Revision

MIS374 - Accounting Information Systems (AIS)

(Chapter 1&2)

1. Explain the six components of an accounting information

system (AIS)

 People using the system

 Procedures and Instructions For collecting, processing, and
storing data
 Data about the organization and its business activities
 Software used to process data.
 Information Technology (IT) Infrastructure
Computers, peripherals, networks used in the AIS.
 Internal Control and Security Measures
Safeguard the AIS and its data

2. Explain AIS business functions

 Collect and store data about organizational activities, resources,

and personnel.
 Transform data into information enabling Management to plan,
execute, control, and evaluate activities, resources, and personnel
 Provide adequate control to safeguard the organization’s assets
and data

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3. Draw the data processing cycle

This process consists of four steps: data input, data storage,

data processing, and information output

4. What is coding? Explain the four coding techniques;

support your answer with examples.

Coding is the systematic assignment of numbers or letters to

items to classify and organize them

With Sequence Codes

Items are numbered consecutively to account for all items.

Any missing items cause a gap in the numerical sequence.

Examples include prenumbered checks, invoices, and

purchase orders.

 With a Block Code

Specific ranges of numbers are associated with a category

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  In Group Code

Two or more subgroups of digits used to code items, are

often used in conjunction with block codes. Positioning of
digits in code provide meaning

Example of a seven-digit product code number

Digit Position Meaning

1–2 Product Line, size, and so on
3 Color
4–5 Year of Manufacture
6–7 Optional Features
1241000 12 = Dishwasher
4 = White, 10 = 2010, 00 = No
Options.

 With Mnemonic Codes

Letters and numbers are interspersed to identify an item.

The mnemonic code is derived from the description of the

item and is usually easy to memorize.

For example Dry_300w05 could represent a low end (300),

white (w) dryer (Dry) made by Whirlpool (05).

 Chart of accounts

A list of the numbers assigned to each general ledger

account.

Type of block coding

Example:

100-199 Assets

200-299 Non-Current Assets

300-399 Liabilities

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 (Chapter8)
1. What is the difference between authentication and
authorization?

Authentication and authorization are two related controls

designed to restrict access to an organization’s information
systems and resources.

The objective of authentication is to verify the claimed

identity of someone attempting to obtain access.

The objective of authorization is to limit what an

authenticated user can do once they have been given
access.

 Authentication vs. authorization

Authentication—verifies who a person is

1. Something person KNOWS.

2. Something person HAS.

3. Some BIOMETRIC CHARACTERISTIC.

4. Combination of all three.

Authorization—determines what a person can access

2. Explain and justify the idea of defense-in-depth (layering)

information security concept.

The idea of defense-in-depth (layering) is to employ multiple

layers of controls in order to avoid having a single point of
failure.

For example, many organizations use not only firewalls but

also multiple authentication methods (passwords, tokens,
and biometrics) to restrict access.

TA: Aya Saeed

 (Chapter9)
1. Differentiate between hashing and encryption

2. Differentiate between symmetric encryption systems and

asymmetric encryption systems.

Symmetric Encryption Systems

One key used to both encrypt and decrypt

Pro: fast

Con: vulnerable

Asymmetric Encryption Systems

Different key used to encrypt than to decrypt

Pro: very secure

Con: very slow

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3. Draw and explain the creation of a digital signature and
clarify its usefulness.

Creating a digital signature is a two-step process

1. The document creator first generates a hash of the

document (or file)

2. The document creator then encrypts that hash using his or

her private key.

The resulting encrypted hash is a digital signature

4. Explain the factors that influence encryption strength

Key Length

Number of bits used to convert text into blocks of size equal

to the key length

256-bit key is common

Longer keys provide stronger encryption by reducing the

number of repeating blocks in the cipher text

Encryption Algorithm

Manner in which key and text is combined to create

scrambled text

Policies for Managing Cryptographic Keys

Stored securely with strong access codes

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 (Chapter12)
The major activities in the revenue cycle are:

1.0 Sales Order Entry

2.0 Shipping
3.0 Billing
4.0 Cash Collections

For each activity we have to Identify the major threats and evaluate
the adequacy of various control procedures for dealing with those
threats.

1. Outline the general revenue cycle threats and their

corresponding controls.

Important note: you have to create a table like this

To answer this question also you have to write all the threats
and all their corresponding control.

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1.0 Sales Order Entry

2. Outline threats of sales order entry and at least one control

that can be applied to counter each threat.

In this question, you have to mention all the threats and

choose only one control that can be applied to counter
each threat.

For example:

Threat Controls
5.Incomplete/Inaccurate 5.1Data entry edit control
Orders
6.Invalidorders 6.1Digital and written
signatures
7.Uncollectiable accounts 7.1Credit limits
8.Stockouts or excess 8.1 training
inventory
9.loss of customers 9.1CRM System

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2.0 Shipping

3. Outline threats of shipping and at least one control that

can be applied to counter each threat.

In this question, you have to mention all the threats and

choose only one control that can be applied to counter
each threat.

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3.0 Billing

4. Outline threats of billing and at least one control that can

be applied to counter each threat.

In this question, you have to mention all the threats and

choose only one control that can be applied to counter
each threat.

5. Outline threats of cash collection and at least one control

that can be applied to counter each threat.

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