Final Flashcards
Data Analysis Cycle
Data capture
Extraction
Data preparation
Data analysis
Communicating insights
big data Four V’s
Volume = mass of data
Velocity = real time speeds
Variety = unstructured or unprocessed data
Veracity = quality of data
SMART questions
o Specific
o Measurable
o achievable
o Relevant
o Timely
Data structure types
o Structured, unstructured, and semi-structured
Structured query language
o Common way to extract data from a relational database (SELECT, FROM, WHERE)
Data Prep Steps
Understand data
Standardize, structure, clean
Validate data quality and verify data meets requirements
Document transformation process
aggregate
presentation of data in summarized form
data joining
process of combining different data sources
data pivoting
rotating data from rows to columns
parsing
separating data from a single field to multiple fields
concatenation
combining from multiple fields to single field
cryptic data values
data items with no meaning without understanding a coding scheme
misfielded data values
data values that are correctly formatted but not listed in correct field
consistency
every value in a field should be stored in the same way
imputation
process of replacing null or missing value with substituted data
contradiction errors
errors exist when the same entity is described in 2 conflicting ways
threshold violation
errors that occur when a data value falls outside an allowable level
violated attribute dependencies
errors occur when a secondary attribute in row of data does not match the primary attribute.
predictive analytics
will it happen in the future?
Descriptive Analytics
what happened?
diagnostic analytics
why did it happen?
Prescriptive analytics
what should we do based on what we expect to happen?
common analytics problems
o Data overfitting = model is designed to fit training data very well but does not predict well when applying it to other datasets
o extrapolating being the range = process of estimating a value that is beyond the data used to create the model
benefits of visualization
Visualized data is processed faster than written, easier to use, and supports the dominant learning style of the population (most people are visual learners)
misleading visualization
Range/timeline of graphs
Enterprise Resource Planning
o Integrates activities from the entire organization
* Production
* Payroll
* Sales
* Purchasing
* Financial Reporting
Advantages of ERP
better flow of the information as it’s
stored in a centralized database and can be accessed by various departments
improves customer service.
* Data captured once
* Improve access of control of the data through security settings
Disadvantages of ERP
Costly
* Significant amount of time to implement
* Complex
* User resistance (learning new things is sometimes hard for employees)
3 approaches to acquiring software
o Canned
o * Custom
o * Modified
system conversion types
o Direct changeover
o * Parallel
o * Phased
o * Pilot
principles of COBIT
o 1. Meeting stakeholder needs
o 2. Covering the enterprise end-to-end
o 3. Applying a single, integrated framework
o 4. Enabling a holistic approach
o 5. Separating governance from management
types of audit risks
o Inherent = exists before plans are made
o Residual = left over after you control
four audit risks responses
o Reduce = implement effective internal control
o Accept = do nothing
o Share = buy insurance, outsource, or hedge
o Avoid = do not engage in the activity
cost benefit analysis equation
o Expected Loss = impact x likelihood
fraud triangle
opportunity, pressure, rationalization
segregation of accounting duties
o No one individual should do two or more of these function
* Approval function
* Recordkeeping function
* Custody function
functions of internal controls
* Deter problems from occurring
* Discover problems that are not prevented
* Identify and correct problems; correct and recover from the problems
Levers of control
o 1. Belief system
o 2. Boundary system
o 3. Diagnostic control system
o 4. Interactive control system
GAPP
o 1. Management
o 2. Notice
o 3. Choice and consent
o 4. Collection
o 5. Use, retention, and disposal
o 6. Access
o 7. Disclosure to third parties
o 8. Security
o 9. Quality
o 10.Monitoring and enforcement
input controls
make sure that data entered into the system is accurate, valid, & complete
processing controls
makes sure that all legitimate transactions are
processed accurately
output controls
makes sure that all reports or other output are not lost or
seen by unauthorized individuals
Encryption main factors
key length, key management, and encryption algorithm.
2 algorithmic schemes
- Symmetric-key encryption methods. (fast, suitable for large data)
- Asymmetric-key encryption methods (slow, suitable for small data)
authentication vs authorization
o Authentication
Verifies the person
o Authorization
Determines what a person can access
cold vs hot site
delimiters and text qualifiers
o Trojan horse
replicates program to act like “trojan horse”
Functions of the Expenditure Cycle (steps)
o * Requisitioning – ensure that needed goods are requested given available resources
o * Purchasing – ensure that goods are ordered for a low
o * Receiving – ensure that goods are only received for what is ordered and is of good quality; to ensure that the goods are secure
o * Accounts payable – know who to pay, when to pay, and how much to pay
o * Cash disbursements – pay the supplier the correct amount on time; ensure that cash is safe
related source documents for the expenditure cycle
1. Order materials, supplies, and services
2. Receive materials, supplies, and services
3. invoice
4. Cash disbursement
threats to the expenditure cycle
1. Inaccurate or invalid master data
2. Unauthorized disclosure of
sensitive information
3. Loss or destruction of data
4. Poor performance
controls for expenditure cycle
b. Restriction of access to master
data
c. Review of all changes to master
data
Encryption
functions of the revenue cycle
o * Credit and Collection – ensures collectability of customer accounts
o * Shipping –ensures that customers get what they ordered, when they want it, and where they want it
o * Billing and Accounts receivable – who owes the company, how much is owed, and when is it due
o * Cash Receipts – accurately know what is received by the customer and safeguard cash
o * Sales Returns – ensures that returns are properly authorized and tracked
related source documents for revenue cycle
1. Sales order entry
2. Shipping
3. Billing
4. Cash Collections
threats to revenue cycle
1. Inaccurate or invalid master data
2. Unauthorized disclosure of
sensitive information
3. Loss or destruction of data
4. Poor performance
controls to the revenue cycle
b. Restrict access to master data
c. Review of all changes to master
data
b. Encryption
c. Tokenization of customer personal information
3 a. Backup and disaster recovery
procedures
functions of the conversion cycle
o * Product Design
o * Production schedule development
o * Work order, materials requisition, and move ticket creation
o * Raw material issuance to production
o * Convert raw material to finished goods
o * Product cost accumulation for the work-in process
o * Transfer finished product to finished goods inventory
related source documents of fixed assets
* Asset Acquisition
* Depreciation
* Repairs & Maintenance
* Asset Disposition
threats to fixed assets
Theft
Improper accounting
Lack of authorization
controls to fixed assets
Good policies
Proper authorization
Annual review
financing source documents
Issuing stock
Dividends
Stock options
Require stock
New debt
Interest expenses
threat to financing
improper accounting
controls to financing
Verify through minutes
Proper authorization
source documents to payroll cycles
Timecards
Payroll documents
threats to payroll cycle
Theft/fraud
Unauthorized changes to payroll
Inaccurate wage/tax calculations
controls to payroll cycle
Proper authorization
Verify hours w/ manager
Management review
Functions of the Financial Reporting Cycle
* Prepare a preliminary trial balance,
* Prepare and post correcting and adjusting entries,
* Prepare financial statements, and
* Create other managerial reports
threats to financial reporting cycle
1. Inaccurate or invalid general ledger
data
2. Unauthorized disclosure of
financial statement
3. Loss or destruction of data
controls of financial reporting
Restriction of access to G/L
Review of all changes to G/L data
Encryption
o Botnet
robots that overrun computers
o Denial of service
slows computer down
o Spyware
secrete install
o Spoofing
seems real but fake source
o Social engineering
manipulating someone to get info
reorder point equation
ROP = Daily demand × Lead time
