BEC - Part IV - IT- A thru F

usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?

A compressed business cycle with lower year-end receivables balances

a network node that is used to set up as a boundary that prevents traffic from one segment to cross over to another?

A firewall: is a method used to isolate the company computers behind a device that acts as a gatekeeper. This gatekeeper prevents traffic from one segment from crossing over to another.

The marketing department has separate product managers for each product line. Each product manager is given a purchasing budget by the marketing manager. Product managers are not rotated among product lines because of the need to acquire product knowledge and to build relationships with vendors. A subsection of the department does marketing surveys.

A long-term contract specifying prices, maximum delivery amounts, and timing of deliveries would be an acceptable substitute for individual purchase orders

best be considered an example of the use of decision support system (DSS)?

A manager uses a PC-based simulation model to determine whether one of the company's ships would be able to satisfy a particular delivery schedule.

errors most likely would be detected by batch financial totals?

A transposition error on one employee's paycheck on a weekly payroll run - "A transposition error on one employee's paycheck on a weekly payroll run" is correct because the paycheck batch total would not equal the payroll for the week.

is an essential element of the audit trail in an electronic data interchange (EDI) system?

Activity logs that indicate failed transactions

The fixed assets and related depreciation of a company are currently tracked on a password-protected spreadsheet. The information technology governance committee is designing a new enterprise-wide system and needs to determine whether the current fixed asset process should be included because the current system seems to be working properly. What long-term solution should the committee recommend?

Adopting the fixed-asset module of the new system for integration

A shipping department wants to reduce invoicing errors by using a technique to read the universal product codes (UPCs) directly from the merchandise that it receives. What technique should be used?

Barcode scanner

input controls is a numeric value computed to provide assurance that the original value has not been altered in construction or transmission?

Check digit

Passenger 1 and passenger 2 are booking separately on an airline website for the last available seat on a flight. Passenger 1 presses the enter key a few seconds before passenger 2, thus locking out passenger 2 and obtaining the last seat. This locking is a form of which of the following types of control?

Concurrent update control -Only a concurrent update control can prevent problems when multiple users simultaneously update a record (i.e., the control locks other users out of the system until one has finished updating the file). The remaining controls listed do not have this functionality.

items would be most critical to include in a systems specification document for a financial report?

Data elements needed - Before considering the cost, training, or communications changes, you must specify the data elements in the report on which the report will be based.

an encryption feature that can be used to authenticate the originator of a document and ensure that the message is intact and has not been tampered with?

Digital signatures

allows customers to pay for goods or services from a website while maintaining financial privacy?

E-cash

characteristics distinguishes electronic data interchange (EDI) from other forms of electronic commerce?

EDI transactions are formatted using standards that are uniform worldwide.

Which of the following is considered an application input control?

Edit check

considered an application input control?

Edit check - Edit checks are accuracy checks performed by an edit program that test input data to make sure it is accurate and valid. It is an application control when included as part of an application program.

best defines electronic data interchange (EDI) transactions?

Electronic business information is exchanged between two or more businesses.

Savings in clerical costs and transaction processing time are most advantageous for

Electronic commerce: derives most of its benefits from savings in clerical costs and transaction processing time. This is made possible mainly by electronic data interchange (EDI).

A manufacturing company that wanted to be able to place material orders more efficiently most likely would utilize which of the following?

Electronic data interchange

A research-based firm in the medical field could use each of the following Internet-based tools for collaboration, except:

Electronic data interchange (EDI) is the correct answer because EDI is used to electronically transfer information between and within organization computers. It is communication between computer software applications, not between humans.

statements is correct concerning the security of messages in an electronic data interchange (EDI) system?

Encryption performed by a physically secure hardware device is more secure than encryption performed by software.

A company has an online order processing system. The company is in the process of determining the dollar amount of loss from user error. The company estimates the probability of occurrence of user error to be 90%, with evenly distributed losses ranging from $1,000 to $30,000. What is the expected annual loss from user error?

Errors are be evenly distributed between $1,000 and $30,000. The average of this range is ($30,000 + $1,000) ÷ 2, or $15,500. The probability of error is 90%, so the expected value of the annual loss is 90% × $15,500, or $13,950.

A company's new time clock process requires hourly employees to select an identification number and then choose the clock-in or clock-out button. A video camera captures an image of the employee using the system. Which of the following exposures can the new system be expected to change the least?

Errors in employees' overtime computation - Computation of pay is a later step, not affected by the time clock process

true regarding Transmission Control Protocol and Internet Protocol (TCP/IP)?

Every site connected to a TCP/IP network has a unique address.

technologies is specifically designed to exchange financial information over the World Wide Web?

Extensible business reporting language (XBRL)

The accounting information system should efficiently and effectively provide information to both internal and external users. Which of the following would be considered an external user?

External users include investors, creditors, and governmental agencies. Internal users include all managers and employees of the company.

structure refers to the collection of data for all vendors in a relational data base?

File

an auditor ordinarily consider the greatest risk regarding an entity's use of electronic data interchange (EDI)?

Improper distribution of EDI transactions

likely to be a benefit of electronic data interchange (EDI)?

Improved business relationships with trading partners

In an accounting information system, which of the following types of computer files most likely would be a master file?

Inventory subsidiary - Cash disbursements, cash receipts, and payroll transactions are incorrect answer choices because they are temporary transaction files that are combined with other transactions to appear in income statement accounts. Temporary accounts are closed to zero at the end of the period, unlike balance sheet accounts that are carried over to the next period.

A distributed processing environment would be most beneficial in which of the following situations?

Large volumes of data are generated at many locations and fast access is required.

In an e-commerce environment that requires that the information technology (IT) system be available on a continuous basis, more emphasis will be placed on which of the following aspects of the planning than in a traditional organization?

Maintain redundant systems for instant availability to assure the flow of transactions

In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity's computer system correspond to the standard data elements?

Mapping

essential elements of the audit trail in an electronic data interchange (EDI) system?

Network and sender/recipient acknowledgments

The traditional manual procurement of direct and indirect resources used in manufacturing has been supplanted, in some cases significantly, by the use of which of the following?

Online commerce via B2B

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)

statements is correct regarding the Internet as a commercially viable network?

Organizations must use firewalls if they wish to maintain security over internal data.

A major advantage in the adoption and use of electronic commerce lies in the replacement of ?

Paper documents

A systems engineer is developing the input routines for a payroll system. Which of the following methods validates the proper entry of hours worked for each employee?

Reasonableness check

Engaging in traditional electronic data interchange (EDI) provides which of the following benefits?

Reduced likelihood of stockout costs - EDI should automatically initiate a purchase order to restock before a stockout occurs.

usually a benefit of using electronic funds transfer for international cash transactions?

Reduction of the frequency of data-entry errors

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

The DBMS is "application-independent" and does not actually run application programs.

Business-to-business (B2B) commerce seeks to bring buyers and sellers together using which of the following?

The Internet - B2B commerce utilizes the Internet and electronic data interchange (EDI) technology.

Users in one department of a company developed a batch mainframe program to obtain financial information for their cost center. The program extracts data from the general ledger system master file backup tape. The program calls for the current generation of the tape backup. Which of the following error conditions are the users most likely to become aware of?

The job did not complete successfully.

A reason to use barcodes, rather than other means of identification, is to record the movement of parts with minimal labor costs.

The movement of parts can escape being recorded with any identification method. Each vendor has its own part-numbering scheme, which is unlikely to correspond to the buyer's scheme. Each vendor has its own identification method, although vendors in the same industry often cooperate to minimize the number of barcode systems they use.

Because an organization makes heavy use of client/server architecture, end users have much of its critical and sensitive information on their personal computers (PCs) and departmental file servers. The chief financial officer has asked the auditors for input for developing an end-user computing policy. The policy requires a long-range, end-user computing plan. Which of the following documents should most strongly influence the development of this plan?

The organization's strategic operational plan

The CFO of a U.S.-based manufacturing company is considering all of the impacts a conversion to IFRS may have on his organization. The key questions the CFO should be asking herself include:

There are many strategic decisions an organization will need to make when converting to IFRS reporting. While IFRS conversion will drive very detailed systems design requirements—such as chart of accounts changes, and new interfaces—the management of the company will first have to make the higher-level decisions to drive those lower-level design details.

Hash totals are input controls

They are nonsense totals; for example, the sum of several invoice numbers. A hash total is similar to a control total and is used to verify processing (or output) compared to input

Many organizations have developed decision support system (DSS), a class of information systems that addresses the relationships between management decisions and information. Which of the following best describes the objective of a DSS?

To provide interactive assistance during the process of problem solving

not be included as a reason for a company to use EFT (electronic funds transfer) with an EDI (electronic data interchange) system?

To take advantage of the time lag associated with negotiable instruments

terms best describes a payroll system?

Transaction processing system (TPS)

represents an additional cost of transmitting business transactions by means of electronic data interchange (EDI) rather than in a traditional paper environment?

Translation software is needed to convert transactions from the entity's internal format to a standard EDI format.

a risk that is higher when an electronic funds transfer (EFT) system is used?

Unauthorized access and activity

The input device used in a department store where the sales clerk passes a light pen over the price tag to record the purchase is:

a barcode scanner.

A program that converts a source program into instruction codes that the central processing unit can execute is called:

a compiler.

Input devices include:

a mouse—a hand-held peripheral device used to move a cursor on the computer screen, usually on a personal computer, with two or three buttons for "point and click" activity, a magnetic ink character recognition device—a device used to read magnetic ink characters (such as those found on the bottom of checks), and a light pen—a hand-held peripheral device used to actually touch the screen of a terminal or computer to make input selections, also called "point and click" activity.

A compiler is:

a program that converts high-level programming language into machine language.

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

a query utility program.

A software tool used to infrequently select or access items in the database would most likely be:

a query utility program.

A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is:

a strategic information system.

In a computerized billing system, the computer generates a form that has two parts. The first part is a bill that customers are to retain and the second part is to be returned by customers with their payments. The return portion of the form is referred to as:

a turnaround document.

Cloud computing can best be defined as a model that:

allows organizations to use the Internet to access and use services and applications that run on remote third-party technology infrastructure.

An internal version of the Internet that can be accessed using conventional World Wide Web compatible hardware and software is called:

an intranet. - an internal version of the Internet. It can be accessed using conventional hardware and software that works with the World Wide Web (Internet). The Intranet is usually separated from the Internet by a firewall.

Deterministic procedures

are procedures, implemented in computer programs, that permit no uncertainty in outcomes.

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.

A recent application of electronic data interchange (EDI) and the Internet is business-to-business (B2B) online commerce. Effective use of B2B should enable companies to:

both increase market efficiency and reduce purchasing costs.

Franklin, Inc., is a medium-size manufacturer of toys that makes 25% of its sales to Mega Company, a major national discount retailing firm. Mega will be requiring Franklin and other suppliers to use electronic data interchange (EDI) for inventory replenishment and trade payment transactions as opposed to the paper-based systems previously used. Franklin would consider all of the following to be advantages for using EDI in its dealings with Mega, except:

compatibility with Franklin's other procedures and systems.

Simulations are

computer programs that prepare results as if a set of assumptions were true.

Optical character recognition (OCR) software

converts images of paper documents as read by a scanning device into text document computer files.

A transaction document

could be an internal, as well as external, document (e.g., deposit ticket, GL ticket).

One of the first steps in the creation of a database is to:

define common variables and their attributes used throughout the firm.

Algorithms are

defined procedures, characteristic of typical computer programs.

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 network.

A network of computers located throughout an organization's different facilities and linked to a centralized computer to fulfill information processing needs is called:

distributed data processing.

Report, program, and applications generators are

fourth-generation languages that are used to create reports, programs, and applications on a routine basis.

The Internet is made up of a series of networks that include:

gateways to allow mainframe computers to connect to personal computers.

The processing in knowledge-based systems is characterized by:

heuristics.

Corporate intranets are typically characterized by ________ as compared to local and wide area networks.

higher security risk and lower cost

As the planning committee identified the many applications that the proposed network could support, the committee realized that a significant risk could be:

incomplete, inadequately tested, or unauthorized application software.

An accounts payable document

is a transaction document used in the accounts payable system (e.g., invoices, GL tickets).

An office automation system

is used by clerical personnel to process existing information.

In distributed data processing, a ring network:

links all communication channels to form a loop and each link passes communication through its neighbor to the appropriate location

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:

magnetic ink character recognition.

Point-of-sale document

may only be electronic in that the transaction is sent from a terminal without the use of a portion of a form.

A batch record count is the

number of records included in the batch where a record is a set of related fields about the same data. These records are in sequence (101, 102, 103, 104, 105) so the number of records is five. The records are counted before processing and again after processing, and the two totals are compared to assure that no records are added or omitted.

Many entities use the Internet as a network to transmit electronic data interchange (EDI) transactions. An advantage of using the Internet for electronic commerce rather than a traditional value-added network (VAN) is that the Interne

permits EDI transactions to be sent to trading partners as transactions occur

In a large organization, the biggest risk in not having an adequately staffed information center help desk is:

persistent errors in user interaction with systems.

Decision support systems

process semi-structured and unstructured problems.

A pillow manufacturer tracks its production manually. That process results in continuing inaccuracies in inventory and production records on monthly production of about 1 million pillows in three plants. Not knowing how much raw materials inventory is needed, the company maintains surplus inventory of about 25 days production usage at each plant so it can meet its delivery commitments. The company believes it would be advantageous to implement electronic data interchange (EDI) with its suppliers to facilitate just-in-time inventory management. If implementing electronic data interchange (EDI) with suppliers permitted more frequent orders and more frequent communication about them, the company could be more effective by using electronic data interchange (EDI) to:

reduce costs by reducing raw materials inventory.

Management reporting systems:

rely on both internally generated and externally generated data

Access time in relation to computer processing is the amount of time it takes to:

retrieve data from memory.

The use of technology in e-commerce has created the need for increased security. E-commerce security measures include all of the following, except:

simulation. - Simulation is used as an auditing tool in testing transaction processing systems. It is not used directly as a security measure in E-commerce.

Transaction processing systems

support basic routine business functions.

An electronic meeting conducted among several parties at remote sites is referred to as:

teleconferencing

The online data entry control called preformatting is:

the display of a document with blanks for data items to be entered by the terminal operator.

A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:

the movement of parts is easily and quickly recorded.

Misstatements in a batch computer system caused by incorrect programs or data may not be detected immediately because:

there are time delays in processing transactions in a batch system.

not true for Relational databases?

use trees to store data in a hierarchical structure.

In an effort to recognize improvement opportunities, a company is reviewing its in-house systems. The best reason for the company to consider switching to cloud computing as a solution is that it:

usually has lower upfront costs for equipment and maintenance.