AIS Exam 1 (2023/2024) with Certified Solutions

AIS Exam 1 (2023/2024) with Certified Solutions Relevant An accounts receivable aging report used in credit granting decisions Reliable A report checked by 3 different people for accuracy Complete An accounts receivable aging report that included all customer accounts Timely An accounts receivable aging report was received before the credit manager had to make a decision whether to extend customer credit Understandable The report was carefully designed so that the data contained on the report became information to the reader Verifiable The data on a report was checked by two clerks working independently Accessible The manager was working one weekend and needed to find some information about production requests for a certain customer. He was able to find the report on the company's network. Data Raw facts Information Data that has been organized and processed to be useful What is a system? Set of interrelated components that interact to achieve one or more goals Data processing cycle (system flowchart) Data Input - Organizations collect data about events, resources, and agents Storage - In computers data are stored in files and database. Manual, data are stored in journals and ledgers Processes - Once data are collected and entered, they must be processed Information Output - Last step in cycle. Can be in forms of documents, reports, or responses to queries What does CRUD stand for? Creating new data records Reading existing data Update data to record event Delete data Batch Processing Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or month. Online processing Process data as events happen General Ledger A ledger that contains all asset, liability, stockholders' equity, revenue, and expense accounts. Subsidiary ledger Contains the details related to a given general ledger account Specialized journal Records large numbers of repetitive transactions such as sales, cash receipts, and cash disbursements What is an ERP system? Enterprise Resource Planning: a large, integrated, computer-based business transaction processing and reporting system Why documentation is important? Depicting how systems work Training users Auditing AIS Evaluating Strengths and Weaknesses Narrative Written step-by-step explanation of system components DFD Data Source Square (noun) DFD Data Flow Arrows DFD Transformation Processes Circle (verb) DFD Data Storage Two horizontal lines Flowchart a diagram of the sequence of operations in a computer program or an accounting system Types of Flowcharts Document: shows the flow of documents and data for a process, useful in evaluating internal controls System: depicts the data processing cycle for a process Program: illustrates the sequence of logic in the system process AIS Threats 1. Natural and political disasters 2. Software errors and equipment malfunctions 3. Unintentional acts 4. Intentional acts (computer crimes) What 5 things need to occur for there to be a fraud? 1. A false statement 2. Material fact that induces someone to act 3. An intent to deceive 4. A justifiable reliance 5. An injury or loss suffered by the victim Misappropriation of assets theft of company assets by employees fraudulent financial reporting intentional or reckless conduct that results in materially misleading financial statements Fraud Triangle The three factors that contribute to fraudulent activity by employees: opportunity, financial pressure, and rationalization. SAS 99 Auditor's responsibility to detect fraud: 1. understand the fraud 2. discuss the risks of material fraudulent misstatements. 3. obtain information 4. identify, assess and respond to risks 5. evaluate the results of their audit test 6. document and communicate findings 7. incorporate a technology focus. Master File summary or cumulative information about organizations resources transaction file A file that contains the individual business transactions