Additional Study Questions

What Is the resistence between transaction processing organizations, caution tuition systems, and conclusiveness support systems? Transaction processing systems document monetary activities focussing development systems utilize to collect qualitative as well as quantifiable information for decision making within organizations Decision support systems attend to the developers of an ASS identify what information they need for their planning, decision making, and witness functions How is a fluxchart apply?A document flowchart traces the physical flow of documents wrought an organization?that is, the flow of documents from the departments, groups, or individuals who first created them to their final destinations. How is the news report Information system documented? An method of accounting information system Is a collection of information and processing procedures that creates needed Information for Its intakers. An Information systems components information or Infor mation Is Input, processed, and widening as Information for planning, decision-making, and dominance purposes.What atomic number 18 set upive coding systems used in ASS? (1) mnemonic codes, (2) era codes, (3) block codes. And (4) group codes. How do accounting information bundle packages disagree? Owners will cave in to consider what tasks theyll want their system to accomplish, identify what softw be package or packages target answer these tasks, and perhaps evaluate around(prenominal) different ready reckoner hardw atomic number 18 configurations that might support these packages. What are the roles of accounting Information systems In e- craft?Enterprise resource management (ERP) software such(prenominal) as SAP are particularly Important to electronic commerce (e-commerce) applications?for standard, because a simple bargain over the Internet simultaneously affects accounts receivable, inventory, and racketing subsystems. How do accounting information software pack ages differ by care coat? The type of accounting software package used in melodyes depends on the size of caller-up operations, number of users and different segments or departments in a company.Do enterprise resource planning systems add productivity to a business enterprise? Enterprise resource management (ERP) software enables businesses and presidential term agencies to comport and manipulate monetary data on an organization-wide basis. How could unethical behavior associate to the use of information systems impact a acceptable and then performing accordingly. Ethics can govern organizations as well as individuals. An example is the practice of wildcat software copying.How can a business inviolate its electronic monetary data? The Fair Employment Practices Guidelines suggest that company policies cover issues such as (1) who owns the computer and the data stored on the computer, (2) what purposes the computer whitethorn be used (e. G. , primarily for business purposes ), and (3) what uses are unauthorized or prohibited. Further, employers should specifically identify the types of acceptable and unacceptable uses, with round examples. What are some vulnerabilities and threats in information systems? The data that are input manually to a system are particularly vulnerable to compromise Viruses can hide in e-mails from friends and colleagues because their computer systems have been infected. How would input controls, processing controls, and siding controls be used? Data input controls arrest the accuracy, murderness, and timeliness of data during its conversion from its original source into computer data, or entry into a computer application. Data processing controls are used to ensure the accuracy, completeness, ND timeliness of data during either batch or online processing.Data output controls ensure the integrity of output and the correct and timely distribution of any output produced. What are parts of an information bail system? An infor mation protective cover management system (ISMS) is a set of policies concerned with information security management or IT related lay on the lines. How do disaster endangerment management practices benefit a company? An organizations disaster recovery plan describes the procedures to be followed in the event of an emergency, as well as the role of every member of the disaster recovery team (which s made up of specific company employees).What are the techniques used for analyzing internal control systems? polish up subsisting documentation or create new satisfyings. Observe the accredited system in operation. Use questionnaires and surveys. Review internal control procedures. reference system participants. How do internal audited accounting and external auditing of information systems differ? In an internal audit, a companys own accounting employees perform the audit, whereas accountants working for an supreme CPA firm conduct an external audit. What are information system audits?The auditor will first decide if computer examination of the computer-based information system itself What potential fortunes mustiness be evaluated during an information system audit? The auditors will perform respectfulness experimenting to ensure that the controls are in place and working as prescribed. This may entail using some computer-assisted audit techniques (Scats) to audit the computerized ASS. These mean the use of computer processes or controls to perform audit functions, such as sorting data to detect reprise accounts payable invoice numbers. Finally, the auditor will need to obstructively test some account balances.What control procedures should be used to minimize risks in an information system? The desirability of an internal control procedure is a function of its ability to reduce business risk. In fact, it is the business risk itself that is important, not the internal control system. Why is a financial mastery audit required? In performing financi al statement audits, the auditors derive and evaluate audit evidence to form an opinion about whether the financial statements follow the appropriate criteria, usually for the most part accepted accounting principles.The auditors must gather sufficient appropriate audit evidence to let a reasonable basis for their opinion on the financial statements. What are the auditors responsibilities in performing an audit engagement? The auditor may make disrupt assessments of the two risks or an overall assessment of the risk of material misstatement for the applicable self-confidences. How are generally accepted auditing standards used? These adopted and issued standards are required to be followed when auditors audit the financial statements (and internal control) of issuers of securities ( world companies).What analytical procedures are used during an audit? A simple analytical procedure is to compare tax and expense amounts for the current grade to those of prior periods, noting s ignificant differences. A more sophisticated analytical procedure might involve the development of a multiple regression model to estimate the amount of sales for the class using economic and industry data. Analytical procedures also may involve computations of percentage relationships of various items in the financial statements, such as rank profit percentages.In all these approaches, the auditors attempt to identify unexpected differences or the absence of expected differences. Such differences may indicate misstatements in the financial statements that should be investigated fully by the auditors. How is an audit engagement planned? The requirements for the engagement allow the financial statements to be audited, any other requirements (e. G. , regulatory filings), and the timing of the engagement. employment What is include in an audit engagement letter? The objective and arena of the audit The responsibilities of the auditor The responsibilities of management and ident ification of the applicable financial reporting framework Other information fee arrangements, billings, timings, and other specific terms insurance coverage What is the relationship between audit risk and materiality? Audit risk at the overall engagement level, this is the risk that the auditors may unknowingly survive to appropriately modify their opinion on financial statements that are materially misstated.At the financial statement assertion level, it is the risk that a particular assertion about an account balance is materially misstated. Materiality recognizes hat some matters are important to the fair presentation of financial statements, while others are not. The materiality concept is basic to the audit, because the audit report states that an audit is performed to curb reasonable assurance about whether the financial statements are free of material misstatement. What risks are present that affect the procedures to be used during an audit? complexness of calculation s involved.Risk of fraud. Selection and application of accounting policies. Internal and external circumstances bighearted rise to business risks (e. G. , technological change in the industry). Recent developments in the industry and economy. How do the ethical standards set by the American instal of Certified Public Accountants (CPA), Securities Exchange Commission (SEC), and Government Accounting postal service (GAO) differ? CPA The national professional organization of Spas engaged in promoting high professional standards to ensure that Spas serve the commonplace interest.SEC A government agency authorized to regulate companies seeking approval to issue securities for sale to the public. GAO The Governmental Accounting Standards Board (GABS) was formed in 1984 to establish and meliorate tankards of financial accounting for state and local government entities. How do rules of independence impact the CPA and the client? It is important to recognize that independence concer ns exist both at the individual CPA level and at the public accounting firm level one, both, or neither may be considered independent with watch over to a client or potential client.A public accounting firm does not necessarily lose independence with respect to an engagement when one (or more) of its employees or partners are not independent. What is prohibited by the code of professional conduct? The Code of Professional Conduct prohibits a member of the audit team for a client company from prop any common stock in that company. In such circumstances, no further consideration is required?that individual is not independent. 2002 requires that one year pass before a member of the audit team may accept employment with an SEC registrant in certain designated positions (e. . , chief executive officer, controller, chief financial or accounting officer). What elements should be included in an internal control bodily structure? Preventive controls are aimed at avoiding the particular o f misstatements in the financial statements. Detective controls are designed to discover misstatements afterward they have occurred. A corrective control is ordinarily needed to free the situation. How would an auditor test the relationship between control risk and the internal control structure?Internal control is a process, effected by the entitys board of directors, management, and other personnel, designed to provide reasonable assurance regarding the acquisition of objectives in the categories of (1) effectiveness and efficiency of operations, (2) re financial obligation of financial reporting, and (3) compliance with applicable laws and regulations. Prior to 1996, the Aspics Professional Standards referred to an entitys internal control as its internal control structure. What audit sampling is used by the auditor?statistical and Non-statistical take A sample is said to be non-statistical (or Judgmental) when the auditors estimate sampling risk by using professional Judgmen t rather than statistical techniques. Statistical sampling may assist auditors in (1) designing efficient samples, (2) beat the sufficiency of the evidence obtained, and (3) objectively evaluating sample results. How is evidential matter used? Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to dedicate a reasonable basis for an opinion regarding the financial statements under audit.What should a CPA include in a standard management deputation letter? A report to management containing the auditors recommendations for correcting any deficiencies disclosed by the auditors consideration of internal control. In addition to providing management with useful information, a management letter may also help limit the auditors liability in the event a control flunk subsequently results in a loss by the client. What information should the entitys internal control structure report include? Deficiency in internal control l ittle than a significant deficiency Significant deficiency Material weakness the word independent.It is addressed to those for whom it is prepared, generally the audited company itself or to those charged with governance. after the introductory paragraph, the report is divided into sections with headings. The introductory paragraph of the auditors report identifies the financial statements that have been audited. To reduce confusion, audit reports issued in the United States now use arms such as generally accepted auditing standards (United States of America) or auditing standards generally accepted in the United States of America. The visit of the audit report is preferably significant because the auditors have a responsibility to perform procedures through that date to search for any subsequent events that may affect the fairness of the clients financial statements, and due to requirements relating to changes in documentation that arise after that date What information is includ ed in an audit exit interview? After they have completed he draft report, they should arrange an exit conference to reexamination the findings with all persons directly concerned with the operations audited.For each finding, a complete report will describe (1) the criteria used to evaluate the activity, (2) the condition (e. G. , problem) that exists, (3) the cause, (4) the effect, and (5) recommendations for avail What can the CPA learn from the attorney representation letter? Management provides an assertion about compliance in writing in a representation letter to the Spas. That assertion also may be presented in a formal report that accompanies the Spas report or be included in the Spas report.The Spas report provides assurance on either managements assertion or directly on compliance. What other services can CPA firms provide? Tax Accounting and Assurance What is an attestation engagement? In compliance attestation engagements, Spas address an organizations compliance with specified requirements, or its internal control over compliance with specific laws and regulations. How do governmental auditing standards and financial auditing standards differ? GAP defines how businesses, both public and private, prepare their financial tenements.Governmental Auditing Standards are a series of rules that define how an independent agent is supposed to review a government agencys financial statements and internal processes. Do governmental regulations have an effect on financial statement audits? Governmental organizations are subject to a variety of laws and regulations that affect their financial statements?many more than typical business enterprises. An important aspect of generally accepted accounting principles for governmental organizations is the designation of various legal and contractual requirements.