Exam 14: Enterprise System Risks and Controls

A normally trustworthy cashier who opened a company's mail discovered a customer paid off his account in cash ($500). The cashier was working alone at the time and pocketed the cash. She couldn't resist the temptation because she needed to buy some expensive medicine for her infant daughter and the company's insurance policy wouldn't cover the expense. Later, the cashier accessed the company's accounting system and entered a credit memo for that customer in the amount of $500 (so the customer wouldn't receive another bill and complain that he had already paid it). Which of the following controls would have been LEAST effective in PREVENTING this crime?

Who is ultimately responsible for a company's internal control structure?

The inventory part numbers for an enterprise consist of even numbers that range from 700 to 798. If a clerk mistakenly enters a part with an odd number, which control is most likely to detect and correct the error?

Name two examples of economy risk.

Corrective controls focus on preventing an error or irregularity.

Write the CAPITAL letter of the term from the list below that most closely matches each of the following definitions. -the keying of input data twice, with the computer comparing the two entries and highlighting any discrepancies for correction

To what business process risk are economic increment events particularly susceptible, and why?

What type of risk is a mistake made in the advertising or promotions regarding a product available for sale?

An uninterruptible power supply (UPS) is a combination of hardware and software used to shield a computer network from unauthorized users or from file transfers of unauthorized types.

Write the CAPITAL letter of the term from the list below that most closely matches each of the following definitions. -are used to verify that all transactions within batches are processed

Economy risks include those resulting from war, epidemics, financial market changes, terrorist attacks, and natural disasters such as floods, hurricanes, and drought.

The materiality of a risk is determined solely by its impact on the organization; that is, by the size of the potential loss and its impact on achieving the organization's objectives.

A company has established its customer defaults and has entered its customer records into its information system. A sales clerk entering a sales transaction into the system begins by entering the Customer ID code. In response, the system displays the default information (e.g. Name, Ship-to address, Telephone number) for that customer. This is an example of

Radio frequency identification tags are increasingly used to track the chain of custody of resources.

Which of the following is not a risk associated with the sale of merchandise?

What is an independent check on performance?

Write the CAPITAL letter of the term from the list below that most closely matches each of the following definitions. -restrict unauthorized access to the system itself, to physical devices, and to data in the system.

Bartt's Boxes manufactures and distributes boxes of various sizes and strengths. They take mail and telephone orders from customers. They ship the boxes according to the customer orders and send monthly statements to the customers who pay on a monthly basis. What are at least three risks associated with Bartt's sales/collection process, and what are internal controls that would mitigate these risks?

Write the CAPITAL letter of the term from the list below that most closely matches each of the following definitions. -applies a formula to an account number, and if an expected sum is derived, gives some assurance that the number is valid

Many of the risks associated with instigation events in the sales/collection process relate to the salesperson's efficiency and effectiveness.