Describe when an organization would have a need to undertake investment processes.
> 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
> Classify each of the following as a revenue process, expenditure process, conversion process, or administrative process: a. Selling common stock to raise capital b. Purchasing electronic components to manufacture DVD players c. Moving electronic compo
> 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 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?
> Explain the necessity of supervision over fixed assets.
> What is different about the nature of fixed asset purchasing that makes authorization controls important?
> For each category of business processes (revenue, expenditure, conversion, and administrative), give an example of a business process.
> What are some of the practical characteristics of fixed assets that complicate the calculation of depreciation?
> Explain why categorizing fixed asset expenditures as expenses or capital assets is important.
> Why is batch processing well suited to payroll processes?
> Explain two things that should occur to ensure that hours worked on a time card are accurate and complete.
> Explain why an employee’s individual record is accessed frequently, but changed relatively infrequently.
> Why do you think management should specifically approve all employees hired?
> Sales and inventory purchases are routine processes that occur nearly every day in a business. How are these routine processes different from payroll or fixed asset processes?
> Explain how procurement cards provide for increased efficiencies in the accounts payable department.
> How are Web browsers used in e‐payables systems?
> Explain why the availability of computer systems in the receiving department is such an important component of an automated expenditures process.
> There are four methods of data collection used in the study of the current system: observation, documentation review, interviews, and questionnaires. Compare and contrast these four methods.
> Identify compensating controls needed for an effective ERS system.
> Explain how system logic errors could cause cash management problems.
> Identify some inefficiencies inherent in a manual expenditures processing system.
> What specifically does a cash disbursements clerk do when he or she “cancels” an invoice? How does this compare with the procedures followed when computer‐based matching in the system is utilized?
> Why should a receiving clerk be denied access to information on a purchase order?
> Why are backup systems one of the most important controls for POS systems?
> What are the three standard parts of an EDI data transmission?
> What controls should a company implement to ensure consistency of sales information between the front end and back end of its systems?
> Identify two of the biggest risks to companies who use e‐commerce, along with controls to prevent these risks.
> Identify and distinguish between the three types of IT systems used in the sales process.
> Two feasibility studies occur during the SDLC: one during systems planning and one during systems design. Describe the differences between these two feasibility studies.
> How could fraud be perpetrated through the sales returns process?
> How can a security guard in a warehouse be considered an important component of a company’s accounting system?
> Why should the person responsible for shipping goods to customers not also have responsibility for maintaining records of customer accounts?
> How can an effective system of internal controls lead to increased sales revenue?
> Distinguish between a pick list and a packing slip.
> Why is it important to establish and monitor credit limits for customers?
> An auditor’s characteristic of professional skepticism is most closely associated with which ethical principle of the AICPA Code of Professional Conduct?
> Why is it so important to obtain a letter of representation from an audit client?
> Which of the four types of audit reports is the most favorable for an audit client? Which is the least favorable?
> What kinds of audit tools are used to perform routine tests on electronic data files taken from databases? List the types of tests that can be per‑ formed with these tools.
> Describe the role that the board of directors should play in IT governance.
> Explain the necessity for performing substantive testing even for audit clients with strong internal controls and sophisticated IT systems.
> The test data method and an integrated test facility are similar in that they are both tests of applications controls and they both rely on the use of test data. Explain the difference between these two audit techniques.
> Batch totals and hash totals are common input controls. Considering the fact that hash totals can be used with batch processing, differentiate between these two types of controls.
> Explain why Benford’s Law is useful to auditors in the detection of fraud.
