Chapter 8 INAC

• What is the focus of Chapter 9 in INAC Week three?

  Making recommendations
• What must you identify in the exam questions regarding internal controls?

  Issues in the internal controls
• What should you present alongside the identified issues in internal controls?

  Recommendations for improvements
• What types of benefits should be mentioned in recommendations?

  Both financial and non-financial benefits
• What is a cost benefit analysis used for?

  To evaluate system improvement costs
• What should be included in the costs of system improvements?

  Only financial costs
• What type of costs should not be included in the cost benefit analysis?

  SUNK costs
• What additional considerations should be included in the analysis?

  Ethics and sustainability
• What conclusion must be drawn from the cost benefit analysis?

  Whether the change should be enacted
• What is a potential issue during the transition period to a new system?

  Internal controls may be less effective
• What is a concern regarding data capture during the transition?

  Which system will be correct?
• How might staff feel during the transition to a new system?

  Demotivated or unwilling to engage
• What could happen to productivity during the transition?

  Productivity may fall
• What are the methods for managing a transition to a new system?

  • Direct changeover
  • Parallel running
  • Test databases
  • Phased implementation
  • Piloting changes
• What is direct changeover in managing a transition?

  Turning off one system and turning on another
• What does parallel running involve?

  Inputting data into both systems simultaneously
• What is the purpose of test databases during a transition?

  To use real data to test the system
• What does phased implementation mean?

  Implementing changes in stages
• What is the goal of piloting changes?

  To test the new system in a small part
• What does a review of an organization's accounting system reveal?

  Strengths and weaknesses of internal control
• What weaknesses might be identified in an accounting system review?

  Errors, inefficient procedures, and fraud opportunities
• What ethical issues are considered in an accounting system review?

  Strengths and weaknesses relating to ethics
• When are changes made to accounting procedures?

  When current systems are no longer fit for purpose
• What does cost benefit analysis compare?

  Resources used with benefits obtained
• What types of benefits should be analyzed in cost benefit analysis?

  Benefits that cannot be measured financially
• What does cost benefit analysis help determine?

  Whether benefits outweigh the costs
• What must be considered when making recommendations?

  Ethical implications of suggestions
• What code must AAT members adhere to when making recommendations?

  AAT Code of Ethics
• What should recommendations support in terms of sustainable principles?

  One or more of the three sustainable principles
• What are the three sustainable principles?

  Corporate, environmental, and social issues
• What do strengths in a SWOT analysis indicate?

  Areas operating effectively and efficiently
• What do weaknesses in a SWOT analysis indicate?

  Areas where achievement is low
• What should businesses consider as opportunities in a SWOT analysis?

  Improvements in internal controls and procedures
• What do threats in a SWOT analysis represent?

  Obstacles faced in the current environment
• How can PESTLE analysis help in SWOT analysis?

  By identifying external factors affecting the business
• What are some ways change affects staff using systems?

  Internal training, self-teach facilities, support lines
• What might recommendations include regarding organizational procedures?

  Modifications impacting staff and procedures
• What must staff do when external regulations change?

  Amend working practices to comply
• What problems might occur during a system transition?

  Data integrity issues and demotivated staff
• What is direct changeover in system transition?

  Old system turned off, new one on