A small client recently put its cash disbursements system on a server. About which of the following internal control features would an auditor most likely be concerned?
Answer(s): B
Segregation of duties is a basic category of control activities AU 319). Functions are incompatible if a person is in a position both to perpetrate and conceal fraud or errors.Hence, the duties of authorizing transactions, recording transactions, and custody of assets should be assigned to different people. Those employees that operate the server may be able to override the controls to change records to conceal a theft of cash.
Which of the following statements most likely represents a disadvantage for an entity that keeps data files on a server rather than on a manual system?
In a manual system, one individual is usually assigned responsibility for maintaining and safeguarding the records. However, in a server environment, the data files may be subject to change by others without documentation or an indication of who made the changes.
A small company has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in and out with magnetic cards. The computer system automatically updates all payroll records. Because of this change,
In a manual payroll system, a paper trail of documents is created to provide audit evidence that controls over each step in processing are in place and functioning. One element of a computer system that differentiates it from a manual system is that a transaction trail useful for auditing purposes might exist only for a brief time or only in computer-readable form.
Batch processing:
Answer(s): C
Batch processing is the accumulation and grouping of transactions for processing on a delayed basis. The batch approach is suitable for applications that can be processed against the master file at intervals and involve large volumes of similar items, such as payroll, sales, inventory, and billing.
What type of computer processing system is characterized by data that are assembled from more than one location and records that are updated immediately?
Answer(s): D
Real-time processing involves processing an input record and receiving the output soon enough to affect a current decision-making process. In a real-time system, the user interacts with the system to control an ongoing activity. Online indicates that the decision maker is in direct communication with the computer. Online, real-time systems usually permit access to the main computer from multiple remote terminals.
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