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Mid semester cheat sheet...

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Support Activities: a) Firm Infrastructure b) Human Resources c) Technology d) Purchasing Primary Activities: a) Inbound Logistics b) Operations c) Outbound Logistics d) Marketing and Sales e) Service Business Cycle: Revenue: Customer details, patient histories, services provided, booking system details, credit details, payment histories, accounts receivable etc Expenditure: Purchase order details, purchase requisition details, vendor details, stock records, accounts payable etc Data are facts that are collected, recorded, stored and processed by an information system. Information is the data that have been organized & processed to provide meaning to a user. Quantitative measure: Benefits of information – Cost of producing information = Value of information

2. Clerk batches and totals source documents on a batch header before sending them to the data entry section. 3. Data Entry clerks enter totals prior to data entry. 4. Computer calculates the control totals progressively. 5. Control totals are verified by the computer. 6. Edit report printed and reconciled to source documents if there is/are discrepancies. 7. Master files update if there is no discrepancy. Data Process Cycle:  Data Input: Capturing transaction data into system based on ERA activity  Data Storage: Data are organised and stored. Manual filing and relational database  Data Processing: Data are processed into information for decision making Data Processing methods/ system a) Offline Batch Processing b) Online Batch Processing & Real Time  Information output: Soft or hard copy of reports  Enterprise Resource Planning (ERP) a) Pros: Single database, Highly integrated, Improve monitoring capabilities, Better access control

7 Characteristics of useful information: 1. Relevance: The information will reduce uncertainty by assisting in predicting what will happen or confirming what has happened. 2. Reliability: the information is free from error or bias. 3. Completeness: All information of importance is included. 4. Timeliness: The information is received in time to make your decision. 5. Understandability: The information is presented in a way that ensures it can be comprehended and used. 6. Verifiable: Independent people would tend to produce the same information under the same circumstances. 7. Accessibility: The information is accessible when needed and available in a usable format. What is an accounts receivable aging report? A report that lists customer account balances by length of time outstanding. Why is an accounts receivable aging report needed for an audit? To determine whether the accounts receivable balance is properly valued. What is an accounts receivable aging report used for in normal company operations? Evaluating current credit policies, Determining appropriate credit limits, Allow the follow-up of outstanding amounts. What data will you need to prepare the report? Credit sales and cash collections data. What transactions will you collect the data you need to prepare the report? From the sales and cash collections transactions (after the credit limits have been captured in the Customer table). Briefly explain the major steps to be performed in a (Offline) Batch Processing system. 1. All source documents are gathered.

DFD element: a) External entities b) Data flows c) Process that transform data d) Data stores

d) Flow and miscellaneous symbols

What is a source document? A source document contains data relating to a company’s business activities. Why is it important for audit purpose? A source document can be used by auditors for verification purposes to prove that the transaction existed and occurred and is measured correctly. Database Management System a) DFD (Data Flow Diagram) Creating a database b) DML (Data Manipulation Language) Changing a database: update, insert, delete c) DQL (Data Query Language) Querying a database ERP Enterprise Resource Planning RDMS Relational Database Management System AIS Accounting Information System

Flowcharts: a) Input/Output symbols

b) Processing symbols

Relational databases offer many advantages one of which is data sharing explain what is meant by data sharing and how it offers an advantage. The data is integrated or related together through connected tables using foreign keys, including both financial and non-financial data – this means different users from different areas can access all information stored by the entity. It also enables information to be connected or related to other information from different areas, this helps in locating and sharing data between areas or departments. People are one component of an Accounting Information System what are the other five (5) components? a) Policies and procedures b) Software c) Organisations data d) Internal controls and security to protect the data e) IT infrastructure to support the software Threat: any potential adverse occurrence or unwanted event that could be injurious to either the AIS or the organization. Also referred to as an ‘negative’ event.

b) Cons: Costly, Changes to business process, Complexity Turnaround documents: It is a record of company data sent to an external party and then returned by the external party for subsequent input to the system. Turnaround documents are prepared in machine-readable form to facilitate their subsequent processing as input records. An example is a utility bill that a special scanning device reads when the bill is returned with a payment. Turnaround documents improve accuracy by eliminating the potential for input errors when entering data manually. Eg: WA’s electricity (ie Synergy) bill Source data automation: capture transaction data in machinereadable form at the time and place of their origin. Eg: ATMs used by banks, point-of-sale (POS) scanners used in retail stores, and bar code scanners used in warehouses.

c) Storage symbols

Data Processing View of Fraud: a) Input Fraud: i. Disbursement fraud  The perpetrator causes a company to: Pay too much for ordered goods; pay for goods never ordered. ii. Inventory fraud  The perpetrator enters data into the system to show that stolen inventory has been scrapped iii. Payroll fraud  Perpetrators may enter data to: Increase their salaries; create a fictitious employee; Retain a terminated employee on the records. iv. Cash receipt fraud  The perpetrator hides the theft by falsifying system input, eg: cash of $200 is received. The perpetrator records a cash receipt of $150 and pockets the $50 difference.

b) Processor Fraud  Involves computer fraud committed through unauthorized system used  Includes theft of computer time and services  Incidents could involve employee: Surfing the internet; using company’s computer to conduct personal business/ competing business. c) Computer Instructions Fraud:  Involves tampering with the software that processes company data  Modifying the software; Making illegal copies; Using it in an unauthorized manner. Eg: virus & worms d) Data Fraud  Altering or damaging a computer’s data files; Copying, using or searching the data files without authorization.  In many cases, disgruntled employee have scrambled, altered, or destroyed data files.  Theft of data often occurs so that perpetrators can sell the data. e) Output Fraud  Involves stealing or misusing system output.  Output is usually displayed on a screen or printed on paper  Fraud perpetrators can use computers and peripheral devices to create counterfeit outputs, such as cheques. Describe four phishing defences: Never follow a link from a suspicious email. Financial Institutions NEVER send requests for you to verify your account details. iii. If there are spelling & grammatical errors in the email – then that would be suspicious!! iv. If in doubt enter the wrong password. A phishing website will typically accept an incorrect password—which cues you that it is a phishing scam. Specific Fraud & Abuse Techniques i. Denial of Service Attacks  An attacker overloads and shuts down an Internet Service Provider’s email system by sending email bombs at a rate of thousands per second often from randomly generated email addresses.  May also involve shutting down a web server by sending a load of requests for the web pages.  Can cause severe economic & reputation damage to the victim. ii. Logic Bombs  A malicious program that lies idle in the system until triggered by some circumstance or a particular time.  EXAMPLE: A programmer places a logic bomb in a payroll application that will destroy all the payroll records if the programmer is terminated. iii. Trojan Horses  Malicious code hidden within an ‘innocent program’ such as a game. iv. Salami Technique  Stealing small amounts from many people. Eg Bank interest rounding amounts i. ii.

A company requires its employees to undertake training courses and wishes to keep a record of which training courses each employee has undertaken.

At the Barsus steel factory, employees have to enter their working hours on data input terminals and the job code for each project they work on. They enter the starting time and the time they stop working on each project. The payroll database is updated weekly based on the job-time tickets. All employees are paid electronically and therefore no checks are printed; instead, the payroll system deposits an employee’s net pay in the employee’s bank account. Payments are made to government tax bodies. All disbursements are accompanied by a report summarizing the disbursement. The system also produces pay stub data that is stored in a payroll transaction file that is accessible to employees over the internet. An electronic summary payroll report is created....