Control and Accounting Information System - Ch 7 Romney

7/24/2019 Control and Accounting Information System - Ch 7 Romney

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Copyright 2015 Pearson Education, Inc.

Control and Accounting Information ystems

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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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Control and Accounting Information System - Ch 7 Romney

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