Test Bank 10th-Ed Accounting Information Systems by Gelinas-Dull-Wheeler

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Test Bank 10th-Ed Accounting Information Systems by Gelinas-Dull-Wheeler

Sample Chapter No

Chapter 9—Controlling Information Systems: Business Process and Application Controls

 

TRUE/FALSE

 

  1. Specifying control goals is the first step in preparing a control matrix.

 

ANS:  T                    PTS:   1

 

  1. In the control matrix M-1 stands for missing process number one.

 

ANS:  F                    PTS:   1

 

  1. A control matrix is a tool that assists in evaluating the potential effectiveness of control goals in a particular business process.

 

ANS:  T                    PTS:   1

 

  1. Control efficiency addresses whether control goals are being achieved.

 

ANS:  F                    PTS:   1

 

  1. Control effectiveness addresses how individual control plans achieve multiple control goals.

 

ANS:  F                    PTS:   1

 

  1. The purpose of security controls is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse.

 

ANS:  T                    PTS:   1

 

  1. Control redundancy addresses whether too many control plans are directed toward the same control goal.

 

ANS:  T                    PTS:   1

 

  1. Input control goals include those to ensure input validity, input completeness and input accuracy.

 

ANS:  T                    PTS:   1

 

  1. In a control matrix P-1 stands for process number one.

 

ANS:  F                    PTS:   1

 

  1. The most error-prone and inefficient steps in an operations or information process is master file updates.

 

ANS:  F                    PTS:   1

 

  1. A control plan in which a source document is designed to make it easier to prepare the document initially and later to input data from the document into a computer or other input device is called document design.

 

ANS:  T                    PTS:   1

 

  1. Written approval takes the form of a signature or initials on a document to indicate that the proper person has authorized the event.

 

ANS:  T                    PTS:   1

 

  1. Online prompting helps guide the online entry of data by defining the acceptable length and format of certain fields.

 

ANS:  F                    PTS:   1

 

  1. With preformatted screens a computer system asks the user for input or asks questions that the user must answer.

 

ANS:  F                    PTS:   1

 

  1. Programmed edit checks are edits automatically performed by data entry programs upon entry of the input data.

 

ANS:  T                    PTS:   1

 

  1. A variation of the limit check is the reasonableness check.

 

ANS:  T                    PTS:   1

 

  1. Dollar totals represent a summarization of any numeric data field within the input document or record.

 

ANS:  F                    PTS:   1

 

  1. The edit that compares calculations performed manually to those performed by the computer to determine if a document has been entered correctly is referred to as mathematical accuracy checks.

 

ANS:  T                    PTS:   1

 

  1. A check digit is an extra digit that is added to the identification number of entities to help control the accuracy with which the number is entered into a computer system.

 

ANS:  T                    PTS:   1

 

  1. Confirm input acceptance is a control that helps ensure input completeness by informing the user that the input has been accepted for processing.

 

ANS:  T                    PTS:   1

 

  1. The control plan called key verification is designed to reduce the possibility that data will be misread or miskeyed during data entry.

 

ANS:  T                    PTS:   1

 

  1. A dependency check authenticates the identity of a message’s sender and verifies the integrity of a transmitted message.

 

ANS:  F                    PTS:   1

 

  1. A digital signature tests whether the contents of two or more data fields bear the correct logical relationship.

 

ANS:  F                    PTS:   1

 

  1. An exception and summary report reflects the events that were accepted or rejected by the system.

 

ANS:  T                    PTS:   1

 

  1. Master data control plans regulate transaction processing by calculating control totals at various points in a processing run and subsequently comparing these totals.

 

ANS:  F                    PTS:   1

 

  1. Document/record counts are simple counts of the number of documents entered.

 

ANS:  T                    PTS:   1

 

  1. A count of the number of invoices being paid by all of the customer remittances is a type of batch control total called an item or line count.

 

ANS:  T                    PTS:   1

 

  1. A summation of the dollar value of items in a batch is called a hash total.

 

ANS:  F                    PTS:   1

 

  1. A hash total is the general term to describe the summation of data that would not normally be totaled except for control purposes.

 

ANS:  T                    PTS:   1

 

  1. A turnaround document is a document that is printed as an output of multiple computer processes and is used to capture and input a previous transaction.

 

ANS:  F                    PTS:   1

 

  1. Batch control plans regulate information processing by calculating control totals at various points in a processing run and subsequently comparing those totals.

 

ANS:  T                    PTS:   1

 

  1. In order to implement a batch sequence check transactions must be captured on documents that are randomly numbered.

 

ANS:  F                    PTS:   1

 

  1. Dollar totals are a summarization of the dollar value of items in the batch.

 

ANS:  T                    PTS:   1

 

  1. In a batch sequence check a computer program sorts the input documents into numerical order; checks the documents against the sequence number range; and reports missing, duplicate, and out-of-range data.

 

ANS:  T                    PTS:   1

 

  1. The cumulative sequence check provides input control in those situations in which the serial numbers are assigned within the organization but are not entered in perfect serial number sequence.

 

ANS:  T                    PTS:   1

 

  1. A tickler file is a manual or computer file of documents that contain completed business data.

 

ANS:  F                    PTS:   1

 

MULTIPLE CHOICE

 

  1. The two primary steps in preparing the control matrix include:
a. specifying control goals, identifying recommended control plans
b. specifying control plans, specifying input goals
c. specifying the control environment, identifying information process goals
d. specifying control procedures, identifying process goals

 

 

ANS:  A                    PTS:   1

 

  1. The purpose of ____ control goals is to ensure the successful accomplishment of the goals set forth for the operations process under consideration.
a. efficiency
b. effectiveness
c. security
d. input

 

 

ANS:  B                    PTS:   1

 

  1. The purpose of ____ control goals is to ensure that all resources used throughout the business process are being employed in the most productive manner.
a. efficiency
b. effectiveness
c. security
d. input

 

 

ANS:  A                    PTS:   1

 

  1. The purpose of ____ control goals is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse.
a. efficiency
b. effectiveness
c. security
d. input

 

 

ANS:  C                    PTS:   1

 

  1. Entity resources that are always considered in efficiency assessments for an AIS are:
a. cash and equipment
b. inventory and cash
c. people and computers
d. fixed assets and inventory

 

 

ANS:  C                    PTS:   1

 

  1. The purpose of input control goals is to ensure:
a. input validity, input completeness, and input accuracy
b. update completeness and update accuracy
c. both a. and b.
d. none of the above

 

 

ANS:  A                    PTS:   1

 

  1. In a control matrix the coding P-1 means:
a. process 1
b. process 1 is present
c. process 1 is missing
d. none of the above

 

 

ANS:  D                    PTS:   1

 

  1. In a control matrix, the coding M-1 means:
a. a major control plan
b. a missing control plan
c. process 1 is missing
d. none of the above

 

 

ANS:  B                    PTS:   1

 

  1. The most error-prone and inefficient steps in an operations or information process is:
a. report generation
b. master data update
c. data entry
d. none of the above

 

 

ANS:  C                    PTS:   1

 

  1. The columns in a control matrix contain headings listing the business process:
a. control goals
b. control plans
c. control environment
d. control procedures

 

 

ANS:  A                    PTS:   1

 

  1. In the control matrix, the rows represent:
a. control goals of the operations process
b. recommended control plans including both present and missing controls
c. control goals of the information process
d. control goals of the management process

 

 

ANS:  B                    PTS:   1

 

  1. Having too many control plans directed at the same control goal is called:
a. control efficiency
b. control effectiveness
c. control redundancy
d. control completeness

 

 

ANS:  C                    PTS:   1

 

  1. Which of the following control plans is not directed primarily at the control goal of input accuracy?
a. document design
b. written approvals
c. preformatted screens
d. online prompting

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following is a control plan in which the source document is designed to make it easier to input data from the document?
a. document design
b. written approval
c. preformatted screens
d. online prompting

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following is a control plan that takes the form of signatures or initials on a document to indicate that a person has authorized the event?
a. document design
b. written approval
c. preformatted screens
d. online prompting

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following is a control plan that controls the entry of data by defining the acceptable format of each data field?
a. document design
b. written approval
c. preformatted screens
d. online prompting

 

 

ANS:  C                    PTS:   1

 

  1. Which of the following is a control plan that requests user input or asks questions that the user must answer?
a. document design
b. written approval
c. preformatted screens
d. online prompting

 

 

ANS:  D                    PTS:   1

 

  1. Before a completed input screen is recorded the data entry clerk is asked if the data should be accepted. This is which control plan?
a. online prompting
b. mathematical accuracy check
c. preformatted screen
d. confirm input acceptance

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following reflects a summarization of any numeric data field within the input document or record?
a. reasonableness check or limit check
b. document/record hash totals
c. mathematical accuracy check
d. check digit

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following compares manual calculations to computer calculations?
a. reasonableness check or limit check
b. document/record hash totals
c. mathematical accuracy check
d. check digit

 

 

ANS:  C                    PTS:   1

 

  1. A control that can be used to ensure that all of the characters of a social security number are entered by a data entry clerk is:
a. dependency check
b. procedures for rejected inputs
c. preformatted screens
d. turnaround documents

 

 

ANS:  C                    PTS:   1

 

  1. A written approval in the form of a signature or initials on a document indicating that a person has authorized the event is directed primarily at achieving the control goal of:
a. ensure input validity
b. ensure input completeness
c. ensure input accuracy
d. ensure update accuracy

 

 

ANS:  A                    PTS:   1

 

  1. A control that can be used to reduce the likelihood of an error occurring when an account number is entered into a computer is:
a. check digit
b. data encryption
c. preformatted screens
d. reasonableness checks

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following control plans is designed to achieve the goal of input completeness?
a. key verification
b. confirm input acceptance
c. programmed edit check
d. written approvals

 

 

ANS:  B                    PTS:   1

 

  1. A control whose primary purpose is to ensure greater input accuracy is:
a. written approvals
b. preformatted screens
c. confirm input acceptance
d. all of these ensure greater input accuracy

 

 

ANS:  B                    PTS:   1

 

  1. Not knowing whether input data has been accepted by the information system, the user enters the data again, resulting in duplicate event data. The control plan that helps to prevent this error is:
a. key verification
b. confirm input acceptance
c. check digit
d. online prompting

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following control plans is designed to achieve the goal of input accuracy?
a. key verification
b. confirm input acceptance
c. batch sequence check
d. cumulative sequence check

 

 

ANS:  A                    PTS:   1

 

  1. A control in which two people key the same inputs into a system where they are compared is called:
a. online prompting
b. key verification
c. computer matching procedures
d. a redundancy check

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following control plans is designed both to authenticate a system user’s identity and to verify the integrity of a message transmitted by that user?
a. coding schemes
b. digital signature
c. preformatted screens
d. check digit

 

 

ANS:  B                    PTS:   1

 

  1. A control that is primarily directed at ensuring input validity is:
a. written approvals
b. programmed edit checks
c. confirm input acceptance
d. online prompting

 

 

ANS:  A                    PTS:   1

 

  1. Digital signatures address all of the following control goals except:
a. ensure security of resources
b. ensure input completeness
c. ensure input validity
d. ensure input accuracy

 

 

ANS:  B                    PTS:   1

 

  1. A sales representative enters the customer’s account number and the system retrieves certain data about the customer from master data. This control plan addresses all of the control goals except:
a. ensure efficient employment of resources
b. ensure effectiveness of operations (timeliness)
c. ensure input accuracy
d. ensure update completeness

 

 

ANS:  D                    PTS:   1

 

  1. Online prompting is aimed primarily at ensuring which of the following information systems control goals?
a. ensure input accuracy
b. ensure input completeness
c. ensure security of resources
d. ensure update completeness

 

 

ANS:  A                    PTS:   1

 

  1. All of the following are types of programmed edit checks except:
a. a proximity check
b. a document/record hash total
c. a mathematical accuracy check
d. a reasonableness check

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following is not a programmed edit check?
a. online prompting
b. check digit
c. mathematical accuracy check
d. limit checks

 

 

ANS:  A                    PTS:   1

 

  1. A control report generated by a system that shows data about transactions that were accepted or rejected during a transaction processing step is called a(n):
a. violation report
b. exception and summary report
c. variance report
d. program change log

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following is a batch control total that represents the minimum level of control for input completeness?
a. dollar totals
b. document/record counts
c. hash totals
d. item counts

 

 

ANS:  B                    PTS:   1

 

  1. A summation of customer account numbers taken from a batch of sales invoices would be classified as a:
a. record count
b. line count
c. dollar total
d. hash total

 

 

ANS:  D                    PTS:   1

 

  1. Which batch control total generally has no other purpose than control?
a. dollar totals
b. record counts
c. hash totals
d. item counts

 

 

ANS:  C                    PTS:   1

 

  1. Which of the following types of batch totals is likely to be most effective in ensuring the control goal of input accuracy?
a. line counts
b. document/record counts
c. item counts
d. hash totals

 

 

ANS:  D                    PTS:   1

 

  1. When they are sent to a customer and returned with the payment, remittance advices are examples of:
a. batch control totals
b. computer-prepared documents
c. written approval controls
d. turnaround documents

 

 

ANS:  D                    PTS:   1

 

  1. Which of the following activities is not part of the computer agreement of batch totals?
a. a batch total is manually established and entered into the computer prior to data entry.
b. data shown on source documents are key entered or scanned.
c. the computer produces a report that includes a batch total.
d. a person reconciles the manual and computer batch totals.

 

 

ANS:  D                    PTS:   1

 

  1. Which of the following controls requires that documents be numbered sequentially or prenumbered before it can be implemented?
a. completeness check
b. sequence check
c. batch total matching
d. key verification

 

 

ANS:  B                    PTS:   1

 

  1. Inputting a range of numbers comprising a batch and then inputting each serially numbered document is characteristic of the control plan called:
a. cumulative sequence check
b. batch sequence check
c. suspense file of missing numbers
d. computer agreement of batch totals

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following statements related to tickler files is false?
a. A tickler file is reviewed on a regular basis for items that do not clear the file on a timely basis.
b. A tickler file can consist of documents or computer records.
c. A tickler file addresses the control goal of update accuracy.
d. A tickler file addresses the control goal of input completeness.

 

 

ANS:  C                    PTS:   1

 

  1. The process of encoding data so that it may only be read by someone having a key is called:
a. a coding scheme
b. encryption
c. dependency checks
d. check digit

 

 

ANS:  B                    PTS:   1

 

  1. Plaintext is a term associated with ____.
a. coding schemes
b. hash totals
c. programmed edit checks
d. data encryption

 

 

ANS:  D                    PTS:   1

 

COMPLETION

 

  1. Specifying ______________________________ is the first step in preparing a control matrix.

 

ANS:  control goals

 

PTS:   1

 

  1. In the control matrix the P stands for ______________________________ controls.

 

ANS:  present

 

PTS:   1

 

  1. A(n) ______________________________ is a tool that assists in evaluating the potential effectiveness of controls in a particular business process by matching control goals with relevant control plans.

 

ANS:  control matrix

 

PTS:   1

 

  1. Control ______________________________ addresses whether the control goals are being achieved.

 

ANS:  effectiveness

 

PTS:   1

 

  1. Control ______________________________ addresses the extent to which individual control plans achieve multiple control goals.

 

ANS:  efficiency

 

PTS:   1

 

  1. The purpose of ______________________________ controls is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse.

 

ANS:  security

 

PTS:   1

 

  1. Control ______________________________ addresses whether too many control plans are directed toward the same control goal.

 

ANS:  redundancy

 

PTS:   1

 

  1. Input control goals include those for ensuring input validity, input ______________________________, and input ______________________________.

 

ANS:

completeness, accuracy

accuracy, completeness

 

PTS:   1

 

  1. The use of the letter M in a control matrix represents a(n) ______________________________.

 

ANS:

missing control

missing control plan

 

PTS:   1

 

  1. The most error-prone and inefficient step in an operations or information process is ______________________________.

 

ANS:  data entry

 

PTS:   1

 

  1. A control plan that makes it easier to prepare the document initially and later to input data from the document is called ______________________________.

 

ANS:  document design

 

PTS:   1

 

  1. ______________________________ takes the form of a signature or initials on a document to indicate that the proper person has authorized the event.

 

ANS:  Written approval

 

PTS:   1

 

  1. ______________________________ control the online entry of data by defining the acceptable format of each data field, automatically moving to the next field, requiring that certain fields be completed, and/or automatically populating certain fields.

 

ANS:  Preformatted screens

 

PTS:   1

 

  1. ______________________________ describes a computer system asking the user for input or asking questions that the user must answer.

 

ANS:  Online prompting

 

PTS:   1

 

  1. ______________________________ are edits automatically performed by data entry programs upon entry of the input data.

 

ANS:

Programmed edit checks

Programmed edits

 

PTS:   1

 

  1. A(n) ______________________________ check is a variation of a limit check.

 

ANS:  reasonableness

 

PTS:   1

 

  1. ______________________________ represent a summarization of any numeric data field within the input document or record.

 

ANS:  Hash totals

 

PTS:   1

 

  1. The edit that compares calculations performed manually with those performed by the computer to determine if a document has been entered correctly is referred to as ______________________________.

 

ANS:  mathematical accuracy checks

 

PTS:   1

 

  1. A(n) ______________________________ digit is an extra digit that is added to an identification number to help control the accuracy with which the number is entered into a computer system.

 

ANS:  check

 

PTS:   1

 

  1. The control ______________________________ informs the user that the input has been accepted for processing.

 

ANS:  confirm input acceptance

 

PTS:   1

 

  1. The control plan called ______________________________ is designed to reduce the possibility that data will be misread or miskeyed during data entry.

 

ANS:  key verification

 

PTS:   1

 

  1. A(n) ______________________________ authenticates a system user’s identity and verifies the integrity of a message transmitted by that user.

 

ANS:  digital signature

 

PTS:   1

 

  1. A(n) ______________________________ and ______________________________ report is a computer-generated report that reflects the events¾either in detail, summary total, or both¾that were accepted by the system and rejected by the system.

 

ANS:

exception, summary

summary, exception

 

PTS:   1

 

  1. ______________________________ regulate transaction processing by calculating control totals at various points in a processing run and subsequently comparing those totals.

 

ANS:  Batch control plans

 

PTS:   1

 

  1. ______________________________ are simple counts of the number of documents entered.

 

ANS:

Document counts

Record counts

Document/record counts

 

PTS:   1

 

  1. A count of the number of invoices being paid by all of the customer remittances is a type of batch control total called ______________________________.

 

ANS:

item counts

line counts

item/line counts

 

PTS:   1

 

  1. A summation of the dollar value of all invoice totals in a batch are called ______________________________.

 

ANS:  dollar totals

 

PTS:   1

 

  1. A(n) ______________________________ is the general term to describe the summation of data that would not normally be totaled except for control purposes.

 

ANS:  hash total

 

PTS:   1

 

  1. A(n) ______________________________ is printed as an output of one computer process and is used to capture and input a subsequent transaction.

 

ANS:  turnaround document

 

PTS:   1

 

  1. For the control plan ______________________________ a workflow facility is used to route business events to authorizing individuals.

 

ANS:  electronic approvals

 

PTS:   1

 

  1. “Confirm input acceptance” addresses the information process control of ______________________________.

 

ANS:  input completeness

 

PTS:   1

 

  1. In a(n) ______________________________ a computer program sorts the transactions into numerical order; checks the documents against the sequence number range; and reports missing, duplicate, and out-of-range event data.

 

ANS:  batch sequence check

 

PTS:   1

 

  1. The ______________________________ provides input control in those situations in which the serial numbers are assigned within the organization but are not entered in perfect serial number sequence.

 

ANS:  cumulative sequence check

 

PTS:   1

 

  1. A conventional ______________________________ procedure involves a single key that is used both by the sender to encrypt the message and by the receiver to decrypt it.

 

ANS:  data encryption

 

PTS:   1

 

  1. ______________________________ is the control that uses a computer system’s workflow facility to route business events to persons authorized to approve those events.

 

ANS:  Electronic approvals

 

PTS:   1

 

  1. To reduce the number of keystrokes required, making data entry quicker and more efficient, we can ______________________________ in response to the entry of identification codes, such as customer numbers, and have the computer retrieve stored data corresponding to those identification codes.

 

ANS:  populate input screens with master data

 

PTS:   1

 

  1. When there are programmed edits to control data entry, we would expect to also find ______________________________ to ensure that erroneous items are corrected and resubmitted for processing.

 

ANS:  procedures for rejected inputs

 

PTS:   1

 

  1. We prefer to ______________________________ to ensure that business event data is entered in a timely manner and that personnel who enter the data can confirm its legitimacy and easily correct errors.

 

ANS:  enter data close to the originating source

 

PTS:   1

 

  1. With ______________________________ the data entry clerk compares input batch totals to those prepared and output by the computer.

 

ANS:  manual reconciliation of batch totals

 

PTS:   1

 

  1. The manager of shipping reviews a file of open sales orders¾items to be shipped today¾to determine that all shipments are made in a timely manner. The file of open sales orders is called a(n) ______________________________.

 

ANS:  tickler file

 

PTS:   1

 

  1. The shipping clerk compares each line on the shipping document to the items to be shipped, called ______________________________, to ensure that the shipment is accurate.

 

ANS:  one-for-one checking

 

PTS:   1

 

  1. When a clerk enters the identification code for an entity, such as a customer, and the system retrieves data about that entity from the master data, we have the control plan called ______________________________.

 

ANS:  populate input screens with master data

 

PTS:   1

 

  1. For the control plan ______________________________ a data entry clerk enters an identification number, such as a customer number, and then examines the master data record displayed by the computer to determine that the correct identification number has been entered.

 

ANS:  compare input data with master data

 

PTS:   1

 

  1. ______________________________ is a strategy for the capture and entry of event-related data using technology such as OCR, bar codes, RFID, and EDI.

 

ANS:  Automated data entry

 

PTS:   1

 

  1. A(n) ______________________________ can be applied to prenumbered documents to determine that all documents have been processed and that no extra documents have been processed.

 

ANS:  sequence check

 

PTS:   1

 

  1. A(n) ______________________________ reflects a summarization of any numeric data field within the input document or record, such as item numbers or quantities on a customer order.

 

ANS:

document hash total

record hash total

document/record hash total

 

PTS:   1

 

  1. We ______________________________ by reconciling totals prepared before a computer process has begun to totals prepared at the completion of the computer process. The totals may be prepared and reconciled either manually or by the computer.

 

ANS:  agree run-to-run totals

 

PTS:   1

 

PROBLEM

 

  1. The control plan computer agreement of batch totals is described in Chapter 9. Below is a description of a particular example of that plan:
· Billing clerks batch sources documents and calculate batch totals.
· The batch of source documents and batch totals are forwarded to the data entry unit of the data center where the batch totals are entered into the computer and written to a batch control totals file (a disk file).
· As individual source documents are entered, they are recorded in an event data store (disk file).
· After the batch has been entered the computer prepares batch totals for the records on the event data store and compares these totals with those on the batch control totals file.
· The computer prepares an Error and Summary Report, which contains details of each batch, together with an indication of whether the totals agreed or disagreed.

 

Required:

Prepare a system flowchart to diagram the above process.

 

ANS:

 

PTS:   1

 

  1. The table below lists 8 control plans from Chapter 9 and 3 control goals for the information process. Fill in the table cells, as appropriate to indicate which control plans can accomplish which control goals. Number your entries and describe the reason for your entry (i.e. why the control can accomplish the goal). Some rows (controls) will have more than one entry. The first item has been completed for you as an example.

 

Control Input Input Input
  validity completeness Accuracy
Preformatted screens 1
Online prompting
Procedures for rejected inputs
Check digit
Digital signature
Written approvals
Populate input screens with master data
Confirm input acceptance

 

1. Preformatted screens ensure that all data is formatted correctly and that no required fields are skipped.

 

 

ANS:

 

Control Input

validity

Input

completeness

Input

Accuracy

Preformatted screens 1
Online prompting 2
Procedures for rejected inputs 3 4
Check digit 5
Digital signature 6 7
Written approvals 8
Populate input screens with master data 9 10
Confirm input acceptance 11

 

1. Preformatted screens ensure that data is formatted correctly and no required fields are skipped.
2. Online prompting gives data operators a chance to check their entries before continuing and may provide context-sensitive help.
3. Correcting and resubmitting data with errors helps ensure that the data entry process is complete and no transactions are missing.
4. Subjecting corrected and resubmitted data to the same tests it went through the first time helps ensure that all input data is accurate.
5. When a numerical entry is input, the computer performs a calculation to verify correctness. If the original check digit is not calculated, it indicates that the entry is incorrect and needs to be changed.
6. Opening the digital signature message with a sender’s public key ensures that the signature message (and the related encrypted message) was actually sent by that sender thus ensuring the validity of the message.
7. Matching the hash total in the signature message with the hash total of the encrypted message ensures that the message was not altered in transmission.
8. The possibility of invalid events being processed is reduced when written approvals indicating authorization are used.
9. When the computer displays a master record, such as a vendor master record, when a clerk inputs a vendor number for a purchase, we can be sure that we will be executing a purchase from an authorized vendor, thereby validating the purchase.
10. When the computer displays a master record, such as a vendor master record, when a clerk inputs a vendor number for a purchase, fewer keystrokes will be required to enter the purchase data, improving input accuracy.
11. Because the data entry clerk is informed by the computer that an input has been accepted, all inputs are recorded and none are recorded twice.

 

 

PTS:   1

 

  1. The following is a list of 10 control plans.

 

Control Plans
A. Enter data close to the originating source
B. Preformatted screens
C. Confirm input acceptance
D. Check digit
E. Document design
F. Key verification
G. Written approvals
H. Digital signatures
I. Procedures for rejected inputs
J. Compare input data with master data

 

Required:

Listed below are ten system failures that have control implications. On the blank line to the left of each number, insert the capital letter from the list above of the best control plan to prevent the system failure from occurring. If you can’t find a control that will prevent the failure, choose a detective or corrective control plan. A letter should be used only once.

 

Answers SYSTEM FAILURES
           1. Clerks at Ludlow Company enter cash receipts in batches using offline networked PCs. The customer number is often miskeyed. As a result, some cash receipts are posted to the wrong account.
           2. At Washington Company shipping notices are entered in batches. Upon entry, the computer performs certain edits to eliminate those notices that have errors. But, many actual shipments never get recorded.
           3. At Janet’s Fine Fashions, several sales clerks prepare sales slips during the day. The sales slips are then keyed into the computer at the end of the day. Numerous errors occur because the layout of the sales slips is difficult for the data entry clerk to follow.
           4. Winsted Company recently converted to an online order entry system. Clerks key in customer order data at one of several PCs. In the first week of operations, every sales order produced by the system was missing the data for the customer’s “ship to” address.
           5. The computer system at South County Bank received and processed a bogus transaction to transfer funds to a fraudster’s bank account in the British West Indies.
           6. Data entry clerks at the Windsor Inc. use offline networked PCs to prepare a variety of inputs for entry into the computer and the computer performs an agreement of batch totals. Recently, a number of errors have been found in key numeric fields. The supervisor would like to implement a control to reduce the transcription errors being made by the clerks.
           7. At Kramer Company, field salespersons call on customers and take customer orders by recording them on sales order forms. The forms are mailed by each salesperson each night to Kramer’s central data center for processing. The company has been besieged by customer complaints about how long it takes to receive their orders and about being shipped incorrect goods.
           8. Comet, Inc. recently installed a new cash receipts system. A clerk keys in remittance data through a terminal located in the accounts receivable department. On the first day of operations, several remittances were not accepted for processing. The clerk had no idea that these remittances were not processed.
           9. At Southfield Inc., data entry clerks receive a variety of inputs from many departments throughout the company. In some cases, unauthorized inputs are keyed and entered into the computer.
           10. Clerks in the cash applications section of Charlton Company enter customer payments. The amount being paid is often input incorrectly; it does not agree with the amount due as indicated on the accounts receivable master data.

 

 

ANS:

 

System
Failure Answer  
1. D
2. I
3. E
4. B
5. H
6. F
7. A
8. C
9. G
10. J

 

 

PTS:   1

 

  1. The following is a list of 10 control plans:

 

Control Plans
A. Populate input screens with master data
B. Cumulative sequence check
C. Turnaround documents
D. Document/record counts
E. Document design
F. Preformatted screens
G. Compare input data with master data
H. Hash total
I. Tickler file
J. Automated data entry

 

Required:

Listed below are ten statements describing a control. On the blank line to the left of each number, insert the capital letter from the list above of the name of the control plan that corresponds to the control description. A letter should be used only once.

 

Answers CONTROL DESCRIPTIONS
           1. Helps to achieve the information systems control goal of input accuracy by ensuring that dates are properly entered as MM/DD/YY.
           2. By using a pre-recorded bar code to trigger an event, this control plan ensures effectiveness of operations and improves efficiency by reducing the amount of data that must be input and by improving the speed and productivity of data entry. In addition, this control plan improves input validity, and improves input accuracy.
           3. This control plan could help prevent the entry of inconsistent data elements, such as entering a tax code for a customer to whom sales should be nontaxable.
           4. When the order entry clerk types in the customer number, the system automatically retrieves the customer’s name, address, and other standing data from the customer master data. In this way, resources are used more efficiently.
           5. This control plan should prevent a field salesperson from omitting data elements when filling in the sales order form.
           6. In entering a batch of remittance advices into the computer, an operator made several errors in keying the customer identification numbers. However, the errors were detected when the total of the customer ID numbers that were input did not agree with the corresponding total calculated from the source documents.
           7. This control plan helps to identify duplicate, missing, and out-of-range document numbers by comparing input numbers with a previously stored number range.
           8. This batch control total does not help to ensure input accuracy, nor would it detect the fact that one record in a batch was removed and substituted with another.
           9. Bar codes on the items to be shipped are scanned to enter and record the shipment data details. This is quicker and more accurate than typing in each item number.
           10. The manager of the shipping department periodically reviews a file of open sales orders due to be shipped to ensure that all orders are shipped in a timely manner.

 

 

ANS:

 

Control Description Control Plan  
1. F
2. C
3. G
4. A
5. E
6. H
7. B
8. D
9. J
10. I

 

 

PTS:   1

 

  1. At Winsted Company the following procedures are used to enter purchase requisitions (PRs).

 

Clerks in the purchasing department receive purchase requisitions (PRs) from departments throughout Winsted’s home office. The PRs are handwritten on forms specially designed for this purpose. The clerks enter these into preformatted screens on PCs that are connected to the central computer. After each PR is recorded on the purchase requisition event data store the computer informs the clerk that the PR has been recorded. Once recorded the computer forwards the PRs to appropriate managers who can approve the PRs online. Approving individuals enter their approvals (or denials). PRs that are not approved are sent back to the purchasing clerks for corrective action.

 

Below is the annotated systems flowchart and partially completed control matrix for this process.

 

Control Goals of the Winsted Purchase Requisition Data Entry Process
Control Goals of the Operations Process Control Goals of the Information

Process

Ensure

effectiveness

of operations:

 

Ensure

efficient

employment

of resources

(people,

computers)

Ensure

security of

resources

(inventory,

purchase

order

master

data)

For the purchase

order (i.e.,

purchase

requisitions)

inputs, ensure:

For the

purchase

order master

data, ensure:

Recommended control plans A IV IC IA UC UA
Present Controls
 

P-1: Document design.

 

P-2: Preformatted screens.

 

P-3: Confirm input acceptance.

 

P-4: Electronic approvals.

 

P-5: Procedures for rejected inputs.

Possible effectiveness goals include the following:

 

A – Ensure timely input of purchase requisition data.

 

See below for a complete explanation of control plans and cell entries.

IV = input validity

IC = input completeness

IA = input accuracy

UC = update completeness

UA = update accuracy

 

Required:

Complete the control matrix by entering the control plan numbers (P-1, P-2, etc.) in the appropriate cells in the control matrix to indicate to which control goal(s) each control plan is directed. Below the matrix describe how each control plan achieves each control goal that you have indicated on the matrix.

 

ANS:

Control Goals of the Winsted Purchase Requisition Data Entry Process
Control Goals of the Operations Process Control Goals of the Information

Process

Ensure

effectiveness

of operations:

 

Ensure

efficient

employment

of resources

(people,

computers)

Ensure

security of

resources

(inventory,

purchase

order

master

data)

For the purchase

order (i.e.,

purchase

requisitions)

inputs, ensure:

For the

purchase

order master data, ensure:

Recommended control plans A IV IC IA UC UA
Present Controls
 

P-1: Document design.

 

P-1

 

P-1

 

P-1

 

P-2: Preformatted screens.

 

P-2

 

P-2

 

P-2

 

P-3: Confirm input acceptance.

 

P-3

 

P-4: Electronic approvals.

 

P-4

 

P-4

 

P-5: Procedures for rejected inputs.

 

P-5

 

P-5

Possible effectiveness goals include the following:

 

A – Ensure timely input of purchase requisition data.

 

See below for a complete explanation of control plans and cell entries.

IV = input validity

IC = input completeness

IA = input accuracy

UC = update completeness

UA = update accuracy

 

Discussion and Explanation of Recommended Control Plans for Winsted Purchase Requisition Data Entry Process

 

P-1: Document design.
Effectiveness goal A, efficient employment of resources: A well-designed document can be completed more quickly (effectiveness goal A) and can be prepared and entered into the computer with less effort (efficiency).
Purchase requisition input accuracy: We tend to fill in a well-designed document completely and legibly. If a document is legible, data entry errors will occur less frequently.
P-2: Preformatted screens.
Effectiveness goal A, efficient employment of resources: By structuring the data entry process, automatically populating fields, and preventing errors, preformatted screens simplify data input and save time (Effectiveness goal A), allowing a user to input more data over a period of time (efficiency).
Purchase requisition input accuracy: As each data field is completed on a preformatted screen, the cursor moves to the next field on the screen, thus preventing the user from omitting any required data set. The data for fields that are automatically populated need not be manually entered, thus reducing input errors. Incorrectly formatted fields are rejected.
P-3: Confirm input acceptance.
Purchase requisition input completeness: By advising the user that input has been accepted, interactive feedback checks help ensure input completeness.
P-4: Electronic approvals.
Security of resources, purchase requisition input validity: By checking to see that approvals are present on all purchase requisitions, we reduce the possibility that invalid (unauthorized) purchase requisitions will be input and that inventory purchased and funds expended without approval.
P-5: Procedures for rejected inputs.
Purchase requisition input completeness and purchase requisition input accuracy: The rejection procedures (i.e., “Error routine not shown” annotations) are designed to ensure that erroneous data not accepted for processing are corrected (accuracy) and resubmitted for processing (completeness).

 

 

PTS:   1

Test Bank 10th-Ed Accounting Information Systems by Gelinas-Dull-Wheeler

Test Bank 10th-Ed Accounting Information Systems by Gelinas-Dull-Wheeler