Information Systems Control Activities Quiz

Performance reviews

Information processing

Physical controls

An internal auditing function

Management regularly compares divisional performance with budgets for the division

Data processing management regularly generates exception reports for unusual transactions or volumes of transactions and follows up with investigation as to cause

Data processing management regularly reconciles batch control for items processed with batch controls for items submitted

Management has asked internal auditing to perform regular audits of the controls over cash processing

Safeguard the resources of the organization

Provide reasonable assurance that the objectives of the organization are achieved

Encourage compliance with organizational objectives

Ensure the accuracy, reliability, and timeliness of information

Safeguards used to limit access to computer facilties

Process used to prepare significant accounting estimates

Procedures used to assure the proper supervision of staff

Programs and controls intended to address the risks of fraud

Establish and document internal control procedures and to include in their annual reports a report on the company's internal control over financial reporting

Provide a report to include a statement of management's responsibility for and assessment of internal control

Provide an identification of the framework used to evaluate the effectiveness of internal control

Provide a statement that the board approves changes in internal control procedures

Incompatible duties

Management override

Mistakes in judgment

Collusion among employees

Access to the safe-deposit box requires two officers

Only storeroom personnel and line supervisors have access to the raw materials storeroom

The mail clerk compiles a list of the checks received in the incoming mail

Only salespersons and sales supervisors use sales department vehicles

Journalize entries and prepare financial statements

Record cash receipts and cash disbursements

Establish internal control and authorize transactions

Perpetrate and conceal errors or fraud

The audit committee is active in overseeing the entity's financial reporting policies

External policies established by parties outside the entity affect its accounting practices

Management is dominated by one individual who is also a shareholder

Internal auditors have direct access to the board of directors and entity management

Setting of automatic reorder points for material or merchandise

Approval of a detailed construction budget for a warehouse

Establishment of requirements to be met in determining a customer’s credit limit

Establishment of sales prices for products to be sold to any customer

That an individual authorizing a transaction records it

That an individual authorizing a transaction maintain custody of the asset that resulted from the transaction

That an individual maintaining custody of an asset be entitled to access the accounting records for the asset

That an individual recording a transaction not compare the accounting record of the asset with the asset itself

Receive and deposit checks and also approve write-offs of customer accounts

Approve vouchers for payment and also sign checks

Reconcile the bank statements and also receive and deposit cash

Sign checks and also cancel supporting documents

Replace substantive tests

Determine whether the controls have been implemented

Determine the effectiveness of the control procedures

Detect fraud

Performing tests of transactions that corroborate management’s financial statement assertions

Observing the employees as they apply specific controls

Obtaining a flowchart of activities performed by available personnel

Developing audit objectives that reduce control risk

The director of internal auditing

Operating management

The computer processing audit manager

The control group in the computer processing department

Frequent use, external, aggregate information

Future-oriented, outdated, detailed information

Highly current, accurate, largely internal information

Wide scope, aggregate, future-oriented information

A basic familiarity with the computer’s operating systems

A sufficient understanding of the entire computer system

An expertise in computer systems analysis

A background in programming procedures

Attention is focused on the accuracy of the programming process rather than errors in individual transactions

It is usually easier for unauthorized personas to access and alter the files

Random error associated with processing similar transactions in different ways is usually greater

It is usually more difficult to compare recorded accountability with the physical count of assets

Hardware malfunction

Input errors and omissions

Disruption to computer processing caused by natural disasters

Fraud

An AIS supports day-to-day operations by collecting and sorting data about an organization’s transactions

The information produced by an AIS is made available to all levels of management for use in planning and controlling and organization’s activates

An AIS is best suited to solve problems where there is great uncertainty and ill-defined reporting requirements

An AIS is often referred to as a transaction processing system

I and II

II and III

I, III, and IV

I, II, III, and IV

Designed to assure that only authorized users receive output from processing

For developing, modifying and maintaining computer programs

Relating to the correction and resubmission of faulty data

Designed to ensure that all data submitted for processing have been properly authorized