Acct 304 FINAL

  1. General threates to the general ledger and reporting system
    • Innaccurate or invalid data
    • Unauthorized disclosure of financial information
    • Loss or destruction of master data
  2. Journal voucher file
    contains information that would be found in the general journal in a manual accounting system
  3. Updating the General Ledger -Threats (2)
    • Innaccurate journal entries
    • Unauthorized journal entries
  4. Trial balance reports all balances from?
    All general ledger accounts
  5. Audit Trail
    traceable path that shows how a transaction flows through an information system to affect General Ledger Balances
  6. Five categories of adjusting entries
    • Accruals- reflect events that have occurred but for which cash has not been received
    • Deferrals- reflect exchange of cash prior to performance
    • Estimates- reflet a portion of expenses expected to occur over a number of accounting periods
    • Revaluations- reflect either differences between actual and recorded value of an asset or change in accounting principle
    • Corrections- counteract errors found in GL
  7. Posting Adjusting Entries- Threats
    Inaccurate or unauthorized adjustments
  8. Three changes when IFRS replaces GAAP
    • 1. Componentization of fixed assets
    • 2. Permission of capitalization of R&D costs at an earlier stage
    • 3. IFRS doesn't permit LIFO method for inventory
  9. What does XBRL stand for and what does it do?
    eXtensible Business Reporting Language; it is a special programming language designed specifically for communication of business information
  10. Instance Document
    XBRL File containing tagged data that is delivered to users
  11. Element
    each specific data item in an XBRL Document
  12. Taxonomy
    set of file that defines various elements and relationships between them
  13. Schema
    file that contains definitions of every element that could appear in an instance doc
  14. Style sheet
    provides instructions on how to appropriately display the content of an instance document
  15. Preparing financial statements- threats(1)
    Inaccurate or fraudulent financial statements
  16. Producing managerial reports -Threats (2)
    • Poorly designed reports and graphs
    • 3 important controls; responsibility accounting, balanced scorecard, understanding principles of proper graph design
  17. Responsibility accounting
    produces a set of correlated reports that break down the organization's overall performance by subunits which can most directly control these activities
  18. Balanced scorecard
    report that provides a multidimensional perspective of organizational performance
  19. basic principles of graph-making
    • Use a title that summarizes
    • include data values
    • use 2d
    • begin vertical axis at zero
  20. Human resource management/payroll cycle, define
    recurring set of business activities and related data processing operations associated with effectively managing the employee workforce
  21. Knowledge management system
    directory that identifies areas of expertise possessed by each employee, and also captures and stores knowledge that can be shared and used by others
  22. General threats to the payroll cycle
    • Inaccurate or invalid master data
    • Unauthorized disclosure of sensitve information
    • Loss or destruction of master data
    • Hiring unqualified/larcenous employees
    • Violation of laws concerning proper hiring and dismissal of employees
  23. What does updating the payroll master database involve
    Reflects changes such as new hires, terminations, changes in pay rates, and changes in withholdings
  24. Updating Payroll Master Database threats(2)
    • Unathorized changes to payroll master data
    • Inaccurate updating of payroll master data
  25. time card
    records employees' daily arrival and departure times
  26. time sheets
    records time spent performing various tasks(service)
  27. Validating time and attendance data - threats(1)
    Inaccurate time and attendance data- control through source data automation, IT, and review by supervisors
  28. Payroll register
    lists each employee's gross pay and net pay
  29. deduction register
    misc voluntary deductions for each employee
  30. Earnings statement
    lists amount of gross pay, deductions, and net pay for current period and YTD totals
  31. Threats to preparing payroll (1)
    Errors in processing payroll- control by batch totals, crossfooting, and a payroll clearing account
  32. Threats to disbursing payroll(2)
    • Theft
    • Issuance to fake or terminated employees
  33. flexible benefit plan
    employee chooses some minimum coverage in medical issuance, retirement plans, and charitable contributions
  34. Threats to calculating and disbursing employer paid benefits(1)
    Failing to make necessary remittance, untimely remittance, or errors in remittance
  35. 2 ways to outsouce payroll
    • Payroll service bureau - maintains payroll data for each of its clients, does payroll for them
    • Professional Employee Org (PEO) processes payroll and provides HRM services for its clients
  36. Outsourcing is attractive to small to medium business because of
    Reduced costs, wider rage of benefits and freeing up of computer resources
  37. Four basic expenditure cycle activities
    Ordering, receiving, approving invoices, cash disbursements
  38. General threats to expenditure cycle
    • Inaccurate or invalid master data - mitigate by employing data processing integrity controls, restrict access to master data, review changes when they are made
    • Unauthorized disclosure of sensitve information - restrict access and use encryption
    • Loss or destruction of master data - back up data
    • Poor performance
  39. EOQ
    Economic Order Quantity. Calculates the optimal order size to minimize ordering, carrying, and stockout costs
  40. Reorder point
    specifies when to order
  41. Materials Requirement Planning
    seeks to reduce inventory levels by improving accuracy of forecasting techniques to better schedule purchases
  42. Just-In-time inventory
    minimizes or totally eliminates FG inventory by purchasing in response to sales
  43. What's on a purchase requisition
    requisitioner, deliver location and date needed, item numbers, descriptions, quantity, price
  44. Threats to Ordering(5)
    • Inaccurate inventory records- use the perpetual method and IT
    • Purchase unneeded items, or at inflated prices
    • Purchasing goods of inferior quality
    • Unreliable suppliers, unathorized suppliers
    • Kickbacks- gifts(bribes)
  45. Blanket purchase order
    commitment to purchase items at designated prices for a specific amount of time
  46. Vendor-Managed-Inventory
    outsources inventory control and purchasing
  47. Debit memo
    used to record adjustment when goods received do not match purchase order
  48. Threats to receiving(4)
    • Accepting delivery of unordered goods
    • Mistakes in counting items received
    • Theft of Inventory
    • Verifying receipt of services
  49. Legal obligation to pay for goods ordered arises when...
    goods are received
  50. Voucher package, what's it include
    supplier invoice, corresponding purchase order and receiving report
  51. Two ways to process supplier invoices
    • Nonvoucher system- voucher package is posted to AP subsidiary and stored in open-invoice file. When paid, package is stored in paid-invoice file.
    • Voucher system- additional doc called a disbursement voucher is created when invoice is approved for payment
  52. Disbursement voucher
    Identifies supplier, lists outstanding invoices, indicates net amount to be paid
  53. Evaluated receipt settlement
    replaces the 3way matching process (vendor invoice, receiving reports, purchase order) with a two-way process (receiving report, PO)
  54. procurement card
    corporate cc that employees can use only at designated suppliers
  55. threats to approving invoices(2)
    • errors on supplier invoices
    • mistakes in recording and posting payments to AP
  56. Threats to cash disbursements(6)
    • Failing to take advantage of discounts
    • paying for goods not received
    • duplicate payments
    • theft
    • check alteration
    • cash flow problems - have a budget
  57. imprest fund
    petty cash fund; set at fixed amount, requires vouchers for every disbursement
  58. 4 activities in revenue cycle
    sales order entry, shipping, billing, cash collections
  59. General threats to revenue cycle(3)
    • Inaccurate or invalid master data
    • Unathorized disclosure of sensitve information
    • loss or destruction of master data
  60. Electronic data interchange
    submits sales order electronically in a format compatible with company's sales order processing system
  61. Threats to Sales order entry(5)
    • Missing or inaccurate important data
    • Legitimacy of orders
    • Uncollectible accounts
    • Stockouts/excess inventory
    • Loss of customers
  62. picking ticket
    authorizes release of merchandise from inventory to the shipping dept
  63. Customer relationship management system( CRM)
    helps to organize detailed information about customers
  64. Threats to Shipping Orders(3)
    • Picking the wrong items or in the wrong quantity
    • theft
    • shipping errors
  65. Bill of Lading
    legal contract that defines responsibility for the goods in transit
  66. Threats to billing(4)
    • Failure to bill
    • billing errors- price misake or billing for backordered items
    • posting errors in AR
    • inaccurate or invalid credit memos
  67. Two methods for maintaining AR
    • open-invoice method- customers pay according to each invoice. Customers are sent 2 invoices, one to keep and one to return with payment (remittance advice)
    • Balance forward method- customers pay according to amount shown on monthly statements
  68. lockbox
    postal address to which customers send their remittances
  69. Financial electronic data interchange
    integrates EFT and EDI
  70. threats to cash collections(2)
    • theft
    • cash flow problems
  71. data flow diagram
    graphical description of the flow of docs and info between departments
  72. system flowchard
    graphical description of relationship among the input, processing, and output of an info system
  73. Program flowchart
    part of system flowchart. graphical description of the sequence of logical operations a computer performs
  74. data source from DFD
    entities that send or receive data that the system uses or produces
  75. data flow
    movement of data among processes, stores, sources, and destinations
  76. context diagram
    highest level DFD, provides reader with summary level view of system
  77. data processing cycle
    operations performed on data to generate meaningful and relevant information
  78. Types of codes(4)
    • Sequence codes- items are numbered consecutively
    • Block Code- blocks of numbers are reserved for specific categories
    • Group codes- 2 + subgroups of digits used to code items
    • Mnemonic codes- letters and numbers are interspersed to identify an item
  79. file
    group of related records
  80. master file
    stores cumulative information about the org; permanent
  81. database
    set of interrelated, centrally coordinated files
  82. batch processing
    updates periodically
  83. Enterprise Resource Planning system
    integrates all aspects of a company's operations with a traditional AIS
  84. advantages, disadvantages of ERP
    efficient, better access control, greater visibility for management, customer service improves, real-time processing, standardized procedures and reports

    cost, time-consuming, new procedures to adapt to, compex, resistant
  85. system
    set of 2 or more interrelated components that ineract to acheive a goal
  86. 5 major business processes
    • Revenue Cycle
    • Expenditure Cycle
    • Production/Conversion Cycle
    • HR/payroll cycle
    • Financing cycle
  87. predictive analysis
    uses data warehouses and complex algorithms to forecast future events
  88. Six components of AIS
    • people who use the system
    • procedures and instructions used to collect, process and store data
    • data about org
    • software used to process data
    • IT infrastructure, including computers, peripheral devices, and network communication devices
  89. Value chain- 5 primary activities
    • Inbound logistics- receiving, storing materials
    • Operations- transform inputs into final products, services
    • Outbund logistics- shipping, distributing to customers
    • Marketing and sales- activites that help customers buy
    • Service- post sale support
  90. Support Activities (4)

    What do they do?
    • Firm infrastructure- accounting, finance, legal and general administration activities
    • HR- recruting, hiring, training, compensating
    • Technology- r&d, investments in IT, product design
    • Purchasing - buy rm, supplies, machinery

    Help the 5 primary activies to be performed well
Card Set
Acct 304 FINAL