Accounting Information Systems Chapters 15-17
1. Adherence to a code of ethical behavior Accountants adhere to these – accountant are
held to a certain standard of behavior and are expected to follow the rules
2. adverse opinion this means the statements are not prepared in accordance with GAAP
3. applied ethics this involves examining specific controversial issues
4. arbitrary information analysis and organization too much information coming in too fast
impairs a person’s ability to organizae and classify information; overlapping and
inconsistent categories; difficulty seeing the “big picture” – what symptom or effect of
information overload does this describe?
5. assertions by management that must be evaluated as part of auditing the following
factors: existence or occurrence; rights and obligations; valuation and allocation;
completness; and presentation and disclosure – are part of what
6. an audit report or opinion the auditing of a company culminaates with the issuance of
what?
7. Auditing the area of accounting associated with AIS evaluation; it is a methodical
examination or review of a condition or situation
8. auditing standards the Auditing Standards Board (ASB) of the American Institute of
Certified Public Accountants (AICPA) identified 10 whats that govern external audits by
CPA’s
9. Autonomy of Practice refers to independence of self-sufficiency; “independence of
mind” is an important characterisitc for accounting professionals; historically the
accounting profossion was almost completely independent and self-regulating, although
the PCAOB has given less what to auditors, the profession as a whole remains relatively
self-suffiicient
10. Bounded rationality means that people will inherently avoid uncertainty and rely on
proven “rules” for problem solving whenever they can: for example: a friend tells you that
there is a better route to get to school than the way you usually go, under this concept you
will take the way you usually go–avoiding uncertainty
11. Causes of Information Overload Causes: Personal Factors, Information Characteristics,
Task and Process parameters, organizational design, and information technology
12. Characteristics of a Professional The following factors (as given by Dr. Nancy Bell):
communicates effecitvely; thinks rationally, logically, and coherently; appropriately uses
technical knowledge; integrates knowledge from many disciplines; exhibits ethical
professional behavior; recognizes the influence of political, social, economic, legal and
regulatory forces; and actively seeks additional knowledge – are what?
13. Common internal controls the following factors: adequate documentation of business
processes; background checks for prospective employees; comprehensive employee
training; document matching; multiple signatures for checks over a specified threshold;
physical safeguards for assets; regular bank reconciliations; separation of duties – these
factors are part of
14. completness assertions by management that must be evaluated as part of auditing – are
the financial statements (including footnotes) complete? were all the transactions recorded
in the right period?
15. Complex Skill Accounting requires the use of judgement, and also relies on fairly
complex computations in some areas (such as pension accounting); although some
accounting software is straightforward and easy to use, some of our IT tools are reasonalby
sophisticated as well
16. Compliance Audit Governmental and not-for-profit organizations are subject to what
type of audits? GNFP’s are subject to very strict government rules and regulations, many
of which are contained in the yellow book published by the government accountability
office (GAO); this type of audit determines whether or not a GNFP is following the rules
and regulations in the yellow book
17. Consistency this is one of the qualitative characteristics of accounting information in
the conceptual framework; it is also one of the reporting standards; the audit report must
explain any differences between the current period’s application of GAAP and the prior
application
18. Countermeasures for Information Overload examples include: allow more time to
complete important tasks; compress, aggregate, categorize, and structure information;
create small, self-contained tasks rather than trying to do everything at once; define
decision models and rules for common decision contexts; handle information as it comes
to you-don’t put it off!; improve personal information management; improve personal time
management skills and techniques
19. definition of ethics includes “rules or standards governing the conduct of a person or
the members of a profession”
20. disclaimer this of opinion denotes that the auditors could not tell if the statements were
not prepared in accordance with GAAP
21. Disclosure another commonality between GAAS and the conceptual framework;
financial statement users can assume the disclosures in the financial statements are
appropriate unless the audit opinion specifically states they are not
22. the eight-step model for dealing with ethical dilemmas this includes: (1) identify the
facts; (2)identify the ethics issues and the stakeholders involved (3) define the norms,
principles, and values related to the situation (4) identify the alternative courses of action
(5) evaluate the consequences of each possible course of action (6) decide the best course
of action consistent with the norms, principles and values (7) if appropriate, discuss the
alternative with a trusted person to help gain greater perspective regarding the alternatives
(8) reach a decision as tot he appropriate course of action
23. envisioning Falls under which step for better thinking – limitations of endorsed solution
(knowledge sharing requires a change in organizational culture, pilot testing in a subset of
the organization may lead to rumors and later bias against knowledge sharing); skills
integration (once the pilot test is complete managers could use the information to spread
the knowledge sharing project throughout the firm)
24. ethical issues these include: making realistic, unbiased decisions, using AIS data
appropriately, maintaining strong internal control over cash and other liquid assets, and
paying for software and other forms of information technology
25. Evidence this speaks to the importance of having an objective, reasonable basis for
