AIS CH18

What is the General Ledger and Reporting System process?

• update general ledger

• post adjusting entries

• prepare financial statements

• produce managerial reports

What are Threats Throughought General Ledger and Reporting Cycle?

1.Inaccurate or invalid general ledger data

2. Unauthorized disclosure of financial statement

3. Loss or destruction of data

What are Threats to Update General Ledger?

1. Inaccurate updating of general ledger

2. Unauthorized journal entries

What are controls to Innaccurate updating of general ledger?

• data processing integrity controls

• Reconciliation and control reports

• audit trail creation and review

What are controls to unauthorized journal entries?

• Access controls

• reconciliations and control reports

• Audit trail creation and review

What are the different types of adjusting entries?

• Accruals

• Deferalls

• Estimates

• Revalations

• Corrections

What are Revelations?

entries made to reflect differences between actual and recorded value of an asset or change in accounting principle

What are Corrections?

Entries made to counteract effects of errors found in general ledger

What are Threats to Post Adjusting Entries?

1.Inaccurate adjusting entries
2. Unauthorized adjusting entries

What are controls to Inaccurate adjusting entries?

• data processing entry controls )(

• spreadsheet error protection controls

• standard adjuisting entries

• reconciliations and control reports

• audit trail creation and review

What are Threats to Prepare Financial Statements Produce Managerial Reports?

1. Inaccurate financial statements

2. Fraudulent financial reporting

3. Poorly designed reports and graphs

What are controls for inaccurate financial statements?

• processing integrity controls

• use of packaged software

• training and experience in applying IFRS & XBRL

• Internal audits

What are controls to fraudulent financial reporting?

• Internal Audits

What are controls to poorly designed reports and graphs?

• responsibility accounting

• Balanced scorecard

• training on proper graph design

Components of a balenced scorecard are

• financial

• customer

• internal operations

• innovation and learning

What is a flexible budget?

budget formula based upon level of activity

Managerial reports and evaluating performance includes

• responsibility accounting

• flexble budget

• balenced scorecard

• graphs

What is the Threat to Inventory?

Inventory theft

What are the controls to inventory theft

SEGREGATION OF DUTIES - custody from recording and authroization of removal

restrict access to inventory mastery data

periodic physical counts and reconcialtion to recoreded quantities