91 NINJA MCQ Flashcards
A transaction processing system would appropriately include each of the following activities for an online bookseller, except
A Shipping.
B Processing payroll.
C Receiving Internet orders.
D Monitoring competitor price changes.
Monitoring competitor price changes.
Transaction processing systems are systems used for processing transactions such as sales processing systems, payroll processing systems, and cash processing systems.
A transaction processing system would include activities such as shipping, processing payroll, and receiving internet orders.
Monitoring competitor price changes is done by the marketing department and is not a part of the transaction processing system.
An enterprise resource planning system is designed to
A Allow nonexperts to make decisions about a particular problem
B Help with the decision-making process
C Integrate data from all aspects of an organization’s activities
D Present executives with the information needed to make strategic plans
Integrate data from all aspects of an organization’s activities
An enterprise resource planning system consists of complex, highly integrated, multi-module applications that manage a business’ different aspects, from traditional accounting to inventory management and advanced planning and forecasting. This is accomplished by integrating data from all aspects of an organization’s activities.
- The goal of ERP is to integrate and streamline all aspects of a business’s operations in order to improve efficient and decision-making.
- Examples are SAP, Oracle, Microsoft Dynamics
Which of the following are not essential data-flow diagram elements?
A Data destination
B Data source
C Data storage
D System flowchart
System flowchart
A system flowchart is an illustration of a system’s data flow and information processing, including hardware. A dataflow diagram typically includes information on data flows, data destination, data source, data storage, and transformation processes, but not hardware
Here’s why:
Data destination: This element represents the end point of a data flow and is crucial for understanding where information ultimately goes within the system.
Data source: This element represents the origin of a data flow and is essential for identifying the starting point of information in the system.
Data storage: This element represents repositories where data is kept within the system, providing insight into information storage and retrieval processes.
However, system flowcharts depict the internal logic and sequence of processes within a system, using symbols like boxes and arrows to represent tasks and control flow. While system flowcharts can complement and be visually linked to DFDs, their inclusion within the DFD itself is not essential.
A DFD solely focuses on the flow and transformation of data between external entities, processes, and data stores. It doesn’t necessarily delve into the detailed logic and control flow within individual processes, which is the domain of system flowcharts.
A multinational corporation decides to outsource its IT help desk operations to a third-party vendor located in a different country. What is the primary disadvantage associated with this decision?
A Security Risks
B Quality of Service
C Cultural and Language Barriers
D Communication and Coordination Challenges
Cultural and Language Barriers
Outsourcing to a different country can lead to cultural and language barriers, impacting effective communication and coordination.
Outsourcing IT help desk operations to a vendor in a different country often brings challenges related to cultural differences and language barriers. These barriers can impact the effectiveness of communication between the help desk staff and the end-users they are assisting. Misunderstandings or misinterpretations due to language nuances can lead to frustration on both sides and potentially impact the quality of service provided. Additionally, cultural differences might affect the understanding of certain problems or the way in which support is expected to be provided.
While the other options are also valid concerns, they are not as universally impactful as cultural and language barriers:
A. Security Risks: While important, security risks can be mitigated through strong contractual agreements, data protection policies, and adherence to international security standards.
B. Quality of Service: This is a significant concern, but it can be managed through service level agreements (SLAs) and regular performance reviews. Quality of service is also partially dependent on overcoming language and cultural barriers.
D. Communication and Coordination Challenges: These are indeed relevant challenges, especially across different time zones, but they can often be managed through effective project management and communication tools. Cultural and language barriers are a subset of this challenge and often the more difficult part to address.
Which of the following factors has the greatest impact on the design of an effective management reporting system?
A Number of transactions to be processed
B Types of decisions to be made
C Number of authorized users
D Number of regulatory agencies to be satisfied
Types of decisions to be made
Management reporting system processes information to manage and support business decisions. These are designed to assist in business decision making based on data. The type of decisions to be made has the greatest impact on the design of an effective management reporting system.
The primary purpose of a management reporting system is to provide relevant information to support decision-making processes. The nature and complexity of these decisions significantly influence how the reporting system is structured, the types of data it needs to collect and process, and how that data is presented. Different decision types (strategic, operational, tactical) require different kinds of information and reporting formats. For instance, strategic decisions may need more comprehensive, long-term trend data, while operational decisions require more detailed, immediate data.
While the other factors are also important, they are generally secondary to the fundamental requirement of supporting decision-making:
A. Number of transactions to be processed: This affects the system’s capacity and performance requirements but does not primarily drive the system’s design in terms of the type of information presented.
C. Number of authorized users: This impacts access control and scalability but does not fundamentally determine the nature of the information the system should provide.
D. Number of regulatory agencies to be satisfied: While compliance is important, it is usually not the primary driver for the design of a management reporting system, except in highly regulated industries. Compliance requirements often dictate some aspects of the reporting but do not generally define the core purpose of the system.
Out of the options given, the factor with the greatest impact on the design of an effective management reporting system is:
B. Types of decisions to be made
Here’s why:
A. Number of transactions: While the volume of transactions can influence certain aspects of system design like processing speed and scalability, it primarily affects technical considerations, not the core information needs for managerial decisions.
C. Number of authorized users: The user base can influence the system’s interface and access control features, but the primary focus should be on the information needs of those making key decisions, not just all users.
D. Regulatory requirements: Regulatory reporting needs might play a role in data capture and compliance aspects, but ultimately, the system should cater to the internal decision-making needs of the organization first.
The types of decisions made by management drive the entire design and content of effective management reporting systems. This is because:
Information requirements vary based on decision type: Executive-level strategic decisions require different data and analysis compared to operational-level tactical decisions.
Frequency and format of reports: The system should cater to the different reporting frequencies and formats needed for various decisions, like quick dashboards for real-time monitoring or detailed reports for periodic reviews.
Level of detail and aggregation: Deciding to provide highly aggregated data summaries or allow drill-down to granular details depends on the specific analysis and insight needed for different types of decisions.
What attribute is least descriptive of an executive information system?
A Combines, integrates, and summarizes data from many sources
B Designed to monitor business conditions and assist in strategic planning
C Provides immediate and interactive access to information
D Provides only highly aggregated information
Provides only highly aggregated information
While an executive information system (EIS) provides highly aggregated information, details supporting that information ideally are readily available. An EIS combines, integrates, and summarizes data from many sources (external as well as internal) to monitor business conditions and assist in strategic planning. An EIS typically provides immediate and interactive access to information.
While an EIS does provide aggregated information to give executives a high-level overview, it typically also offers the capability to drill down into more detailed data. This feature is crucial for understanding specific aspects of the business or for investigating issues in greater depth. Therefore, saying that an EIS provides only highly aggregated information is misleading and less accurate compared to the other options.
In contrast, the other attributes:
A. Combines, integrates, and summarizes data from many sources
B. Designed to monitor business conditions and assist in strategic planning
C. Provides immediate and interactive access to information
are all highly descriptive of an EIS. These systems are indeed known for integrating data from multiple sources, assisting in strategic planning through monitoring and analysis, and providing immediate and interactive access to vital information.
Here’s why the other options accurately describe EIS characteristics:
A. Combines, integrates, and summarizes data from many sources: This is a cornerstone of EIS functionality. They gather data from various internal and external sources, including financial systems, sales reports, market research, and industry trends, to give executives a holistic view of the organization and its environment.
B. Designed to monitor business conditions and assist in strategic planning: EIS are specifically designed to help executives monitor key performance indicators (KPIs), track trends, and analyze data to inform strategic decision-making. They provide insights into areas like profitability, market share, customer trends, and operational efficiency.
C. Provides immediate and interactive access to information: EIS offer user-friendly dashboards and drill-down capabilities that allow executives to access information quickly and easily. They can explore data in detail, filter by specific criteria, and visualize trends to gain deeper understanding.
An Executive Information System (EIS) is a type of management support system tailored specifically for senior executives and decision-makers within an organization. Its primary purpose is to provide these high-level users with easy access to important information about various aspects of the organization’s operations. Key characteristics and features of an EIS include:
User-Friendly Interface: EIS systems are designed with a focus on simplicity and ease of use, often featuring graphical displays like dashboards. They are tailored to individuals who may not have extensive technical or analytical backgrounds.
Critical Data Access: The system provides quick access to critical data that is crucial for decision-making. This includes summary-level information, key performance indicators (KPIs), and other data that highlight the overall performance and health of the organization.
Drill-Down Capability: While EIS typically presents data at a summary level, it often allows users to drill down into more detailed views if needed. This feature is useful for understanding the root causes of problems or for getting more context around certain metrics.
What attribute is not characteristic of a decision support system?
A Expert system
B Interactive computer-based modeling processes
C Judgment on the part of the decision maker
D Models
Expert system
Decision support systems (DSS) are used primarily for semi-structured problems requiring the exercise of judgment. Rather than providing answers, a DSS provides information to assist a user to develop answers. Expert, or knowledge-based, systems provide answers based on information provided by the user and the rules developed by an expert to address specified situations. By comparison, DSS facilitate problem-solving by providing computational capacity and data for use in interactive models.
An expert system is a distinct type of system in the field of artificial intelligence designed to simulate the decision-making ability of a human expert. While a DSS may incorporate elements of an expert system or use its principles for specific functions, an expert system in itself is not a defining characteristic of a DSS. A DSS primarily focuses on facilitating and improving the decision-making process through data analysis, interactive modeling, and providing support to the decision-maker, rather than simulating expert-level decision-making autonomously.
A Decision Support System (DSS) can include models and may also integrate aspects of an expert system, but it fundamentally relies on the judgment of the decision maker.
Inclusion of Models: DSS often incorporates various models for analysis, including statistical, financial, optimization, or simulation models. These models help in analyzing data and simulating different scenarios. For instance, a DSS might use financial models to project future revenues under different market conditions.
Integration with Expert Systems: Some DSSs may integrate features of expert systems. Expert systems are a branch of artificial intelligence designed to replicate the decision-making ability of a human expert. In a DSS, these systems can provide specialized guidance or recommendations based on the data and predefined rules.
Reliance on Human Judgment: Despite the sophisticated analysis and recommendations provided by a DSS, the final decision-making rests with the human user. Unlike automated decision-making systems, a DSS serves as a support tool, enhancing the decision maker’s understanding and analysis of the situation. It does not replace human judgment but rather augments it with data-driven insights.
Interactive Process: The effectiveness of a DSS is in its interactive nature, allowing decision-makers to explore various scenarios and modify assumptions to see how outcomes change. This process requires active engagement and judgment from the user, as they interpret the information and implications presented by the system.
In summary, while a DSS can include advanced models and even elements of expert systems, its core function is to support and enhance human decision-making, not to replace it. Decision makers use DSS to gather and analyze information, explore different scenarios, and make informed decisions based on a combination of the system’s insights and their own judgment and expertise.
Which of the following controls would be most effective in assuring that recorded purchases are free of material errors?
A The Receiving Department compares the quantity ordered on purchase orders with the quantity received on receiving reports.
B Vendors’ invoices are compared with purchase orders by an employee who is independent of the Receiving Department.
C Receiving reports require the signature of the individual who authorized the purchase.
D Purchase orders, receiving reports, and vendors’ invoices are independently matched in preparing vouchers.
Purchase orders, receiving reports, and vendors’ invoices are independently matched in preparing vouchers.
The most effective controls over recorded purchases occur when supporting forms such as purchase orders, receiving reports, and vendor invoices are compared independently for agreement. For good control, the Receiving Department should not know the quantity ordered.
Answer B. is a step in the right direction, but does not encompass as many independent comparisons as does answer D. Answer C. is an example of incompatible functions. Assets should not be checked in and recorded by the person who authorized their purchase.
This procedure, known as the “three-way match,” involves comparing the purchase order (what was ordered), the receiving report (what was received), and the vendor’s invoice (what is being billed). This control helps ensure that the company pays only for goods or services that are ordered and actually received. By independently matching these three documents, discrepancies can be identified and resolved before payment is made, significantly reducing the likelihood of material errors in the recording of purchases.
Here’s why the other options are less effective:
A. Comparing quantities: While verifying received quantities against purchase orders helps detect discrepancies, it only focuses on quantities, not price, description, or other vital purchase details. It wouldn’t catch errors like incorrect pricing or unauthorized purchases.
B. Independent invoice comparison: Checking invoices against purchase orders by an independent department minimizes collusion within the purchasing department, but it wouldn’t necessarily catch errors within the receiving department or related to quantity or item discrepancies.
C. Authorized signatures: Requiring authorization signatures on receiving reports helps ensure authorized purchases, but it doesn’t guarantee actual receipt of the ordered goods or accurate matching of invoices and receiving reports.
Independent matching of all three documents (purchase orders, receiving reports, and vendor invoices) during voucher preparation is the most comprehensive control. This cross-verification ensures:
Agreement in pricing, quantities, and item descriptions.
Detection of unauthorized or duplicate purchases.
Identification of discrepancies between what was ordered, received, and invoiced.
Minimization of errors due to collusion or individual mistakes.
This control establishes a clear separation of duties and provides multiple layers of verification before accepting and paying for purchases. While other controls play important roles, independent matching offers the most comprehensive protection against material errors in recorded purchases.
Which of the following internal control procedures would prevent an employee from being paid an inappropriate hourly wage?
A Having the supervisor of the data entry clerk verify that each employee’s hours worked are correctly entered into the system
B Using real-time posting of payroll so there can be no after-the-fact data manipulation of the payroll register
C Giving payroll data entry clerks the ability to change any suspicious hourly pay rates to a reasonable rate
D Limiting access to employee master files to authorized employees in the personnel department
Limiting access to employee master files to authorized employees in the personnel department
An employee’s hourly wage is recorded on the employee master file. Access to the employee master files should be limited to authorized employees in the personnel department only. This is an effective separation of duties. Having the data-entry clerk’s supervisor verify hours worked doesn’t prevent manipulation of wage rates. Early timing of the payroll posting doesn’t prevent data manipulation. Giving data-entry clerks authorization to set wage rates as well as enter hours worked (recording) is a violation of the separation of duties.
This control is effective because it restricts the ability to alter pay rates to a select group of authorized personnel, typically in the human resources or personnel department. By doing so, it reduces the risk of unauthorized or inappropriate changes to employee wage information. Ensuring that only qualified and authorized individuals have the ability to modify sensitive data in the employee master files is a fundamental aspect of internal control systems in payroll processing.
Here’s why the other options are less effective:
A. While supervisor verification can help reduce errors, it doesn’t directly prevent intentional manipulation of employee hours. A dishonest employee could still enter incorrect hours even with supervisor approval.
B. Real-time posting might deter after-the-fact changes, but it wouldn’t prevent inappropriate hourly rates being entered initially. This control focuses on timing of transactions, not data accuracy.
C. Giving data entry clerks the ability to change rates opens the door for potential abuse. Instead of correcting validly high rates, they could manipulate data to pay themselves or others inappropriately.
Restricting access to employee master files, where wage rates are typically stored, creates a stronger control for preventing unauthorized changes. Only authorized personnel in the personnel department, responsible for managing payroll data, have access to modify rates, minimizing the risk of intentional manipulation by data entry clerks or other unauthorized individuals.
This control can be further strengthened by implementing:
Dual authorization: Requiring two authorized personnel to approve any changes to employee master files, adding an extra layer of oversight.
Audit trails: Logging all changes made to employee master files, including who made the change and when, for accountability and traceability.
Regular reviews: Periodically reviewing employee master files and payroll records to identify potential discrepancies or anomalies.
An enterprise resource planning (ERP) system has which of the following advantages over multiple independent functional systems?
A Modifications can be made to each module without affecting other modules
B Increased responsiveness and flexibility while aiding in the decision-making process
C Increased amount of data redundancy since more than one module contains the same information
D Reduction in costs for implementation and training
Increased responsiveness and flexibility while aiding in the decision-making process
Responsiveness and flexibility is increased in an ERP system since all modules are intricately connected and share data simultaneously. The interconnectivity among the modules generally means that modification to one module will automatically have an effect on other modules. There is less data redundancy in an ERP since multiple modules can access the same data from a single source. Because of their complexity and size, ERP implementation and training can be expensive; there is no assurance of any reduction in these costs over use of multiple independent systems.
An enterprise resource planning (ERP) system has several advantages over multiple independent functional systems. Out of the provided options, the most significant advantage is:
B. Increased responsiveness and flexibility while aiding in the decision-making process.
Here’s why the other options are less accurate:
A. Modifications to one module might affect others in an ERP system, unlike independent systems. While some modules might be loosely coupled and allow certain independent modifications, a core benefit of ERP is its integrated nature, meaning changes in one module can impact others depending on their interconnectedness.
C. Data redundancy is actually a potential disadvantage of ERP systems as storing the same information in multiple modules can increase storage requirements and lead to data inconsistencies if not managed properly. ERP systems strive to eliminate redundancy and centralize data for better accuracy and integrity.
D. Implementation and training costs for ERP systems can be high due to their complexity, especially compared to individual, simpler systems. While long-term cost savings and operational efficiencies can outweigh the initial investment, implementation itself can be expensive.
Therefore, the enhanced responsiveness and flexibility offered by ERP systems stands out as their primary advantage. This is achieved through:
Integrated data: Having a single source of truth for all organizational data allows for faster information retrieval and analysis across various departments.
Streamlined workflows: Automated processes and standardized procedures across the system improve efficiency and responsiveness to changing needs.
Real-time reporting: Access to up-to-date data facilitates better decision-making based on accurate and timely insights.
Improved collaboration: Shared information and common processes foster better communication and collaboration between departments.
While other benefits exist, increased responsiveness and flexibility remain the key drivers for organizations to adopt ERP systems and move away from independent functional systems.
ERP systems integrate various functional areas of an organization into one comprehensive system. This integration helps in streamlining processes and data across departments, leading to increased responsiveness and flexibility. It also aids in the decision-making process by providing a unified view of business data, improving visibility, and facilitating better informed and more timely decisions. ERP systems enable businesses to adapt more quickly to changing market conditions and internal demands, thanks to their integrated and flexible nature.
The most appropriate data-gathering techniques for a system survey include interviews, quick questionnaires, observations, and
A Prototypes
B Systems documentation
C PERT charts
D Gantt charts
Systems documentation
ystems documentation helps the user to be aware of the operations and use of the system. It also helps in keeping track of alterations to the existing program along with the reasons that led to the system changes. This way it acts as a data gathering technique for system survey.
(A) is incorrect because prototypes of a system are the basic working model of a system which is developed in order to demonstrate the use and functionality of a system. It does not help in collecting data for a system survey.
(C) is incorrect because PERT charts are system management and evaluation tools and not a data gathering tool. PERT stands for Program Evaluation Review Technique and allows the tasks in a particular project to be analyzed.
(D) is incorrect because Gantt chart is a type of bar chart, devised by Henry Gantt in the 1910s, to illustrate a project schedule. It helps in scheduling, managing and monitoring specific tasks in a system. It is not a data collection tool.
The most appropriate data-gathering techniques for a system survey include interviews, quick questionnaires, observations, and:
C. Systems documentation
Here’s why:
Prototypes: Prototypes are more relevant for user testing and feedback during system development, not for initial data gathering in a system survey.
PERT charts and Gantt charts: These project management tools are not data-gathering techniques and wouldn’t directly provide information about the existing system.
However, systems documentation plays a crucial role in gathering data for a system survey:
Source of existing information: Documentation can provide valuable insights into the system’s functionalities, processes, limitations, and user interactions.
Reduces reliance on interviews: Analyzing documentation can save time and effort compared to conducting extensive interviews, especially for technical details.
Increases accuracy and completeness: Reviewing documentation alongside other data-gathering techniques (interviews, observations) can help validate information and ensure a comprehensive understanding of the system.
Certainly, here are the definitions for each of those terms:
A. Prototypes:
In the context of software development and system design, a prototype is an initial, working model of a new product or system. It is created to demonstrate the functionality and design of the product, allowing for testing and feedback before the final version is developed. Prototypes are used to visualize and test concepts, identify potential issues, and gather user feedback to refine the system’s requirements and design.
B. Systems Documentation:
Systems documentation refers to the comprehensive collection of documents that describe the design, operation, and maintenance of an information system. This can include technical specifications, design documents, user manuals, maintenance guides, and other relevant materials. It serves as a reference for understanding how the system works, for troubleshooting, and for guiding future modifications and enhancements.
C. PERT Charts (Program Evaluation and Review Technique):
A PERT chart is a project management tool used to schedule, organize, and coordinate tasks within a project. It is a graphical representation of a project’s timeline and includes the project’s tasks, the sequence of these tasks, and the critical path—the longest duration path through a network, determining the shortest time to complete the project. PERT charts are particularly useful in projects where the time required to complete various tasks is uncertain.
D. Gantt Charts:
A Gantt chart is another project management tool used for scheduling tasks within a project. It provides a visual timeline for the start and finish dates of project elements. A Gantt chart lists tasks vertically and time intervals horizontally, with bars representing the duration and overlap of each task. This tool is particularly useful for tracking project schedules and progress, as it clearly shows which tasks are to be completed and when, as well as their dependencies.
In an IT department, which of the following professionals would be assigned the task of understanding the needs of the end-users and training them for new systems?
A Computer operators
B System analysts
C System programmers
D Application programmers
System analysts
System analysts are assigned tasks that relate to making developed/purchased systems functional within an organization’s hierarchy. This task is achieved by determining the networks to be used, setting up the IT policies and architecture, and most importantly, by working with the end-users. System analysts understand the needs of the users and train them in the event of a new system being implemented.
System analysts play a crucial role in bridging the gap between the technical capabilities of a system and the needs of its users. They are responsible for understanding both the business requirements and the technical aspects of a system. Their duties often include analyzing user needs, designing and testing solutions, and ensuring that the implemented systems meet those needs. Part of their role can also involve training users on new systems, as they have a deep understanding of how the system operates and how it can be best utilized in the business context.
Here’s why:
Computer operators: These individuals manage the day-to-day operations of computer systems, including monitoring performance and ensuring availability. They typically don’t have direct interaction with end-users or training expertise.
System programmers: These professionals focus on the internal workings of computer systems, developing and maintaining core system software. They might not have the necessary skills or user-centric approach for effective training.
Application programmers: These individuals design and develop application software specific to business needs. While they might provide some basic training on their developed applications, their primary focus is on the technical aspects of development, not broader user training.
System analysts, on the other hand, act as a bridge between business users and IT. They analyze business needs, define system requirements, and design solutions that align with user needs. Their skills in:
Needs analysis: They can effectively assess and understand user requirements and challenges.
Communication: They can clearly explain technical concepts to non-technical users.
Instructional design: They can develop and deliver effective training programs.
User documentation: They can create clear and understandable user guides and manuals.
make them the most suitable professionals to handle user training, particularly for implementing new systems.
Which of the following illustrates the path of data as it is processed by a system?
A Decision table
B Program flowchart
C Pseudo code
D System flowchart
A system flowchart is an illustration of a system’s data flow and information processing, including hardware. A decision table illustrates all the various possibilities in a given situation. A program flowchart illustrates details of a program, not a system. Pseudo code is a structured language (sometimes called structured English) designed to assist in coding; programmers may write programs in pseudo code and then translate those notes to a formal computer language. A program flowchart is an illustration of a program’s (rather than a system’s) data flow and information processing.
Certainly, here are definitions for each of the four terms:
A) Decision Table:
A decision table is a systematic and structured way of representing complex decision logic in a tabular format. It is often used in software engineering and business analysis to document and analyze various conditions and their corresponding actions or outcomes. Decision tables help in simplifying decision-making processes and are particularly useful for situations with multiple possible combinations of conditions and outcomes.
B) Program Flowchart:
A program flowchart is a graphical representation of the logic and flow of a computer program or algorithm. It uses symbols, shapes, and arrows to depict the sequence of program instructions, decision points, loops, and the flow of data within the program. Flowcharts are valuable for visualizing and understanding the program’s structure, making it easier to design, analyze, and debug software.
C) Pseudo Code:
Pseudo code is a high-level, human-readable description of a computer program or algorithm. It is not a formal programming language but rather a way to express the logic and steps of a program using natural language and simple code-like constructs. Pseudo code is used during the design and planning stages of software development to outline the program’s functionality before actual coding begins.
D) System Flowchart:
A system flowchart is a visual representation of the processes, data flows, and interactions within a system or a complex process. It illustrates how data and information move through various components of a system, including inputs, processes, outputs, and storage. System flowcharts are helpful for documenting and analyzing the operation of systems, including business processes, software systems, and organizational workflows.
Which of the following controls should prevent an invoice for the purchase of merchandise from being paid twice?
A The check signer accounts for the numerical sequence of receiving reports used in support of each payment.
B An individual independent of cash operations prepares a bank reconciliation.
C The check signer reviews and cancels the voucher packets.
D Two check signers are required for all checks over a specified amount.
The check signer reviews and cancels the voucher packets.
If the check signer reviews and cancels the voucher packets that should prevent an invoice from being paid twice. All of the other answers are valid controls, but not for the purpose of preventing an invoice from being paid twice.
Here’s why the other options are less effective in this specific context:
A. Tracking receiving report numbers: While verifying receiving reports and their sequence numbers against payments can help identify potential duplicates, it’s not foolproof. An invoice could be paid twice even if different receiving reports are used for each payment.
B. Independent bank reconciliation: This control helps ensure the accuracy of accounts, but it primarily focuses on matching bank records with internal records. While discrepancies might show up during reconciliation, it wouldn’t automatically prevent duplicate payments unless specifically designed to flag invoice duplications.
D. Dual check signers: This strengthens authorization for large payments, but it doesn’t directly address the issue of duplicate invoices. Both signers could approve the same invoice twice unless additional controls are in place to verify invoice payments.
Therefore, reviewing and canceling the voucher packets is the most effective control in this scenario. Voucher packets typically contain supporting documents for a payment, including the invoice. By reviewing and canceling the invoice after the payment is made, the check signer physically marks the document to prevent it from being used for another payment. This simple control provides a clear and direct way to stop duplicate invoice payments.
This control is effective because when the check signer reviews and cancels (or marks as paid) the voucher packets, it ensures that each invoice is only paid once. Voucher packets typically include the invoice, a corresponding purchase order, and receiving report. By cancelling or marking these packets as paid, it prevents the same invoice from being processed for payment again, thereby avoiding duplicate payments.
The authority to accept incoming goods in receiving should be based on a(an)
A Vendor’s invoice
B Materials requisition
C Bill of lading
D Approved purchase order
D Approved purchase order
A good internal control system will include the segregation of [incompatible] duties, such as the comparison of an approved purchase order to items received.
Answers A. and C. represent documentation included with the order as it is received, without any indication of authorization. Answer B. represents a form used when goods and materials are taken from inventory to be used or shipped.
The authority to accept incoming goods in the receiving department should typically be based on an approved purchase order (PO). A purchase order is a formal document issued by the purchasing department or relevant authority within an organization to request the procurement of specific goods or services from a vendor. When the receiving department receives goods, they should refer to the approved purchase to verify that the goods match what was ordered and that they meet the terms and conditions outlined in the purchase order. The purchase order serves as the authorization for receiving and accepting the goods.
Question 108 1Aii Enterprise and AIS
