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ACCT 427 > Midterm 2 Chapter 10 > Flashcards

Midterm 2 Chapter 10 Flashcards

1
Q

Threat

A

Any potential adverse occurrence or unwanted event that could be injurious to either the accounting information system or the organization

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2
Q

Exposure/Impact

A

The potential dollar loss should a particular threat become reality

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3
Q

Likelihood

A

The probability that the threat will happen

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4
Q

What is the primary objective of an AIS?

A

To control the organization so the organization can achieve its objectives/goals

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5
Q

Management expects accountants to:

A
  • Take a proactive approach to eliminating system threats
  • Detect, correct, and recover from threats when they occur
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6
Q

Strategic, operating, reporting, compliance objectives

A
  • What does the company want to accomplish?
  • What are the risks to that?
  • What are the ways we can mitigate those risks?
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7
Q

Internal Controls

A

Safeguard assets
Maintain sufficient records
Provide accurate and reliable information
Prepare financial reports according to established criteria
Promote and improve operational efficiency
Encourage adherence with management policies
Comply with laws and regulations

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8
Q

Preventative Controls

A

Deter problems from occuring

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9
Q

Detective Controls

A

Discover problems that are not prevented

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10
Q

Corrective Controls

A

Identify and correct problems; correct and recover from the problems

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11
Q

General Controls

A

Ensure that organization’s control environment is stable and well managed

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12
Q

Application Controls

A

Controls that prevent, detect, and correct transaction errors and fraud in application programs. These controls are concerned with the accuracy, completeness, validity, and authorization of the data captured, entered, processed, stored, transmitted to other systems, and reported.

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13
Q

Design

A

The first test
Would it mitigate the risk?

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14
Q

Operating

A

Is it working effectively?

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15
Q

COBIT

A

Framework for IT control

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16
Q

COSO

A

Framework for enterprise internal controls (control-based approach)

17
Q

COSO-ERM

A

Expands COSO framework taking a risk-based approach

18
Q

What is the current framework version of COBIT?

A

COBIT 2019

19
Q

What principles is COBIT based on?

A

Meeting stakeholder needs
Covering the enterprise end-to-end
Applying a single, integrated framework
Enabling a holistic approach
Separating governance from management

20
Q

What are the 3 benefits of a standard framework for IT controls?

A
  1. Management to benchmark their environments and compare it to other organizations
  2. Because the framework is comprehensive, it provides assurances that IT security and controls exist
  3. Auditors to substantiate their internal control opinions
21
Q

What 5 principles is COBIT based on?

A
  1. Meeting stakeholders’ needs means that enterprises exist to create value to their shareholders. Thus, the governance objective is value creation. (stakeholder and NOT shareholders)
  2. Covering the enterprise from end-to-end means that COBIT 2019 addresses governance and management of information and information-related technologies throughout the enterprise. This means that it is not focused solely on the IT function as information technology runs throughout the enterprise.
  3. Applying a single, integrated framework means that COBIT 2019 can align with other governance frameworks such as COSO and COSO-ERM.
  4. Enabling a holistic approach
  5. Separating governance from management (segregation of duties)
22
Q

Stakeholder

A

Effected by the company

23
Q

Stakeholder

A

Effected by the company

24
Q

Shareholder

A

Has an ownership interest

25
Q

TCWG

A

Those charged with governance. Referring to the board of directors.

26
Q

What are the 5 components of the COSO Internal Control Framework?

A

Control environment
Risk assessment
Control activities
Information and communication
Monitoring

27
Q

Control Environment

A

People and their individual attributes (integrity, discipline, ethical values, and competence)
Oversight by BOD, retain individuals, hold individuals accountable

28
Q

Risk Assessment

A

Identify, analyze, and manage risks.
Specify objectives, consider potential fraud, identify changes that could impact the system

29
Q

Control Activities

A

Ensure management identifies risks and mets objectives.
Select controls that might mitigate risks to an acceptable level, select controls over technology, control policies

30
Q

Information and Communication

A

Systems that capture and exchange information need to conduct, manage, and control the organization’s operations.
Generate relevant/high quality information, communicate information for internal control, communicate to external parties.

31
Q

Monitoring

A

Monitor and modify process.
Evaluate and communicate deficiencies to those responsible

ACCT 427 (5 decks)

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