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AIS – Final Analyze Chapter Highlights Chapter one particular – ACCOUNTING SYSTEM OBSERVATIONS 1 . Venture system – A system that supports organization activities throughout the enterprise, including inputs, digesting, and outputs 2 . Built-in enterprise system – Shares data around functional areas within the venture 3.

Business processes – Related actions performed by an venture to create benefit by transforming input in to output 4.

Value sequence – A great organizing framework for business procedures, beginning with sellers and stopping with customers Baseline accounting system – A model providing you with an enterprise-wide view of the firm`s accounting system 1 . Transaction periods – Accounting transactions relevant to specific organization processes (1) Purchasing circuit – Deals related to purchasing items by vendors (2) Payroll cycles – Deals with personnel (3) Sales cycle – Exchange or transactions among an enterprise and its buyers 2 .

Suppliers module – A module related to purchasing goods and services a few. Customers module – A module related to selling the client a product or service four. Employee component – A module related to the payroll cycle five. Banking module – A module that requires cash received and funds paid 6th. Financial component – A module that includes adjusting and correcting articles (1) Adjusting entries – Entries to create accounts up-to-date at 12 months end (2) Correcting items – Items to correct errors (3) Final entries – Zeros away income and expense accounts at yr end six.

Reports module – A module that relates to end result from the accounting system (1) Financial reports – Studies that include a company`s cash flow statement, “balance sheet”, and affirmation of cash goes (2) Duty reports – Reports utilized when filling federal, condition, and local returns (3) Supervision reports – Reports prepared to assist managers in making decisions (4) Durability reports – Reports utilized to evaluate a great enterprise`s durability performance Precisely what is the importance and value details as an asset? Today, the value of information possessions for some organization exceeds the value of other assets, such as land and complexes What is the role with the accounting system within the much larger enterprise program? * The accounting program spans the whole value string of an business, tracking deal information from your purchase of items from vendors through the sale for products or services to customers. Business processes happen to be associated with the related accounting deals known as deal cycles.

As well read Modules on the lookout for & 15

The getting cycle contains employee and payroll transactions. The sales cycle consists of exchanges or perhaps transactions among an venture and its buyers. In addition to the accounting system, various other modules or subsystem may include supply sequence management (SCM), operations/production system (OPS), hrm (HRM), and customer romantic relationship management (CRM). What are the database necessities that today’s accounting specialist needs to know? 1) An area is a item of data, including customer initial name (2) A record can be described as collection of related fields, such as a customer record (3) A table is known as a collection of related records, such as a CUSTOMER desk (4) A database is actually a collection of related tables, including an accounting database (5) A database form is actually a computer-based type for coming into data into the database (6) A database query is employed to extract data from a data source, such as trying to find a user’s account balance. (7) A database report is a computer-based outcome to display Precisely what are the SDLC (Software Expansion Life Cycle) phases? The system development life cycle sets up the activities associated with developing a fresh system into the following 6 distinct stages: (1) Plan the system job including scheduling, budgeting, and staffing (2) Analyze the new system requirements, such as what reports are required and what data must be collected by the system (3) Design organization processes and databases pertaining to the new program (4) Build/buy and check databases and computer programs for the newest system (5) Install fresh IT hardware, software, and databases 6) Deploy the new system, using the system on an ongoing basis and preserving and upgrading it as required. Why is it essential to safeguard data assets? * To protect details assets, businesses implement reliability and regulates to prevent fraud, unauthorized access, modification, devastation, or disclosure. Internal control is the group of policies and procedures companies use to safeguard assets, which includes information resources, and to prevent and detect errors. Precisely what are the three features of an accounting system in today’s business environment? 1) Collecting, recording, and storing economic and accounting data (2) Providing financial analytics and business intelligence intended for improved decision making and business performance (3) Safeguarding data assets kept in accounting devices using security, controls, and risk management Chapter 2 – ACCOUNTING DIRECTORIES 1 . Operational database – Databases used to store data related to organization operations and transactions installment payments on your Data warehouse – Stores data via a variety of sources and is utilized for business intelligence several. Database supervisor (DBA) – Responsible for taking care of the enterprise’s databases some.

Intersection desk – Placed at the junction of two tables to get rid of a many-to-many relationship your five. Composite major key – Used the moment more than one field is required to exclusively identify a list 6. Normalization – A process for removing database particularit� or complications 7. Databases integrity – Ensures that the database is made up of accurate, valid data Rule 1: Entity integrity Each record inside the database need to have a unique identifier. No two records inside the database can easily have the same major key worth. Rule two: Primary essential integrity The primary key value cannot be null (empty).

Secret 3: Website integrity The field values must be coming from a pre-defined domain. Rule 4: Referential integrity Info referenced and stored in related tables has to be consistent throughout the database. DBMS is a software program used to (1) Create repository tables (2) Transfer info from the accounting software towards the database (3) Update info in the repository (4) Delete data from the database (5) Sort data source tables (6) Run inquiries What info is stored in accounting databases? * Companies store data about resources, liabilities, functions, transactions, workers, customers, distributors, and more in databases.

Accounting databases needs to be well organized, redundancy-free, steady, and current What are three tiers in accounting program architecture? (1) Database tier: The back-end accounting databases stores accounting data in database dining tables. A back-end database management system (DBMS) types, stores, inserts, updates, and deletes accounting data and runs queries (2) Software tier: Accounting software applications connect to the DBMS to access the back-end accounting database (3) User tier: The user rate consists of the interface appearing on the accountant’s computer screen.

The person interface contains database forms and reviews. What are business databases? * Enterprise databases used by an enterprise for people who do buiness purposes can be viewed as one of two sorts: internal directories or exterior databases (1) Internal directories are directories in which the info belongs to the business. Internal databases consist of two varieties: functional databases and data warehouses. Operational sources, such as a great accounting database, store organization transactions. Info warehouses retail store data by a variety of options. 2) Exterior databases are databases made up of data accumulated by various other organizations. What problems can easily result from terribly designed databases? * Inadequately designed sources may consist of database complications or particularit�, such as difficulties with inserting, updating, and removing data. This could result in erroneous, unreliable accounting data. 5. Three types of databases anomalies (problems) are DUI: Deletion, Bring up to date, Insertion What are the steps accustomed to build an accounting databases? (1) Determine and build database tables (2) Identify and enter domains in every database table (3) Select the primary important for each stand 4) Recognize and build human relationships among repository tables, taking away any many-to-many relationships by creating area tables Phase 3 – ACCOUNTING SOFTWARE 1 . Gui (GUI) – User interface that contain images and icons 2 . Data affirmation – Equipment used to lessen data entry errors, such as drop-down prospect lists 3. Real-time reports , Reports that provide up-to-the-minute info without a period lag 4. Live studies – Reviews that provide up-to-date data continually 5. Organised query terminology (SQL) – Code accustomed to search and retrieve data 6.

Query Builder Tools – Rationalizes query development What is the role from the accounting system interface? 2. The accounting system ui plays a significant role in entering accounting data and retrieving accounting information. The accountant sights the user interface on the screen, and the RDBMS and data source are behind the screen. The accounting software software interacts with the RDBMS using database varieties, queries, and reports. Highlights of a practical interface consist of user-friendly, easy navigation, and customizable choices. What is the role of database varieties? Database forms are commonly accustomed to input info into accounting system. The database forms are frequently created to look like widely used and familiar items, such as an bill or a verify. What is the role of database studies? * The outcome of the accounting system is typically displayed within a report format. The record displayed within the user’s screen is actually a databases report that is certainly formatted to meet accounting requirements. The data source report uses information through the database to populate the report. Precisely what is the function of data source queries? 2. One element of the user interface is collection or question.

Sometimes the interface can call this a search and supply a form in which the search query can be came into. In other occasions, a query may be run to make a report, retrieving data from the database to into the data source report that appears for the user’s monitor. Well-designed database forms are designed to save some minimize data entry problems. A few general guidelines to get database kind design include the following: (1) Enter data once (2) Use info validation (3) Enable vehicle entry (4) Mirror conventional paper forms (5) Design useful forms (6) Implement ideal security Part 4 – ACCOUNTING SYSTEMS AND W.

PROCESSES 1 . Data flow diagrams (DFDs) – a technique used to document business procedures using agent, event, data store, and data movement symbols installment payments on your Data goes – displays how data enter, moves, and completely a system several. Data retailers – a database desk represented by simply an open rectangular shape 4. Situations – a process represented with a rounded rectangle 5. Providers – a person or perhaps department symbolized by a square symbol 6th. External agent – an agent outside the venture 7. Inside agent – employees in the organization almost eight. Event-agent-database (EAD) table – each row in this desk corresponds to a meeting in a DFD 9.

DFD Fragment – a DFD of a solitary event 12. Black gap – a DFD mistake that occurs when info goes into a procedure but zero data is present 11. Greyish hole – a DFD error that occurs when the suggestions data would not correspond to the output data 12. Miracle – a DFD error that occurs when there is no type to a procedure The way of reading a DFD is to use the following four steps (1) Identify the agents (internal and external) (2) Discover events (3) Identify repository tables (4) Trace your data flows How are accounting systems developed today? * Today, most accounting systems happen to be developed in two periods.

First, primary accounting applications are selected. Then your accounting applications are customized to fulfill the enterprise’s specific requirements. How is customization of accounting devices documented? 2. Customizing a great accounting system involves recording the specific demands of the organization using data flow layouts to provide a comprehensive view with the enterprise’s organization processes. Every single module in the baseline version can be custom-made to meet the enterprise’s requirements. Additional segments might also always be needed to give the required customization, such as a creation module to manufacturing costs.

Chapter five – BUSINESS PROCESSES 1 ) Gap Analysis refers to analyzing the distance between the base modules and the customization instructed to meet enterprise-specific needs. installment payments on your Big Hammer refers to when ever all program modules are built and applied for the entire organization at the same time. several. Stages identifies when modules or places for a fresh system are built and applied stage simply by stage rather than all at once. How are business operations documented? 5. The base accounting program can be personalized using info flow diagrams (DFDs) to document the enterprise’s business processes.

What is gap evaluation? * A niche analysis recognizes the difference between the chosen baseline program, such as SAP, and the modification required by the specific enterprise. What is the between the big bang strategy and periods approach to personalization? * Both the approaches to modification are big bang and stages. The top bang strategy is used the moment all the quests are built and implemented for the entire enterprise as well. The levels approach consists of completing quests or places stage by stage rather than all at once. What exactly is workflow management? Workflow managing systems systemize workflow by automatically forwarding the digital document to another step in the organization process. Phase 6 – INTEGRATED ENTERPRISE SYSTEMS 1 ) Order-to-cash – corresponds to the sales pattern 2 . Procure-to-pay – corresponds to the getting cycle three or more. Spaghetti code – encoding code used to connect stand-alone systems some. Three-tier buildings – when an enterprise program uses levels of IT elements: enterprise data source, application, and client computer systems 5. Fire wall – software packages on a router that monitor network targeted traffic 6.

Organization process administration (BPM) – transforming organization processes to improve efficiency Main reasons for Failed ERPs are the following: (1) Unrealistic spending budget. Underestimated costs. Overestimated benefits. (2) Unrealistic schedule. Too little time brought about project achievement. (3) A bad fit. User requirements are generally not net. Primary system not a good fit with business processes. (4) Too much modify. Failure to teach employees about changes to anticipate. Lack of adequate change management. (5) Insufficient project winner at the top. Dedication by top management is lacking to champion the project.

What are advantages of an integrated enterprise program? * The integrated enterprise system offers many advantages over the practical silo way of enterprise systems. The accounting functions will be integrated into the larger enterprise program, permitting accounting to share data with other practical areas and better synchronize activities. Exactly what are challenges associated with an integrated business system? 2. Challenges associated with an integrated business system include business processes that may should be redesigned and managing all of the changes required by the new system. How is usually data came into in an bundled enterprise program? Database varieties that relate to business process activities allow users to enter data once into the IES and have the info shared through the enterprise, eliminating the need for diverse functional areas to rekey the same info. How does a built-in enterprise program relate to the accounting program? * Integrated enterprise program use a flip approach that is consistent with the baseline accounting system model. The basic module brands may vary nevertheless the functions are basically the same. Integrated venture systems incorporate accounting to modules for an organization.

Customer and vendor devices can also be bundled. Chapter twelve – SCAMS AND INSIDE CONTROL 1 ) Entity-level THIS controls – processes, corporation structure, and leadership for this to support an organization’s business strategy and objectives, just like internal audits 2 . THAT general controls – handles that affect IT companies in general and be sure continued IT operation and availability, just like change and access regulates 3. App controls – controls inserted within organization process applications, such as accounting software controls A.

Category by the control objectives particular in the AVENIDA internal control framework: i. Operation handles , regulates to ensure that procedures are accomplished appropriately, like the timing of cash disbursements to ensure late fees are avoided ii. Financial controls – controls to ensure that external economical reports have decided on a on time basis in compliance with laws, control, or contractual agreements iii. Compliance settings – handles to maintain privacy of information in accordance with all appropriate laws and regulations N.

Classification by simply how the process is completed: 4. Manual regulates – settings performed with no assistance of technology sixth is v. Automated settings – handles performed automatically by computer systems 1 . Suggestions controls – controls over data entered into the system 2 . Processing controls – handles to ensure that sums have been highly processed appropriately three or more. Output handles – settings to ensure that information are given away only to appropriate users mire. Hybrid settings – a combination of manual and automated settings What is SOX and how would it affect the accounting system? Sarbanes-Oxley (SOX) legislation resulted through the accounting scams of 2002. This legislation requires businesses to use known framework pertaining to internal regulates. As a result, a large number of organizations followed COSO’s Interior Control – Integrated Structure and the COBIT framework for IT controls The gender chart control buildings? * IT control architecture is a formula for IT regulates in the organization. This formula shows that inside control influences IT by three amounts within the business resulting in three levels of THAT controls: 2. Entity-level THIS controls App controls 2. IT basic controls How do control disadvantages be recorded? (1) Create a DFD (2) Document preventative and picky controls within the DFD (3) Document control HotSpots around the DFD Fraud and abuse can be grouped into 3 broad groups: (1) Corruption, such as bribery (2) Misappropriation of possessions, including thievery of cash, deceptive disbursements, or stealing goods (3) Fraudulent financial reporting, such as misstating financial assertions in order to fulfill earning focuses on. Three components required to demonstrate fraud are the followings: 1) A materials false statement is made with the intent to trick (2) A victim depends upon the false declaration (3) The victim incurs damages The fraud triangular depicts the three conditions that typically must exist for a fraud to be perpetrated (1) Objective – basis for committing the fraud, such as financial problems (2) Chance – access to the advantage or financial statements in order to carry out the fraud (3) Means – knowledge or skills that permit the perpetrator to dedicate the criminal offenses Internal Control is a process, effected by simply an entity’s board of directors, managing, and other personnel.

This process was created to provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, stability of financial credit reporting, and conformity with suitable laws and regulations. SOX (Sarbanes-Oxley Act) emphasize a powerful system of internal control as a way of keeping away from Enron-sized accounting frauds. SOX Requirements to consider (1) Section 302. Business responsibility pertaining to financial reviews (2) Section 404. Management assessment of internal controls (3) Section 806.

Security for employees of publicly traded companies who provide evidence of fraudulence (4) Section 906. Company responsibility intended for financial reports Audit and Internal Handles (SOX) (1) Audit of internal control – testing of controls to obtain proof that interior control over monetary reporting features operated properly (2) Review of financial assertions – tests of controls to assess risk and hypostatic procedures to collect evidence regarding the accuracy, completeness (3) THAT audit – audit from it controls 4) Integrated audit – combines an examine of internal control with an taxation of financial transactions There are two sorts of insufficiencies that may be present in internal control of financial revealing: (1) Material weakness – deficiency that results in a fair possibility that the material misstatement of financial assertions will not be prevented or recognized on a well-timed basis (2) Significant deficiency – a deficiency in internal control over financial credit reporting that is fewer severe than the usual material weakness COSO (Committee of Recruiting Organization in the Treadway Commission) Internal Control Objectives 1) Effectiveness and efficiency of operations (2) Reliability of economic reporting (3) Compliance with laws and regulation Interior Control Pieces (1) Control environment – control environment factors include integrity and ethical beliefs, importance of plank directors, management philosophy and operating design, organization composition, commitment to financial credit reporting competencies, power and responsibility, and recruiting (2) Risk assessment – involves figuring out, analyzing, and managing hazards that impact a industry�s ability to record, process, sum it up, and statement financial info properly.

Risk assessment control objectives include the following: A. Importance of economic reporting goals B. Identity and examination of financial revealing risks C. Assessment of fraud risk (3) Control activities – include policies and methods to reduce risks including financial, detailed, and compliance controls. Control activities are the following: Deb. Segregation of duties – to break down authorization, saving, and property custody between different people E. Impartial reconciliations of assets and accounting documents – such as bank assertion reconciliations and inventory reconciliations F.

Physical controls – to provide to get physical secureness of property, such as video security cameras and restricted access to company buildings G. IT controls – to make certain appropriate information processing, authorization, and info integrity. (E. g. Info validation) (4) Information and communication – includes the accounting system for figuring out, recording, processing, and reporting transactions and financial info. An organization’s system creates reports, that contains operational, economical, and conformity information.

Internal control concepts related to this component consist of information technology, info needs, data control, managing communication, upstream communication, board communication, and communication with external get-togethers (5) Monitoring – entails assessing interior controls plus the process to look at corrective actions if required. Effective monitoring includes: H. Ongoing monitoring – such as controls above purchasing I. Separate reviews – just like an internal review that analyzes internal handles. J.

Upstream communication to report internal control deficiencies COBIT (Control Objectives for Information and related Technology) Three Dimensions (1) IT Assets can be broken into the following 4 categories: A. Application – consists of manual and programmed procedures to process data B. Data – comes with structured and unstructured data in any kind, such as text message, graphics, images, audio and video. Data is input, processed, and output by the system C. Infrastructure – refers to THIS technology which include hardware and software. This may also include physical structures, for example a data centre facility D.

People – includes personnel as well as their very own knowledge and skills to plan, set up, acquire, put into action, deliver, support, monitor, and evaluate THIS processes and systems (2) IT Procedures deliver details, run applications, and employ infrastructure and folks to accomplish IT goals in light of organization requirements. THAT processes happen to be grouped in to the following 4 domains Electronic. Plan and Organize (PO) domain – relates to THAT strategy and tactics to contribute to getting business goals F. Get and Apply (AI) site – identifies, acquires (built or bought), and accessories IT alternatives.

Also makes certain that the SDLC phases and activities are being used when upgrading and adjusting current devices G. Deliver and Support (DS) site – worried about the delivery of IT providers. Encompasses THIS operations, protection and training. Assures the continued support and maintenance of these kinds of services H. Monitor and Evaluate (ME) domain – monitors THIS processes to get compliance with control requirements. Includes supervision oversight of control processes as well as 3rd party assurance providers provided by internal and external audits (3) Business Requirements (Information Criteria) I.

Three criteria connect with the information security: confidentiality, sincerity, availability (CIA) J. Intended for the remaining four criteria, COBIT relies after definitions utilized by COSO’s Interior Control – Integrated Structure (Effectiveness, Efficiency, Reliability, Compliance) Chapter 11 , CYBERSECURITY What are the 10 fields of cybersecurity? (1) Legal, regulations, complying, and brought on (2) Info security and risk management (3) Security structure and design (4) Telecommunications, network, and Internet reliability (5) Control access (6) Operations secureness (7) Physical and environmental security 8) Application security (9) Business continuity and disaster restoration (10) Cryptography What is the scope of cybersecurity inside the accounting system? * Cybersecurity in an venture is certainly not limited to simply guarding against hackers and cyberattacks. That involves aspects worth considering of venture operations, which includes how you coach and educate your staff about protection awareness to safeguarding details assets, the right way to implement fresh technologies within a security mindful manner, keeping backups in order to recover and continue organization operations, as well as how to provide the maximum level of secureness in a cost effective way

How come encryption crucial in obtaining accounting info? * To get accounting uses, encryption offers an especially beneficial tool providing increased info integrity and confidentiality. Encryption can be used pertaining to accounting info in transportation and for accounting data stored in the repository. If an attacker is successful in penetrating the enterprise secureness and gets to the database, encryption with the stored info is yet another line of protection *Refer to Lecture PPT slides for more detailed details regarding key terms.

Chapter doze – THE CHANCE INTELLIGENT VENTURE What is a risk intelligent venture? * The danger intelligent venture moves past security and controls to managing risk and then to using risk to create worth What is the enterprise risk management (ERM) structure? * The ERM construction offers assistance to corporations implementing business risk management. ERM units may consist of entity-level units, partitions, business units, and subsidiaries 2. The several ERM goals are Tactical – connect with goals that support the entity’s quest * Detailed – correspond with the powerful and effective use of the entity’s solutions * Reporting – relate to the dependability of the enterprise’s reporting, both equally internal and external 5. Compliance – relates to the entity’s conformity with all applicable laws and regulations 2. The ten ERM pieces consist of 5. Internal environment – requires the risk managing philosophy from the enterprise, such as tone collection by top rated management. Risk resilience, risk appetite, risk tolerance, sincerity, and ethical values also affect the nternal environment * Objective environment – environment objectives which have been consistent with the entity’s mission and risk urge for food * Function identification – involves determining potential incidents that might affect the entity. Situations can be possibly internal occasions or external events that may affect the entity’s ability to obtain objectives. 5. Risk analysis – the process of assessing the extent to which events will impact an entity’s ability to achieve the objectives (impact/likelihood) * Risk response (avoidance/reduction/sharing/acceptance) * Control activities Details and interaction * Monitoring What is schedule risk management? 2. A significant risk for many companies is the widespread use of spreadsheets with limited controls. A spreadsheet risikomanagement program involves using gain access to and change settings with spreadsheets in order to be SOX compliant Phase 13 – ACCOUNTING PROGRAM DEVELOPMENT 2. This phase explains periods of SDLC (Software Advancement Life Cycle) and SDM (Software Creation Methodologies). Consider Lecture PPT slides for more information.

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