QUIZ 2 Flashcards
(62 cards)
primary recipients of financial statement information are _______ such as _______
external users
stockholders, creditors, and government agencies
Is the Internet standard specifically designed for business reporting and information exchange.
XBRL(Extensible Business Reporting Language)
Is a freely available and global standard for exchanging business
information.
XBRL(Extensible Business Reporting Language)
________ is the financial and
operational business reporting offshoot of Extensible Markup Language
(XML)
Extensible business reporting language (XBRL)
BENEFITS OF XBRL
● Investors will have more time for analysis and insight.
● The influence of XBRL in the financial reporting chain is such that regulatory reporting agencies like the Security Exchange Commission (SEC) are able to receive financial information faster, and hopefully detect and prevent fraud.
The entity should be available to classify the important activities, particularly for economic operations.
Transaction Authorization
In transaction authorization, documentation should be ______
complete, accurate, and in accordance with the structures and policies of the management.
The task of updating the general ledger must be
separate from all accounting and asset custody responsibility within the organization.
Segregation of duties
Individuals with access authority to GL accounts should not:
● Have record-keeping responsibility for special journals or subsidiary ledgers.
● Prepare journal vouchers.
● Have custody of physical assets.
Unauthorized access to the GL accounts can result in
errors, fraud, and misrepresentations in financial statements.
Access Controls
______ must undergo an audit trail because it facilitates error prevention and correction when the data files are conveniently and logically organized.
Accounting records
Management Reporting System
● Provides a formal means for monitoring the function of internal controls.
● Applications are discretionary.
● Produces the financial and nonfinancial information needed by management
to plan and control its business.
Factors That Influence the MRS
-Management Principles
-Management function, levels, and decision type
-Problem Structure
-Types of management reports
-Responsibility accounting
-Behavioral Considerations
● Management structures the firm around the tasks it performs rather than around individuals with unique skills.
● It allows specification of the information needed to support the tasks
Formalization of tasks
● Responsibility is an individual’s obligation to achieve desired results.
● Authority is an individual’s power to make decisions within the limits of that responsibility.
● Managers delegate responsibility and authority downward to subordinates.
Responsibility and authority
● The number of subordinates directly under the manager’s control.
● Detailed reports for managers with narrow spans of control.
● Summarized information for managers with broad spans of control.
Span of controls
● Managers should limit their attention to potential problem areas.
● Reports should focus on changes in key factors that are asymptomatic of potential problems.
Management by exception
Management Principles
-Formalization of tasks
-Responsibility and authority
-Span of Controls
-Management by exception
Strategic planning
Top Management
Tactical Planning
Middle Management
Operational control
Operations Management
reflects how well the decision maker understands the
problem.
Problem Structure
provide information to solve problems that users have
anticipated.
Programmed reports
reports designed and created on an “as needed” basis as situations arise that require new information needs.
Ad hoc reports
