Flashcards
RSM427 Midterm Prep
Cards in this deck (32)
- 1System Assurance CriteriaCAA TOE
Completeness
Authorization
Accuracy
Timeliness
Occurrence
Efficiency - 2Name 3 components of assurance: Completeness-all transactions are recorded
-all management info is complete
-Accounting records are complete - 3Name 3 components of assurance: Authorization-Only authorized transactions processed
-reports are produced for authorized users ONLY
-authorization for access: integrity confidentiality - 4Name 3 components of assurance: Accuracy-transactions are accurately recorded
-reports are accurate
-info in storage is maintained and checked reg - 5Name 3 components of assurance: Timeliness-reports are current
-completed in timely basis
-info in storage checked reg for currency - 6Name 3 components of assurance: Occurence-only real transactions recorded
-underlying assumptions realistic
-acc bal reflect reality - 7Name 3 components of assurance: Efficiency-Transactions are quickly processed
-cost effective
-scaleable: can deal with volume changes - 8What is AISAccounting Information System
- 9Components of AISPeople
Internal controls/security measures
hardware/infrastructure
software
processes
information - 10What is the purpose of AIS?-collect/store data about activities, resources and personnel
-transform data into information for decision making
-provide controls to safeguard org assets/data - 11Differentiate between random errors and systematic errorsRandom: occur randomly
Systematic: often with computer processing, same type of error could occur continuously - 12Outline 3 neg effects of computer processing1. Transaction trails may not exist
2. elim random errors, incite systematic ones
3. internal controls no longer segregated
4. errors harder to observe - 133 positive effects of computer processing1. increased management supervision
2. cost savings (?)
3. efficiency - 14Differentiate between IR CR and DR WRT info systemsIR: risk of errors or undesirable financial events: depends on industry and nature of org
CR: risk of controls not being able to prevent undesirable events: depends on org practices and business
DR: risk of audit procedures failing to detect errors: depends on IR and CR - 15What is IT's effect on Inherent Risk?Probability of input error is higher since external parties responsible for entering transaction data
- 16What's IT's effect on Detection Risk?Increases detection risk, less visible audit trail, data structure more complex, systems more integrated
Decreases DR: comp assisted allows for more audit coverage, accuracy, and stronger basis for conclusion - 17What's IT's effect on Control Risk?Increase, less segregation of duties, mgmgt less knowledgeable about IT system, due to complexity, and put less effective controls in place, open access
- 18Three phases of the transaction cycleinput
processing
output - 19Which risks can management control? Which risks can auditors control?CR
DR - 20Khan case frameworkRequired (R1, R2, ...)
Users/Objective
Hook
Weakness
Implication
Recommendation
Conclusions at end (C1, C2,...) - 21Differentiate between hot, warm, and cold disaster recovery sitesHot: avail within a day, hardware, procedures, software and data. Expensive
Warm: avail within few days. hardware. less exp
Cold: avail within week: no hardware, software or data. least expensive - 22Framework for Testing RiskRCOCT
R: risk
CO: control objective
C: control
T: testing - 23Why do we test System Development Controls?To modify the nature, timing and extent of substantive testing procedures
- 24Source Code Vs Object CodeSource code is written from the source-programmers
Object code is what computers run - 253 Types of Software: what are theyOpen source
Proprietary
In-House Developed - 26What is open source softwareAvailable for free, anyone can modify, is flexible
May not meet needs - 27PROs and CONs proprietary software?-Provided by vendor at a cost, the vendor modifies with supposed expertise
-More expensive - 28What are PROS/CONS of in-house developed software?-coded by the company, company can make changes,
-more potential for bugs, may cost more - 29Four approaches to system conversion- what are they1. Parallel
2. Direct
3. Phased
4. Pilot (single location) - 30What is segregation of EnvironmentsDevelopment, test, and production environment should logically and (physically) be separated if possible
- 31Name the top 10 IT issues1. Securing the IT Environment
2. Managing and retaining data
3. Managing Risk and Compliance
4. Privacy
5. Leveraging emerging technologies
6. Managing system Implementation
7. Enabling decision making and Managing performance
8. Governance and Managing IT investment/spending
9. Preventing and responding to fraud
10. Managing vendors and service providers - 32—
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- RSM427 Flashcards on RSM427 Midterm Prep, created by A H on 11/02/2018.
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- A H
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