Information Technology

Question 1

Electronic Commerce (Value-Added Network) (VAN)

Answer 1

Network that allows one computer to initiate an action on another

Question 2

Electronic Data Interchange (EDI) - E-Commerce

Answer 2

1) Extranets established as VANs to communicate between suppliers and customers
2) Can use internet instead o VANs
3) Special considerations:
- Strict standards for form of data
- Translation software needed to convert data between EDI stadard and internal processing (mapping is process of IDing which field on transmitted form to fields on internal form)
- Unauthorized access (encryption and firewall)

Question 3

Advantages of EDI

Answer 3

1) No human intervention
2) More efficient
3) Eliminates gaps and shortens business cycles (ie. automatically ordering supplies)
4) Payments made/received authomatically

Question 4

Risks of E-Commerce (Elements)

Answer 4

1) Confidentiality
2) Integrity - unauthorized alteration/deletion of data
3) Availability
4) Authentication and nonrepudiation - parties prove identities and confirmation of transaction
5) Power shift to customers

Question 5

Risks of E-Commerce and Controls

Answer 5

1) Improper use of information
- Security architecture for e-commerce
- Firewalls
- Unique and positive ID process
2) Risk of improper distribution of transactions:
- Routing verification procedures
- Message acknowledgements
3) Spoofing:
- Echo transmissions
- Digital signatures

Question 6

Networks and Control Risk

Answer 6

1) Limit network access:
- Read only & read/write
2) Viruses (worm, hoax virus, phishing)
- Antivirus
3) Unauthorized access:
- Firewalls (network and application)

Question 7

Data Structure

Answer 7

1) Bits (binary digits)
2) Byte = 8 bits
3) Character - group of bytes
4) Field - group of characters
5) Record - group of fields
- Primary and secondary keys to ID record
6) File - group of records
7) Database - group of files

Question 8

Database Management System (DBMS)

Answer 8

1) Software system that controls organization, storage, and retrieval of data in a database
2) Consists of software and database
- Should be independent of each other (don’t have to use same program and can restrict access)

Question 9

Big Data

Answer 9

Set of data so large that can only be managed using numerous computers running parallel software simultaneously

Question 10

Data Mining

Answer 10

Analysis of data in database to look for trends or anomalies

Question 11

Data Normalization (DBMS)

Answer 11

Process of organizing database for minimum redundancy

Question 12

Organizations of an IT Environment (Systems Development and Maintenance)

Answer 12

1) Systems analyst - designs information system using system flowcharts
2) Application programmer - writes, tests, and debugs system programs
3) Database admin - responsible for security and information classification of shared data

Question 13

Systems Development Life Cycle (SDLC)

Answer 13

Used to plan, design, develop, test, and implement an application system or major modification

Question 14

Operations of an IT Function

Answer 14

1) Data control clerk
2) Computer operator - operates computer in a datacenter and performs related activities
3) Librarians - responsible for safeguarding and maintenance of all program and data files

Question 15

Controls (General)

Answer 15

Overall computer environment/Segregation of Duties

1) Personnel policies:
- Systems = Development & Maintenance (analysts, application programmer, database admins) AUTHORIZATION
- Operations = input (data entry/computer operator) RECORDING and output (control clerk/librarian) CUSTODY
2) File security:
- Backup/planned downtime controls (grandfather/father/son retention system, checkpoint backup)
- Lock out (timed and concurrent update control)
- Read-only
3) Contingency planning - business continuity/disaster recovery (hot/cold site/mirrored web server)
4) Computer facilities - fire/insurance
5) Access controls (passwords, cybersecurity)

Question 16

Controls (Application)

Answer 16

• Specific Program Controls
• Preventative controls (fraud & error)
• Detective controls and automated controls
• User controls & corrective controls

1) Input:
- Check digit (inputted correctly)
- Validity check
- Edit test (i.e. #s not letters)
- Limit test
- Financial total (vs manual control totals)
- Record counts (vs manual control totals)
- Hash = meaningless total (adding record numbers) (vs manual control totals)
- Non financial totals (vs manual control totals)
2) Processing:
- System & software documentation
- Error-checking compiler
- Test data
- System testing (programs within system are interacting correctly)
- User Acceptance testing
3) Output - Accurate:
- Detect errors and output only to authorized persons

Question 17

Extensible Business Reporting Language (XBRL)

Answer 17

1) Computer-readable identifying tags for each individual item of data
2) Eliminates costs of manual data comparison and reduces errors when generating reports
3) SEC mandated all public companies file F/S in XBRL