4B3 - Processing Integrity. Questions from Review

Mainframe computer systems include several advanced processing procedures. Two of the most common processing procedures are multiprocessing and multiprogramming. Which of the following statements about these processing procedures is false?

- "Multiprogramming allows multiple programs to be executed at exactly the same time," is false. Multiprocessing involves the simultaneous execution of two or more tasks, usually by using two or more processing units that are part of the same system (with a single central memory). Multiprogramming is the appearance of simultaneous execution of two programs as a single processing unit switches back and forth between the programs.

To avoid invalid data input, a bank added an extra number at the end of each account number and subjected the new number to an algorithm. This technique is known as:

- A check digit is an extra reference number that follows an identification code and bears a mathematical relationship to the other digits. This extra digit is input with the data. The identification code can be subjected to an algorithm and compared to the check digit.

All of the following are computer input devices, except a:

- A plotter is a specialized printing device used for graphs and large-scale graphic output. Printers are examples of output devices.

Which of the following transaction processing modes provides the most accurate and complete information for decision making?

- An online transaction is processed with other computers or networks immediately through the internet. The transaction is processed without delay as it is initiated and executed. Input or initiation equipment (e.g., a cash register) is in direct and open communication with the CPU (central processing unit) of the processing computer system. An online system provides updated information for the entire system, not only a part. In batch processing, items to be processed are collected in groups to permit fast and convenient processing (processed as a group). However, there is a delay before the batch is processed. Distributed data processing is a network of interdependent computers where certain functions are centralized, other functions are decentralized, and processing is shared among two or more computers. Since some functions are decentralized, there is a delay in combining records for the entire system. An application is a computer program for performing a specific function, such as a payroll program. It does not provide complete information for the entire entity.

Management of a company has a lack of segregation of duties within the application environment, with programmers having access to development and production. The programmers have the ability to implement application code changes into production without monitoring or a quality assurance function. This is considered a deficiency in which of the following areas?

- Change control Change control is the process of modifying application software, including requesting a change, reviewing the effectiveness of the change, approving the change, and implementing the change. Since programmers can implement application code changes without approval, there is a weakness in control over changes to application programs. Management override refers to management not following controls that are properly designed and in force. Data integrity refers to accuracy of data entered into the program or processing of that data rather than the software itself. Computer operations refer to the management of the computer system running the application rather than the steps programmed into the software.

What is the role of the systems analyst in an IT environment?

- Designing systems, preparing specifications for programmers, and serving as intermediary between users and programmers

Systems analysts are the personnel within an organization who are responsible for the development of the company's information system. Which one of the following functions is least likely to be performed by a systems analyst?

- Developing, coding, and testing computer programs Systems analysts are typically involved with user information requirements, design of computer applications, and preparation of specifications for computer programming . The systems analyst would not typically be involved in developing, coding, and testing computer programs. These tasks would be performed by programmers.

A type of flowchart representing areas of responsibility (such as departments) as columns is called horizontal or ________ flowcharts.

- Document flowcharts, also called horizontal flowcharts, depict areas of responsibility such as departments arranged horizontally across the chart. For example, purchasing, receiving, and storage might be used in a flowchart representing materials acquisition.

Routines that utilize the computer to check the validity and accuracy of transaction data during input are called:

- Edit programs may be used to examine selected fields of input data and to reject those transactions (or other types of data input) whose data fields do not meet pre-established standards of data quality.

An organization's computer help-desk function is usually a responsibility of the:

- Help desks are usually a responsibility of computer operations because of the operational nature of their functions, e.g., assisting users with systems problems involving prioritization and obtaining technical support/vendor assistance. Applications development is responsible for developing systems. After formal acceptance by users, developers typically cease having day-to-day contact with a system's users. The responsibility of systems programming is to implement and maintain system-level software such as operating systems, access control software, and database systems software. The responsibility of user departments is to interact with application systems as planned. User departments typically do not have the expertise necessary to solve their own systems problems.

Which of the following strategies would a CPA most likely consider in auditing an entity that processes most of its financial data only in electronic form, such as a paperless system?

- In a paperless system there is no paper trail, so computer controls are used to compensate. An embedded audit module allows the auditor to monitor processing as it occurs and identify unexpected patterns that could indicate fraud or errors.

Most large-scale computer systems maintain at least three program libraries: production library (for running programs); source code library (maintains original source coding); and test library (for programs which are being changed). Which of the following statements is correct regarding the implementation of sound controls over computer program libraries?

- Only the program librarian should be allowed to make changes to the production library.

Which of the following areas of responsibility are normally assigned to a systems programmer in a computer system environment?

- Operating systems and compilers Systems programmers use the design developed by the analysts to develop an information system and write the computer programs. It follows, therefore, that the programmers would be concerned with the operating system and how it will handle various applications, as well as with compilers (computer programs that convert a source program into an object program, reducing the programming effort). Systems analysis is assigned to systems analysts, who help users analyze their information needs and design information systems that meet those needs. Data communications hardware and software would be outside the duties of the programmer, since these items control how the system transmits data and communicates with other systems. Computer operations are assigned to computer operators. Programmers should never have access to computer operations so that a proper segregation of duties for internal control can be maintained. error_outline

An auditor has a paper memorandum that needs to be made into a computer file, so that text from the memorandum can be cut and pasted into an audit report. In addition to a scanner, what software is needed to accomplish this task?

- Optical character recognition (OCR) software converts images of paper documents as read by a scanning device into text document computer files.

An employee mistakenly enters "April 31" in the date field. Which of the following programmed edit checks offers the best solution for detecting this error?

- Reasonableness Programmed edit checks deal with the mathematical accuracy and reasonableness of data entries. There is no mathematical calculation in determining that April 31 is an incorrect date. However, the determination would be part of a reasonableness check comparing the actual number of days in a specific month with the day of the month entered in the date field.

Which of the following attributes of a management report has the greatest impact on management's ability to make effective decisions?

- Relevance relates to the data and information that has a direct impact on (or is relevant to) decision making. Summarization, conciseness, and exception orientation relate to the aggregation of information that deals with unusual items and make information easier and faster to read.

A value-added network (VAN) is a privately owned network that performs which of the following functions?

- Routes data transactions between trading partners A value-added network (VAN) provides specialized hardware, software, and long-distance communications to private networks so that they can exchange data. A VAN adds value to the basic data communications process by handling the difficult task of interfacing with multiple types of hardware and software used by different parties.

Which one of the following input validation routines is not likely to be appropriate in a real-time operation?

- Sequence check In real-time operations, transactions are processed as they occur, without regard to any particular sequence. Therefore, a sequence check would not be an appropriate input validation routine. Field check Sign check Redundant data check

Specialized programs that are made available to users of computer systems to perform routine and repetitive functions are referred to as:

- Service programs are applications programs that can be called in by the user's programs to perform some common, subordinate function. They are sometimes referred to as "canned" programs.

Which of the following tasks is least likely to be undertaken in the implementation phase of an accounting software application?

- The implementation phase of an accounting software application would include obtaining and installing hardware, documenting user procedures, training users, and entering and verifying test data. Identifying inputs and outputs would occur in the systems design and development phase, preceding implementation.

Credit Card International developed a management reporting software package that enables members interactively to query a data warehouse and drill down into transaction and trend information via various network set-ups. What type of management reporting system has Credit Card International developed?

- This system is intended to allow users to analyze stored data, so it is an analytical system. An online transaction-processing system does not process transactions. An online executive information system does not provide high-level (summary) information. An online information storage system does not store data; instead, it accesses data already stored.

An input clerk enters a person's employee number. The computer responds with a message that reads: "Employee number that you entered is not assigned to an active employee. Please reenter." What technique is the computer using?

- With existence checks, the computer compares input reference data to tables or master files to make sure that valid codes are being used. In this example, the computer compared the input with a table containing the employee numbers of all active employees.

A decision table indicates the:

- alternative logic conditions and actions to be taken in a program. A decision table is useful in building logical models. It is a tabular representation of logical processes. It indicates the alternative logic conditions and actions to be taken in a program.

In a large database system maintained on a mainframe computer, the most common medium for data files for the database is:

- hard disk. - In a large system, the magnetic tape files would not be a cost-efficient storage medium. - Data should never be stored in CPU memory. Efficiency of operations would be severely impaired and risk of data loss would be substantial. - Read-only memory does not apply to data files. Read-only memory normally is reserved for the computer operating system.

Decision tables differ from program flowcharts in that decision tables emphasize:

- logical relationships among conditions and actions. A decision table is a chart used to document actions in response to specific conditions. A decision table shows the logic between conditions and resulting actions. A flowchart is a graphic depiction, using uniform symbols to show the control flow, primary actions, and interrelationships of a task or a set of tasks.

A systems program:

- manipulates application programs. By definition, systems software consists of programs that act on the instructions provided in application programs. Stated another way, a systems program manipulates application programs.

An example of an internal check is:

- recalculating an amount to assure its accuracy. Examples of internal checks are as follows: - Limit check, which identifies if data have a value higher or lower than a predetermined amount - Identification, which determines if the data is valid Sequence check, which checks sequencing - Error log, which is simply an up-to-date log of all identified errors - Transaction log, which provides the basic audit trail - Arithmetic proof, which computes the calculation in order to validate the result

A characteristic common to companies that have converted to a database system is that before conversion the companies had:

- redundant data fields. The primary purpose of a database management system is to reduce data redundancy.

A key component of database processing is a database management system (DBMS). A function that is not performed by the DBMS is to:

- run application programs. Database management systems (DBMS) are complex software packages which permit users to access information from the database. In addition to basic data movement (utility) services, the DBMS provides for access and identification security, concurrent use of data, and backup and recovery. The DBMS is "application-independent" and does not actually run application programs.

A modem is a device that:

-allows computer signals to be sent over a telephone line. The term "modem" is an acronym for modulator-demodulator. This device is used to convert digital signals received from a computer into analog signals that can be transmitted over telephone lines to another modem where the analog signal is converted back into a digital signal before it enters another computer system.

During the annual audit, it was learned from an interview with the controller that the accounting system was programmed to use a batch processing method and a detailed posting type. This would mean that individual transactions were:

-assigned to groups before posting, and each transaction had its own line entry in the appropriate ledger. Batch processing is updating master files periodically to reflect all transactions that occurred during a given time period. To do this, transactions are grouped in batches and processed as a batch.

A partial set of standard characteristics of a real-time system is:

A real-time system is characterized by online files, prompt input from users, an extensive communication network, random access and immediate update. The language in the communications process is usually low-level.

All activity related to a particular application in a manual system is recorded in a journal. The name of the corresponding item in a computerized system is a:

A transaction file is the file of original entry and hence, corresponds to manual journal. A master file is a list of all accounts and required information (records) for an application. This is similar to a ledger in a manual system. A year-to-date file is an accumulated transaction file from the beginning of a fiscal year. A current balance file shows some account information including and focusing on the current balance.

Which of the following terms best describes a payroll system?

A transaction processing system (TPS) is a form of information system that collects, stores, modifies, and retrieves the data transactions of an enterprise. The success of a business enterprise depends on reliable processing to ensure a variety of items: - Customer orders being met on time - Ensuring employees and suppliers are paid - Ensuring payments can be made

A disk storage unit is preferred over a magnetic tape drive because the disk storage unit:

Access to data takes less time with disk storage than with magnetic tape storage. Consider how data is stored on magnetic tape. Blocks of data files are arranged linearly along the entire length of the tape. In order to move from a read location at or near the beginning of the tape to a read location near the end of the tape, it is necessary to travel over all tape between the two read locations. On the other hand, if disk storage is used, it is possible to jump directly from one read location to another. This is possible because disk storage offers random access to data files.

All of the following are characteristic of computer machine language, except:

All of the answer choices except assembly language are characteristic of computer machine language. Assembly language is a programming language in which each machine language instruction is represented by mnemonic characters; it is a symbolic language, an English-like and understandable alternative to basic machine language. Machine language is the binary code (the on/off electrical switches: zero and one) that can be interpreted by the internal circuitry of the CPU. The binary code is usually arranged as a hexadecimal (base 16) code. It is a very time-consuming, error-prone programming process.

At a remote computer center, management installed an automated scheduling system to load data files and execute programs at specific times during the day. The best approach for verifying that the scheduling system performs as intended is to:

Auditing job accounting data for file accesses and job initiation/termination messages will reveal whether the right data files were loaded/dismounted at the right times and the right programs were initiated/terminated at the right times, and thus verify whether the scheduling system performs as intended. Analyzing job activity with a queuing model to determine workload characteristics gives information about resource usage but does not verify whether the right data files were loaded/dismounted at the right times and the right programs were initiated/terminated at the right times. Simulating the resource usage and comparing the results with actual results of operating helps management characterize the workload but does not verify whether the right data files were loaded/dismounted at the right times and the right programs were initiated/terminated at the right times. Using library management software to track changes to successive versions of application programs permits control of production and test versions but does not verify whether the scheduling system performs as intended.

Banks are required to process many transactions from paper documents (e.g., checks, deposit slips) during the course of an average business day. This requires a reliable, yet economical form of input. The most common source automation device used by banks is:

Disk and magnetic tapes are storage devices. Bar coding is one type of data entry device used with an optical character reader but it is most often used in manufacturing, distribution, retail sales of products, and elsewhere. Magnetic ink character recognition is most often used by banks to read the magnetic ink on checks and deposit slips.

A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:

Distributed data processing is a network of interdependent computers where certain functions are centralized and other functions are decentralized and processing is shared among two or more computers. In a distributed data processing network, each computer can also process its own data. Distributed data processing is an alternative to both centralization and decentralization.

Which of the following computer-assisted auditing techniques allows fictitious and real transactions to be processed together without client operating personnel being aware of the testing process?

Integrated test facility

The processing in knowledge-based systems is characterized by

Knowledge-based systems use symbolic processing based on heuristics, rules-of-thumb. -Algorithms are defined procedures, characteristic of typical computer programs. - Deterministic procedures are procedures, implemented in computer programs, that permit no uncertainty in outcomes. - Simulations are computer programs that prepare results as if a set of assumptions were true.

Management reporting systems:

Management reporting systems rely on a mix of internal and external data. They also combine financial and operational data so that managers have flexibility in determining the information that they will use for decision making.

Program documentation is a control designed primarily to ensure that:

Program documentation serves to improve communication, provides reference material for past actions, provides a guide for system maintenance, serves as a tool for training, and reduces impact of turnover. As a control device, it helps to keep programs up to date and performing as intended.

A software tool used for ad hoc, online access to items in a database would most likely be:

Query utility programs are used to access information contained in databases. Query utility programs provide users with online access to database information items and are characterized by their ability to enable a user to design an ad hoc query to retrieve only that information needed by the user.

An online data entry technique that can be employed when inexperienced personnel input data is the use of:

Some software assists users in data entry by prompting (the use of questions and predetermined input formats). Prompting is very helpful in avoiding input errors by inexperienced personnel.

Which of the following is responsible for ensuring that transactions are processed correctly and that input and output are reconciled?

The data control group makes sure that: - a log is kept of all inputs, data processing operations, stored data, and system output, - source data have been properly approved, - transactions are processed correctly, - input and output are reconciled, - records of input errors are maintained so they can be corrected and resubmitted, - data-related errors are sent to the users who originated the transaction for correction, - systems output is distributed to the intended and proper user, and - there is adequate rotation of operator duties.

The purpose of a software monitor is to:

The purpose of a software monitor is to collect data on the use of various hardware components during a computer run. Tests for controls are the responsibility of the auditor who usually develops them.

Which of the following is responsible for authorizing and recording transactions and for correcting errors?

Users authorize and record transactions, use system output, and are responsible for correcting errors. - The data control group logs data inputs, processing, and outputs, and makes sure that transactions have been authorized. They do not authorize or record transactions themselves. - Computer operators maintain and run daily computer operations. - Security management is responsible for preventing unauthorized physical and logical access to the system.

A company's labor distribution report requires extensive corrections each month because of labor hours charged to inactive jobs. Which of the following data processing input controls appears to be missing?

Validity tests are used to ensure that recorded transactions contain valid transaction codes, valid characters, and valid field size. Inactive jobs should have transaction codes that register as invalid. - Completeness tests are used to ensure that the input has the prescribed amount of data in all data fields. - Limit tests are used to determine whether the data exceed certain predetermined limits. - Control totals are used to reconcile EDP input to the source document totals.

Employee numbers have all numeric characters. To prevent the input of alphabetic characters, what technique should be used?

With a field check, the computer checks that the characters entered are the proper type (e.g., alpha or numeric).