control and accounting information system - ch 7 romney
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Control and Accounting Information ystems
Chapter !
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Learning Objectives
# E$plain %asic control concepts and &hy computer control and security are important.
# Compare and contrast the C'(I), C'', and E*+ control frame&ors.
# -escri%e the maor elements in the internal en/ironment of a company.
# -escri%e the four types of control o%ecti/es that companies need to set.
# -escri%e the e/ents that affect uncertainty and the techniues used to identify them.
# E$plain ho& to assess and respond to ris using the Enterprise *is +anagement model.
# -escri%e control acti/ities commonly used in companies.
# -escri%e ho& to communicate information and monitor control processes inorganiations.
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Why Is Control Needed?
# Any potential ad/erse occurrence or un&anted e/entthat could %e inurious to either the accountinginformation system or the organiation is referred to
as a threator an
e/ent.
# )he potential dollar loss should a particular threat%ecome a reality is referred to as the exposureor
impactof the threat.
# )he pro%a%ility that the threat &ill happen is thelikelihood associated &ith the threat
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A Primary Objective of an AIS
# Is to control the organiation so the organiationcan achie/e its o%ecti/es
# +anagement e$pects accountants to34 )ae a proacti/e approach to eliminating system
threats.
4 -etect, correct, and reco/er from threats &henthey occur.
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Internal Controls
# Processes implemented to pro/ide assurancethat the follo&ing o%ecti/es are achie/ed34 afeguard assets
4 +aintain sufficient records4 Pro/ide accurate and relia%le information
4 Prepare financial reports according to esta%lishedcriteria
4 Promote and impro/e operational efficiency
4 Encourage adherence &ith management policies
4 Comply &ith la&s and regulations
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Fnctions of Internal Controls
# Pre/enti/e controls4 -eter pro%lems from occurring
# -etecti/e controls4 -isco/er pro%lems that are not pre/ented
# Correcti/e controls4 Identify and correct pro%lems6 correct and reco/er
from the pro%lems
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Control Frame!or"s
# C'(I)4 8rame&or for I) control
# C''4 8rame&or for enterprise internal controls9control"%ased approach:
# C''"E*+
4 E$pands C'' frame&or taing a ris"%asedapproach
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CO#I$ Frame!or"
# Current frame&or /ersion is C'(I)5
# (ased on the follo&ing principles3
4 +eeting staeholder needs4 Co/ering the enterprise end"to"end
4 Applying a single, integrated frame&or
4 Ena%ling a holistic approach
4 eparating go/ernance from management
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CO#I$% Se&arates 'overnance from
(anagement
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