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• Lecture 1

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• Three types of information in organizations

  1. Information for delegation and accountability.
  
  Division of labour -> Responsibility -> Account for
  Vertical Flow
  
  2. Information for decision-making
  E.g. decision to purchase or design product
  Vertical Flow
  
  3. Information for operating the business
  E.g. sharing knowledge, coordinating activities
  Horizontal Flow

• Decision tree spectrum of information

  See slides

• Name the aspects of quality of information

  
  - Validity
  - Accuracy
  - Completeness
  - Precesion
  - Timeliness
  - Understandability

• Risks - Business process and assets loss

  Threats form ineffective or inefficient processes for acquiring, financing, transforming, and marketing products, and loss of tangible, intangible and market-based assets.

• What types of internal controls are there

  
  - Detailed checks, total checks, and partial observation
  - Direct and indirect checks
  - Formal and material checks
  - Negative and positive checks
  - Policy control
  - Standards control
  - Expectations control
  - Authority control
  - Progress control
  - Efficiency control
  - Execution control
  - Custody control

• Information and Communication - internal control component

  
  - Recording of transactions
  - Matching of internal with external recordings
  - Confirmations to thirds parties
  - Communications of procedures and task assignments
  - Accountability
  - Other management reports

• What are the two different forms of monitoring

  
  - Monitoring as a continuous process
  - Monitoring as separate evaluations
  
  Examples:
  Periodical physical stocktaking, comparing the results with the accounting records, and reporting on the differences.

• What are the cornerstones of internal control?

  
  1. The steering paradigm
  2. The management cycle
  3. The basic pattern of information provision
  4. The value cycle

• The basic pattern of information provision

  
  In general, each process of information provision has the same structure and consists of three parts:
  1. Input
  2. Processing - using procedures and existing data collections
  3. Output
  
  An information system produces information by combining input data with existing data (usually contained with computer files) according to certain procedures (usually contained within computer programs) to generate the desired output.

• What are the segregation of duties?

  
  - Authorizing transactions (e.g. approving events (external party))
  - Recording transactions (record events in book of original entry)
  - Custody of resources (physically protect resources)
  - Controlling activities (checking (reconciliations, control totals, SOD)
  - Executing transactions (physically move resources)