Question 1

Three terms used in the chapter to refer to when a control plan is exercised are ______________________________, ______________________________, and corrective control plans.

Accepted Answer

The answer of Three terms used in the chapter to...

Question 2

The control goal that is concerned with the correctness of the transaction data that are entered into a system is called ensure ______________________________.

Accepted Answer

The answer of The control goal that is concerned with...

Question 3

The control goal of ensure ______________________________ provides assurance that objects or events which were entered into the computer are in reflected correctly in their respective master data.

Accepted Answer

The answer of The control goal of ensure ______________________________ provides...

Question 4

Listed below are 13 specific fraud examples taken from some well-known fraud cases: MiniScribe, ZZZZ Best Carpet Cleaning, Lesley Fay, and Equity Funding.
Required:
For each fraud example, enter a letter corresponding to which information control goal was initially violated-Validity, Completeness, or Accuracy. Some examples might involve more than one violation.
NOTE: When we say initially, we mean what control goal failure led to this example, not what is the present condition. For example, master data might contain information that is inaccurate, but it might have been an inaccurate input that initially caused the data to be inaccurate.

Accepted Answer

The answer of Listed below are 13 specific fraud examples...

Question 5

The control goal of ensure ______________________________ provides assurance that all valid objects or events which were entered into the computer are in turn reflected in their respective master data once and only once.

Accepted Answer

The answer of The control goal of ensure ______________________________ provides...

Question 6

Figure TB-7.1 depicts the objective setting process shown in Chapter 7 but with all labels removed.
Required:
Complete Figure TB-7.1 by inserting the following labels where they belong in the model:
 $\begin{array}{c}
\begin{array}{lll}
\underline {\text { Box Title }}\
 \text {A. Related objectives}\
\
 \text {B. Strategy}\
\
 \text {C. Mission, vision, purpose}\
\
\
 \text {D. Strategic objectives}\
\ 
\end{array}
\begin{array}{lll}
\underline{\text { Box Description }}\
\text {E. e.g., to be in the top quartile of product sales for}\
\text { retailers of our products}\
\text {F. e.g., to be the leading producer of household}\
 \text {products in the regions in which we operate}\
\text {G. increase production of \( x $ by $ 15 \% $}\
\text {- hire 180 qualified new staff}\
\text {- maintain product quality}\
\text {H. e.g., expand production of our top-five selling}\
\text { retail products to meet increased demand}

\end{array}
\end{array}\)

Accepted Answer

The answer of Figure TB-7.1 depicts the objective setting process...

Question 7

A(n) ______________________________ control plan is designed to discover problems that have occurred.

Accepted Answer

The answer of A(n) ______________________________ control plan is designed to...

Question 8

______________________________ is software designed specifically to damage or disrupt computer systems.

Accepted Answer

The answer of ______________________________ is software designed specifically to damage...

Question 9

A(n) ______________________________ relates to a specific AIS process, such as billing or cash receipts.

Accepted Answer

The answer of A(n) ______________________________ relates to a specific AIS...

Question 10

______________________________ are applied to all IT service activities.

Accepted Answer

The answer of ______________________________ are applied to all IT service...

Question 11

Information-processing policies and procedures that assist in accomplishing control goals are known as ______________________________.

Accepted Answer

The answer of Information-processing policies and procedures that assist in...

Question 12

______________________________ are automated business process controls contained within computer programs.

Accepted Answer

The answer of ______________________________ are automated business process controls contained...

Question 13

A missing data field on a source document or computer screen is an example of an error that could undermine the achievement of the control goal of ensure ______________________________.

Accepted Answer

The answer of A missing data field on a source...

Question 14

The CFO of Exeter Corporation is very uncomfortable with its current risk exposure related to the possibility of business disruptions. Specifically, Exeter is heavily involved with e-business and its internal information systems are tightly interlinked with its key customers' systems. The CFO has estimated that every hour of system downtime will cost the company about $5,000 in sales. The CFO and CIO have further estimated that if the system were to fail, the average downtime would be about 2 hours per incident. They have anticipated (assume with 100% annual probability) that Exeter will likely experience 10 downtime incidents in a given year due to internal computer system problems, and another 10 incidents per year due to external problems; specifically system failures with the Internet service provider (ISP). Currently, Exeter pays an annualized cost of $25,000 for redundant computer and communication systems, and another $25,000 for Internet service provider (ISP) support just to keep total expected number of incidents to 20 per year.
Required:
a.Given the information provided thus far, how much ($) is the company's current expected gross risk?
b.A further preventative control would be to purchase and maintain more redundant computers and communication lines where possible, at an annualized cost of $30,000, which would reduce the expected number of downtimes per year to 5 per year due to internal computer system problems. What would the dollar amount of Exeter's current residual expected risk at this point?

Accepted Answer

The answer of The CFO of Exeter Corporation is very...

Question 15

A(n) ______________________________ control plan is designed to rectify problems that have occurred.

Accepted Answer

The answer of A(n) ______________________________ control plan is designed to...

Question 16

Control plans that relate to a multitude of goals and processes are called ______________________________.

Accepted Answer

The answer of Control plans that relate to a multitude...

Question 17

A(n) ______________________________ is program code that can attach itself to other programs or macros thereby infecting those programs and macros.

Accepted Answer

The answer of A(n) ______________________________ is program code that can...

Question 18

The control goal of ensure ______________________________ requires that all valid objects or events are captured and entered into the computer once and only once.

Accepted Answer

The answer of The control goal of ensure ______________________________ requires...

Question 19

Listed below are 8 descriptions of sections of the Sarbanes-Oxley Act of 2002 (SOX) followed by the names of 8 sections of SOX.
Required:
On the blank line next to the numbered section description enter a letter of the corresponding section name.

Accepted Answer

The answer of Listed below are 8 descriptions of sections...

Question 20

Match between columns
                        Premises: This requires each annual report filed with the SEC to include an internal control report...
States that COSO is a suitable framework for an assessment of internal control...
This was developed to help management identify, assess and manage risk.
This prohibits a CPA firm that audits a public company to engage in certain nonaudit services with the same client...
Provides guidance for conducting an integrated audit of financial statements under Sarbanes-Oxley Act Section 404...
The definition of internal control in this document has been adopted throughout the world.
This addressed four categories of management objectives: strategic, operations, reporting and compliance...
A fundamental aspect of management's stewardship responsibility is to provide shareholders with reasonable assurance that the business is adequately controlled...
Reduces the number of internal controls that need to be documented, evaluated and tested...
This addresses the effect of IT on audits...

Accepted Answer

The Answer of Statement on Auditing Standards No. 94 and is...

Quiz 7: Controlling Information Systems: Introduction to Enterprise Risk Management and Internal Control

Three terms used in the chapter to refer to when a control plan is exercised are , , and corrective control plans.