PIPFA Foundation flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Accounting Equation

Assets equal liabilities plus equity. Every recorded transaction must keep this equality intact, which is why double-entry bookkeeping always records equal debits and credits.

Accrual Basis

Revenue is recognized when earned and expenses when incurred, regardless of when cash moves. This differs from cash basis, which records only actual receipts and payments.

Straight-Line Depreciation

Annual charge equals cost minus residual value, divided by useful life. It spreads the depreciable amount evenly across each year the asset is expected to be used.

Current Ratio

Current assets divided by current liabilities. It measures short-term liquidity: a ratio below one suggests obligations due within a year exceed resources expected to convert to cash.

Quick Ratio

Current assets excluding inventory and prepayments, divided by current liabilities. It is a stricter liquidity test because inventory may take time to convert into cash.

Gross Profit

Revenue minus cost of sales. It reflects profit from core trading before operating expenses, interest, and tax, and is often expressed as a gross margin percentage.

Working Capital

Current assets minus current liabilities. Positive working capital indicates short-term obligations can be met; negative working capital signals possible liquidity strain requiring financing.

Audit Assertions

Statements management implicitly makes about financial information, including existence, completeness, accuracy, cut-off, classification, rights and obligations, and valuation. Auditors design procedures to test each.

Appropriation Budget

A budget authorizing spending up to a legislated limit for a defined period. Expenditure beyond the appropriation generally requires supplementary approval from the legislature.

Fund Accounting

Resources are grouped into separate self-balancing funds by purpose or restriction. Each fund keeps its own assets, liabilities, and balances so restrictions are visibly respected.

Modified Accrual Basis

Used in government funds: revenue is recognized when measurable and available, while expenditures are recognized when the related liability is incurred. It bridges cash and full accrual accounting.

Encumbrance

A commitment recorded when an order is placed, reserving budget before goods or services arrive. It prevents overspending and is reversed when the actual expenditure is recorded.

Fiscal Deficit

Total government expenditure minus total revenue, excluding borrowing. It shows how much spending must be financed by debt or other inflows during the period.

Primary Deficit

Fiscal deficit minus interest payments on outstanding debt. It isolates current-year borrowing needs from the inherited cost of past debt, revealing underlying fiscal stance.

Performance Audit

Examines economy, efficiency, and effectiveness of public programs. Unlike financial audit, it asks whether objectives were achieved and resources used well, not merely whether records are accurate.

Segregation of Duties

No single person controls authorization, custody, recording, and reconciliation of a transaction. Splitting these functions limits the opportunity for error or fraud to pass undetected.

Value for Money

Public procurement principle combining economy, efficiency, and effectiveness. Awards should be based on documented criteria, competitive tender, and best overall benefit rather than lowest price alone.

Presentation Structure

Open with a hook and stated purpose, deliver three to five key points with evidence, then summarize and give a call to action. Structure keeps audiences oriented and decisions actionable.

Action Headline

A slide title that states the conclusion rather than labeling the topic. For example, 'Costs fell 12% after automation' tells the audience what the data means.

Chart Selection Rule

Use bar charts for comparison, line charts for trends over time, and pie charts only for parts of a whole with few slices. Wrong chart types obscure the relationship being shown.

Speaking Rate

Roughly 120 to 150 words per minute is comfortable for technical presentations. Faster delivery reduces comprehension, while strategic pauses emphasize key points and allow note-taking.

Rehearsal Buffer

Plan content for about 80 percent of the allotted time. The remaining fifth absorbs overruns, technical delays, and audience questions without cutting essential conclusions.

Question Handling

Repeat the question to confirm understanding, answer concisely, and defer unknowns with a specific follow-up date. This maintains credibility and prevents derailing the presentation.

Accessible Slides

Use readable font sizes, high contrast, and alt text on figures. Never encode meaning by color alone, since color-blind audience members would miss the distinction.

Absolute Cell Reference

A reference such as $A$1 that locks both column and row when copied. Mixed references lock one axis only, which is essential for consistent formula construction.

INDEX-MATCH

MATCH locates a key's position and INDEX returns the value at that position. Unlike VLOOKUP, the lookup column need not be the first column of the range.

Pivot Table

Summarizes large datasets by rows, columns, values, and filters. Source data changes require a refresh before the summary reflects updated figures.

ACL EXTRACT Command

Creates a new table containing only records meeting a specified condition. Audit tests commonly extract exceptions, such as duplicate invoices or payments above an approval threshold.

ACL JOIN Command

Merges two tables on a common key field, combining related attributes. Auditors use it to match purchase orders to invoices and detect unmatched or duplicate transactions.

ACL Gap Detection

Tests whether a sequence such as document numbers is complete. Missing numbers may indicate deleted, suppressed, or unrecorded transactions requiring further investigation.

SAP Three-Tier Architecture

Presentation, application, and database layers. The user interface is only the presentation tier; business logic runs on application servers and data resides in the database.

SAP Authorization Objects

Granular control points checked when a user performs an action. Roles bundle authorizations, and conflicting combinations, such as creating vendors and paying them, indicate segregation-of-duties risk.