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Requirements:
a. Describe the role that each of the following areas has in the establishment,
maintenance, and evaluation of internal control:
The audit committee must be willing to challenge the internal auditors as well
as management, when necessary.The committee should consist of people
who outsiders not associated with the families of executive management nor
former officers, and at least one member of the audit committee must be a
“financial expert.”
Chapter 3
Requirement: for each of the three control categories listed, provide two
specific controls and explain how each contributes to ensuring the reliability of
data.
INPUT CONTROL
RANGE CHECK- this control can examine the pay rate field of all payroll
records to ensure that they fall within this range.
MISSING DATA CHECK- this edit identifies blank or incomplete input
fields that should contain data that are required to process the transaction.
PROCESSING CONTROL
BATCH CONTROL- used to manage the flow of high volumes of
transactions through batch processing systems. The objective of this is to
reconcile system output with the input originally entered into the system.
RUN-TO-RUN CONTROLS- use the values in the batch control record to
monitor the batch as it moves from one programmed procedure to another.
This ensures that each run in the system processes the batch correctly
and completely.
OUTPUT CONTROL
OUTPUT SPOOLING- output devices such as line printers can become
backlogged, this can cause bottleneck and adversely affect system
throughput. To ease this burden, applications are often designed to direct
their output to a magnetic disk file rather than print it directly. This is called
spooling.
END-USER CONTROL- once in the hands of the user, output reports
should be examined for correctness. errors the users detects should be
reported to the appropriate IT management. such errors may be
symptoms of an improper system design , incorrect procedures, errors
accidentally inserted during system maintenance, or unauthorized access
to data file or program. once a report has served its purpose, it should be
stored in a secure location until its retention period has expired and then it
should be shredded.
Chapter 7
Review Questions
7) The document triggers the beginning of the cost accounting process for a
given production run is when the production planning and control
department sends a copy of the original work order to the cost accounting
department.
10) The receipt of the last move ticket for a particular batch signals the
completion of the production process and the transfer of products from
WIP to the FG inventory.
14) It means that because of setup cost constraints, firms tend to overproduce
inventories in large batches to absorb the allocated costs and create the
image improved efficiency. The true cost of this dysfunctional activity is
hidden in the excess’ inventories.
15) The goal of lean production is improved efficiency and effectiveness in
every area, including product design, supplier interaction, factory
operations employee management, and customer relations.
16) Activities describes the work performed in a firm, while Cost objects are
the reasons for performing activities.
20) Value stream includes all steps in the process that are essential to
producing a product.
Chapter 8
CHAIRMAN
PRESIDENT
Academic
Quality
Registrar Student Guidance
Assurance NSTP
Affairs
Officer
Coordinator
Problem 9: Decision Level
Examining whether
production levels are
within a predicted
range
Making purchasing
arrangements with a
new supplier
Increasing production
capabilities this year by
purchasing a more
efficient piece of
machinery
Insights: