Core accounting information systems concepts including internal controls, ERP systems, and transaction data flow.
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- What is the COSO internal control framework?
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A widely accepted framework that defines five components: control environment, risk assessment, control activities, information and communication, and monitoring- What is the primary purpose of internal controls in an accounting system?
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To safeguard assets, ensure accurate financial reporting, and promote operational efficiency and compliance with regulations- Define preventive controls.
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Controls designed to stop errors or irregularities from occurring in the first place- Define detective controls.
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Controls designed to identify and correct errors or irregularities after they have occurred- Define corrective controls.
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Controls implemented to fix problems identified by detective controls and prevent recurrence- What is an ERP system?
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An integrated software system that consolidates business processes and data across an organization into a single database- What are the main modules typically found in an ERP system?
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Financial, human resources, inventory management, supply chain, sales and distribution, and production/manufacturing- What is a key advantage of implementing an ERP system?
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Integration of data across departments eliminates silos, reduces redundancy, and provides real-time information- What does real-time posting mean in an ERP system?
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Transactions are recorded and immediately updated in the system without delay, ensuring current financial data- What is a master file in an ERP system?
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A database table containing relatively permanent information such as customer, vendor, or employee records- What are the four main phases of the transaction processing cycle?
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Initiation, authorization, recording, and reconciliation- Define segregation of duties.
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The practice of dividing tasks among different people to reduce the risk of error or fraud- What are the three key incompatible duties that should be segregated in accounting?
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Authorization, recording, and custody of assets, plus reconciliation- What is an audit trail in an accounting information system?
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A record of all transactions and system activities that allows tracking of how data was entered, modified, and processed- What is FIFO in inventory management?
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First In, First Out, an inventory valuation method where oldest items are assumed to be sold first
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