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ABA
American Bar Association
ABCDS
A credit default swap based on an Asset-Backed Security itself based on relatively risky home equity loans (U.S.) In effect a type of insurance against default on the underlying ABS.
ABCP
Taiwan: Asset-Backed Commercial Paper
Activity Level
One of two levels at which internal controls can operate. The control is applied at the point of an activity. An example is a bank reconciliation to control cash movements.
ALM
Application Lifecycle Management
Application Access
Access to an application via direct connection, Web services or a terminal.
Application Controls
A type of control activity. Typically involve controls over processing of individual applications, ensure transactions are valid, properly authorized, completely and accurately processed.
Automated User Enrollment
Process to move user identity information over a network from a data source to a directory where it is needed.
BaFin
Germany: financial regulator
Beta
Hedge Funds: market exposure
By-name Authorization
From an individual username, connecting authorized access to a data target.
Circular A-123
US Federal Government version of the Sarbanes-Oxley Act. From Oct 2006, agencies will have to provide annual reports on internal controls. Agency's controls will have to be documented and tested.
CISSP
Certified Information Systems Security Professional
Control Activities
One of five components of internal control according to the COSO Internal Control Framework. Also known as Control procedures.
Control policies and procedures to ensure actions identified as necessary for risk assessment are carried out. They have to be both established and executed for their effectiveness to be established. Control activities are made up of two elements, policies and procedures.
Control Environment
One of five components of internal control according to the COSO Internal Control Framework
Senior management have to set the tone at the top, that positively influences the control consciousness of entity personnel. Discipline and structure are generated by the control environment and is the central building block for the other components of internal control.
COSO
Committee Of Sponsoring Organizations of the Treadway Commission
COSO Framework
Most widely used framework to assess the effectiveness of internal control.
CPPI
Constant Proportion Portfolio Insurance
Data Governance
The process by which companies govern appropriate access to and the use and transmission of their critical data by measuring operational risk and controlling security exposures.
Data Integrity
Accuracy and reliability of published and non-published information maintenance.
Database Access
Access to one or more data entries in a database.
Deferred Prosecution
U.S. legal deal where in response for public acknowledgement and/or payment of a fine/restitution and/or co-operate in ongoing investigations, corporations can escape prosecution. Should the corporation comply with the conditions in the agreement for a specified period, the indictment is dismissed.
Directory-enabled access controls
Controls over access to digital resources that is controlled by entries in a service directory
Disclaimed Opinion
Report by an auditor that it is unable to express an opinion regarding a company's internal control over financial reporting.
An example is from Deloitte And Touche at Cray "Because of the limitation on the scope of our audit described in the second paragraph of this report, the scope of our work was not sufficient to enable us to express, and we do not express an opinion o management's assessment referred to above."
Distributed Enrollment
Process of enrollment conducted by persons at one or more remote locations acting as agents for enrolling end users.
Donaldson, William
Former chairman of the Securities and Exchange Commission
Dynamo
A public Constant Proportion Portfolio Insurance product BNP
EPA
Environmental Protection Agency
ERM
Enterprise Risk Management
Extranet Access
Access for employees and business partners to internal Web-enabled applications.
FFS
South Korea: Financial Supervisory Service
Financial Accounting Standards Advisory Council
Overseer of the Financial Accounting Standards Board.
Financial Supervisory Commission
Taiwan: financial regulator
Finite Access Control
Control of end-user access for one username to specific resources.
General Controls
A type of control activity. Typically involve controls over data center operations, system software acquisition, system maintenance and access security.
HMRC
Her Majestys Revenues and Customs
IAPP
International Association of Privacy Professionals
Information and Communication
One of five components of internal control according to the COSO Internal Control Framework
Systems surrounding the control activities. The accounting system counts as information and communication. Information needed to manage, control and conduct operations are captured by the entity.
Information Processing
In the context of Control Activities and Sec 404, performed to check accuracy, completeness and authorization of transactions. Broadly break down into two groups:- Application controls and general controls.
Information Systems Audit and Control Association
Publisher with Information Technology Governance Institute of the IT Control Objectives for Sarbanes-Oxley.
Information Technology Governance Institute
Publisher with Information Systems Audit and Control Association of the IT Control Objectives for Sarbanes-Oxley.
Integrity and Ethics
Reside under the Control Environment. The senior management need to set the tone for the company. Whilst they might be considered "soft" and "intangible" concepts, they affect the design, administration and monitoring of other internal controls. According to COSO, the actions of management is more important than having them written down.
Negative examples of integrity and ethics are the infamous Enron and WorldCom scandals.
A positive example is BP which sets a high bar for ethical behaviour by employees. To back this policy up they make mention of it and its effectiveness in financial reports.
Internal Control - Integrated Framework
Formal name of the COSO Framework
Internal Control Deficiency
Occurs when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
ISACA
Information Systems Audit and Control Association
ISDA
International Swaps and Derivatives Association
ITGI
Information Technology Governance Institute
KKR
Kohlberg Kravis Roberts
Material Weakness
A significant deficiency that, by itself, or in combination with other significant deficiencies, results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
MD&A
Management's Disclosure and Analysis
Mezzanine
When applied to finance refers to moderate risk or mid level.
Nonrepudiation
Reducing an end-users ability to deny he was the one who authorized an action or sent a message.
NTS
South Korea: National Tax Service
NYSE
New York Stock Exchange
Physical Controls
A type of control activity. They involve the physical security of assets. They ensure adequate safeguards over access to assets and records.
Private Equity Intelligence
Research group specialising in the private equity arena.
Private Securities Litigation Reform Act of 1996
US legislation allowing companies avoid liability of inaccurate forward-looking statements as long as the statement is identified as forward-looking and are accompanied by "meaningful cautionary statements".
PSLRA
Private Securities Litigation Reform Act of 1996
Public Company Accounting Oversight Board
Organization set up under Sarbanes-Oxley Act 2002 to regulate auditing of public companies and auditors.
Reduced sign-on
Using the same username/password combination to access every resource over multiple logon events.
Regulation FD
Regulation Fair Disclosure
Rule enforced by the SEC requiring U.S. to make available to the public that they make to securities analysts. If the disclosure is intentional the release has to be simultaneous. Unintentional disclosure has to be made available to the public within 24 hours.
Risk Assessment
One of five components of internal control according to the COSO Internal Control Framework
Risks faced by the company have to be recognized. Objectives have to be set, integrated into the value-chain. To achieve the objectives, risks have to be identified, analyzed and develop methods to manage them.
Role Definition
Access authorization based on the job or work performed. Typically applied to a single person or a group sharing the same work.
Role-based access control
Controlling access bas only on the role definitios
SCSE
Society of Corporate Compliance and Ethics
SEC
Securities and Exchange Commission.
Section 104
Section of the Sarbanes-Oxley Act requiring the PCAOB to inspect registered public accounting firms on a regular basis
Section 302
Section of the Sarbanes-Oxley Act of 2002 requiring a certification to accompany each quarterly and annual report filed with the SEC.
Section 404
Section of the Sarbanes-Oxley Act of 2002 mandating CEOs and CFOs of public companies to evaluate and report on the effectiveness of an entity's internal control over financial reporting.
Segregation of Duties
A type of control activity. Different people are assigned responsibilities for authorizing transactions, recording transactions and maintaining custody of assets. The purpose is to inhibit the perpetration and concealment errors or irregularities, by reducing the opportunity to do so in the course of people's everyday work.
Self-Enrollment
End-user is permitted to enter his own identity information using an online process
Significant Deficiency
An internal control deficiency that adversely affects the entity's ability to initiate, record, process, or report external financial data reliably in accordance with generally accepted accounting principles (GAAP). A significant deficiency could be a single deficiency or a combination of deficiencies, that results in more than a remote likelihood that a misstatement of the annual or interim financial statements that is more than inconsequential in amount will not be prevented or detected.
Single sign-on
Using the same username/password combination to access every resource from a single logon event.
SOX
Shorthand for Sarbanes-Oxley.
SPI
Synthetic Portfolio Insurance
Statement No. 123R
FASB Statement of Financial Accounting Standards No. 123, Share-Based Payment. Requires companies to recognize compensation paid in the form of employee stock options as a cost in their financial statements.
Structured Notes
Derivatives-linked bonds designed to deliver high returns over a fixed period.
Synthetic Collateralised Debt Obligations
Repackaged portfolios of credit derivatives.
TOCOM
Tokyo Commodity Exchange
AICPA
American Institute of Certified Public Accountants
Alpha
Hedge Funds: the incremental return above the market that a manager generates.
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