Chapter 10

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Accounting Information Systems, 12e (Romney/Steinbart)

Chapter 10 Information Systems Controls for Systems ReliabilityPart 3: Processing Integrity and Availability

1) The best example of a hash total for a payroll transaction file could be A) total of employees' social security numbers.

B) sum of net pay.

C) total number of employees. D) sum of hours worked. Answer: A

Page Ref: 277

Objective: Learning Objective 1 Difficulty : Easy

AACSB: Analytic

2) Error logs and review are an example of A) data entry controls.

B) data transmission controls. C) output controls.

D) processing controls. Answer: A

Page Ref: 277

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3) Following is the result of batch control totals on employee Social Security Numbers in a payroll processing transaction: Correct Values From Masterfile Values Entered During Processing 487358796 487358796 534916487 534916487 498374526 498374526 514873420 514873420 534196487 534916487 678487853 678487853 471230589 471230589 3719438158 3720158158

The difference in the control totals is 720,000. Which data entry control would best prevent similar data entry errors in the future?

A) Modulus 11 B) Validity check C) Check digit D) Sequence check Answer: C Page Ref: 277

Objective: Learning Objective 1 Difficulty : Moderate

AACSB: Analytic

4) Which of the following data entry controls would not be useful if you are recording the checkout of library books by members?

A) Sequence check B) Prompting C) Validity check

D) Concurrent update control Answer: A

Page Ref: 276

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5) A customer failed to include her account number on her check, and the accounts receivable clerk credited her payment to a different customer with the same last name. Which control could have been used to most effectively to prevent this error?

A) Closed-loop verification B) Duplicate values check C) Validity check

D) Reconciliation of a batch control total Answer: A

Page Ref: 277

AACSB: Analytic

6) If invoices are processed in groups of fifty, which fields from the document shown below would not be used to create a hash control total?

A) Amount B) Item Number C) Quantity Ordered

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Page Ref: 277

AACSB: Reflective Thinking

7) A data entry input control in which the application software sums the first four digits of a customer number to calculate the value of the fifth digit and then compares the calculated number to the number typed in during data entry is an example of a

A) check digit verification. B) validity check.

C) closed-loop verification. D) duplicate data check. Answer: A

Page Ref: 277

AACSB: Analytic

8) All of the following controls for online entry of a sales order would be useful except A) check digit verification on the dollar amount of the order.

B) validity check on the inventory item numbers.

C) field check on the customer ID and dollar amount of the order. D) concurrent update control.

Answer: A Page Ref: 277

Objective: Learning Objective 1 Difficulty : Difficult

AACSB: Analytic

9) A specific inventory record indicates that there were 12 items on hand before a customer brings two of the items to the check stand to be purchased. The cashier accidentally entered quantity 20 instead of 2. Which data entry control would best have prevented this error?

A) sign check B) limit check C) validity check D) field check Answer: A Page Ref: 276

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10) When processing weekly payroll, an employee accidentally entered 400 for hours worked. The best data entry control for this error would be

A) a limit check. B) a check digit.

C) batch total reconciliation. D) a field check.

Answer: A Page Ref: 276

AACSB: Analytic

11) The data entry control that would best prevent entering an invoice received from a vendor who is not on an authorized supplier list is

A) a validity check. B) an authorization check. C) a check digit. D) closed-loop verification. Answer: A Page Ref: 276

AACSB: Analytic

12) Forms design is an example of this type of control. A) Data entry control

B) Processing control C) Output control D) Input control Answer: D Page Ref: 276

AACSB: Analytic

13) Sequentially prenumbered forms is an example of a(n) A) data entry control.

B) data transmission control. C) processing control. D) input control. Answer: D Page Ref: 276

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14) Turnaround documents are an example of a(n) A) data entry control.

B) output control. C) processing control. D) input control. Answer: D Page Ref: 276

AACSB: Analytic

15) A validity check is an example of a(n) A) data entry control.

B) data transmission control. C) output control.

D) input control. Answer: A Page Ref: 276

AACSB: Analytic

16) Parity checks are an example of a(n) A) data entry control.

D) processing control. Answer: B

Page Ref: 279

AACSB: Analytic

17) User reviews are an example of a(n) A) data entry control.

D) processing control. Answer: C

Page Ref: 278

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18) Data matching is an example of a(n) A) data entry control.

B) data transmission control. C) processing control. D) input control. Answer: C Page Ref: 277

AACSB: Analytic

19) Batch totals are an example of a(n) A) data entry control.

D) processing control. Answer: A

Page Ref: 277

AACSB: Analytic

20) Cancellation and storage of documents means that

A) data are copied from a document and stored, after which the document is shredded. B) documents are defaced before being shredded.

C) documents are defaced and stored.

D) cancellation data are copied from documents before they are stored. Answer: C

Page Ref: 276

AACSB: Analytic

21) Check digit verification is an example of a(n) A) data transmission control.

B) output control. C) processing control. D) input control. Answer: D Page Ref: 277

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22) This ensures that the input data will fit into the assigned field. A) Limit check B) Range check C) Size check D) Validity check Answer: C Page Ref: 276

AACSB: Analytic

23) This tests a numerical amount to ensure that it does not exceed a predetermined value nor fall below another predetermined value.

A) Completeness check B) Field check C) Limit check D) Range check Answer: D Page Ref: 276

AACSB: Analytic

24) This determines if all required data items have been entered. A) Completeness check B) Field check C) Limit check D) Range check Answer: A Page Ref: 276

AACSB: Analytic

25) This determines the correctness of the logical relationship between two data items. A) Range check B) Reasonableness test C) Sign check D) Size check Answer: B Page Ref: 276

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26) This determines if characters are of the proper type. A) Field check B) Alpha-numeric check C) Range check D) Reasonableness test Answer: A Page Ref: 276

AACSB: Analytic

27) This tests a numerical amount to ensure that it does not exceed a predetermined value. A) Completeness check B) Limit check C) Range check D) Sign check Answer: B Page Ref: 276

AACSB: Analytic

28) This batch processing data entry control sums a field that contains dollar values. A) Record count B) Financial total C) Hash total D) Sequence check Answer: B Page Ref: 277

AACSB: Analytic

29) This batch processing data entry control sums a non-financial numeric field. A) Record count B) Financial total C) Hash total D) Sequence check Answer: C Page Ref: 277

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30) When I enter a correct customer number, the data entry screen displays the customer name and address. This is an example of

A) prompting. B) preformatting. C) closed-loop verification. D) error checking. Answer: C Page Ref: 277

AACSB: Analytic

31) This control ensures that the correct and most current files are being updated. A) Cross-footing balance test

B) Data matching C) File labels

D) Write-protect mechanism Answer: C

Page Ref: 277

AACSB: Analytic

32) This batch processing data entry control sums the number of items in a batch. A) Financial total B) Hash total C) Record count D) Sequence check Answer: C Page Ref: 277

AACSB: Analytic

33) This data entry control compares the ID number in transaction data to a master file to verify that the ID number exists. A) Reasonableness test B) User review C) Data matching D) Validity check Answer: D Page Ref: 276

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34) File labels are an example of A) data entry controls.

B) output controls. C) processing controls. D) source data controls. Answer: C

Page Ref: 277

AACSB: Analytic

35) A computer operator accidentally used the wrong master file when updating a transaction file. As a result, the master file data is now unreadable. Which control could best have prevented this from happening?

A) Internal header label B) Validity check C) Check digit D) Parity check Answer: A Page Ref: 277

AACSB: Analytic

36) Chaz Finnerty called the IT Help Desk in a huff. "I'm trying to open an Excel file and I get a message that says that the file is locked for editing. What's going on?" The answer is likely that A) the file is corrupted due to a computer virus.

B) there is no problem. Chaz is editing the file, so it is locked. C) concurrent update controls have locked the file.

D) Chaz probably opened the file as read-only. Answer: C

Page Ref: 278

AACSB: Analytic

37) This control protects records from errors that occur when two or more users attempt to update the same record simultaneously.

A) Concurrent update controls B) Cross-footing balance test C) Data conversion controls D) Recalculation of batch totals Answer: A

Page Ref: 278

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38) Modest Expectations Investment Services (MEIS) allows customers to manage their investments over the Internet. If customers attempt to sell more shares of a stock than they have in their account, an error message is displayed. This is an example of a

A) reasonableness test. B) field check. C) validity check. D) limit check. Answer: A Page Ref: 276

AACSB: Analytic

39) Modest Expectations Investment Services (MEIS) allows customers to manage their investments over the Internet. If customers attempt to spend more money than they have in their account, an error message is displayed. This is an example of a

A) reasonableness test. B) field check. C) validity check. D) limit check. Answer: A Page Ref: 276

AACSB: Analytic

40) The Spontaneous Combustion Rocket Shoppe in downtown Fargo, North Dakota, generates three quarters of its revenue from orders taken over the Internet. The revenue clearing account is debited by the total of cash and credit receipts and credited by the total of storefront and Internet sales. This is an example of a

A) data integrity test. B) zero-balance test. C) trial balance audit.

D) cross-footing balance test. Answer: B

Page Ref: 278

AACSB: Analytic

41) What is the most effective way to ensure information system availability? A) High bandwidth

B) Maintain a hot site C) Maintain a cold site D) Frequent backups

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42) Concerning system availability, which of the following statements is true? A) Human error does not threaten system availability.

B) Proper controls can maximize the risk of threats causing significant system downtime. C) Threats to system availability can be completely eliminated.

D) Threats to system availability include hardware and software failures as well as natural and man-made disasters.

Answer: D Page Ref: 284

AACSB: Analytic

43) Which of the following is not an objective of a disaster recovery plan? A) Minimize the extent of the disruption, damage or loss.

B) Permanently establish an alternative means of processing information. C) Resume normal operations as soon as possible.

D) Train employees for emergency operations. Answer: B

Page Ref: 287

AACSB: Analytic

44) Which item below would not typically be part of an adequate disaster recovery plan? A) a system upgrade due to operating system software changes

B) uninterruptible power systems installed for key system components C) scheduled electronic vaulting of files

D) backup computer and telecommunication facilities Answer: A

Page Ref: 287

AACSB: Analytic

45) A facility that contains all the computing equipment the organization needs to perform its essential business activities is known as a

A) cold site. B) hot site. C) remote site. D) subsidiary location. Answer: B Page Ref: 287

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46) A facility that is pre-wired for necessary telecommunications and computer equipment, but doesn't have equipment installed, is known as a

A) cold site. B) hot site. C) remote site. D) subsidiary location. Answer: A Page Ref: 287

AACSB: Analytic

47) When a computer system's files are automatically duplicated on a second data storage system as they are changed, the process is referred to as

A) real-time mirroring. B) batch updating. C) consistency control. D) double-secure storage. Answer: A Page Ref: 287

AACSB: Analytic

48) ________ enables a system to continue functioning in the event that a particular component fails. A) An incremental backup procedure

B) Fault tolerance

C) Preventive maintenance D) A concurrent update control Answer: B

Page Ref: 284

AACSB: Analytic

49) A copy of a database, master file, or software that will be retained indefinitely as a historical record is known as a(n) A) archive. B) cloud computing. C) differential backup. D) incremental backup. Answer: A Page Ref: 286

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50) While this type of backup process takes longer than the alternative, restoration is easier and faster. A) Archive B) Cloud computing C) Differential backup D) Incremental backup Answer: C Page Ref: 286

AACSB: Analytic

51) ________ involves copying only the data items that have changed since the last partial backup. A) Archive B) Cloud computing C) Differential backup D) Incremental backup Answer: D Page Ref: 285

AACSB: Analytic

52) ________ copies all changes made since the last full backup. A) Archive B) Cloud computing C) Differential backup D) Incremental backup Answer: C Page Ref: 286

AACSB: Analytic

53) The maximum amount of time between backups is determined by a company's A) recovery time objective.

B) recovery point objective. C) recovery objective.

D) maximum time recovery objective. Answer: B

Page Ref: 285

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54) The maximum acceptable down time after a computer system failure is determined by a company's A) recovery time objective.

B) recovery point objective. C) recovery objective.

D) maximum time recovery objective. Answer: A

Page Ref: 285

AACSB: Analytic

55) The accounting department at Synergy Hydroelectric records an average of 12,500 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 25,000 transactions. If the firm's recovery time objective is 120 minutes, then the worst case recovery time objective is

A) 1 hour B) 2 hours C) 3 hours D) 4 hours Answer: D Page Ref: 285

AACSB: Analytic

56) The accounting department at Synergy Hydroelectric records an average of 10,000 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 20,000 transactions. If the firm's recovery time objective is 60 minutes, then the worst case recovery time objective is

A) 1 hour B) 2 hours C) 3 hours D) 4 hours Answer: C Page Ref: 285

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57) The accounting department at Synergy Hydroelectric records an average of 10,000 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 40,000 transactions. The firm's recovery point objective is therefore A) 40,000 transactions B) 10,000 transactions C) 10 hours D) 4 hours Answer: D Page Ref: 285

AACSB: Analytic

58) The accounting department at Synergy Hydroelectric records an average of 12,500 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 25,000 transactions. The firm's recovery point objective is therefore A) 25,000 transactions B) 12,500 transactions C) 1 hour D) 2 hours Answer: D Page Ref: 285

AACSB: Analytic

59) This control entails verifying that the proper number of bits are set to the value 1 in each character received. A) Echo check B) Field check C) Parity check D) Trailer record Answer: C Page Ref: 279

AACSB: Analytic

60) Probably the most important change management control is A) monitoring user rights and privileges during the change process.

B) testing all changes thoroughly prior to implementation on a stand-alone computer. C) updating all documentation to reflect changes made to the system.

D) management's careful monitoring and review. Answer: D

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61) Which of the following is true?

A) Cloud computing is a control technique for system availability.

B) Cloud computing eliminates the need for backup of applications and data.

C) Cloud computing refers to the practice of storing application files and backup data on satellites 'in the clouds'.

D) Cloud computing eliminates the need for companies to own their own software and servers. Answer: A

Page Ref: 288

AACSB: Analytic

62) Discuss how cloud computing could both positively and negatively affect system availability. Answer: Cloud computing significantly reduces the risk that a single event would result in system unavailability, since the 'cloud' consists of banks of redundant servers, in multiple locations. However, since users don't own the cloud, if a provider goes out of business, users may find it very difficult to access applications and data stored in the cloud. Additionally, users should evaluate the security and availability controls of the cloud provider before transacting business.

Page Ref: 288

AACSB: Analytic

63) Define and contrast a recovery point objective and a recovery time objective.

Answer: A recovery point objective is the maximum amount of time that a firm is willing to risk the possible loss of transaction data. A recovery time objective is the maximum amount of time that a firm is willing to risk losing access to its accounting information system due to disaster.

Page Ref: 285