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AC 389 Test 1

Terms in this set (94)

Accounting
An information system for the measurement and reporting of the transformation and resources into goods and services and the sale or transfer of these goods and services to customers
Data
FAW FACTS collected, recorded, stored, and processed by a system (e.g- a list of sales transactions)
Information
PROCESSED DATA that provides meaning and improves decision making (e.g- total sales versus budgeted sales, total sales versus prior period sales)
Relevant
needed to make decision, reduces uncertainty
Reliable
free from bias or error
complete
does not omit important aspects of events or activities
timely
provided in time to make decision
understandable
presented in meaningful manner and in a useful format
verifiable
2 independent people produce same conclusion
accessible
available when needed
Revenue Cycle
give goods/service--> get cash
Expenditure Cycle
get goods/service--> give cash
Production cycle
give labor/raw materials--> get finished goods
Payroll Cycle
give cash--> get labor
Financing Cycle
Give Cash--> get cash
Information Technology (IT)
the computers and other electronic devices used to store, retrieve, transmit and manipulate data

effectively filter and condense information
Business Processes
a set of related, coordinated, and structured activities and tasks
System
A collection of components organized to accomplish a specific function or set of functions
Accounting Information System (AIS)
a collection of data and processing procedures that creates needed information for its users efficiently and effectively
Source Document
document used to capture transaction data at its source-when the transaction takes place (ex- PO, sales order, employee time cards)
Turnaround Documents
example: utility bill sent to a customer, returned with customer's payment, and read by special scanning device when returned
Source Data Automation
Collects transaction data in machine-readable form at the time and place of origin (ex: ATMs)
Source Document
Used to capture data when transaction occurs
Audit Trail
Can trace path of transaction
Mnemonic Code
gives visible clues concerning the objects they represent (eg.- S,M,L,XL)
Sequence Code
assign numbers or letters in consecutive order
Block Codes
sequential codes in which blocks of numbers are reserve for particular uses
Group Codes
combines tow or more subcodes
master files
Data is stored in ____________ __________ or transaction files
batch processing
Updating periodically (ex.-data)
real-time processing
database is updated while the transaction is taking place
Document
records of transaction or other company data (eg.- sales invoice)
Report
used to help employees to control operation activities and help managers create business strategies (eg- monthly sales)
Query
used to help with problems that need answers immediately (question for specific info)
Enterprise Resource Planning
What does ERP stand for?
1. Integrated enterprise-wide
2. Data captured once
3. Greater visibility/monitoring
4. Improve access control
5. Standardization
6. Increases productivity
Enterprise Resource Planning (ERP) Advantages
1. Costly
2. Significant implementation time
3. Customization is difficult
4. Complexity
5. User resistance
Enterprise Resource Planning (ERP) Disadvantages
1. IT system must be compatible with AIS
2. May have to provide guidance on hardware/software purchases
3. May have to evaluate the extent to which an IT system can be relied upon
4. May have to evaluate the efficiency and effectiveness of an IT system
5. IT changes can result in changes to accounting processes
6. CPA and CMA exams require IT knowledge
Why should you understand IT?
Primary Memory
used to temporarily save applications and work space (ex- Random Access Memory aka RAM)
Microprocessors
The Arithmetic Logic Unit component performs arithmetic and logical calculations

Control Unit (Supervises Processing)

Ex- like Pentium or Celeron Chips
processor speed
Accounting functions are more constrained by input/output speed than by ____________ _____________.
Wide Area Network
A network that enables access to resources and sharing of technology and knowledge in a widely dispersed area (even across countries)
Client/Server Computing
Client/server applications distribute (share) data and software among the server and client (PC) computers of the system
Wireless Data Communications
Wireless Fidelity (Wi-Fi) transmits voice signals (digital data) over wireless communication channels
Radio Frequency Identification (RFID)
Computer Chips with antennas
Computer Administrator
Windows 8 is an example of a __________ _____________
Application Software
Microsoft office products such as Excel, Access, Word, Power Point... these are all examples of _________________ ___________________
Programming Languages
C++, Java, and Visual Basic are all examples of ___________________ __________________
Documentation
__________________________ is a vital part of any AIS, may be viewed as a roadmap
physical
Document Flowcharts trace the _____________ flow of documents through an organization
weaknesses
Accountants use document flowcharts when analyzing a current system for ____________________ in controls and reports
System Flowcharts
Depicts the logical flow of data through an AIS, creates an audit trail
Program Flowcharts
Outlines the processing logic and order for each part of a computer program
NATURAL & Political
Wildfires and earthquakes are what type of threat?
Software errors & equipment malfunction
Power outages are what type of threat?
Unintentional Acts
Accidents caused by human carelessness, failure to follow established procedures, and poorly trained or supervised personnel
Innocent errors or omissions
Lost, destroyed, or misplaced data
Logic errors

ex- someone entering the wrong number in
Intentional Acts
Something that is done on purpose

ex- taking/stealing money
Cash
What is the easiest thing to use once you steal it?
Unintentional Acts
Which type of threat is the greatest risk to information systems and causes greatest dollar loss?
Fraud
an act, deceitful
any means used to gain an unfair advantage over another person, including:
-false statement, representation, or disclosure
-material fact which induces victim to act
-intent to deceive
-victim relied on misrepresentation
-injury or loss was suffered by victim
Fraudulent financial reporting
want people to think the company is good when it is not
pressure, opportunity, rationalization
The three conditions for a fraud triangle
Pressure
--A Condition for Fraud--
Person's incentive or motivation for committing fraud
Employee
-Financial, Lifestyle, Emotional
Rationalize
--A Condition for Fraud--
they don't think of themselves as criminals
-justify behavior
-attitude that rules don't apply
-lack personal integrity
Commit, Conceal, & Convert to personal gain
--Conditions for Fraud--
Opportunity to do what 3 things?
computer fraud
illegal act that requires computer knowledge/use to perpetuate
Input
Type of Computer Fraud
-to alter/falsify computer info, simplest and most common
Processing
Type of Computer Fraud
-unauthorized system use, including theft or computer time and services
Computer Instruction
Type of Computer Fraud
-missing or altered so fraud is allowed
Data
Type of Computer Fraud
-can steal data and assets
Output
Type of Computer Fraud
-steal what you don't have access to
Hacking
Unauthorized access or use of computer or device
Social Engineering
Trick people to gain access to information
Malware
software used to do harm
Hijacking
Gaining control of computer to carry out illicit activities without the user's knowledge
Botnet
robot network, powerful network of hijacked computers called zombies
Denial of service attack
Attacker sends so many information requests to a target computer system that the target cannot handle them successfully and typically crashes
Spamming
sending of unsolicited multiple commercial electronic messages
Spoofing
a technique intruders use to make their network or internet transmission appear legitimate to a victim computer or network

immitating an actual site
Man in the Middle
Hacker places themselves between client and host to intercept communications
Data diddling
interfering or changing data as it is going into the system aka changing hours worked before submitting it
Salami technique of round down fraud
instructing the computer to round down all interest calculations by two decimal places. The fraction of a cent rounded down on each calculation is put into the programmer's account
social engineering
techniques used to get people to comply with what the bad guy wants
Pretexting
occurs when someone deceives by pretending to be someone else aka Nigerian price scam
Posing
creating a seemingly legitimate business, collecting personal information while making a sale, and never delivering the product

fake business
phishing
An attack that sends an email or displays a Web announcement that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information

IRS notices
pharming
Reroutes requests for legitimate websites to false websites
URL hijacking
Redirecting a user to a fictitious website based on a misspelling of the URL.
Scavenging
going through people's trash
shoulder surfing or eavesdropping
looking over someone's shoulder and getting their passwords
Spyware
software that enables a user to obtain covert information about another's computer activities by transmitting data covertly from their hard drive.
Ransomware
Software that encrypts programs and data until a ransom is paid to remove it.
Trojan Horse
a program that appears desirable but actually contains something harmful

like a worm or virus
Keylogger
a malicious program that records keystrokes.
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