Years ago, the company purchased a software package that was used by other companies in the same industry (it was not a specially made software). It was sold by a leading software company known for their highly rated products. Which management assertions apply to this control? Existence & Occurrence, Rights, Completeness, Valuation

Years ago, the company purchased a software package that was used by other companies in the same industry (it was not a specially made software). It was sold by a leading software company known for their highly rated products. Which management assertions apply to this control? Existence & Occurrence, Rights, Completeness, Valuation

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter1: The Information System: An Accountant’s Perspective

Section: Chapter Questions

Problem 14MCQ: Which of the following statements is most accurate? a. ERP systems are commercial software packages...

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The ABC Company is switching from its legacy centralizedsystem to a fully distributed system. Underthe new model, all employees will work from PCsconnected to a local area network. a. Outline a plan of action to ensure that the propercontrols over hardware, software, data, people,procedures, and documentation are in place.b. Discuss any risks the company may face if thedevised plan is not implemented.
Which of the following statements is most accurate? a. ERP systems are commercial software packages that are sometimes called turnkey systems because they can be implemented by the user with little or no modification. b. Substantive tests provide evidence focused on the system controls. c. Public accounting firms that provide attest services are not allowed under SOX to offer IT advisory services. d. Both small and large firms that have standardized information needs are potential customers for commercial software. e. External auditors may rely on the work of internal auditors only if they report to the controller or the CEO of the client company.
Which statement is NOT correct?a. Legacy systems may process financially significant transactions.b. Some legacy systems use database technology.c. Mainframes are exclusive to legacy systems, while modern systems use only the client-server model.d. All the above are true.
5. Which of the following is not a risk in a computerized information system (CIS) a. need for CIS experienced staff b. separation of CIS duties from accounting functions c. improved audit trail d. hardware and data vulnerability Required: choose the correct answer and Justify your answers in at least 6 sentences.
Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Will different system access levels for different users be incorporated?
Software production costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways: a. all software production costs should be recorded as R&D expenseb. all software production costs should be capitalizedc. all software production costs should be recorded in R&D expense until technologicalfeasibility is establishedd. all software production costs should be recorded in R&D expense until the product isavailable for general release to customers
General Controls. Indicate the benefits of each of the following examples of general controls. a. Echo checks are designed and built into the computer by the manufacturer.b. The company schedules regular maintenance on its computer hardware.c. The company involves users in its design of programs and selection of prepackaged software and programs.d. New programs are tested and validated prior to being implemented.e. Documentation is required prior to modifying existing programs using “emergency”change orders.f. The duties of system analysts, programmers, and computer operators are appropriatelyseparated.g. Appropriate backup and data retention policies are implemented.h. The access rights granted to employees are periodically reviewed and evaluated, giving consideration to known changes resulting from promotions and transfers within the company.
4. Development costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways?a. All software development costs should be capitalized until technological feasibility is established.b. All software development costs should be recorded in R&D expense until the product is available for general release to customers.c. All software development costs incurred between the establishment of technological feasibility and general release should be capitalized.d. All software development costs incurred between the establishment of technological feasibility and general release should be recorded as R&D expense.
Which of the following would reduce the effectiveness of internal control in an accountinginformation system?a. The computer librarian maintains custody of computer program instructions and detailed lists.b. Computer operators have access to operator instructions and detailed program lists.c. The control group is solely responsible for the distribution of all computer output.d. Computer programmers write and debug programs that perform routines designed by thesystems analyst.
Question #66: Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Will all data entry clerks and accounting personnel have their own PCs with log‐in IDs and password protection? Will different system access levels for different users be incorporated? Will customer orders be received via the Internet? Has the company identified an off‐site alternative computer processing location? Does the project budget include line items for an upgraded, uninterrupted power source and firewall? Required: In a two (2) page response, describe the control purpose for each point presented in the case.
1. _____ are controls that do not rely on the client's information technology (IT) environment for their operation. a. IT general controls (ITGCs) b. Automated controls c. Computer application controls d. Manual controls 2. Assessing control risk begins with understanding entity-level controls. a. True b. False
Which of the following is least likely to be a general control over computer activities? a. Procedures for developing new programs and systems b. Requirements for system documentation c. An access control d. A control total Required: choose the correct answer and Justify your answers in at least 6 sentences.