FINAL EXAM Flashcards
Batch Processing (type of computer system)
Input data are gathered and processed periodically in discrete groups
Online Capabilities (type of computer system)
Users have direct access to data stored in the system. In online, real-time systems, transactions are processed immediately and all accounting records are updated instantaneously.
Database system
separate application files are replaced with integrated databases that are shared by many users and application programs
Computer Networks
the electronic transmission of information between computers. Networks of computers linked together through telecommunication links enable companies to communicate information. Networks that span a large geographical area are called WAN. LAN is a communications network that allows resources, data, and program sharing within a limited geographical area.
End User Computing
The user departments are responsible for the development and execution of certain computer applications. The department both generates and uses its own information.
General Control Activities
Apply to all computer applications.
1) Developing or customizing new programs and systems
2) Changing existing programs and systems
3) Access to programs and data
4) Computer operations
Application Control Activities
Relates to only a specific application such as Preparation of Payroll.
Includes:
1)Programmed Control Activities : input & processing ctrls
2)Manual Follow Up: review & analysis
Testing the System
1) Make inquiries of personnel, review minutes & inspect documentation of tests performed
2) Review documentation of program changes and compare them to the log of mgr approvals
3) inquire of client and observe the segregation of duties and physical controls over equipment and access to data.
4) test operations controls
Test Data
- Involves development of set simulated transactions
- Include transactions w/missing data, or is erroneous/illogical
- Not useful for substantive testing
- used for appraising programmed ctrl activities to determine effectiveness
Limitations of Test Data
Costs are high, take a lot of skills to create test data
Must be specially coded to avoid contamination of client’s records and files
Doublechecking test data is same as actual data
Variable Sampling
concerned with how much or dollar amount
-used in terms of substantive testing
Attribute Sampling
Concerned with “how many”
-used to test effectiveness of internal control
Precision
Allowable margin of sample error, or allowance for sampling risk from sample mean
Confidence or reliability
risk of sampling
risk of incorrect acceptance
sample effectiveness
risk of incorrect rejection
sample efficiency
Sampling Risk
Controlled by sample size
-Risk that sample may not be representative of population
Nonsampling Risk
Miscalculate sample results; selection of incorrect audit procedure
Systematic Selection
Selection of every nth item in population
-Population items dont need to be numbered.
Stratification
Used to control variable of items in population to reduce sample size
-Divide population into subgroups. Measure variable-standard variation
Dollar Unit Sampling
Used to audit for overstatement
-used to estimate maximum amount of error in a population
Statistical Sampling
Used to measure & control sample risk
-Based on mathematical laws of probability
Non-Statistical Sampling
Judgement Sampling
Difference Estimation
Size of Misstatement is independent of BV of population
