Question: Classify each of the following as a

> Caleb Westerfield is the owner of CW Sports, a consignment shop for used sporting goods. Caleb accepts consigned goods and offers them for sale to the general public. Caleb rents business space, including a retail store where the consigned goods are disp

> You are the recent heir of $40,000 cash, with which you are considering opening a sushi bar in the university community. You would accept cash and credit card payments, which would be handled primarily by your servers. You also plan to offer introductory

> In 1990, Luigi Romano opened a pizza restaurant that he named Romano’s in St. Louis, Missouri. Over the years, he opened both company and franchise locations and grew the business to include over 40 restaurants that serve the three states around the St.

> Describe why accountants should be concerned about ethics.

> Perform an Internet search to determine the nature of Xerox Corporation’s management fraud scheme and to find out what happened to the company after the problems were discovered.

> Visit the ISACA website at www.isaca.org and click the Knowledge Center tab, then select ITAF (Information Technology Assurance Framework) and click on the IT Audit Basics tab to find articles covering topics concerning the audit process. Locate an artic

> In order to preserve auditor independence, the Sarbanes Oxley Act of 2002 restricts the types of non-audit services that auditors can perform for their public‐company audit clients. The list includes nine types of services that are prohibited because the

> Given is a list of audit standard‑setting bodies (shown on the left) and a description of their purpose (shown on the right). Match each standard‐setting body with its purpose. I. PCAOB a. Established by the AICPA

> Using the Internet or other research tool, search for “Microsoft Dynamics GP software” and describe the type of company where Great Plains would be a good choice for an ERP system.

> Using the Internet or other research tool, search for “SAP software” and describe the type of company where SAP would be a good choice for an ERP system.

> Using the Internet or other research tool, search for “compare ERP software” and describe pros and cons of two Midmarket/tier two ERP systems.

> Using the Internet or other research tool, search for “Total Cost of Ownership” and “ERP Software” and describe costs to consider when calculating the total cost of ownership for an ERP system.

> Using the Internet or other research tool, search for “ERP software in the cloud” and outline (a) pros, (b) cons, and (c) considerations of adopting cloud deployment for an ERP system.

> Using the Internet or other research tool, search for the terms “ERP” and “SME.” Describe why a small to medium‐sized entity might choose an ERP system.

> Give a brief summary of each of the following: a. enterprise risk management b. corporate governance c. IT governance

> Using the Internet or other research tool, search for the terms “big bang” and ERP. Identify at least one company that represents a success story with regard to this ERP implementation method (other than Marathon, as described in this chapter’s RealWorld

> Using the Internet or other research tool, search for the terms “best of breed ERP systems strategy” and ERP. Locate information that addresses the debate and dilemma faced by many companies regarding the implementation choice between best of breed techn

> Suppose a company is experiencing problems with omitted transactions in the conversion processes—that is, inventory transactions are not always being recorded as they occur. How can an ERP system help to alleviate such a problem?

> Compare and contrast the functionality of the logistics module and supply chain management activities.

> Identify and describe the first generation of ERP systems used in the 1970s and the second generation of ERP systems used in the 1980s.

> Describe the ERP’s modular interface that is necessary in a typical manufacturing environment.

> Go to any website that sells goods. Examples would be BestBuy, Staples, and J. Crew. Pretend that you wish to place an order on the site you choose and complete the order screens for your pretend order. Do not finalize the order or enter either real or f

> Using the Internet or other research tool, look up the terms “disaster recovery,” along with “9/11.” The easiest way to search for both terms together is to type into the search box the following: “disaster recovery” “9/11.” Find at least two examples of

> Visit the AICPA website at www.aicpa.org. Search for the terms “WebTrust” and “SysTrust.” Describe these services and the role of Trust Services Principles in these services.

> Using the Internet or other research tool, look up the term “penetration testing.” Describe the software tools you find that are intended to achieve penetration testing. Describe the types of systems that penetration testing is conducted upon.

> The networks discussed in this chapter were LANs, Internet, intranet, and extranet. Explain each.

> The IT governance committee should comprise top level managers. Describe why you think that is important. What problems are likely to arise with regard to IT systems if the top level managers are not involved in IT governance committees?

> Explain how each of the following input validation checks can prevent or detect errors: a. Field check b. Validity check c. Limit check d. Range check e. Reasonableness check f. Completeness check g. Sign check h. Sequence check i. Self checking

> Control totals include batch totals, hash totals, and record counts. Which of these totals would be useful in preventing or detecting IT system input and processing errors or fraud described as follows? a. A payroll clerk accidentally entered the same t

> Many IT professionals feel that wireless networks pose the highest risks in a company’s network system. Required: a. Why do you think this is true? b. Which general controls can help reduce these risks?

> The use of smart cards or tokens is called two factor authentication. Answer the following questions, assuming that the company you work for uses smart cards or tokens for two factor authentication. Required: a. What do you think the advantages and di

> Explain why an organization should establish and enforce policies for its IT systems in the following areas regarding the use of passwords for log in: a. Length of password b. Use of numbers or symbols in passwords c. Using common words or names as pa

> Using a search engine, search for articles on the following two companies, which were paying bribes in foreign countries: Siemens and Johnson & Johnson. The settlements were in 2011. For each company, describe a. How it was discovered b. The end result

> Using a search engine on the Internet, search for articles on fraud that occurred in 2000 to 2002 in the following companies: Adelphia Enron Global Crossing WorldCom Xerox Try to locate articles or information about stock prices, how the fraud was

> Using a search engine on the Internet, find articles or descriptions of the collapse of Enron. The collapse began in November 2001, and many articles appeared over the next two to three years. Required: a. Briefly describe the fraud that occurred. b.

> Shown are a list of selected sources of internal control guidelines, given in order of issuance, followed by a list of primary purposes. Match each guideline with its primary purpose. I. Foreign Corrupt Practices Act II. COSO III. SAS 99 IV. Sarbanes

> Consider the accounting information system in place at an organization where you have worked. Do you think that it was a manual system, a legacy system, or an integrated IT system? Describe one or two characteristics of that accounting information system

> Identify whether each of the following accounting positions or duties involves authorization, recording, or custody: • Cashier • Payroll processor • Credit manager • Mailroom clerk • Data entry clerk • Deliver paychecks • Deliver the bank deposit

> Using the Internet or other research tool, search for the terms “client–server” and “scalable.” From the results you find, explain why client–server systems are scalable.

> Using the Internet or other research tool, search for the term “RFID.” From the results you find, describe how RFID will be used as an input method.

> Suppose that a large company is considering replacing a legacy system that is nearing obsolescence. Describe any aspects of this decision that the company should consider.

> Using the Internet or other research tool, search for the terms “Amazon elastic cloud.” Describe what you find. Why do you believe it is called elastic?

> Using the Internet or other research tool, search for “HealthSouth” and “fraud” or “Scrushy” (the name of the company’s CEO). Explain the fraud that occurred at HealthSouth Corporation. What was the ultimate result of the prosecution of HealthSouth offic

> Using the Internet or other research tool, search for the term (in quotations) “earnings management.” From the items you read, answer the following questions: a. Is earnings management always criminal? b. Is earnings management always unethical?

> Go to the COSO website and locate the guidance on enterprise risk management. The executive summary of the article “Enterprise risk management—Integrated Framework” can be downloaded at no cost. Read the sections titled “Roles and Responsibilities” and “

> Using the Internet or other research tool, search for the terms “RFID” and “supply chain.” Put both of these terms in your search and be sure that “supply chain” is in quotation marks. Read some of the resulting websites you find and answer these questio

> Each of the points listed next represents an internal control that may be implemented within a company’s accounting information system to reduce various risks. For each point, identify the appropriate business process (revenue, expenditure, conversion, a

> For an accounts receivable system, what kind of data would be found in the master files and transaction files, respectively? What type of structured and unstructured data might relate to an accounts receivable system?

> Business processes are composed of three common stages: an initial event, a beginning, and an end. For items a–h listed in Problem 48, identify the applicable initial event, beginning, and end of the process. From problem 48: Classify each of the follow

> If an accounting information system were entirely a manual system (no computers used), explain how data would be captured, recorded, classified, summarized, and reported. Discuss how the sophistication of the company’s computer system impacts the account

> Thomas Clark is an accounting software consultant at Tann and Associates Consulting. Tann is a value added reseller of accounting software for midsize companies, which normally have revenue between $50 million and $500 million. One of Clark’s responsibil

> There are several approaches to applying an SDLC methodology to IT system change. Using an Internet search engine, search for these terms: SDLC, waterfall, JAD (joint application development), RAD (rapid application development), build and fix, and spira

> CEEMCO Corp. is a small, privately owned manufacturing company in Cincinnati. CEEMCO manufactures custom products as well as store display products to sell to other companies such as retailers. Using an Internet search engine, do a search on the terms “C

> Assume that you are the manager of the project team that is engaged in a systems analysis. The company is a large, national retailer with several stores and warehouses located throughout the United States. The corporate headquarters are in Atlanta, and a

> What is the importance of a standard formatting language for Web pages and a standard addressing system?

> Describe the relationship between national backbone providers, regional ISPs, and local ISPs.

> How do e-commerce and e-business differ?

> Describe automated matching in the purchasing process and explain how this IT enablement has improved efficiency in companies.

> How might the sales and cash collection process at Boeing Co. (maker of commercial passenger jets) differ from the sales and cash collection processes at McDonald’s?

> What are some internal control measures that could prevent a hacker from altering data in your company’s database?

> Why is control over unauthorized access so important in a database environment?

> Explain the terms Big Data and data analytics.

> Why would a small company with 400 employees find it advantageous to use a cloud database (DaaS)?

> Differentiate between centralized data processing and distributed data processing.

> Identify and describe the analytical tools in OLAP.

> How has Anheuser‐Busch used data warehousing and data mining successfully?

> How is data mining different from data warehousing?

> Differentiate between a data warehouse and an operational database.

> Which database model is used most frequently in the modern business world? Why do you believe it is frequently used?

> Explain how business process reengineering occurs. Also, explain how it differs from the typical changes in company policies.

> Which database models are built on the inverted tree structure? What are the disadvantages of using the inverted tree structure for a database?

> Describe the organization of a flat file database.

> Describe the trade‐offs of using the hierarchical model of database storage.

> Identify one type of business that would likely use real‐time data processing rather than batch processing. Describe the advantages of real‐time processing to this type of business.

> Why is it important for companies to store transaction data?

> Why are managers, rather than employees, more likely to engage in unethical behavior in capital and investment processes?

> How would operational internal reports differ from financial internal reports?

> Does the general ledger provide all information necessary for internal reports?

> Describe the nature of reports for external users.

> To properly segregate duties, what are the three functions that general ledger employees should not do?

> Explain a supply chain linkage and give an example.

> In a complex IT system, how may a customer actually authorize a sale?

> Within accounting software systems, what is the purpose of limiting the number of employees authorized to post to the general ledger?

> In what way are subsidiary ledgers and special journals replicated in accounting software?

> How is a subsidiary ledger different from a general ledger?

> What advantages would motivate management to conduct fraud related to source of capital processes?

> Explain how cash resulting from source of capital processes may be handled differently than cash in revenue processes.

> Why is the monitoring of funds flow an important underlying part of investment processes?

> Describe when an organization would have a need to undertake investment processes.

> Describe the nature of the authorization of source of capital processes.

> What characteristics of administrative processes are different from the characteristics of revenue, expenditures, or conversion processes?

> Think of a company that you have worked for or with which you have done business. Which departments within the company need reports generated by the accounting information systems?

> How can conversion processes be manipulated to show higher earnings?

> What is the difference between MRP, MRP‐II, and ERP?

> What is the difference between CAD, CAM, and CIM?

> How can programmed controls within the IT system for conversion processes enhance internal controls?

> Explain how a physical inventory count would differ in a company using a perpetual inventory system versus one using a period inventory system.

> Why is it so important that variance reports be prepared in a timely manner?

> Why is it important to separate the functions of inventory control and the production stations? What could go wrong if these functions were not separated?

> What are the three primary components of logistics?