of all sales orders shipped to customers

A

Shipping Log

58
Q

permits the auditor to specify the fields from the two input files that are to be passed to the new output file.

A

ACL’s Join Feature

59
Q

This test involves direct written contact between the auditors and the client’s customers to CONFIRM account balances and transactions

A

Confirmation of Accounts Receivable

60
Q

INVOICES are recorded individually rather than being summarized or grouped by creditor

A

Open-Invoice System

61
Q

useful when the auditor suspects that a large number of accounts may be in DISPUTE.

A

Positive Confirmation

62
Q

request the recipients to respond only if they DISAGREE with the amount shown in
the letter.

A

Negative Confirmation

63
Q

contain information needed to service individual customers’ accounts.

A

Remittance Advices

64
Q

Sales Order Procedures

(RCPSB)

A
  1. Receive Order
  2. Check Credit
  3. Picked Goods
  4. Ship Goods
  5. Bill Customer
65
Q

is a special journal used for recording completed SALES transactions.

A

Sales Journal

66
Q

Sales Return Procedures

(PPAUUU)

A
  1. Prepare return Slip
  2. Prepare Credit Memo
  3. Approved Credit Memo
  4. Update Sales Journal
  5. Update Inventory and AR Records
  6. Update General Ledger
67
Q

Cash Receipts Procedure

A
  1. Open Mail and Prepare Remittance Advice
  2. Record and Deposit Checks – Cash Receipts
    Journal, Deposit Slip
  3. Update Accounts Receivable
  4. Update General Ledger
  5. Reconcile Cash Receipts and Deposits

INFOTECH AMY (2 decks)

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