CHAPTER ONE: Accounting Information Systems and the Accountant DISCUSSION QUESTIONS: 3. Advances in IT are likely to have a continuing impact on financial accounting. What are some changes you think will occur in the way financial information is gathered‚ processed‚ and communicated as a result of increasingly sophisticated IT? Advances in IT that allow transactions to be captured immediately‚ accountants and even the AIS itself can produce financial statements almost in real-time. Interactive data
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baked. Instructions: Identify the six principles of internal control and give and example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all principles.) The six principles of internal control are establishment of responsibility‚ Physical‚ mechanical‚ and electronic controls‚ segregation of duties‚ independent internal verification‚ documentation procedures‚ and other controls. 1. Establishment of responsibility: Establishment of
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evidence to draw conclusions. AUDIT EVIDENCE DECISIONS • A major decision facing every auditor is determining the appropriate types and amounts of evidence to accumulate to be satisfied that financial statements are fairly stated and the internal control system is effective. • This judgment is important because of the prohibitive cost of examining and evaluating all available evidence. • The auditor ’s decisions on evidence accumulation can be broken down into the following four sub-decisions:
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think will help prepare you or better prepare you? Auditing Insight p. 150-151-A Suitcase Full of Money Companies in the Insight were fined for bribery but pleaded guilty to failing to maintain proper internal and keeping adequate records (FCPA.). 14. How are failing to maintain proper internal controls and records and bribery connected? Or are they? Briefly explain. For p. 91 2nd question Audit Procedures Audit Procedures specifically refer to the methods or techniques used by auditors in the
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Internal Controls and Risk Evaluation Kudler Food’s internal control is designed to provide reasonable assurance in regards to the reliability of Kudler Food’s financial reporting. With proper internal controls Kudler Food’s strives for effectiveness and efficiency of all the company’s operations along with compliance with the laws and regulations that are applicable in the State of California. Kudler Food’s internal control consists of five components. The first component is the control
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P(6-12) a. Internal control strengths in PEI’s system include: * Automated customer credit limit master file. Allows automated checking of a customer’s credit line on a real-time basis before sales orders are filled. * The Credit Manager establishes credit limits for new customers on a daily basis so that credit-worthy customers may have their orders filled in a timely manner. * Real-time customer credit checks before orders are processed. * Aging reports provided
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sample of sales invoices and trace to the shipping document agreeing name and quantity. Preparation Question: What is an audit procedure? B. What sample size to select for a given procedure. C. Which items to select from the population. D. When to perform the procedures (timing). III. Audit Program Preparation Question: What is an audit program? IV. Persuasiveness of evidence Which audit procedures: A. Appropriateness 1. Relevance Example: Trace from sales invoices in the Sales Journal
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Entity’s Internal Control ............................................ 11-24 Identifying and Assessing the Risks of Material Misstatement ............ 25-31 Documentation ...................................................................................... 32 Application and Other Explanatory Material Risk Assessment Procedures and Related Activities ............................ A1-A16 The Required Understanding of the Entity and Its Environment‚ Including the Entity’s Internal Control .....
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permitted to | |perform. Access control matrix: shows that access controls of each user or device in your company to see | |who have what privileges. Best Practice of Passwords: Must have at least 8 characters in length‚ must have| |multiple character types (upper-lower case‚ numbers‚ and special characters)‚ Randomness (not be words | |found in dictionary)‚ and changed frequently (every 30 for sensitive of 90 for most users). Physical | |Access Controls: Only have one unlocked door during
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accounting system 1. Transaction cycles – Accounting transactions related to specific business processes (1) Purchasing cycle – Transactions related to purchasing items from vendors (2) Payroll cycles – Transactions with employees (3) Sales cycle – Exchange or transactions between an enterprise and its customers 2. Vendors module – A module related to purchasing goods and services 3. Customers module – A module related to selling the customer a product or service 4. Employee
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