Section 4B

Question 1

____ refers to practices, strategies, and technologies that businesses use to interact, analyze, forecast, and manage customer relationships, trends, and

CRM is preferably a cloud-based system that stores customer and prospect contact information, accounts, leads, and sales opportunities in MULTIPLE central database, available to all departments in a business, such as sales, customer service, accounting, marketing, and business development.behaviors. T/F

Answer 1

Customer relationship management (CRM)

False - One central database

Question 2

Customer relationship management (CRM) technologies include the following: (3)

____ The company purchases licenses upfront instead of buying yearly subscriptions from a cloud CRM provider.

_____ Data is stored on an external, remote network that employees can access anytime, anywhere via an Internet

___An open-source CRM system, such as OroCRM, SuiteCRM, or SugarCRM, offers alternatives to the proprietary platforms from Salesforce, Microsoft, and other vendors.

Answer 2

1. ON-Premises CRM
2. Cloud Based CRM (SaaS)
3. Open Source CRM

Question 3

Cloud-based systems have several concerns that companies must cope with:

____Given that the company does not physically control the storage and maintenance of its data, an entity’s data can be compromised or lost if the cloud provider goes out of business or is acquired by another company.

___The cost of subscription fees for cloud-based CRM software can be more costly over time than for on-premises models.

Answer 3

Data security:

Cost

Question 4

Which of the following is not a true statement concerning customer relationship management (CRM) systems?
The cost of subscription fees for cloud-based CRM software can be more costly over time than on-premises models.

An entity’s CRM data can be compromised or lost if the cloud provider goes out of business or is acquired by another company.

CRM stores customer and prospect contact information, accounts, leads, and sales opportunities in multiple locations and databases, available to all departments in a business, such as sales and customer service.

CRM refers to practices, strategies, and technologies that businesses use to interact, analyze, forecast, and manage customer relationships, trends, and behaviors.

Answer 4

CRM stores customer and prospect contact information, accounts, leads, and sales opportunities in multiple locations and databases, available to all departments in a business, such as sales and customer service.

Customer relationship management (CRM) is preferably a cloud-based system that stores customer and prospect contact information, accounts, leads, and sales opportunities in one central database (not multiple locations and databases)

Question 5

Which one of the following would not be included as a reason for a company to use EFT (electronic funds transfer) with an EDI (electronic data interchange) system?

To take advantage of the time lag associated with negotiable instruments
To allow the company to negotiate discounts with EDI vendors based upon prompt payment
To improve its cash management program
To reduce input time and input errors

Answer 5

To take advantage of the time lag associated with negotiable instruments

Time lag is the amount of time it takes a regular check to arrive at the payee, be deposited, and clear through regular banking channels. All of these processes are eliminated with EFT.

Question 6

There are two principal forms of e-business:

___, where individuals purchase items (books, music, airline tickets) on the Internet
…….A consumer visits a company website, decides what to purchase, places an order, and pays using a credit card. T./F

____, where organizations do business with one another

Answer 6

Business-to-consumer (B2C)
True

Business-to-business (B2B)

Question 7

Biz-To-Consumer

__ and __ are important in B2C transactions because the parties do not have long-term relationships;

Consumers need confidence that:
a company’s website represents a legitimate electronic “storefront.” T/F
their orders will be filled correctly. T/F
the vendor can and will keep the __they provide private.

Services such as __(developed by the AICPA) have been designed to provide these assurances.

Answer 7

Trust and confidence

True
True
personal information

WebTrust

Question 8

Biz-2-Biz

Most B2B transactions occur between organizations with established relationships so there is more need for third-party assurance services.

Partial payments on accounts are permitted, which makes accounting for and controlling sales and customer payments more challenging. T/F

Answer 8

false -less need for 3rd party services

True

Question 9

The traditional manual procurement of direct and indirect resources used in manufacturing has been supplanted, in some cases significantly, by the use of which of the following?

Auctions featuring telephone bidding
Online commerce via B2B
24/7 purchasing
V`irtual transactions

Answer 9

Online Commerce Via B2B

A recent development in the acquisition and sale of manufacturing resources is “business-to-business” (B2B) commerce. B2B uses the Internet and electronic data interchange technology.

Question 10

A research-based firm in the medical field could use each of the following Internet-based tools for collaboration, except:

an e-mail application.
videoconferencing.
groupware systems.
electronic data interchange.

Answer 10

electronic data interchange.

Electronic data interchange (EDI) is the correct answer because EDI is used to electronically transfer information between and within organization computers. It is communication between computer software applications, not between humans.

Question 11

Internet Technologies
____ own and maintain portions of the Internet backbone and provide access to the Internet.
___link the intranets of two or more companies.

___ often implemented via software, translates between two or more different protocol families and makes connections between dissimilar networks possible.

An___) uses the Internet to rent software programs to its customers.

Answer 11

Internet service providers (ISPs)
Extranets

A gateway,

application service provider (ASP

Question 12

A ____is an independent organization that provides hardware and software that allow the various EDI (electronic data interchange) networks to communicate with the ACH (Automated Clearing House) network.

A ____offers specialized hardware, software, and long-distance communications to private networks so they can exchange data. Enhances security

Answer 12

financial value-added network (FVAN)

value-added network (VAN)

Question 13

___links computers and other devices located close to each other, such as in the same building. This can be configured in 3ways

1. __each device is connected to a central server that controls all communications between devices.
   2.____, each device is linked to two other devices. To control data flow, a software token
   is continually passed around the ring.
2. __configuration, each device is connected to a main channel called a bus. A software algorithm controls communications between devices

Answer 13

local area network (LAN)

star configuration,
ring configuration
bus

Question 14

A _____connects sending and receiving devices. A communications network often uses several different channels, as each possesses characteristics that affect the network’s reliability, cost, and security.

Common channels include telephone lines, fiber optic cables, terrestrial microwaves, satellite, and cellular radio frequencies. T/F

A channel’s information carrying capacity is measured by its ___. The greater the ___, the greater the capacity and speed of transmission.

Answer 14

communications channel

True

bandwidth

Question 15

In a client/server system a ___, referred to as the client, sends a data request to a server. Client/server systems can be configured in two ways:

1. _____ system - , where the central database is stored on the server and each client has its own application software.
2. ____ system - where a top-tier server stores the central database and a second-tier server uses applications programs to do most of the data processing. All the client has to do is request data from the servers and format data.

Answer 15

desktop computer

Two-tiered

three-tiered

Question 16

The accounting information system (AIS) is a subset of the management information system (MIS). The AIS is composed of both the human and capital resources within an organization that are responsible for all of the following except:

preparation of financial information.
collection and storage of data about activities and business transactions.
physically safeguarding the organization’s assets.
processing data into information and providing reports.

Answer 16

physically safeguarding the organization’s assets

The accounting information system provides controls to safeguard the organization’s assets but is not responsible for physically safeguarding its assets

Question 17

The AIS is composed of both the human and capital resources within an organization that are responsible for:

the preparation of financial information and
the information obtained from collecting and processing company transactions.

AIS can perform 3 special functions

1. Collect/store data about biz transactions
2. Process dat into report for decision making
3. Provide adequate control to safeguard org’s assets electronically, not physically

Answer 17

Yup yup

Question 18

Which of the following can be discovered using a data-mining process?

Data structure
Previously unknown information
Artificial intelligence
Standard query reporting

Answer 18

Previously unknown information

Data-mining technology helps examine large amounts of data to discover previously unknown information and patterns. With data-mining software, companies can sift through all the chaotic and repetitive noise in data, pinpoint what is relevant, use that information to assess likely outcomes, and then accelerate the pace of making informed decisions.

Question 19

Tech used for Big Data Analyitics

____: Data needs to be high-quality and well-governed before it can be reliably analyzed

____technology helps examine large amounts of data to discover patterns.

____is a free, open-source software framework that stores large amounts of data and rapidly runs applications on clusters of commodity hardware.

_______This technology removes data preparation and analytical processing latencies to test new scenarios and create models,

______technology uses data, statistical algorithms, and machine-learning techniques to identify the likelihood of future outcomes based on historical data

_______, entities can analyze text data from the web, comment fields, books, and other text-based sources to uncover insights not previously identified. Text mining uses machine learning or natural language processing

Answer 19

Data Management

Data Mining

Hadoop

In-memory Analytics

Predictive analytics

text-mining

Question 20

Which of the following statements regarding machine learning (ML) is false? T/F

ML systems often have low “interpretability,” meaning that humans have difficulty figuring out how the systems reached their decisions.

Machines may have hidden biases, derived from the data provided to train the system.

When the ML system does make an error, diagnosing and correcting exactly what went wrong is generally a simple task.

The algorithms that have driven successful machine learning depend on an approach called deep learning, which uses neural networks.

Answer 20

T
T
F
T

When the ML system does make an error, diagnosing and correcting exactly what went wrong is generally a simple task.

However, when the ML system does make an error, diagnosing and correcting exactly what went wrong can be difficult (not “generally a simple task”)

Question 21

Machine learning (ML) brings with it certain risks

. ML systems often have low “____,” meaning that humans have difficulty figuring out how the systems reached their decisions.

Machines may have hidden biases, T/F

Neural network systems deal with ___truths rather than ___truths. That makes it almost impossible to guarantee that the system will work in all cases

When the ML system does make an error, diagnosing and correcting exactly what went wrong can be _

ML has deep learning algorithms. Deep-learning algorithms can make better use of much smaller data sets.

A ___is a computer system designed to recognize images and classify them according to elements they contain. It basically works on a system of probability

Answer 21

interpretability

True

Statistical, literal

difficult.

False – much larger data sets

neural network

Question 22

ML is driving biz changes at 3 levels

1. __- identifies potential cancer cells
2. ____ - redesigning workflow and plant layouts
3. ___– intelligently recommend choices to consumers in a personalized way.

Answer 22

Tasks & occupations

Biz process redesign

Biz models

Question 23

Which of the following would an auditor ordinarily consider the greatest risk regarding an entity’s use of electronic data interchange (EDI)?

Authorization of EDI transactions
Duplication of EDI transmissions
Improper distribution of EDI transactions
Elimination of paper documents

Answer 23

Improper distribution of EDI transactions

ectronic data interchange (EDI) transmits confidential information to business partners. There is always a risk in data transmission of it being received by unintended recipients, and this would concern an auditor.

Question 24

Client/server architecture may potentially involve a variety of hardware, systems software, and application software from many vendors. The best way to protect a client/server system from unauthorized access is through:

a combination of application and general access control techniques.
use of a commercially available authentication system.
encryption of all network traffic.
thorough testing and evaluation of remote procedure calls.

Answer 24

combination of application and general access control techniques.

Since there is no “perfect solution,” a combination of application and general access control techniques is the best way to protect a client/server system from unauthorized access.

Authentication systems, such as Kerberos, are only a part of the solution.
Encryption of all network traffic only affects general access control techniques.
Testing and evaluation of remote procedure calls (RPCs) may be a small part of an overall security review.

Question 25

Which of the following statements is true regarding Transmission Control Protocol and Internet Protocol (TCP/IP)? Every TCP/IP-supported transmission is an exchange of funds. TCP/IP networks are limited to large mainframe computers. Every site connected to a TCP/IP network has a unique address. The actual physical connections among the various networks are limited to TCP/IP ports.

Answer 25

Every site connected to a TCP/IP network has a unique address.

Question 26

____control the flow of information sent over the Internet or an internal local area network. ....... Data to be sent is divided into packets and transmitted, and the device receiving the packets reassembles the packets to recreate the original message or data. T/F Every IP packet consists of two parts: a ___ and a ___ ...........The header contains the packet's __ and __ addresses, as well as information about the type of data contained in the body of the packet A router reads the ___address field in an IP packet header to determine where it is to be sent. Rules, referred to as an ___, determine which packets are allowed into a system. A ___router connects an organization's information system to the Internet.

Answer 26

Routers true header and a body. origin and destination destination access control list (ACL) border

Question 27

Two important protocols, referred to as ___, govern the process for transmitting information over the Internet. The___ specifies the procedures for dividing data into packets and reassembling them. __ specifies the structure of the packets and how to route them to the proper destination.

Answer 27

TCP/IP Transmission Control Protocol (TCP) The Internet Protocol (IP)

Question 28

Multi-cycle threat: Loss or unauthorized disclosure of data. Data can be lost, resulting in: a. inaccurate external and internal reporting, b. inaccurate responses to customer and vendor inquiries, c. customer or vendor information leaked to competitors, d. inventory and fixed assets not being monitored effectively, e. manufacturing activities not being performed efficiently and effectively, f. morale problems, g. lawsuits, or h. the potential demise of the entire organization.

Answer 28

yeeep

Question 29

Which of the following allows customers to pay for goods or services from a website while maintaining financial privacy? Credit card Site draft E-cash Electronic check

Answer 29

E-cash E-cash currencies, such as bitcoins, are anonymous and allow payment for purchases from websites. A credit card, a sight draft (one that promises immediate payment to the holder of the draft), and an electronic check (such as created when a debit card is used for a purchase) are not anonymous.

Question 30

An ___enables continuous monitoring and analysis of transaction processing, including the functioning of processing controls.

Answer 30

embedded audit module

Question 31

Prepare and review PERFORMANCE reports to assess the efficiency and effectiveness of cycle activities and to look for inefficient or ineffective performance. For example: 1. Assess sales force effectiveness 2. Assess marketing performance 3. Evaluate frequency and size of back-order 4. Identify slow-moving products 5. Prep A/R aging to monitor collection & estimate Bad debt 6. PRep cash budget 7. Monitor vendor performance

Answer 31

yeah buddy

Question 32

Control: Monitor employee who telecommute to make sure they're: 1. working the hours that they're paid for t/f 2. Not using company resources ___

Answer 32

inappropriately

Question 33

Which of the following is usually a benefit of using electronic funds transfer for international cash transactions? Improvement of the audit trail for cash receipts and disbursements Creation of self-monitoring access controls Reduction of the frequency of data-entry errors Off-site storage of source documents for cash transactions

Answer 33

Reduction of the frequency of data-entry errors Since electronic funds transfer (EFT) allows transactions to take place more directly and with fewer intervening steps, there is less chance of human error. EFT actually reduces the paper audit trail FT may actually require stronger access controls

Question 34

A company has an online order processing system. The company is in the process of determining the dollar amount of loss from user error. The company estimates the probability of occurrence of user error to be 90%, with evenly distributed losses ranging from $1,000 to $30,000. What is the expected annual loss from user error?

Answer 34

$13,950 Errors are be evenly distributed between $1,000 and $30,000. The average of this range is ($30,000 + $1,000) ÷ 2, or $15,500. The probability of error is 90%, so the expected value of the annual loss is 90% × $15,500, or $13,950

Question 35

The three steps in the sales order entry process are 1. take customer ___, 2. approve ___ 3. check ___availability.

Answer 35

orders credit inventory

Question 36

The revenue cycle begins when ___are received. The primary objectives of the sales order entry process are to: accurately and efficiently process ___. make sure all sales are ___. make sure the company gets paid for all __sales.

Answer 36

customer orders customer orders legitimate credit

Question 37

When evaluating internal control of an entity that processes sales transactions on the Internet, an auditor would be most concerned about the: lack of sales invoice documents as an audit trail. potential for computer disruptions in recording sales. inability to establish an integrated test facility. frequency of archiving and data retention.

Answer 37

potential for computer disruptions in recording sales

Question 38

____is a general term that describes any effort to help people understand the significance of data by placing it in a visual (pictorial or graphical) context, helping to understand and communicate complex concepts and ideas. * It can detect pattern/trends/correlations T/F * Visualization is imperative to advanced ___. Analytics examines large amounts of data. ____visualization allows the user to drill down into the charts and graphics, changing the data and observing the revised output.

Answer 38

Data visualization True Analytics Interactive

Question 39

Which of the following is likely to be a benefit of electronic data interchange (EDI)? Increased transmission speed of actual documents Improved business relationships with trading partners Decreased liability related to protection of proprietary business data Decreased requirements for backup and contingency planning

Answer 39

Improved biz relationships w/ trading partners

Question 40

____is the exchange of documents in standardized electronic form between different entities in an automated manner directly from a computer application in one entity to an application in another

Answer 40

Electronic data interchange (EDI)

Question 41

A total interruption of processing throughout a distributed information technology system can be minimized through the use of: exception reporting. fail-soft protection. backup and recovery. data file security.

Answer 41

fail-soft protection

Question 42

Disaster recovery plans should contain the following: Recovery Priorities - identify and prioritize hardware/software apps to sustain critical apps Insurance to replace equipment and compensate biz for interruptions Assign a plan coordinator. They're responsible for implementing recovery plan & assigning teams Backup computers by: Establish agreements w/ compatible facilities so they can use their tech if an emergency happens....sign a contract for a contingent site...Fail-soft distribute processing capacity so other facilities can take over if 1 location is damaged Periodic testing/revision - test w/ a simulated disaster, constantly improve, and review to make sure revisions reflect computer applications Complete documentation by having copies of documents stored at different locations &&& 1 copy should be some distance from the system in general.

Answer 42

Yep

Question 43

Which of the following factors has the greatest impact on the design of an effective management reporting system? Number of transactions to be processed Types of decisions to be made Number of authorized users Number of regulatory agencies to be satisfied

Answer 43

Types of decisions to be made

Question 44

___information system (EIS): An EIS is an information system designed to provide executives with the needed information to make strategic plans,

Answer 44

Executive

Question 45

INFORMATION SYSTEMS FUNCTIONS IS Should provide adequate controls to 1. : ___org's assets & data 2. Ensure information is accurate & Reliable t/f 3. Collect & Store ___ 4. Transform data into ___. Used to make decisions 5. Improve decision making. .....Reports can identify potential Problems T/

Answer 45

Safeguard True Data Information

Question 46

The usefulness of financial information is enhanced if it is comparable, verifiable, timely, relevant, faithfully represented, and understandable. 1. ____- reduces uncertainty 2. ______- free from error or bias 3. ____ identify similarities 4. ___- Provided in time to enable decisions 5. ____- two independent ppl make the same conclusion 6. ____ - info is comprehensive

Answer 46

``` Relevant Faith Rep Comparable Timely Verifiable Understandable ```

Question 47

A _____is a set of two or more interrelated components that interact to achieve a goal.

Answer 47

system

Question 48

In an e-commerce environment that requires that the information technology (IT) system be available on a continuous basis, more emphasis will be placed on which of the following aspects of the planning than in a traditional organization? Maintain appropriate written source documents so the data can be re-entered if it is lost or compromised Maintain redundant systems for instant availability to assure the flow of transactions Review additional expenses to obtain the required amount of business interruption insurance coverage for the organization Assure that appropriate data backups are stored in an off-site location

Answer 48

Maintain redundant systems for instant availability to assure the flow of transactions If the system must be available on a continuous basis, there is an important need for backup systems that are instantly available in case of interruption of the primary system.

Question 49

EBIZ APPS REQUIRE COMMUNICATION SOFTWARE THAT: ``` Controls network ___ Manage the ___ Control the transfer of data T/F Detect and control ___ Works with protocols (rules and procedures) T/F ```

Answer 49

``` access network True Error True ```

Question 50

The Internet is made up of a series of networks that include: gateways to allow mainframe computers to connect to personal computers. bridges to direct messages through the optimum data path. repeaters to physically connect separate local area networks (LANs). routers to strengthen data signals between distant computers.

Answer 50

gateways to allow mainframe computers to connect to personal computers. Gateways connect Internet computers of dissimilar networks. Routers determine the best path for data. Bridges connect physically separate LAN's. Repeaters strengthen signal strength.

Question 51

A ____system, where computers at each location handle local processing and are also linked to the corporate mainframe A ____ connects multiple sites with multiple workstations for shared use of common resources. ____: This provides information that may allow an organization to make strategic, competitive decisions. _____is a computerized information system that allows non-experts to make decisions about a particular problem that are comparable with decisions of experts in the area.

Answer 51

distributed data processing (DDP) metro-area network (MAN) Strategic information system (SIS) Expert system (ES): An ES

Question 52

Three ways to configure a WAN (wide area Network) 1. Centralize - all devices are linked to a ____ 2. Decentralized -- each department has its own computer & LAN t/f 3. ____- where computers at each location handle local processing and are also linked to the corporate mainframe

Answer 52

mainframe True Distributed Data processing system

Question 53

A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company's future is: a transaction processing system. an office automation system. a strategic information system. a decision support system.

Answer 53

a strategic information system A strategic information system provides information that may allow an organization to make strategic, competitive decisions. Transaction processing systems support basic routine business functions. An office automation system is used by clerical personnel to process existing information. Decision support systems process semi-structured and unstructured problems.

Question 54

A pillow manufacturer tracks its production manually. That process results in continuing inaccuracies in inventory and production records on monthly production of about 1 million pillows in three plants. Not knowing how much raw materials inventory is needed, the company maintains surplus inventory of about 25 days production usage at each plant so it can meet its delivery commitments. The company believes it would be advantageous to implement electronic data interchange (EDI) with its suppliers to facilitate just-in-time inventory management. If implementing electronic data interchange (EDI) with suppliers permitted more frequent orders and more frequent communication about them, the company could be more effective by using electronic data interchange (EDI) to: reduce costs by reducing raw materials inventory. ensure that it always maintained a 25-day buffer stock. track materials through production to completed orders. schedule production to reduce the number of setups required.

Answer 54

reduce costs by reducing raw materials inventory. If implementing electronic data interchange (EDI) with suppliers permitted more frequent orders and more frequent communication about them, the company could reduce costs, e.g., inventory carrying costs, by reducing raw materials inventory. The company could ensure that it always maintained the 25-day buffer stock, but there would be no reason to do so if it could ensure more reliable deliveries by ordering more frequently. Tracking materials through production and scheduling production (intracompany processes) are not a use of electronic data interchange (EDI), which is intercompany exchange of business information.

Question 55

A recent application of electronic data interchange (EDI) and the Internet is business-to-business (B2B) online commerce. Effective use of B2B should enable companies to: increase market efficiency. reduce purchasing costs. both increase market efficiency and reduce purchasing costs. neither increase market efficiency nor reduce purchasing costs.

Answer 55

Both Purchasing raw materials and supplies online should reduce the cost of purchasing those goods. The ease of obtaining price quotations increases market intelligence.

Question 56

When connecting two or more electronic mail systems, which of the following is a major security issue? Inability to encrypt messages going between network gateways Loss of critical text within messages Inability of receiving users to automatically acknowledge receipt of messages Inability to keep backup copies of messages

Answer 56

Inability to encrypt messages going between network gateways

Question 57

Which of the following is not considered a risk to be considered prior to implementing blockchain technology? Regulators such as the SEC will have to accept blockchain’s use for securitization, including blockchain’s methods for entering, verifying, and protecting data. Data security and privacy issues may arise since blockchain’s structure stores and shares sensitive data on multiple nodes. Access to a blockchain requires only a public key, making it possible for a hacker to easily access data within a blockchain. Blockchain is still a relatively new technology; many blockchain applications have not yet reached a demonstrably “bulletproof” level of reliability.

Answer 57

Access to a blockchain requires only a public key, making it possible for a hacker to easily access data within a blockchain. Access to a blockchain requires both a public and a private key. Since it is essentially impossible to access data without the right combination of public and private keys, hackers will have a very difficult time accessing data within a blockchain.

Question 58

company is converting its payroll from a manual system to a magnetic tape system. Management wants to be sure the file data is converted accurately and that all necessary controls are incorporated into the new system. An EDP control used to assure that paychecks had been written for all employees for a pay period would be the use of a: record count. hash total on employee Social Security numbers. check digit. validity check.

Answer 58

Hash total on employee social security numbers Hash totals on employee Social Security numbers would represent a total of all Social Security numbers. This would be an EDP control used to assure the paychecks had been written for all employees for a pay period.

Question 59

Which of the following is a risk that is higher when an electronic funds transfer (EFT) system is used? Improper change control procedures Unauthorized access and activity Insufficient online edit checks Inadequate backups and disaster recovery procedures

Answer 59

Unauthorized access and activity

Question 60

A bank implemented an expert system to help account representatives consolidate the bank's relationships with each customer. The expert system has: a sequential control structure. distinct input/output variables. a knowledge base. passive data elements.

Answer 60

Knowledge Base Expert systems have knowledge bases that represent the facts and inferences it knows, which were “taught” to it by human experts.

Question 61

A company is considering a move to a software as a service (SaaS) offering instead of a traditional in-house application. Which of the following concerns is unique to SaaS? Disaster recovery capabilities and documented recovery procedures User credential setup and control over the actions that employees can perform Allocation of software expenses and overhead charged to departments Ownership of processed data and costs of data migrations

Answer 61

Ownership of processed data and costs of data migrations Cloud-based systems have several concerns that companies must cope with: (1) Given that the company does not physically control the storage and maintenance of its data, an entity’s data can be compromised or lost if the cloud provider goes out of business or is acquired by another company. (2) The cost of migration and subscription fees for cloud-based CRM software can be more costly over time than on-premises models.

Question 62

Cloud-based systems have several concerns that companies must cope with: (1) Given that the company does not physically control the storage and maintenance of its data, an entity’s data can be compromised or lost if the cloud provider ___ or ___ (2) The cost of ____and subscription fees for cloud-based CRM software can be more costly over time than on-premises models.

Answer 62

goes out of business or is acquired by another company. migration

Question 63

A manufacturing company that wanted to be able to place material orders more efficiently most likely would utilize which of the following? Electronic check presentment Electronic data interchange Automated clearinghouse Electronic funds transfer

Answer 63

EDI Electronic data interchange, or EDI, is the use of computerized communication to exchange business data electronically in order to process transactions. EDI eliminates double entry of data, improves accuracy, and cuts costs. EDI is more efficient than manual ordering.

Question 64

A company is converting its payroll from a manual system to a magnetic tape system. Management wants to be sure the file data is converted accurately and that all necessary controls are incorporated into the new system. The EDP control used to assure that the hours an individual worked in one week do not exceed a designated maximum is a: field check. limit check. hash total. record count.

Answer 64

Limit Check Limit checks are designed to alert the user when errors occur through the establishment of out-of-range amounts. Field checks verify the correct type of characters. A hash total is a sum of data that would not otherwise be added (e.g., employee numbers, invoice numbers). A hash total helps ensure that the same records are entered as were included in the batch. A record count is a simple sum of the number of records included in a batch.

Question 65

Include edit checks in data entry programs: A ___check is an edit check in which the characters in a field are examined to ensure they are of the correct field type (e.g., numeric data in numeric fields). ___ checks are designed to alert the user when errors occur through the establishment of out-of-range amounts. ___checks, on the employee number field

Answer 65

Field check Limit Check Validity Check

Question 66

ch of the following statements is correct concerning internal control in an electronic data interchange (EDI) system? Preventive controls generally are more important than detective controls in EDI systems. Control objectives for EDI systems generally are different from the objectives for other information systems. Internal controls in EDI systems rarely permit control risk to be assessed at below the maximum. Internal controls related to the segregation of duties generally are the most important controls in the EDI systems.

Answer 66

Preventive controls generally are more important than detective controls in EDI systems. In addition, the paperless nature of EDI transactions makes it difficult to detect and correct errors once they occur. Therefore, it is more important that internal controls are in place to prevent errors.

Question 67

The concept of a management information system (MIS) continues to evolve over time. Which of the following is generally understood to be a central element of an MIS? Maintenance of a large collection of raw, unorganized data to support a variety of information needs Processing of data items is based on decision models. The user-machine nature of an MIS means that users have to be skilled in the use of computers to realize any benefits. A single, highly integrated computer system that combines processing for all organizational functions

Answer 67

ocessing of data items is based on decision models.

Question 68

Data output, or reporting, is therefore a key component of an ___ When displayed on a monitor, output is referred to as a ___copy. When printed on paper, it is referred to as a __copy.

Answer 68

information system. soft, hard

Question 69

Each transaction cycle faces a number of threats that put company assets at risk; controls are put in place to eliminate or minimize these risks. Which of the following is not a typical control used in securing computer access? Access controls exist for each individual terminal Restrict access to blank documents Limit activities involving managerial approval Renumber documents to make sure all transactions are recorded

Answer 69

Limit activities involving managerial approval NEver want to limit manager approvals

Question 70

As part of the Sales Order Entry function within the revenue cycle, threats and controls to inventory availability must be assessed. Which of the following is not a control to inventory availability? Making periodic physical inventory counts to verify record accuracy Monitoring supplier performance Examining excess inventory Creating accurate systems for sales forecasting and inventory control

Answer 70

Examining excess inventory Excess inventory is a threat, not a control, to inventory availability. It brings additional carrying costs and may require significant markdowns. Controls over inventory availability include making periodical physical inventory accounts and creating accurate systems for sales forecasting and inventory control

Question 71

Threat and controls in inventory availability THREATS: 1. Stockouts/Carrying costs/Markdowns/Excess Inventory ----Excess inventory increases ___ cost and may require significant ___: CONTROLS Periodic inventory ___ Accurate systems for sales ____ Monitor ___ performance

Answer 71

Carrying costs & Sig markdowns Counts sales forecasting Supplier performance

Question 72

T/F regarding digital business models? A digital business model defines how a business makes money digitally. Businesses leaders and CIOs will not need to understand digital business models as long as they have a chief digital officer. A digital business model blends the lines between digital and physical operating environments. Digital business models are based upon a digital strategy, which is a plan for maximizing the benefits of data assets and technology-focused initiatives.

Answer 72

True False -- All leaders must understand True True

Question 73

T/F An information system adds value to an organization by improving all of the following : improving decision making by providing accurate information in a timely manner. sharing knowledge and expertise, thereby improving operations and providing a competitive advantage. improving the quality of products or services. improving the efficiency of operations by providing timely information. improving the efficiency and effectiveness of the supply chain. improving customer relations by providing product cost information to wholesalers.

Answer 73

``` True True True True True False ```

Question 74

At what phase in the systems development process is a report generated that describes the content, processing flows, resource requirements, and procedures of a preliminary system design? File and database design Conceptual systems design Physical systems design Procedures design

Answer 74

Conceptual systems design

Question 75

During ____design, the company identifies and evaluates appropriate design alternatives; develops detailed specifications that describe the content, processing flows, resource requirements, and procedures for the system; and communicates the conceptual design requirements to the information systems steering committee. During the ___design phase, the company uses the conceptual design requirements to design input and output documents, write computer programs, create files and databases, develop policies and procedures, and build controls into the new system.

Answer 75

conceptual physical

Question 76

Corporate intranets are typically characterized by ________ as compared to local and wide area networks. higher security risk and higher cost higher security risk and lower cost lower security risk and higher cost lower security risk and lower cost

Answer 76

higher security risk and lower cost Intranets are private networks that behave in much the same manner as the Internet. They are subject to higher security risks but are less costly to operate than local or wide area networks.

Question 77

Some advantages of decentralized data processing facilities are: decentralization increases ___access by users, standalone capabilities are distributed to points of need, T/F ___is increased in designs and use, and the ability to share computing power, which decreases the significance of ___

Answer 77

direct true participation system failure.

Question 78

Which of the following errors most likely would be detected by batch financial totals? A transposition error on one employee’s paycheck on a weekly payroll run A missing digit in an invoice number in a batch of daily sales A purchase order mistakenly entered into two different batches Malfeasance resulting from a receivable clerk’s pocketing of a customer’s payment and altering of the related records

Answer 78

A transposition error on one employee’s paycheck on a weekly payroll run "A transposition error on one employee’s paycheck on a weekly payroll run" is correct because the paycheck batch total would not equal the payroll for the week. The other answer choices are incorrect: "A missing digit in an invoice number in a batch of daily sales" is incorrect because invoice numbers are not financial amounts. A total of invoice numbers is a meaningless hash total amount rather than a batch financial total.

Question 79

Threat and controls in preparing payroll' THREAT 1. Costly if overpay employees 2. Hurt employee morale if checks are late 3. Result in fines if incorrect payroll tax is paid 2 gov CONTROL 1. Calculate _--total 2. Cross-foot payroll register & make sure net pay =__ 3. Use payroll ___account 4. Classify workers as employees or independent contractors....t/f

Answer 79

Overypay late fines Batch total gross minus deductions Clearing True

Question 80

___total is an input control, the sum of the number of items or total amount. Input is compared to processing

Answer 80

Batch

Question 81

Invoice # Product Quantity Unit Price --------- ------- -------- ---------- 201 F10 150 $ 5.00 202 G15 200 10.00 203 H20 250 25.00 204 K35 300 30.00 Which of the following most likely represents a hash total?

Answer 81

810

Question 82

In building an electronic data interchange (EDI) system, what process is used to determine which elements in the entity’s computer system correspond to the standard data elements? Mapping Translation Encryption Decoding

Answer 82

Mapping Advantages of an EDI system include reduced errors, costs, and processing time. Mapping is establishing correspondence between the system and standard data elements. Decoding is converting encrypted data back to readable data.

Question 83

In terms of machine learning and automation, which of the following T/F Automation enables machines to perform mundane and simple tasks but is not capable of replacing humans for the more complex tasks. Automation allows machines to perform tasks via programmed commands without human intervention. Continued advancement of automation will put a substantial share of employment at risk in the near future. Automation technology has resulted in the creation of a number of other technologies, such as robotics.

Answer 83

Automation enables machines to perform mundane and simple tasks but is not capable of replacing humans for the more complex tasks. . Over time, automated systems have become increasingly sophisticated and complex, often surpassing human capabilities, and thereby partially or completely replacing humans on the assembly line. False T T T

Question 84

A___ uses the Internet to create a privately owned network that: provides a secure, cost-effective method of providing remote access to an organization's network. saves companies money, as the cost of the VPN software and higher-capacity lines linking the organizational network to the Internet is less than the leased lines and toll-free phones that the Internet replaces.

Answer 84

virtual private network (VPN)

Question 85

The revenue cycle produces information that is used by other accounting cycles: Both the ___cycles use sales information to purchase or produce additional inventory. The ___cycle uses sales information to compensate employees (calculate sales commissions and bonuses). The ___and reporting function uses revenue cycle information to prepare financial statements and performance reports.

Answer 85

expenditure and the production payroll general ledger

Question 86

In an automated payroll processing environment, a department manager substituted the time card for a terminated employee with a time card for a fictitious employee. The fictitious employee had the same pay rate and hours worked as the terminated employee. The best control technique to detect this action using employee identification numbers would be a: batch total. record count. hash total. subsequent check.

Answer 86

Hash total Assuming that the substitution takes place after the time cards have been batched for processing, the best control technique listed would be the hash total. The hash total is a type of batch control total. It is the summation of a quantitative but noninformational data field; for example, check numbers, purchase order numbers, and employee identification numbers.

Question 87

Many entities use the Internet as a network to transmit electronic data interchange (EDI) transactions. An advantage of using the Internet for electronic commerce rather than a traditional value-added network (VAN) is that the Internet: permits EDI transactions to be sent to trading partners as transactions occur. automatically batches EDI transactions to multiple trading partners. possesses superior characteristics regarding disaster recovery. converts EDI transactions to a standard format without translation software.

Answer 87

permits EDI transactions to be sent to trading partners as transactions occur. Value-added networks transmit data to trading partners with additional conversion and auditing steps. Using the Internet directly allows a business to send transactions immediately to trading partners without the delay inherent in the additional VAN steps.

Question 88

Which of the following are essential elements of the audit trail in an electronic data interchange (EDI) system? Network and sender/recipient acknowledgments Message directories and header segments Contingency and disaster recovery plans Trading partner security and mailbox codes

Answer 88

Network and sender/recipient acknowledgments An audit trail allows the auditor to follow a single transaction from inception to recording in the appropriate journal or general ledger. A record of network and sender/recipient acknowledgments in an EDI system would allow the auditor to track a transaction through the system to its ultimate recording.

Question 89

Managers of local offices of an international consulting firm need better access to human resource data for their offices' employees than they have now from the consolidated database at the firm's headquarters. A distributed database, in which data about individuals would reside on computers at local offices but would be accessible to managers worldwide, has been proposed. A risk of the proposed arrangement is that: segregation of incompatible duties might not be maintained at the firm's headquarters. the data might not be updated as quickly as with the centralized system. database integrity might not be preserved during a network or computer failure. the data are more vulnerable to outsiders than with the centralized system.

Answer 89

database integrity might not be preserved during a network or computer failure.

Question 90

T/F regarding blockchain Once completed, a block goes into the blockchain as a permanent database. Blockchain technology (which uses what is known as machine-learning technology (MLT)) is primarily used to verify transactions within digital currencies. The blockchain has complete information about different user addresses and their cryptocurrency balances from the genesis block to the most recently completed block. Documents can be digitized, coded, and inserted into the blockchain, creating a record that cannot be changed.

Answer 90

Blockchain technology (which uses what is known as machine-learning technology (MLT)) is primarily used to verify transactions within digital currencies T F T T Originally developed as the accounting method for the virtual currency Bitcoin, blockchain technology uses what is known as distributed ledger technology (DLT), not machine-learning technology, and is primarily used to verify transactions within digital currencies.

Question 91

The finance department is evaluating two accounts receivable transaction processing systems. System A provides for batch processing twice weekly. System B provides online real-time processing. Which of the following requirements is most important in determining whether to adopt system A or system B? Accuracy of weekly accounts receivable aging report Accuracy of monthly general ledger balance Need for controls that validate transactions Need to immediately answer customers' questions regarding account balances

Answer 91

Need to immediately answer customers' questions regarding account balances In a batch processing system (system A), the master files are updated periodically to reflect all transactions that occurred during a given time period. Online, real-time (OLRT) processing (system B) is where the computer captures data electronically, edits it for accuracy and completeness, and updates the master file as each transaction occurs

Question 92

Which of the following definitions describes data visualization? A digitized, decentralized, public ledger of all cryptocurrency transactions Any effort to help people understand the significance of data by placing it in a visual format, aiding in the understanding and communication of difficult concepts and ideas Often defined by the three "V's": volume, velocity, and variety Rapidly examines large amounts of data to identify hidden patterns, correlations, and other insights

Answer 92

Any effort to help people understand the significance of data by placing it in a visual format, aiding in the understanding and communication of difficult concepts and ideas

Question 93

Which of the following characteristics distinguishes electronic data interchange (EDI) from other forms of electronic commerce? EDI transactions are formatted using standards that are uniform worldwide. EDI transactions need not comply with generally accepted accounting principles. EDI transactions ordinarily are processed without the Internet. EDI transactions are usually recorded without security and privacy concerns.

Answer 93

EDI transactions are formatted using standards that are uniform worldwide. Electronic data interchange allows exchanges between entities because they are based on a standard. EDI relates to the data and not to how the data is programmed. EDI is the direct computer-to-computer transfer of business transaction documents and information between two organizations. The format and content of the documents must be standardized so that both computers can accept and process them.

Question 94

Which of the following statements is incorrect regarding artificial intelligence (AI)? AI can perform tasks such as identifying patterns in the data more efficiently than humans, enabling businesses to gain more insight out of their data. AI can be categorized as narrow/weak AI or general/strong AI. AI is the science and engineering of simulating human intelligence processes by machines. AI is a current application of machine learning based on the idea that we should be able to give machines access to data and let them learn for themselves.

Answer 94

AI is a current application of machine learning based on the idea that we should be able to give machines access to data and let them learn for themselves. Machine learning is one application of artificial intelligence (AI) (not vice versa), based on the idea that we should be able to give machines access to data and let them learn for themselves.

Question 95

Artificial intelligence (AI) can be categorized as narrow (or weak) AI, or general (or strong) AI: ___AI: Designed to perform a narrow task ____AI: Strong AI, also known as artificial general intelligence, is an AI system with generalized human cognitive abilities so that when presented with an unfamiliar task, it has enough intelligence to find a solution. Traditional processing techniques can successfully analyze big data sets. T/F

Answer 95

Narrow/weak General/strong False - it is inadequate

Question 96

In a large firm, custody of an entity's data is most appropriately maintained by which of the following personnel? Data librarian Systems analyst Computer operator Computer programmer

Answer 96

Data Librarian

Question 97

Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment? A compressed business cycle with lower year-end receivables balances A reduced need to test computer controls related to sales and collections transactions An increased opportunity to apply statistical sampling techniques to account balances No need to rely on third-party service providers to ensure security

Answer 97

A compressed business cycle with lower year-end receivables balances Such a system can facilitate just-in-time inventory systems and also speed payment via electronic funds transfer after the transaction, resulting in lower year-end receivables balances.

Question 98

hich of the following is the primary advantage of using a value-added network (VAN)? It provides confidentiality for data transmitted over the Internet. It provides increased security for data transmissions. It is more cost effective for the company than transmitting data over the Internet. It enables the company to obtain trend information on data transmissions.

Answer 98

It provides increased security for data transmissions. Value-added networks (VANs) are telecommunication networks providing communication facilities, enhancing basic telecommunication services by passing, storing, and converting messages using enhanced security techniques.

Question 99

Threats and controls in general ledger and reporting system (Part 1) THREAT: 1. Misleading ___ 2. Poor ___ CONTROLS 1. JE represent actual reporting period 2. Validity checks to make sure GL acct exists 3. Field check to make sure amount field contains only __data 4. Zero balance checks to make sure ___ 5. ___check to ensure all data entered 6. ___verification to ensure acct #=Acct descript 7. Adj entry files exist for ___entries 8____totals to verify batch processing accuracy

Answer 99

Reports Decisions ``` T T NUMERIC DR=CR Completeness Closed-loop recurring . Run-to-run ```

Question 100

Which of the following represents an additional cost of transmitting business transactions by means of electronic data interchange (EDI) rather than in a traditional paper environment? Redundant data checks are needed to verify that individual EDI transactions are not recorded twice. Internal audit work is needed because the potential for random data entry errors is increased. Translation software is needed to convert transactions from the entity's internal format to a standard EDI format. More supervisory personnel are needed because the amount of data entry is greater in an EDI system.

Answer 100

Translation software is needed to convert transactions from the entity's internal format to a standard EDI format. Electronic data interchange is used to electronically transfer information between and within organization computers. However, it comes at a cost. The service is standardized, so translation is needed to convert data from the usual format to that acceptable to the EDI system.

Question 101

Which of the following statements is correct regarding the Internet as a commercially viable network? Organizations must use firewalls if they wish to maintain security over internal data. Companies must apply to the Internet to gain permission to create a home page to engage in electronic commerce. Companies that wish to engage in electronic commerce on the Internet must meet required security standards established by the coalition of Internet providers.

Answer 101

I only Anyone can establish a home page on the Internet. (Statement II) There are no security standards for connecting to the Internet, nor is there a coalition of Internet providers which dictate such standards. The lack of such standards is a major problem with the Internet. (Statement III)

Question 102

A company permits employees to work from home using company-owned laptops. Which of the following competitive advantages does the company most likely obtain as a result of this decision? Integrity Reliability Availability Confidentiality

Answer 102

Availability deo chats, conference calls, VPN networks, and wireless internet allow employees to be constantly connected and available, even after hours and on weekends. Hiring remote workers offers the added advantage of expanding the talent pool without incurring relocation costs.

Question 103

High-level corporate executives should make individual departments or individuals responsible for specific business objectives or processes and then hold them accountable. They can do this with: 1. Formal ___ descriptions 2. Formal code of __ that covers ___ 3. Written policy/procedures 4. Operating plans/sched/budgets

Answer 103

1. Job 2. conduct that covers ethical behavior 3. True 4. True

Question 104

Which of the following is an essential element of the audit trail in an electronic data interchange (EDI) system? Disaster recovery plans that ensure proper backup o files Encrypted hash totals that authenticate messages Activity logs that indicate failed transactions Hardware security modules that store sensitive data

Answer 104

Activity logs that indicate failed transactions An activity log indicating failed transactions in an EDI system would allow the auditor to identify why a transaction was not recorded and at what stage the transaction failed. This information would allow the auditor to test controls over such transactions. Other options are NOT elements of the audit trail

Question 105

T/F regarding a neural network (for machine learning) A neural network is a computer system designed to recognize images and classify them according to the elements they contain. A neural network essentially works on a system of probability: based on data fed to it, it is able to make statements, decisions, or predictions with a degree of certainty. A feedback loop in the neural network enables “learning”; by sensing or being told whether its decisions are right or wrong, the computer system modifies the approach it takes in the future. Neural network systems deal with literal truths rather than statistical truths.

Answer 105

True true True False

Question 106

Which of the following procedures would an entity most likely include in its disaster recovery plan? Convert all data from EDI format to an internal company format. Maintain a Trojan horse program to prevent illicit activity. Develop an auxiliary power supply to provide uninterrupted electricity. Store duplicate copies of files in a location away from the computer center.

Answer 106

Store duplicate copies of files in a location away from the computer center. In the event of certain disasters, the company will need to restore computer files. For certain disasters, the backup will only be possible if the copies are stored at a separate location.

Question 107

To ensure the completeness of update in an online system, separate totals are accumulated for all transactions processed throughout the day. The computer then agrees these totals to the total of items accepted for processing. This is an example of: run-to-run controls. computer matching. computer sequence check. one-for-one checking.

Answer 107

run-to-run control Computer matching compares transaction data to referenced fields or records. Computer sequence checks identify changes or breaks in a numerical sequence. One-for-one checking generally requires manual comparisons of input data elements to processing results

Question 108

Which of the following best defines electronic data interchange (EDI) transactions? Electronic business information is exchanged between two or more businesses. Customers' funds-related transactions are electronically transmitted and processed. Entered sales data are electronically transmitted via a centralized network to a central processor. Products sold on central web servers can be accessed by users at any time.

Answer 108

Electronic business information is exchanged between two or more businesses. Electronic data interchange (EDI) is defined as the use of computerized communication to exchange data electronically in order to process transactions between and within computers and computer networks of various organizations.

Question 109

A client would like to implement a management information system that integrates all functional areas within an organization to allow information exchange and collaboration among all parties involved in business operations. Which of the following systems is most effective for this application? A decision support system An executive support system An office automation system An enterprise resource planning system

Answer 109

ERP System