Controls and AIS Flashcards
(6 cards)
What are internal controls?
safeguard assets
Types of internal control
general control
- make sure information system is stable and well-managed
Application
- prevent, detect and correct transaction errors and fraud
Functions of internal control
- preventative controls
- deter problems before they arise
segregation of duties
hiring quality staff
controlling physical access to assets - detective controls
- duplicated checking of calculations
- reconciling bank statements
- monthly trial balances - corrective controls
- files backup
data entry validation
exception incident alerts
What is foreign corrupt practices?
prevent companies from bribing foreign officials to obtain business
What is the Sarbanes Oxley Act
prevent financial statement fraud
What are the SOX changes to the professional accounting practices?
- created a board to control auditing professional standards
- partner with international securities exchange commission
- new rules for auditors
- must be on board of directors and a financial expert
- CEO must certify the fair accuracy of financial statements
- statement to declare management is responsible for maintaining internal control system