Exam 1

Question 1

Information System

Answer 1

Gathers, processes, and formats reports from data

Question 2

Accounting Information System

Answer 2

Reports are specific to accounting

Question 3

Business Model

Answer 3

How you plan to profit

Question 4

Business Process

Answer 4

How objectives are acheived

Question 5

Business Event

Answer 5

Events that result in economic activity

Question 6

3 Business Processes

Answer 6

1) Acquisition & payment
2) Conversion
3)Marketing & Sales

Question 7

Fundamental Characteristics of Useful Information

Answer 7

1) Relevance
2) Faithful Representation

Question 8

Enhancing Characteristics of Useful Information

Answer 8

1) Verifiability
2) Timeliness
3) Understandability
4) Comparability

Question 9

ERM

Answer 9

Enterprise Risk Management- Risk analysis and controls

Question 10

Internal Risk

Answer 10

1) Operational Risk- day to day activity
2) Financial Risk- money related
3) Reputation Risk- name of the company

Question 11

External Risk

Answer 11

1) Compliance- regulation and laws
2) Strategic- based on company strategy
3) Physical- weather, crime, etc

Question 12

Risk Score

Answer 12

Likelihood x Impact

Question 13

Risk Appetite

Answer 13

How much risk a company is willing to take on

Question 14

Inherent Risk

Answer 14

Natural levels of risk prior to controls

Question 15

Residual Risk

Answer 15

Risk levels after controls are implemented

Question 16

4 Risk Responses

Answer 16

1) Accept
2) Mitigate
3) Transfer
4) Avoid

Question 17

3 Objectives of Internal Controls

Answer 17

1) Preventative- before something goes wrong
2) Detective- find if something has gone wrong
3) Corrective- address what has gone wrong

Question 18

Management Override

Answer 18

Internal controls not functioning because management is not following procedure

Question 19

Collusion

Answer 19

People working together to circumvent controls

Question 20

Physical Controls

Answer 20

Someone physically doing something (eg. locking a door)

Question 21

IT General Control

Answer 21

Controls applied to all software (eg. passwords, data backup)

Question 22

IT Application Controls

Answer 22

Controls applied to a specific application (eg. looks for completeness or validity)

Question 23

Manual Controls

Answer 23

Similar to physical controls, someone doing something

Question 24

Automated Controls

Answer 24

System completes controls consistently

Question 25

4 Phases of business process maturity model

Answer 25

1) Limited- low controls 2) Informal- some processes defined 3) Defined- processes formally documented 4) Optimized

Question 26

COSO objectives

Answer 26

1) Compliance 2) Reporting 3) Operations

Question 27

COSO components

Answer 27

1) Control Environment 2) Risk Assessment 3) Control Activities 4) Information & Communication 5) Monitoring

Question 28

OLTP

Answer 28

Online Transaction Processing- recording transactions

Question 29

OLAP

Answer 29

Online Analytical Processing- leveraging data from OLTP

Question 30

Real-time processing Adv/ Dis

Answer 30

Advantage- Immediate upon data collection Disadvantage- Less efficient

Question 31

Batch processing Adv/ Dis

Answer 31

Advantage- more efficient & simple, less errors Disadvantage- Data is not up to date at all times

Question 32

3rd Party Software Risks

Answer 32

Copyright infringement, data breeches, disruption, updates

Question 33

In-House Developed Software Risks

Answer 33

Expensive, takes a long time, software may be developed poorly, changes in external market, Fraud

Question 34

System Integrations

Answer 34

2 systems joining together when companies are acquired or join

Question 35

Types of System Integration

Answer 35

1) Lift and Shift- move acquired system into the data center and maintain both simultaneously 2) Immediate Integration- eliminate original system

Question 36

Centralized System Adv/Dis

Answer 36

Advantage- Easy set up, good security, easily accessible data, cheap Disadvantage- Disruption creates problems for everyone, High traffic causes issues, remote employees may have lags

Question 37

Decentralized System Adv/Dis

Answer 37

Advantage- Reduced central processing power and storage, better for remote employees, disruption creates less problems Disadvantage- Higher security risk, more expensive

Question 38

Distributed System Adv/Dis

Answer 38

Advantage- Better communication, faster processing, reduced hardware costs, easily growable Disadvantage- Most expensive, most complex

Question 39

ERP and common modules

Answer 39

Enterprise Resource Planning 1) Human Recourses Management 2) Financial 3) Production 4) Supply Chain Management 5) Customer Relation Management 6) Sales Management

Question 40

Cost and Benefit or ERP

Answer 40

Cost- licensing, hardware, training, consulting, customization Benefits- Improved data transparency and quality, future cost savings, increased quality and efficiency, automation of routine business processes