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Controls and AIS Flashcards

(6 cards)

1
Q

What are internal controls?

A

safeguard assets

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2
Q

Types of internal control

A

general control
- make sure information system is stable and well-managed

Application
- prevent, detect and correct transaction errors and fraud

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3
Q

Functions of internal control

A
  1. preventative controls
    - deter problems before they arise
    segregation of duties
    hiring quality staff
    controlling physical access to assets
  2. detective controls
    - duplicated checking of calculations
    - reconciling bank statements
    - monthly trial balances
  3. corrective controls
    - files backup
    data entry validation
    exception incident alerts
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4
Q

What is foreign corrupt practices?

A

prevent companies from bribing foreign officials to obtain business

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5
Q

What is the Sarbanes Oxley Act

A

prevent financial statement fraud

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6
Q

What are the SOX changes to the professional accounting practices?

A
  1. created a board to control auditing professional standards
  2. partner with international securities exchange commission
  3. new rules for auditors
  4. must be on board of directors and a financial expert
  5. CEO must certify the fair accuracy of financial statements
  6. statement to declare management is responsible for maintaining internal control system
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