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Accounting Information Systems 4th Edition - Chapter 11 - Key Terms – Accounting Information Systems and Internal Controls
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- 1application controlsControls specific to a subsystem or an application to ensure the validity, completeness, and accuracy of the transaction.
- 2code of ethicsA formal expectation on what is considered to be ethical within an organization to promote ethical behavior.
- 3Committee of Sponsoring Organizations (COSO)Composed of several organizations (AAA, AICPA, FEI, IIA, and IMA); studies the causal factors that lead to fraudulent financial reporting and develops recommendations for public companies, independent auditors, the SEC and other regulators, and educational institutions to improve the quality of financial reporting through internal controls and corporate governance.
- 4control objectives for information and related technology (COBIT)An internationally accepted set of best IT security and control practices for IT management released by the IT Governance Institute (ITGI).
- 5control riskThe threat that errors or irregularities in the underlying transactions will not be prevented, detected, and corrected by the internal control system.
- 6corporate governanceA set of processes and policies in managing an organization with sound ethics to safeguard the interests of its stakeholders.
- 7corrective controlsFix problems that have been identified, such as using backup files to recover corrupted data.
- 8cost/benefit analysisImportant in determining whether to implement an internal control.
- 9detective controlsFind problems when they arise.
- 10enterprise risk management (ERM)A process, affected by the entity’s board of directors, management, and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of objectives.
- 11general controlsPertain to enterprisewide issues such as controls over accessing the network, developing and maintaining applications, and documenting changes of programs.
- 12Information Technology Infrastructure Library (ITIL)A set of concepts and practices for IT service management.
- 13inherent riskThe risk related to the nature of the business activity itself.
- 14input controlsEnsure the authorization, entry, and verification of data entering the system.
- 15International Organization for Standardization (ISO) 27000 seriesThis series contains a range of individual standards and documents specifically reserved by ISO for information security.
- 16IT application controlsActivities specific to a subsystem’s or an application’s input, processing, and output.
- 17IT controlsInvolve processes that provide assurance for information and help to mitigate risks associated with the use of technology.
- 18IT general controls (ITGC)Enterprise-level controls over IT.
- 19output controlsProvide output to authorized people and ensure the output is used properly.
- 20Manual / physical controlsMainly manual but could involve the physical use of computing technology.
- 21preventive controlsDeter problems before they arise.
- 22processing controlsEnsure that data and transactions are processed accurately.
- 23Public Company Accounting Oversight Board (PCAOB)Established by SOX to provide independent oversight of public accounting firms.
- 24residual riskThe product of inherent risk and control risk (i.e., Residual risk = Inherent risk × Control risk).
- 25risk assessmentThe process of identifying and analyzing risks systematically to determine the firm’s risk response and control activities.
- 26Sarbanes–Oxley Act of 2002 (SOX)A response to business scandals such as Enron, WorldCom, and Tyco International; requires public companies registered with the SEC and their auditors to annually assess and report on the design and effectiveness of internal control over financial reporting.
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- Accounting Information Systems 4th Edition - Chapter 11 - Key Terms – Accounting Information Systems and Internal Controls
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- Susan Esch
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