Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?
Answer(s): A
EDI transactions are typically transmitted and processed in real time. Thus, EDI compresses the business cycle by eliminating delays. The time required to receive and process an order, ship goods, and receive payment is greatly reduced compared with that of a typical manual system. Accordingly, more rapid receipt of payment minimizes receivables and improves cash flow.
The emergence of electronic data interchange EDI) as standard operating practice increases the risk of:
EDI is the communication of electronic documents directly from a computer in one entity to a computer in another entity. EDI for business documents between unrelated parties has the potential to increase the risk of unauthorized third-party access to systems because more outsiders will have access to internal systems.
Which of the following are essential elements of the audit trail in an electronic data interchange EDI) system?
An audit trail allows for the tracing of a transaction from initiation to conclusion. Network and sender/recipient acknowledgments relate to the transaction flow and provide for the tracking of transactions.
Which of the following statements is true concerning internal control in an electronic data interchange (EDI) system?
In general, preventive controls are more important than detective controls because the benefits typically outweigh the costs. In electronic processing, once a transaction is accepted, there is often little opportunity to apply detective controls. Thus, it is important to prevent errors or frauds before they happen.
A control that a company can use to detect forged EDI messages is to:
If the company acknowledges messages initiated externally, the alleged sender will have the opportunity to recognize that it had not sent the message and will then be able to notify the company of the potential forgery. Then corrective action can be taken by the company.
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