Question 1
4 out of 4 points
Discussion Question 10:
A bank in California has 13 branches spread throughout northern
California, each with its own minicomputer where its data are stored. Another
bank has ten branches spread throughout California, with the data being stored
on a mainframe in San Francisco. Which system do you think is more vulnerable
to unauthorized access? Excessive losses from disaster?
Question 2
4 out of 4 points
Discussion Question 15:
An organization’s internal audit department is usually considered an
effective control mechanism for evaluating the organization’s internal control
structure. Birch Company’s internal auditing function reports directly to the
controller. Comment on the effectiveness of this organizational structure.
Question 3
4 out of 4 points
2. INTERNAL CONTROL
During the past year, Howard Industries has experienced
excessive employee turnover in their IT function. Exit interviews with
employees revealed that they were dissatisfied with the working environment.
Howard employed the services of a management consulting firm that had expertise
in employee relationship management. The consulting firm made recommendation to
restructure IT operations to create a greater sense of “ownership” among the IT
staff. After three months, under the new operation a survey indicated a marked
increase in the level of job satisfaction among the IT group.
During the conduct of the audit planning phase of the annual
financial audit, the auditor observed the Following practices: Individual IT professionals are
assigned exclusively to
support specific business functions such as sales processing, billing, customer
account maintenance, etc. Each professional provides a
range of IT
services for their
respective users including computer
operations, program changes, and documenting the
system through record layouts,
system flowcharts, and
program listings. They also reconcile computer output reports and logs
of transactions errors.
Required:
a. Identify and
explain any control concerns you have with the new operations.
b. What potential
computer fraud might this operational approach permit?
Question 4
4 out of 4 points
5. DISASTER RECOVERY PLANNING CONTROVERSY
The relevance of a disaster recovery plan (DRP) to a
financial statement audit is a matter of debate. Some argue that the existence
of a DRP is irrelevant to the audit. Others argue that it is an important
control that needs to be considered in the assessment of internal control.
Required: Address both sides of this
debate.
a. Provide a logical argument why a DRP should not be
considered in the audit.
b. Argue why a DRP is an important control and should be
reviewed within the conduct of a financial audit.
Question 5
2 out of 2 points
Per the article The Kiss of Identity Theft – Password
Simplicity and Redundancy, which of the following statements is true?
I. Hackers who use
powerful computers can break passwords containing dictionary words 100 times
faster.
II. Adding just one
capital letter and one asterisk would change the processing time (for a hacker)
from 2.4 days to 2.1 centuries.
ScholarMatic: Explanation & Answer
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