Module 9 Flashcards
Business processes are a series of activities that enable a company to
Meet one or more of its objectives
Automated business processes vs manual
More consistent and efficient and better at identifying exemptions.
Control activities for all processed transactions should be designed to provide management with reasonable assurance regarding (4)
- Effectiveness and efficiency of operations
- Reliability of management reporting, analysis and decision making
- Reliability of financial reporting
- Compliance with applicable laws and regulation
Limitations of business processes (6)
- Obsolescence
- Cost
- Collusion
- Human error
- Unusual transactions
- Management override
Computerised control activities (3)
- Master files - access, editing, integrity
- Configuration of computer system
- Review of exception reports
Credit sales system - Phase 1
Sales order
Credit sales system - Phase 2
Order fulfilment/ despatch
Credit sales system - Phase 3
Invoicing
Credit sales system - Phase 4
Payment Processing
Returns Sales - Phase 5
Return received
Returns Sales - Phase 6
Credit note processing
Returns Sales- Phase 7
Refund made/ receivable cancelled
Credit purchases system - Phase 1
Purchase order
Credit purchases system - Phase 2
Receipt of goods
Credit purchases system - Phase 3
Purchase invoice processing
Credit purchases system - Phase 4
Payment processing
Returns purchases system - Phase 5
Goods despatch
Returns purchases system - Phase 6
Credit note processing
Returns purchases system - Phase 7
Refund receipt/ payable cancelled
Purchases in advance - Phase 1
Purchase order
Purchases in advance - Phase 2
Purchase invoice processing
Purchases in advance - Phase 3
Payment processing
Purchases in advance - Phase 4
Receipt of goods`
Inventory system - Phase 1
Receipt of inventory (receipt of goods - purchases cycle)
Inventory system - Phase 2
Movement and manufacturing of inventory
Inventory system - Phase 3
Holding of inventory
Inventory system - Phase 4
Issuance of inventory (orders despatched - sales cycle)
Inventory system - Phase 5
Valuation of inventory
Perpetual (cycle) inventory count
Alternative to full year end count
Main controls for perpetual inventory counts (6)
- Must be set programme of counts
- All items must be counted at least once in the period
- High risk/ value items should be counted more than once
- Counter should prepare report showing discrepancies
- Differences between system and count should be investigated and system figures amended
- Process for investigating discrepancies
If perpetual inventory counts straightforward with few problems,
Inventories figures for financial statements may be taken straight from inventory listing on the system
HR/ Personnel System - Phase 1
Engagement termination of employees and maintenance of master data (HR)
HR/ Personnel System - Phase 2
Work done and time recorded
HR/ Personnel System - Phase 3
Calculation of payroll liability
HR/ Personnel System - Phase 4
Payment of payroll liability
Risks when a computerised system used for payroll (4)
- System crashes and payroll cannot be run
- Unauthorised access to employees’ personal data
- Unauthorised changes to employee data
- Unauthorised changes to payroll programme
Key controls for fixed assets (4)
- All NCA acquired are identified as an asset
- NCA accurately recorded in NCAR/ FAR and general ledger
- All NCA disposals and transfers are identified and FAR is updated accordingly
- Senior officials responsible for monitoring effectiveness, cost efficiency and operational use of assets
Monthly financial reporting (4)
- Month-end journals
- Month-end reconciliations
- Production of management accounts
- Production of year end financial statements
Big data
Extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interaction
Four Vs - big data
- Volume
- Velocity
- Variety
- Veracity
Volume
Sheer quantity of data - often beyond storage and processing power of traditional IT infrastructure
Velocity
Rate at which data is created and processed
Variety
Range of data sources available
Veracity
Need for big data to be trusted and trustworthy
