Regardless of whether a company develops, buys, leases, or pays for the use of the software for EDI transmissions, internal audit should be responsible for evaluating whether the software:
Answer(s): D
An EDI application should meet business objectives and satisfy user and control requirements. The internal auditors should consider the organization's important EDI applications because they represent significant risk exposures and control problems. This role is within the scope of work of the internal auditors, who are charged with examining and evaluating internal control and the quality of performance in carrying out assigned responsibilities.
A company using EDI tracked the functional acknowledgments from trading partners and issue warning messages if acknowledgments did not occur within a reasonable length of time.What risk was the company attempting to address by this practice?
Answer(s): B
Tracking of customers' functional acknowledgments, when required, will help to ensure successful transmission of EDI transactions. Some possible controls include the provision of end-to-end acknowledgments, particularly when multiple, interconnected networks are involved, and maintenance of a tickler file of outstanding functional acknowledgments, with issuance of warnings for those that are overdue.
An audit of the electronic data interchange EDI) area of a banking group revealed the facts listed below.Which one indicates the need for improved internal control?
The system should employ automatic dial-back to prevent intrusion by unauthorized parties. This procedure accepts an incoming modem call, disconnects, and automatically dials back a prearranged number to establish a permanent connection for data transfer or inquiry.
Before authorizing payment of an EDI invoice, the computer automatically compares the invoice with the purchase order and receiving report data.When the system was being developed, the auditor reviewed the payment authorization program and made recommendations.Which one of the following was most likely recommended by the auditor for the situation in which the quantity invoiced is greater than the quantity received?
Answer(s): A
An exception report error listing) should be issued so that company personnel can investigate the discrepancy, determine its cause, and take appropriate corrective action.
Consider the following computer applications:(a) At a catalog sales firm, as phone orders are entered into their computer, both inventory and credit are immediately checked.(b) A manufacturer's computer sends the coming week's production schedule and parts orders to a supplier's computer.Which statement below is true for these applications?
The catalog sales firm is using an online processing system known as an online, real-time system OLRT). OLRT systems handle transactions as they are entered, processing the input and providing output soon enough to affect a current decision making process, e.g., inventory and credit status of phone call orders. The sending of upcoming production schedules and parts orders by and manufacturer's computer to a supplier's computer is an example of electronic data interchange EDI). EDI is the communication of electronic documents directly from one entity's computer to another's computer.
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