30 Questions
Which cycle involves planning, scheduling, and control of the physical product through the manufacturing process?
Conversion cycle
What type of transaction is reflected in the accounts and is measured in monetary terms?
Monetary transaction
Which type of journal records specific classes of transactions that occur in high frequency?
Special journals
What is the time lag between the two components in the revenue cycle due to?
Credit relations with customers
Which type of accounting records is used to capture and formalize transaction data needed for transaction processing?
Source documents
Which subsystem of the expenditure cycle involves the acquisition of goods?
Physical component
What does the cost accounting system monitor in the conversion cycle?
Flow of cost information related to production
Which type of ledger shows activity for each account listed on the chart of accounts?
General ledger
What are product documents the result of?
Transaction processing
Which type of system uses journals, ledgers, and source documents as accounting records?
Manual system
What type of databases were used in later legacy systems?
Hierarchical and network databases
What does batch processing involve?
Grouping similar transactions over time for processing together
What is the purpose of a recovery program in database backup procedures?
To create a pre-update version of the master file
What is the advantage of batch processing?
Increases efficiency by grouping large numbers of transactions into batches
Why do many AIS use batch processing?
AIS processing is characterized by high-volume, independent transactions
What is the primary function of the Sort Run in batch processing?
Places the transaction file in the same order as the master file using a primary key
What is the characteristic of real-time systems in terms of processing transactions?
Process transactions individually at the moment the economic event occurs
What is the main reason why batch processing may be done using real-time data?
High-volume checks can be processed during off-peak computer time
What does the Edit Run do in batch processing?
Identifies clerical errors in the batch and places them into an error file
What type of environment did data storage systems in legacy systems promote?
Single-user environment that discourages information integration
Which documentation technique represents the relationship between entities in a system using the REA model?
Entity Relationship Diagrams
Which documentation technique uses symbols to represent the processes, data sources, data flows, and entities in a system and does not represent the physical system?
Data Flow Diagrams
Which type of flowchart is used to illustrate the relationship among processes and the documents that flow between them and contains more details than data flow diagrams?
Document Flowcharts
Which flowchart type is used to represent the relationship between the key elements of computer systems, depicting the type of media being used?
System Flowcharts
When auditing a computer-based system, what serves as the physical trail due to the less observability of the audit trail?
Data entry and computer programs
Which technique is commonly used for tracing an audit trail in accounting and involves verifying details with a third party?
Sampling and confirmation
In auditing, what does the AR control figure need to be reconciled with?
AR subsidiary account total
What do modern accounting systems use for data storage and what do they consist of?
Relational database tables; master files, transaction files, reference files, and archive files
What are legacy systems still used for in some firms' data processing?
Certain aspects of data processing
What are the five common documentation techniques essential in a computer-based environment?
Entity Relationship Diagrams, Data Flow Diagrams, Document Flowcharts, System Flowcharts, and Program Flowcharts
Study Notes
Audit Trail and Documentation Techniques in Accounting Information Systems
- The AR balance in the balance sheet should be compared with the master file AR control account balance during an audit.
- The AR control figure needs to be reconciled with the AR subsidiary account total.
- Sampling and confirmation are common techniques used for tracing an audit trail in accounting.
- In a computer-based system, the audit trail is less observable, and the data entry and computer programs serve as the physical trail.
- Computer-based systems store data in magnetic files and consist of master files, transaction files, reference files, and archive files.
- Documentation in a computer-based environment is essential for various reasons, and five common documentation techniques are Entity Relationship Diagrams, Data Flow Diagrams, Document Flowcharts, System Flowcharts, and Program Flowcharts.
- The Entity Relationship Diagram (ERD) is a widely used documentation technique that represents the relationship between entities in a system using the REA model.
- Data Flow Diagrams (DFD) use symbols to represent the processes, data sources, data flows, and entities in a system and do not represent the physical system.
- Document Flowcharts illustrate the relationship among processes and the documents that flow between them and contain more details than data flow diagrams.
- System Flowcharts are used to represent the relationship between the key elements of computer systems, depicting the type of media being used.
- Program Flowcharts illustrate the logic used in programs and use symbols to represent the logical process.
- Modern accounting systems are client-server based, process transactions in real time, use relational database tables, and have a high degree of process integration and data sharing. However, some firms still use legacy systems for certain aspects of their data processing, and accountants need to understand these legacy systems.
Test your knowledge of audit trail and documentation techniques in accounting information systems with this quiz. Explore concepts such as reconciliation, sampling, documentation techniques like Entity Relationship Diagrams and Data Flow Diagrams, and the impact of computer-based systems on auditing practices.
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