Module 3 Internal Control Systems Flashcards

1
Q

What is the purpose of a system of internal control?

A

To provide directors with reasonable assurance over:

  • The reliability of financial reporting
  • The effectiveness and efficiency of operations
  • Compliance with applicable laws and regulations
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2
Q

What are the five components of internal control?

A
  • Control activities
  • Risk assessment process
  • Information Systems
  • Monitoring of controls
  • control Environment
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3
Q

What is accounting information systems?

A

Structures used by organisations to collect, store and process financial and accounting data

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4
Q

What are the 5 categories of control activities? APIPS

A
  • Authorisation control
  • Performance Review
  • Information processing controls
  • Physical controls
  • Segregation of duties
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5
Q

What are the six commonly used IT application controls

A
  • Audit Log
  • Batch controls
  • Programmed Editing
  • Calculation
  • Check digits
  • Exception reports
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6
Q

What are the limitations of internal control systems? RC CHUM

A
  • Relevancy/Obsolescence
  • Cost
  • Collusion
  • Human error
  • Unusual/infrequent transactions
  • Management override
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7
Q

What are the four commonly covered areas by IT General Controls? APOC

A
  • Access to programs and data
  • Program changes and development
  • Computer operations
  • Continuity of operations
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8
Q

Program changes and development, what needs to be considered? DATA

A
  • Authorisation
  • Development
  • Testing
  • Approval
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9
Q

What are the stages of system development life cycle

A
  • Business analysis
  • Feasibility study
  • Systems analysis
  • Design
  • Development
  • Testing
  • Implementation
  • Maintenance
  • Post implementation review
  • Enhancements/Wish list
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10
Q

Business process

A

A series of activities that enable a company to meet one or more of its objectives. Cover every conversion of business transactions, financial to non financial

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11
Q

Business risk

A

The threat that an action or event will adversely affect the organisation’s ability to achieve its objectives.

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