Accounting Information System Answer Key Chapter 8

ANSWER KEY 1) D 2) C 3) C 4) C 5) D 6) D 7) D 8) B 9) C 10) D 11) A 12) B 13) A 14) D 15) C 16) C 17) D 18) D 19) C 20) A 21) C 22) B 23) D 24) A 25) D 26) B 27) D 28) B 29) C 30) C 31) C 32) C 33) B 34) A 35) A 36) C 37) C 38) D 39) B 40) B 41) A 42) D 43) C 44) C 45) A 46) A 47) B 48) B 49) D 50) A 51) Encryption 52) Answers include: forms design, pre-numbered forms sequence test, turnaround documents, cancellation and storage of documents, authorization and segregation of duties, visual scanning, check digit verification, RFID security. 53) Answers include: field check, sign check, limit check, range check, size check, completeness check, validity check, reasonableness check, prompting, pre-formatting, closed-loop verification, transaction log. 54) Answers include: data matching, file labels, recalculation of batch totals, cross-footing balance test, write-protection mechanisms, database processing integrity procedures, concurrent update controls, data conversion controls. 55) Answers include: parity checking, echo check, trailer record, numbered batches. 56) Answers include: user review of output, reconciliation procedures, external data reconciliation. 57) Fault tolerance is the use of redundant components that enable a system to continue functioning in the event that a particular component fails. 58) Not allowing visitors to move through the building without supervision. Coding reports to reflect their importance. Requiring employees to log out of applications when leaving their desk. Restricting access to rooms with printers. 59) Management. Notice. Choice and consent. Collection. Use and retention. Access. Disclosure to third parties. Security. Quality. Monitoring and enforcement. 60) Shred documents containing personal information. Never send personally identifying information in unencrypted email. Beware of email/phone/print requests to verify personal information that the requesting party should already possess. Do not carry your social security card with you. Print only your initials and last name on checks. Limit the amount of other information preprinted on checks. Do not use your mailbox for outgoing mail. Do not carry more than a few blank checks with you. Use special software to digitally clean any digital media prior to disposal. Monitor your credit cards regularly. File a police report as soon as you discover a purse or wallet missing. Make photocopies of driver's license, passports and credit cards and keep in a safe location. Immediately cancel any stolen or lost credit cards. Chapter 8 MULTIPLE CHOICE 1. Concerning virtual private networks (VPN), which of the following is not true? a) VPNs provide the functionality of a privately owned network using the Internet. b) Using VPN software to encrypt information while it is in transit over the Internet in effect creates private communication channels, often referred to as tunnels, which are accessible only to those parties possessing the appropriate encryption and decryption keys. c) The cost of the VPN software is much less than the cost of leasing or buying the infrastructure (telephone lines, satellite links, communications equipment, etc.) needed to create a privately owned secure communications network. d) It is more expensive to reconfigure VPNs to include new sites than it is to add or remove the corresponding physical connections in a privately owned network. 2. The goal of information systems controls is a) b) c) d) To ensure that systems objectives are met. To ensure that systems function To ensure that systems are reliable. To ensure that data are confidential. 3. Which of the following is not one of the 10 internationally recognized best practices for protecting the privacy of customers' personal information? a) b) c) d) Choice and consent. Disclosure to third parties. Reimbursement. Use and retention. 4. Which of the following is not one of the 10 internationally recognized best practices for protecting the privacy of customers' personal information? a) b) c) d) Access. Monitoring and enforcement. Registration. Security. 5. A text file created by a website and stored on a visitor's hard disk. a) b) c) d) Validity check Spam Error log Cookie 6. Forms design is an example of this type of control. a) b) c) d) Data entry controls Data transmission controls Output controls Source data controls 7. Sequentially pre-numbered forms is an example of . a) Data entry controls b) Data transmission controls c) Processing controls d) Source data controls 8. Message acknowledgement techniques are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Processing controls 9. File labels are an example of a) b) c) d) Data entry controls Output controls Processing controls Source data controls 10. Turnaround documents are an example of a) b) c) d) Data entry controls Output controls Processing controls Source data controls 11. Input validation checks are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Source data controls 12. Parity checks are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Processing controls 13. Error logs and review are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Processing controls 14. Visual scanning is an example of a) b) c) d) Data entry controls Output controls Processing controls Source data controls 15. User reviews are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Processing controls 16. Data matching is an example of a) b) c) d) Data entry controls Data transmission controls Processing controls Source data controls 17. Batch totals are an example of a) b) c) d) Data entry controls Data transmission controls Output controls Processing controls 18. Check digit verification is an example of a) b) c) d) Data transmission controls Output controls Processing controls Source data controls 19. Data conversion checks are an example of a) b) c) d) Data entry controls Output controls Processing controls Source data controls 20. This determines if the characters in a field are of the proper type. a) b) c) d) Field check Limit check Range check Reasonableness test 21. This ensures that the input data will fit into the assigned field. a) b) c) d) Limit check Range check Size check Validity check 22. This tests a numerical amount to ensure that it does not exceed a predetermined value. a) b) c) d) Completeness check Limit check Range check Sign check 23. This tests a numerical amount to ensure that it does not exceed a predetermined value nor fall below another predetermined value. a) b) c) d) Completeness check Field check Limit check Range check 24. This determines if all required data items have been entered. a) b) c) d) Completeness check Field check Limit check Range check 25. This compares the ID number in transaction data with similar data in the master file to verify that the account exists. a) b) c) d) Reasonableness test Sign check Size check Validity check 26. This determines the correctness of the logical relationship between two data items. a) b) c) d) Range check Reasonableness test Sign check Size check 27. This batch processing data entry control tests if a batch of input data is in the proper numerical or alphabetical sequence. a) b) c) d) Batch total Financial total Hash total Sequence check 28. This batch processing data entry control sums a field that contains dollar values. a) b) c) d) Batch total Financial total Hash total Sequence check 29. This batch processing data entry control sums a non-financial numeric field. a) b) c) d) Batch total Financial total Hash total Sequence check 30. This batch processing data entry control sums the number of items in a batch. a) b) c) d) Batch total Hash total Record count Sequence check 31. This ensures that the correct and most current files are being updated. a) b) c) d) Cross-footing balance test Data matching File labels Write-protect mechanism 32. These find processing errors. a) b) c) d) Cross-footing balance test File labels Recalculation of batch totals Write-protect mechanisms 33. This compares the results produced by more than one method to verify accuracy. a) b) c) d) Concurrent update control Cross-footing balance test Data matching Recalculation of batch totals 34. This protects records from errors that occur when two or more users attempt to update the same record simultaneously. a) b) c) d) Concurrent update controls Cross-footing balance test Data conversion controls Recalculation of batch totals 35. The system and the receiving unit calculate a summary statistic and compare it. a) b) c) d) Echo check Numbered batches Parity check Trailer record 36. This entails verifying that the proper number of bit sare set to the value 1 in each character received. a) b) c) d) Echo check Numbered batches Parity check Trailer record 37. This entails verifying that the proper number of bits are set to the value 1 in each character received. a) b) c) d) Echo check Numbered batches Parity check Trailer record 38. Concerning availability, which of the following statements is true? a) b) c) d) Human error does not threaten system availability. Proper controls can maximize the risk of threats causing significant system downtime. Threats to system availability can be completely eliminated. Threats to system availability include hardware and software failures as well as natural and manmade disasters. 39. This enables a system to continue functioning in the even that a particular component fails, a) b) c) d) Backup procedures Fault tolerance Preventive maintenance None of the above 40. This enables a system to continue functioning in the even that a particular component fails, a) b) c) d) Backup procedures Fault tolerance Preventive maintenance None of the above 41. Every organization should have a disaster recovery plan so that data processing capacity can be restored as smoothly and quickly as possible. Which item below would not typically be part of an adequate disaster recovery plan? a) b) c) d) a system upgrade due to operating system software changes uninterruptible power systems installed for key system components scheduled electronic vaulting of files backup computer and telecommunication facilities 42. ________ involves copying only the data items that have changed since the last backup. a) b) c) d) Archive Backup Differential backup Incremental backup 43. ________ copies all changes made since the last full backup. a) b) c) d) Archive Backup Differential backup Incremental backup 44. While this type of backup takes longer, it's restoration is simpler. a) b) c) d) Archive Backup Differential backup Incremental backup 45. A copy of a database, master file, or software that will be retained indefinitely as a historical record. a) b) c) d) Archive Backup Differential backup Incremental backup 46. A location that is pre-wired for necessary telecommunications and computer equipment. a) a cold site b) a hot site c) a remote sister site d) a subsidiary location 47. A facility that contains all the computing equipment the organization needs to perform its essential business activities. a) b) c) d) a cold site a hot site a remote sister site a subsidiary location 48. Which of the following is not the objective of a disaster recovery plan? a) b) c) d) Minimize the extent of the disruption, damage or loss. Permanently establish an alternative means of processing information. Resume normal operations as soon as possible. Train employees for emergency operations. 49. The most important change management technique is probably a) b) c) d) User rights and privileges are carefully monitored during change process. Changes tested thoroughly prior to implementation. All documentation is updated to reflect changes to the system. Adequate monitoring and review by top management. 50. Which of the following is not a useful control procedure to control access to system outputs? a) b) c) d) Allowing visitors to move through the building without supervision. Coding reports to reflect their importance. Requiring employees to log out of applications when leaving their desk. Restricting access to rooms with printers. SHORT ANSWER 51. Identify a fundamental control procedure for protecting that confidentiality of sensitive information. 52. Identify four source data controls. 53. Identify four data entry controls. 54. Identify four processing controls. 55. Identify four data transmission controls. 56. Identify two output controls. 57. What is fault tolerance? ESSAY 58. Identify four useful procedures for controlling access to system outputs. 59. Identify the 10 internationally recognized best practices for protecting the privacy of customers' personal information. 60. Describe some steps you can take to minimize your risk of identify theft.