Which type of audit is most likely to be performed by government auditors? Which type of audit is most likely to be performed by internal auditors?
> Why is it important to use an independent paymaster to distribute paychecks?
> For each AICPA Trust Services Principles category shown, list a potential risk and a corresponding control that would lessen the risk. An example is provided. EXAMPLE Security: Risk: A hacker could alter data. Control: Use a firewall to limit unauthori
> What is the purpose of supervisory review of employee time cards?
> Explain the reasons for an organization having a separate bank account established for payroll.
> Why is it important that the human resources department maintain records authorizing the various deductions from an employee’s paycheck?
> Even though payroll and fixed asset processes may not be as routine as revenue processes, why are they just as important?
> What techniques can a company use to reveal problems concerning potential exposure to unauthorized access to its systems?
> Identify three ways that buyers and sellers may be linked electronically.
> Identify each category of risk that can be reduced by using authority tables, computer logs, passwords, and firewalls.
> What is typically the most time‐consuming aspect of the expenditures process?
> What paper document is eliminated when ERS is used?
> What can a company do to protect itself from business interruptions due to power outages?
> Each of the given situations is independent of the other. For each, list the programmed input validation check that would prevent or detect the error. a. The ZIP code field was left blank on an input screen requesting a mailing address. b. A state abbr
> How is an audit trail maintained in an IT system where no paper documents are generated?
> Explain how system availability problems could cause cash management problems.
> List three examples of BPR used in the expenditures processes.
> What are the advantages of BPR?
> What accounting records are used by accounts payable personnel to keep track of amounts owed to each vendor?
> Why should accountants periodically review the sequence of checks issued?
> During the process of reconciling the bank account, why is it necessary to review the dates, payees, and signatures on the canceled checks?
> Why would some checks need to include two signatures?
> Which department is responsible for making sure that payments are made in time to take advantage of vendor discounts?
> Under what circumstances would it be necessary to manually update accounts payable prior to the receipt of a vendor’s invoice?
> Discuss the accuracy of the following statements regarding internal control: • The more computerized applications exist within a company’s accounting system, the lower the risk will be that fraud or errors will occur. • The more involved top management
> Briefly describe the five components of an accounting information system.
> How does the maintenance of a receiving log enhance internal controls?
> Name the first document that should be prepared when a production employee recognizes that the quantity of goods on hand is insufficient to meet customer demand.
> Describe a popular fraud scheme where company employees misuse the sales revenues cutoff.
> List some advantages of a POS system.
> What is the purpose of maintaining transaction logs? Why are they especially important in IT systems?
> List the advantages of an EDI system.
> How could it be possible for two companies to conduct EDI if they are not directly connected with each other?
> What are the three important characteristics of the EDI definition?
> Why is a redundant server system needed in an e‐commerce environment?
> List the advantages of e‐commerce systems.
> Identify the steps involved in risk assessment. Do you think it would be effective for an organization to hire external consultants to develop its risk assessment plan? Why, or why not?
> Distinguish between B2B sales and B2C sales. Other than those presented in this chapter, name a company from your personal experience that uses B2C sales.
> How are sales invoices used (in a manual system) in the preparation of credit memos?
> What is the purpose of a credit memorandum?
> How can auditors evaluate internal controls when their clients use IT outsourcing?
> Think about a place you have worked where computers were present. What are some physical and environmental controls that you have observed in the workplace? Provide at least two examples of each from your personal experience.
> Identify four important aspects of administrative control in an IT environment.
> During which phase of an audit would an auditor consider risk assessment and materiality?
> List the techniques used for gathering evidence.
> Which professional standard‐setting organization provides guidance on the conduct of an IT audit?
> Explain how the presence of IT processes can improve the quality of information that management uses for decision making.
> Think of a job you have held, and consider whether the control environment was risky or conservative. Describe which you chose and why.
> Describe the three causes of information risk.
> Identify the three areas of an auditor’s work that are significantly impacted by the presence of IT accounting systems.
> What are assurance services? What value do assurance services provide?
> Which tier one company introduced the first ERP system that was “pure Internet,” requiring no programming code to reside on the client computer?
> Differentiate between Oracle’s back office and front office modules.
> Which company is today’s top seller of ERP systems in the United States?
> How did the tragic events of September 11, 2001, affect the market for ERP systems?
> How do ERP II systems allow businesses to improve efficiencies with respect to sharing information with trading partners?
> Why is real‐time processing essential in an ERP system?
> Describe why the control environment is regarded as the foundation of a business’s system of internal control.
> Describe how ERP systems enhance efficiency in a business organization.
> What ethical obligations do employees have as IT systems are revised?
> How does the SDLC serve as an internal control?
> Why is post implementation review undertaken?
> Why is user acceptance important?
> Why is parallel conversion costly?
> Why is a direct cutover conversion risky?
> What is the purpose of software testing?
> Which part of the system design phase would include designing rows and columns of output reports? Why is it important to design reports?
> Within the system design phase, what are the purposes of evaluation and selection?
> What are some ways a business could promote its code of ethics?
> How is conceptual design different from detailed design?
> Why might it be important to follow some or all of the SDLC phases for purchased software?
> What are the advantages of Internet EDI over traditional EDI?
> What are the ten areas of privacy practices described in the Online Privacy section of the AICPA Trust Services Principles?
> Describe the benefits to a company that engages in B2B transactions via the Internet.
> Describe the benefits to the company of B2C sales.
> Using Anheuser‐Busch’s BudNet example presented in this chapter, think about the queries that might be valuable if a company like Gap, Inc., used data mining to monitor its customers’ buying behavior.
> Identify several factors that indicate the need for more extensive internal controls covering conversion processes.
> Explain the kinds of information that must be maintained in fixed asset records during the asset continuance phase.
> Describe how the use of prenumbered forms for debit memos can help a company ascertain that purchase return transactions have not been omitted from the accounting records.
> Explain the relationship between computer hacking and industrial espionage. Give a few additional examples of how hacking could cause damage in a business.
> Explain why standards of fieldwork for GAAS are not particularly helpful to an auditor who is trying to determine the types of testing to be used on an audit engagement.
> Identify which of the cardinal relationships apply, from the following: a. Component part–product b. Customer–product c. Employee ID badge–employee d. Employee–supervisor e. Vendor–check
> Arrange the following database models in order from earliest development to most recent: network databases, hierarchical databases, flat file databases, and relational databases.
> Identify whether the following reports would be categorized as trading partner documents, internal documents, internal reports, or external reports: a. Daily cash receipts listing b. Accounts receivable aging c. Wire transfer of funds to a vendor d.
> Debate the logic used in the following statement: “The person responsible for approving cash disbursements should also prepare the bank reconciliation because he is most familiar with the checks that have been written on that bank account.”
> How might a company use both an operational database and a data warehouse in the preparation of its annual report?
> Describe how the matching of key information on supporting documents can help a company determine that its revenue transactions have not been duplicated.
> Suppose that a company wants to upgrade its legacy system, but cannot afford to completely replace it. Describe two approaches that can be used.
> Distinguish between general and specific authorization.
> Much of the e-business and e-commerce conducted by companies uses the Internet as the form of electronic communication. Describe other electronic means to conduct e-business or e-commerce.
> Discuss whether any of the following can be examples of customer fraud: • An employee billed a customer twice for the same transaction. • A customer remitted payment in the wrong amount. • A customer received merchandise in error, but failed to return
> Arrange the following data storage concepts in order from smallest to largest, in terms of their size: file, record, database, character, and field.
> Describe how IT performance reports are important in IT governance.
> Operation and maintenance is the longest and costliest part of the SDLC. Explain why this is true.
> What are some examples of outputs generated for trading partners?
> How would real time processing provide a benefit to managers overseeing business processes?
> What roles do accountants have in relation to the accounting information system?
> In what way is a code of ethics beneficial to an organization?
> In general, what types of transactions are well suited to batch processing?
> Describe why enterprise risk management is important.
> Name the objectives of an effective account‑ ing system.
