Study Notes Acct 311 Final Exam

Chapter 6 Payroll and Fixed Assets systems

As with the previous transaction processing chapters you should know the following:
1) The departments (functions) that constitute the systems
2) The key activities of the departments (functions)
3) The information (document(s)) that trigger activities
4) The risks associated with the systems
5) The controls specific to the system that reduce the risks
Chapter 7
Traditional manufacturing problems cost accounting issues
Documents in Batch process: p. 301
Control issues p. 312 314
Elements of a world class company
Principles of lean manufacturing
Value stream mapping
MRP, MRPII, ERP

Chapter 8
Financial Reporting System:
Understand the financial reporting process as indicated in figure 8-4
Know the control issues
XBRL terminologies
Management Reporting System:
Factors that influence MRS. Management principle, management function, level, and
decision type
Responsibility accounting (page 370 374 NOT ON EXAM)
Behavioral considerations
Chapter 9
Flatfile problems
Elements of the Database Environment
Key segregation of duties
Associations and Cardinality
How to link tables in a 1:1, 1:M, and M:M association
Anomalies caused by unnormalized data.
Structural dependencies (review that section of the appendix)
The normalization process (1st NF, 2nd NF, 3rd NF) 436
Techniques for distributing databases

Chapter 15
Know the key feature of SOX 302 and 404
Understand relationships in figure 15-1
IT Governance:
Know organization structure issues, risks, and controls.
Centralized v distributed
Computer center control definitions
You do not need to know the audit objectives and audit procedures.
Disaster Recovery Planning
Key features of the DRP
Second site backup
Critical applications
DRP Team
Appendix
Attest v assurance
What services auditors cannot render attest clients
External v internal auditing
Audit committee role
Understand concept of management assertions
Components of audit risk
Relationship between tests of controls and substantive tests
1.

Section 302 requires that corporate management (including the CEO) certify
quarterly and annually their organizations internal controls over financial
reporting. The certifying officers are required to:
a. have designed internal controls.
b. disclose any material changes in the companys internal controls that
have occurred during the most recent fiscal quarter.

2.

Section 404 requires the management of public companies to assess the

effectiveness of their organizations internal controls over financial reporting
and provide an annual report addressing the following points: 1) A
statement of managements responsibility for establishing and maintaining
adequate internal control. 2) An assessment of the effectiveness of the
companys internal controls over financial reporting. 3) A statement that the

organizations external auditors has issued an attestation report on

managements assessment of the companies internal controls. 4) An explicit
written conclusion as to the effectiveness of internal control over financial
reporting. 5) A statement identifying the framework used by management to
conduct their assessment of internal controls.