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IS 414 CH. 7 (VOCAB) Flashcards

1
Q

Threat/event

A

Any potential adverse occurrence or unwanted event that could injure the AIS or the organization

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2
Q

Exposure/impact

A

The potential dollar loss should a particular threat become a reality

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3
Q

Likelihood

A

The probability that a threat will come to pass

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4
Q

Internal controls

A

The processes and procedures implemented to provide reasonable assurance that control objectives are met

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5
Q

Preventive controls

A

Controls that deter problems before they arise

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6
Q

Detective controls

A

Controls designed to discover control problems that were not prevented

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7
Q

Corrective controls

A

Controls that identify and correct problems as well as correct and recover from the resulting errors

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8
Q

General controls

A

Controls designed to make sure an organization’s information system and control environment is stable and well managed

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9
Q

Application controls

A

Controls that prevent, detect, and correct transaction errors and fraud in application programs

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10
Q

Belief system

A

System that describes how a company creates value, helps employees understand management’s vision, communicates company core values, and inspires employees to live by those values

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11
Q

Boundary system

A

System that helps employees act ethically by setting boundaries on employee behavior

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12
Q

Diagnostic control system

A

System that measures, monitors, and compares actual company progress to budgets and performance goals

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13
Q

Interactive control system

A

System that helps managers to focus subordinates’ attention on key strategic issues and to be more involved in their decisions

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14
Q

Foreign Corrupt Practices Act (FCPA)

A

Legislation passed to prevent companies from bribing foreign officials to obtain business; also requires all publicly owned corporations maintain a system of internal accounting controls

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15
Q

Sarbanes-Oxley Act (SOX)

A

Legislation intended to prevent financial statement fraud, make financial reports more transparent, provide protection to investors, strengthen internal controls at public companies, and punish executives who perpetrate fraud
(most important business orientated legislation in the last 80 years)

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16
Q

Public Company Account Oversight Board (PCAOB)

A

A board created by SOX that regulates the auditing profession
Sets and enforces auditing, quality control, ethics, independence, and etc)
Consists of 5 people appointed by the Securities and Exchange Commission (SEC)

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17
Q

Control Objectives for Information and Related Technology (COBIT)

A

A security and control framework that allows (1) management to benchmark the security and control practices of IT environments, (2) users of IT services to be assured that adequate security and control exists, and (3) auditors to substantiate their internal control opinions and advise on IT security and control matters

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18
Q

Committee of Sponsoring Organizations (COSO)

A

A private-sector group consisting of the American Accounting Associations, the AIPCA, the Institute of Management Accountants, and the Financial Executives Institute

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19
Q

Internal Control - Integrated Framework (IC)

A

A COSO framework that defines internal controls and provides guidance for evaluating and enhancing internal control systems

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20
Q

Enterprise Risk Management -

A

Integrated Framework (ERM) A COSO framework that improves the risk management process by expanding (adds three additional elements) COSO’s Internal Control - Integrated

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21
Q

Internal environment

A

The company culture that is the foundation for all other ERM components as it influences how organizations establish strategies and objectives; structure business activities; and identify, assess, and respond to risk

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22
Q

Risk appetite

A

The amount of risk a company is willing to accept to achieve its goals and objectives. To avoid undue risk, risk appetite must be in alignment with company strategy

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23
Q

Audit committee

A

The outside, independent board of director members responsible for financial reporting, regulatory compliance, internal control, and hiring and overseeing internal and external auditors

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24
Q

Policy and procedures manual

A

A document that explains proper business practices, describes needed knowledge and experience, explains document procedures, explains how to handle transactions, and lists the resources provided to carry out specific duties

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25
Background check
An investigation of a prospective or current employee that involves verifying their educational and work experience, talking to references, checking for a criminal record or credit problems, and examining other publicly available information
26
Strategic objectives
High-level goals that are aligned with and support the company's mission and create shareholder value
27
Operations objectives
Objectives that deal with the effectiveness and efficiency of company operations and determine how to allocate resources
28
Reporting objectives
Objectives to help ensure the accuracy, completeness, and reliability of company reports; improve decision making; and monitor company activities and performance
29
Compliance objectives
Objectives to help the company comply with all applicable laws and regulations
30
Event
A positive or negative incident or occurrence from internal or external sources that affects the implementation of strategy or the achievement of objectives 
31
Inherent risk
The susceptibility of a set of accounts or transactions to significant control problems in the absence of internal controls
32
Residual risk
The risk that remains after management implements internal controls or some other response to risk
33
Expected loss
The mathematical product of the potential dollar loss that would occur should a threat become a reality (called impact or exposure) and the risk or probability that the threat will occur (called likelihood)
34
Control activities
Policies, procedures, and rules that provide reasonable assurance that control objectives are met and risk responses are carried out
35
Authorization
Establishing policies for employees to follow and then empowering them to perform certain organizational functions. Authorizations are often documented by signing, initialing, or entering an authorization code on a document or record
36
Digital signature
A means of electronically signing a document with data that cannot be forged
37
Specific authorization
Special approval an employee needs in order to be allowed to handle a transaction
38
General authorization
The authorization given employees to handle routine transactions without special approval
39
Segregation of accounting duties
Separating the accounting functions of authorization, custody, and recording to minimize an employee's ability to commit fraud
40
Collusion
Cooperation between two or more people in an effort to thwart internal controls
41
Segregation of systems duties
Implementing control procedures to clearly divide authority and responsibility within the information system function
42
Systems administrator
Person responsible for making sure a system operates smoothly and efficiently
43
Network manager
Person responsible for ensuring that applicable devices are linked to the organizations networks and that the networks operate properly
44
Security management
People that make sure systems are secure and protected from internal and external threats
45
Change management
Process of making sure changes are made smoothly and efficiently and do not negatively affect systems reliability, security, confidentiality, integrity, and availability
46
Users
People who record transactions, authorize data processing, and use system output
47
Systems analysts
People who help users determine their information needs and design systems to meet those needs
48
Programmers
People who take the analysts' design and develop, code, and test computer programs
49
Computer operators
People who operate the company's computers
50
Information system library
A collection of corporate databases, files, and programs stored in a separate storage area and managed by the system librarian
51
Data control group
People who ensure that source data is properly approved, monitor the flow of work, reconcile input and output, handle input errors to ensure their correction and resubmission, and distribute systems outputPeople who ensure that source data is properly approved, monitor the flow of work, reconcile input and output, handle input errors to ensure their correction and resubmission, and distribute systems output
52
Steering committee
An executive-level committee to plan and oversee the information systems function
53
Strategic master plan
A multiple-year plan that lays out the projects the company must complete to achieve its long-range goals and the resources needed to achieve the plan
54
Project development plan
A document that shows how a project will be completed
55
Project milestones
Points where progress is reviewed and actual and estimated completion times are compared
56
Data processing schedule
A schedule that shows when each data processing task should be performed
57
Systems performance measurements
Ways to evaluate and assess a system
58
Throughput
The amount of work performed by a system during a given period of time
59
Utilization
The percentage of time a system is used
60
Response time
How long it takes for a system to respond
61
Postimplementation review
Review, performed after a new system has been operating for a brief period, to ensure that it meets its planned objectives
62
Systems integrator
An outside party hired to manage a company's systems development effort
63
Analytical review
The examination of the relationships between difference sets of data
64
Audit trail
A path that allows a transaction to be traced through a data processing system from point of origin to output or backward from output to point of origin
65
Computer security office (CSO)
An employee independent of the information system function who monitors the system disseminates information about improper system uses and their consequences, and reports to top management
66
Chief compliance officer (CCO)
An employee responsible for all the compliance tasks associated with SO and other laws and regulatory rulings
67
Forensic investigators
Individuals who specialize in fraud, most of whom specialized training with law enforcement agencies such as the FBI or IRS or have professional certifications such as Certified Fraud Examiner (CFE)
68
Computer forensics specialists
Computer experts who discover, extract, safeguard, and document computer evidence such that its authenticity, accuracy, and integrity will not succumb to legal challenges
69
Neural networks
Computing systems that imitate the brain's learning process by using a network of interconnected processors that perform multiple operations simultaneously and interact dynamically
70
Fraud hotline
A phone number employees can call to anonymously report fraud and abuse

IS 414 (23 decks)

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