Final Exam Flashcards
What is a record?
A row
What is an attribute?
A column
What is a field?
A specific attribute of interest; where the row and attribute meet
What is a primary key?
A database attribute that uniquely identifies a specific row in a table
What is a foreign key?
An attribute in one table that is also a primary key in another and is used to link two tables
What is ARC and what does it attempt to stop?
ARC is the segregation of duties. It attempts to separate authorization, recording, and custody.
What was the role of SOX in the establishment of internal control?
Public companies are required to have it. CFO and CEO
SOX Act requires companies to implement and maintain internal controls over financial reporting
What does CRIME stand for?
Control Environment
Risk Assessment
Information and Communication
Monitoring
Existing Control Activities
What is the bill of lading.
Is a legal contract that defines responsibility for goods that are in transit. (Outside of the box)
What is a remittance advice?
Shows amounts is allocated to each aspect of the order.
It’s a document a customer sends to a supplier to confirm that an invoice has been paid.
What is a purchase requisition?
Is a formal request for an organization to purchase goods or services.
What is a voucher?
A document used by A/P to prove that you actually owe the payable (in the expenditure cycle)
What is a total cost sheet?
A list of the actual costs of a task. It is a method for a business to divide costs.
What is a production cost report?
A document that summarizes the production and cost activity within a department for a reporting period.
What is a job-time ticket?
A document that shows the time spent by an employee working on a particular job.
What is a material requisition?
A document used by the production department to request materials they need to complete a manufacturing process.
What is the difference between the Effectiveness and Efficiency?
In an AIS, effectiveness is measured on how good it is, while efficiency is focused on how quick it is to complete a task.
What are some potential control options in the production cycle?
- Access controls
- ARC
What are the risks associated with the human resource/payroll cycle?
- Timecards - fraud, people state they work 4 hrs when they did not.
- Complexity
- Under pay
What does an employee master file contain?
Name, address, contact number, salary, job position, family details
Why is the payroll cycle usually separated from the other cycles?
It’s complex and boring/monotonous
What is a payroll clearing account?
A zero-balance account that companies use to record and monitor their payrolls.
How does ARC relate to the payroll cycle?
It involves processing and distributing employee compensation. (explain more)
What is the definition of ethics?
The study of moral principles that govern behavior and decision-making.
What is the digital divide and why is it an ethical issue?
The digital divide is the gap between those who have access to modern technology and the internet, and those who do not.
It prevents equal access to opportunities in education, employment, and civic participation
What is the CIA Triad?
The CIA Triad represents the fundamental goals of security in information technology.
1. Confidentiality
2. Integrity
3. Availability
Why shouldn’t a business rely on completely automated accounting systems?
If the accounting system has errors in data input and interpretation, it will be incorrect or incomplete.
A lack of human judgement and ethical concerns are not taken into account when it is fully relied on automated accounting systems.
What are the 3 components of an information system?
People, organization, technology
What is the data processing cycle?
Storage
Input –> Processing –> output
What are the 3 primary functions of an AIS?
- Recording transactions
- Processing
- Safeguarding
What are some potential disadvantages of an AIS?
- Initial costs is expensive
- No control or limited control of the business activities
How might a business acquire an AIS? What are the benefits and disadvantages of these methods?
- A business buys an AIS – it is cheaper
- A business develops it in house – very expensive
What is the difference between descriptive and, diagnostic, predictive, and prescriptive?
Descriptive analytics (what happened?)
Diagnostics analytics (why did this happen?)
Predictive analytics (what might happen in the future?)
Prescriptive analytics (what should be done?)
Why is fraud found in the expenditure cycle?
Due to cash, access to cash and cash handling
What is a voucher?
A document used by A/P to prove that you actually owe the payable (in the expenditure cycle)
What is a purchase requisition?
A formal request for an organization to purchase goods and services.
What are the 3 reasons why Ethics matter in accounting?
- Trust in financial statements
- Reputation
- Legal
The production cycle differs from the revenue & expenditure cycle for all of the following reasons except:
a. cost accounting is involved in all activities
b. not all organizations have a production cycle
c. there are no direct external data sources or destinations
d. very little technology exists to make activities more efficient
C
The best control procedure for accurate data entry is:
a. the use of on-line terminals
b. an access control matrix
c. passwords and user IDs
d. automation of data collection
D. (people is what causes most mistakes
The threat of loss of data exposes the company to:
a. the loss of assets
b. ineffective decision making
c. inefficient manufacturing
d. all of the above
D.
Describe 5 threats in the production cycle and the applicable control procedures used to mitigate each threat:
- Quality control issues
- Theft of assets
- Inefficiencies
- Loss of assets
- Recording (posting)
What percentage of total production costs are generally incurred during the design stage?
50-80% (cost of a business)
What information is necessary to create the master production schedule? (a production cycle cannot exist independently)
sales forecasts, special orders information, and inventory levels
What is a master production schedule?
Is a detailed plan used in manufacturing and production management that outlines what products are manufactured, when they are produced, and in what quantities
For recording time spent on specific work projects, manufacturing companies usually use a:
a. job time ticket
b. time card
c. time clock
d. labor time card
Job time ticket
Identify the following item that should contribute to the efficiency of a payroll system.
a. Segregation of heck distribution from payroll duties
b. Prompt redeposit of unclaimed paychecks
c. use a separate payroll bank account
d. direct deposit of checks
D
Why is a separate payroll account used to clear payroll checks?
a. for I/C purposes, to help limit any exposure to loss by the company
b. to make bank reconciliation easier
c. to separate payroll and expense checks
d. all of the above
A
A payroll clearing account is used to:
a. check the accuracy of payroll costs
b. speed up payroll transaction processing
c. reduce the transaction costs associated with payroll transaction processing
d. eliminate the need to manually record payroll transactions
A
All of the following are controls that should be implemented in a payroll process, except:
a. supervisor distribute paychecks since they should know all employees in their department
b. someone independent of the payroll process should reconcile the payroll bank account
c. sequential numbering of paychecks and accounting for the numbers
d. restrict access to blank payroll checks and documents
A
Which objectives listed below is not a cost accounting objective for the production cycle?
a. Provide info for planning, controlling, and evaluating the performance of productions operations
b. provide cost data about products used in pricing and product mix decisions
c. collect & process the info used to calculate inventory & cost of goods sold amounts that appear in the financial statements
d. provide tests of audit control functions as part of the AIS
D
Identify the role below that accountants can play in the production cycle:
a. participate in product design
b. perform cost analysis
c. help an organization choose an inventory control system
d. all of the above
D
Discuss the various types and sources of input into the HR</payroll cycle
- Employees: Deductions and personal information (SSN, name, address)
- Employers: Time ticket, Employee master file (pay rate)
- Government: Tax, Federal laws
What are the risks associated with the production cycle?
- Theft
- Poorly planned production (under or over producing)
- Inaccurate data or loss of data
