Accounting Information System

Front 1

How do you trace a transaction?

Back 1

1. Capture the Transaction.
2. Record in Special Journal.
3. Post to Subsidiary Ledger.
4. Post to General Ledger.
5. Prepare the Unadjusted Trial Balance.
6. Make Adjusting entries.
7. Journalize and post adjusting entries.
8. Prepared Adjusted Trial Balance.
9. Prepare Financial Statements.
10. Journalizing and post closing entries.
11. Prepare the Post-Closing Trial Balance.

Front 2

What is the difference between flat-file and database system on Data Storage?

Back 2

In FF system, organizations must incur the cost of both multiple collection and multiple storage procedures.
In DB, each element is stored only once, thereby eliminating data redundancy and reducing storage costs.

Front 3

What is the difference between flat-file and database system on Data Updating?

Back 3

In FF, any changes must be made separately for each user adding significant to the cost of data mgt.
In DB, because the data element exits in only one place, it requires a single update.

Front 4

What is the difference between flat-file and database system on Currency of Information?

Back 4

A FF is unable to update all the files of users affected by change. This could leave info outdated.
In DB, any changes made by any user yields current data values for all other users.

Front 5

What is the difference between flat-file and database system on Task-Data Dependency?

Back 5

In FF, the problem is the user's inability to obtain additional info. as his/her needs change. It is difficult to establish a mechanism for sharing.
In DB, users have access to the full domain of data available.

Front 6

What are the three views of the DBMS?

Back 6

Internal view which presents the physical arrangement of records in the database. It describes the structure of records, the linkages b/w them, and the physical arrangement and sequence of records in a file.
The conceptual view (schema) represent the database logically and abstractly.
The User view (subschema) defines how a particular user sees the database. This is the portion of the database a user is authorized to access.

Front 7

What are the two generally accepted rules that define a relational system?

Back 7

1. Represent data in the form of two-dimensional tables such as database table, called customer.
2. Supports the relational algebra functions of restrict, project, and join.

Front 8

Define Restrict, Project, and Join.

Back 8

Restrict - extracts specified rows from a specified table. This creates a virtual table that is a subset of the original table.
Project - extracts specified attributes (columns) from a table to create a virtual table.
Join- builds a new physical table from two tables consisting of all concatenated pairs of rows, from each table.

Front 9

What are the Data Normalization rules?

Back 9

1. All nonkey attributes in the table are dependent on the primary key.
2. All nonkey attributes are independent of the other nonkey attributes.

Front 10

Name three anomalies and explain them.

Back 10

Update Anomaly - results from data redundancy in an unnormalized table.
Insertion Anomaly - results from not being able to add new info because a connection to a primary key does not exist.
Deletion Anomaly - involves the unintentional deletion of data from a table.

Front 11

What is the difference between a partitioned database and a replicated database?

Back 11

Partitioned DB can reduce the potential for disaster by having data located in several sites. Transaction processing response time is improved.
Replicated DB is where entire DB are replicated in some locations where there is a high degree of data sharing. This primarily supports read-only queries.

Front 12

What is section 302 of Sox act of 2002?

Back 12

Section 302 requires Corp. Mgt. to certify financial and other info. contained in the organization's quarterly and annual report. They also have to certify the internal controls over financial reporting. The certifying officers are required to have designed internal controls and to provide reasonable assurance as to the reliability of the FRS. Any material changes must be reported that happened in the most recent fiscal period.

Front 13

What is section 404 of Sox act of 2002?

Back 13

This section requires that Mgt. of public companies assess the effectiveness of their organization's internal controls over financial reporting. Mgt. is required to issue an annual report that address the following:
A statement of Mgt.'s. responsibility for establishing and maintaining adequate internal controls.
An assessment of the effectiveness of the company's internal controls over financial reporting.
A statement that the organizational external auditor has issued an attestation...
An explicit written conclusion as to their effectiveness.
A statement identifying the framework used by Mgt. to conduct their assessment.

Front 14

What is attestation?

Back 14

The attest function is defined as an engagement in which a practitioner is engaged to issue, or does issue, a written communication that expresses a conclusion about the reliability of a written assertion that is the responsibility of another party?

Front 15

What is an Assurance service?

Back 15

Assurance services are professional services that are designed to improve the quality of information, both financial and nonfinancial, used by decision makers. Assurance services constitute a broader concept that encompasses, but is not limited to, attestation.

Front 16

What is the existence or occurrence assertion?

Back 16

The existence or occurrence assertion affirms that all assets and equities contained in the balance sheet exist and that all transactions in the income statement actually occurred.

Front 17

What is the completeness assertion?

Back 17

The completeness assertion declares that no material assets, equities, or transactions have been omitted form the financial statements.

Front 18

What is the rights and obligations assertion?

Back 18

The rights and obligation assertion maintains that assets appearing on the balance sheet are owned by the entity and that the liabilities are reported as obligations.

Front 19

What is the valuation or allocation assertion?

Back 19

The valuation or allocation assertion states that assets and equities are valued in accordance to GAAP and that allocated amounts like depreciation expense are calculated on a systematic and rational basis.

Front 20

What is the presentation and disclosure assertion?

Back 20

The presentation and disclosure assertion alleges that financial statement items are correctly classified and that footnote disclosures are adequate to avoid misleading the users of financial statements.

Front 21

What are the five fundamental control objectives of an Operating System?

Back 21

1. The OS must protect itself from its users. User applications should not gain control of, or damage in any way the OS, thus causing it to cease running or destroy data.
2. The OS must protect users from each other.
3. The OS must protect users from themselves. A user's application may consist of several modules stored in separate memory locations, each with its own data. One module must not be allowed to destroy or corrupt another module.
4. The OS must be protected form itself.
5. The OS must be protected from its environment. In the event of a power failure or other disaster, the OS should be able to achieve a controlled termination of activities from which it can later recover.

Front 22

What are some coding techniques used in Accounting systems?

Back 22

Sequential coding, Block coding, Group coding, Alphabetic coding, and Mnemonic coding.

Front 23

What are the audit implications for Sox 302?

Back 23

Section 302 also carries significant new auditor implications. In addition to expressing an opinion on Mgt.'s assessment of internal control, auditors have responsibility regarding Mgt.'s quarterly certifications of internal controls. Specifically, auditors must perform the following procedures quarterly to identify any material modifications in controls over financial reporting:
Interview Mgt. regarding any significant changes in the design of the internal controls.
Evaluate the implications of misstatements identified by the auditor.
Determine whether changes in the internal controls are likely to materially affect internal controls over financial reporting.

Front 24

What are the audit implications of Sox 404?

Back 24

Compliance with section 404 requires Mgt. to provide their external auditors with documented test results of functioning controls as supporting evidence for assertions in its report on control effectiveness. This is done by an organization's specialized SOX team. Hence, Mgt. must actually perform its own test of control before that of the auditors.

Front 25

What are some organizational structure controls?

Back 25

Segregate the tasks of transaction authorization form transaction processing.
Segregate record keeping from asset custody.
Divide transaction-processing task among individuals so that fraud will require collusion between two or more individuals.

Front 26

What does an attestation require?

Back 26

Attestation services require written assertions and practitioner's written report.
Attestation services require the formal establishment of measurement criteria or their description in the presentation.
The levels of service in attestation engagements are limited to examination, review, and application of agreed-upon procedures.

Front 27

What are the General Standards of GAAS?

Back 27

The auditor must have adequate technical training and proficiency.
The auditor must have independence of mental attitude.
The auditor must exercise due professional care in the performance of the audit and the preparations of the report.

Front 28

What are the Standards of Field Work of GAAS?

Back 28

Audit work must be adequately planned.
the auditor must gain a sufficient understanding of the internal control structure.
The auditor must obtain sufficient, competent evidence.

Front 29

What are the Reporting Standards of GAAS?

Back 29

The auditor must state in the report whether financial statements were prepared in accordance to GAAP.
The report must identify those circumstances in which GAAP were not applied.
The report must identify any items that do not have adequate informative disclosures.
The report shall contain an expression of the auditor's opinion on the financial statements as a whole.

Front 30

What are the responsibilities of the Database Administrator?

Back 30

The duties of the DBA fall into the following areas: database planning, database design, database implementation, database operation and maintenance, and database change and growth.