Accounting information system an overview 9e bodnar and hopwood 2015 chapter 10

Processing Integrity and Availability Controls Chapter 10 Copyright © 2015 Pearson Education, Inc 10-1 Learning Objectives • Identify and explain controls designed to ensure processing integrity • Identify and explain controls designed to ensure systems availability Copyright © 2015 Pearson Education, Inc 10-2 Processing Integrity Controls • Input ▫ Forms design  ▫ Sequentially prenumbered Turnaround documents Copyright © 2015 Pearson Education, Inc 10-3 Processing Integrity: Data Entry Controls • Field check ▫ • • Limit check ▫ • Data in a field is appropriate sign (positive/negative) ▫ • • Tests numerical amount against lower and upper limits Verifies that all required data is entered Validity check ▫ Compares data from transaction file to that of master file to verify existence • Reasonableness test ▫ • Correctness of logical relationship between two data items Check digit verification ▫ Copyright © 2015 Pearson Education, Inc Input data fits into the field Completeness check ▫ Tests numerical amount against a fixed value Range check Size check ▫ Characters in a field are proper type Sign check ▫ • Recalculating check digit to verify data entry error has not been made 10-4 Additional Data Entry Controls • Batch processing ▫ Test of batch data in proper numerical or alphabetical sequence Batch totals  Summarize numeric values for a batch of input records    Financial total Prompting ▫ Sequence check  ▫ • • System prompts you for input (online completeness check) Closed-loop verification ▫ Checks accuracy of input data by using it to retrieve and display other related information (e.g., customer account # retrieves the customer name) Hash total Record count Copyright © 2015 Pearson Education, Inc 10-5 Processing Controls • Data matching • File labels • Recalculation of batch totals ▫ ▫ Two or more items must be matched before an action takes place • Cross-footing ▫ Ensures correct and most updated file is used Verifies accuracy by comparing two alternative ways of calculating the same total • Zero-balance tests ▫ • Write-protection mechanisms ▫ • For control accounts (e.g., payroll clearing) Protect against overwriting or erasing data Concurrent update controls ▫ Prevent error of two or more users updating the same record at the same time Copyright © 2015 Pearson Education, Inc 10-6 Output Controls • • User review of output Reconciliation ▫ Procedures to reconcile to control reports (e.g., general ledger A/R account reconciled to Accounts Receivable Subsidiary Ledger) ▫ • External data reconciliation Data transmission controls Copyright © 2015 Pearson Education, Inc 10-7 Availability Controls • • Preventive maintenance • Raised floor Fire suppression ▫ • Copyright © 2015 Pearson Education, Inc Procedures to restore organization’s IT function   Uninterruptible power supply (UPS) Patch management and antivirus software Copies all changes made since last full backup Disaster recovery plan (DRP) ▫ • Copies only items that have changed since last partial backup Differential backup  Air conditioning Surge protection Incremental  Use of redundant components Data center location and design ▫ ▫ ▫ ▫ ▫ Backup procedures ▫ Fault tolerance ▫ • • Cold site Hot site Business continuity plan (BCP) ▫ How to resume all operations, not just IT 10-8 Key Terms • • • • • • • • • • • Turnaround document Field check Sign check Limit check Range check Size check Completeness check Validity check Reasonableness test Check digit Check digit verification Copyright © 2015 Pearson Education, Inc • • • • • • • • • • • • Sequence check Batch totals Financial total Hash total Record count Prompting Closed-loop verification Header record Trailer record Transposition error Cross-footing balance test Zero-balance test 10-9 Key Terms (continued) • • • • • • • • • Concurrent update controls Checksum Parity bit Parity checking Fault tolerance Redundant arrays of independent drives (RAID) Uninterruptible power supply (UPS) Backup Recovery point objective (RPO) Copyright © 2015 Pearson Education, Inc • • • • • • • • • • Recovery time objective (RTO) Real-time mirroring Full backup Incremental backup Differential backup Archive Disaster recovery plan (DRP) Cold site Hot site Business continuity plan (BCP) 10-10 ... Identify and explain controls designed to ensure processing integrity • Identify and explain controls designed to ensure systems availability Copyright © 2015 Pearson Education, Inc 10- 2 Processing... restore organization’s IT function   Uninterruptible power supply (UPS) Patch management and antivirus software Copies all changes made since last full backup Disaster recovery plan (DRP) ▫... reconciliation Data transmission controls Copyright © 2015 Pearson Education, Inc 10- 7 Availability Controls • • Preventive maintenance • Raised floor Fire suppression ▫ • Copyright © 2015 Pearson Education,