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Accounting Definitions and Types of Controls

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Added on  2023-01-05

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This document provides definitions and explanations of various accounting concepts, such as echo control, validity control, check digit control, and more. It also discusses different types of controls, including preventive, detective, and corrective controls. Additionally, it covers auditing through the computer and CAATs techniques. This information is relevant for students studying accounting and auditing.

Accounting Definitions and Types of Controls

   Added on 2023-01-05

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Accounting 25
DEFINITIONS:
1. Echo control
Also called an echo check, an echo is data repeated back to the sender by the recipient, to verify that it
was received correctly. For example, in a command line you can use the echo command to echo any text
to the screen. The same can be applied for printers.
Echo is the local display of data, either initially as it is locally sourced and sent, or finally as a copy of it
is received back from a remote destination. Local echo is where the local sending equipment displays
the outgoing sent data. Remote echo is where the display is a return copy of data as received remotely.
Both are used together in a computed form of error detection to ensure that data received at the remote
destination of a telecommunication are the same as data sent from the local source (a/k/a echoplex, echo
check, or loop check). When (two) modems communicate in echoplex mode the remote modem echoes
whatever it receives from the local modem.
Accounting Definitions and Types of Controls_1
2. Validity control
process of ensuring that a concept or construct is acceptable in the context of the process or system that
it is to be used in. for example, in computer systems which revolve around the creation, consumption
and manipulation of data, it is very important that all data are correct before processing to ensure that no
errors are encountered. A validity check is done on the input data to ensure that it meets the
requirements of the system.
Validation does not ensure that the data entered is correct, just that it is possible and sensible. A user
may accidentally enter a date of birth that is possible and sensible, but incorrect. The program has no
way of knowing that the date has been entered incorrectly. To get around this, many programs include
verification checks - they repeat the entered data to the user and ask them to confirm if this data is
correct. If the user confirms the data, the program then assumes it to be correct. This is an example of
how planning the design of a program can help reduce errors. Validation can be very simple. This
program will iterate until the user enters a correct response:
TYPES:
Range check - the input must fall within a specified range. This is usually applied to numbers and
dates, but can apply to characters. For example, when making a payment to someone, the amount to
be entered might be set to be greater than zero and not greater than the funds available.
Length check - the input must not be too long or too short. For example, a surname will require at
least one letter, but is unlikely to require more than 40.
Presence check - a data value must be entered. For example, entering a quantity when placing an
order.
Format check - the data must be in the correct format, such as entering a date in the format
DD/MM/YYYY.
Type check - the data must be of a specified data type, such as an integer when specifying a quantity.
3. Check digit control
A check digit is the final digit in a code of numbers. It is calculated from all the other digits in the code.
Its purpose is to spot human errors on data entry. Check digits are often found on barcodes.
4. Boundary protection
"monitoring and control of communications at the external boundary of an information system to
prevent and detect malicious and other unauthorized communication." Protection is achieved through the
use of gateways, routers, firewalls, guards, and encrypted tunnels.
5. File integrity
Accounting Definitions and Types of Controls_2
process of protecting a file from unauthorized changes, including cyber-attacks. In other words, a files
'integrity is validated to determine whether or not it has been altered after its creation, curation,
archiving or other qualifying event. Companies can monitor file integrity by leveraging advanced file
integrity monitoring (FIM) tools that help automatically track and alert IT admins to unauthorized
modifications across critical files.
With regular file integrity testing, IT administrators can keep track of unauthorized file access, alert
security professionals if an anomaly is detected, and mitigate cyberthreats. File integrity monitoring
works by first creating a baseline, which acts as a reference point and is periodically analyzed to detect
tampering or fraud.
6. Interleaving
Interleaving is a tool that is used to enhance existing error correcting codes so that they can be used to
perform burst error corrections as well.
Most error correcting codes (ECCs) are designed to correct random errors, i.e. error
caused by additive noise that is independent of each other. Burst error are the errors that
occur in a sequence or as groups. They are caused due to defects in storage media or
disruption in communication signals due to external factors like lightning etc.
Interleaving modifies the ECC or does some processing on the data after they are
encoded by ECCs.
TYPES:
Periodic Interleaving - In this case, the message is ordered in a repeating sequence of bytes. The
interleaver accepts data symbols in blocks and performs identical permutations on the blocks before
transmitting them. For example, the sequential blocks of code may be written to a matrix in a row-wise
manner and then read out from the matrix in a column-wise manner. Block interleaving is a type of
periodic interleaving.
Pseudo-random Interleaving - Pseudo-random interleaving involves rearrangement of the message
blocks in a pseudo-random sequence generated by specific algorithms.
Accounting Definitions and Types of Controls_3

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