AIS - CH 10

Analytical Review

Examining relationships between data sets to identify unusual trends or abnormalities.

Application Controls

Ensure accuracy, completeness, validity, and authorization of data in application programs. Contrast with general controls.

Audit Committee

Independent board members overseeing financial reporting, compliance, internal control, and auditors.

Authorization

Restricting access and actions of authenticated users.

Background Check

Verifying a prospective or current employee’s credentials and history.

Belief System

Communicates company values and vision to inspire employees.

Boundary System

Encourages ethical behavior by setting behavioral limits.

Change Management

Ensures smooth and efficient system changes.

Chief Compliance Officer (CCO)

Oversees compliance with SOX and other regulations.

Collusion

Cooperation to bypass internal controls.

COSO

A group of professional organizations that developed internal control frameworks.

Computer Forensics Specialists

Experts in preserving and analyzing digital evidence.

Computer Operators

Ensure proper data input, processing, and output.

Computer Security Officer (CSO)

Monitors system security and reports misuse.

Control Activities

Policies and procedures to ensure control objectives are met.

Control Environment

Organizational culture influencing internal control.

COBIT

Framework for IT security and control benchmarking.

Corrective Controls

Identify and fix problems and recover from errors.

Data Control

Manages data flow, input/output reconciliation, and error handling.

Data Processing Schedule

Timetable for data processing tasks.

Detective Controls

Identify issues not prevented, e.g., reconciliations.

Diagnostic Control System

Tracks performance against goals for feedback.

Digital Signature

Encrypted hash for data integrity.

Expected Loss

Product of potential loss and likelihood of a threat.

Exposure/Impact

Potential dollar loss from a threat.

FCPA

Prevents bribery of foreign officials and mandates internal controls.

Forensic Investigators

Fraud specialists with law enforcement or certification backgrounds.

Fraud Hotline

Anonymous reporting channel for fraud.

General Authorization

Routine transaction handling without special approval.

General Controls

Ensure system stability and management. Contrast with application controls.

Inherent Risk

Risk level without internal controls.

Interactive Control System

Engages managers in strategic decision-making.

Internal Control—Integrated Framework (IC)

COSO framework for evaluating internal controls.

Internal Controls

Processes ensuring control objectives are met.

Likelihood/Risk

Probability of a threat occurring.

Network Managers

Maintain proper network operations.

Neural Networks

Systems mimicking brain learning via interconnected processors.

Policy and Procedures Manual

Guide for business practices and transaction handling.

Postimplementation Review

Evaluates new systems after implementation.

Preventive Controls

Deter issues before they arise.

Programmers

Develop and test software based on analyst designs.

Project Development Plan

Outlines project requirements and execution.

Project Milestones

Progress checkpoints comparing actual vs. estimated timelines.

PCAOB

Regulates auditing profession under SOX.

Residual Risk

Remaining risk after controls are applied.

Response Time

Time between query and system response.

Risk Appetite

Acceptable risk level aligned with strategy.

SOX

Enhances transparency, internal controls, and fraud prevention.

Security Management

Protects systems from threats.

Segregation of Accounting Duties

Divides authorization, custody, and recording.

Segregation of Systems Duties

Divides authority in IT functions.

Specific Authorization

Special approval for certain transactions.

Steering Committee

Oversees information systems planning and execution.

Strategic Master Plan

Long-term project roadmap.

System Performance Measurements

Metrics like throughput, utilization, and response time.

Systems Administrators

Ensure smooth system operations.

Systems Analysts

Identify user needs and design systems.

Systems Integrator

External party managing system development.

Threat

Potential adverse event affecting AIS or the organization.

Throughput

Useful work done or good units produced over time.

Users

Individuals who interact with the system for transactions and outputs.

Utilization

Percentage of time a system is actively used.