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41.Software should never be implemented before it is tested. 42.It is essential that accountants oversee the data conversion from the old system to the new system to make sure that all accounting data is completely and correctly converted. 43.The file or database storage for the new accounting system may not be different.
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136. What is the advantage of studying the current system within the Systems Analysis phase?  137. During the systems analysis phase, which two data collection methods help determine user        requirements?  138. What are the advantages of purchased software when compared to software developed in-        house?  139. Why might it be.
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81.The purpose of this step in the systems analysis phase is to determine whether the problem or deficiency in the current system really exists and to make a “go” or a “no-go” decision. A.Survey of the Current System B.Determination of User Information Needs C.Business Process Reengineering D.Preliminary Investigation 82.A detailed study of the current system.
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164. Trace Johnson is an accounting software consultant at Fipps and Associates Consulting.  Fipps is        a value-added reseller of accounting software for mid-size companies.  Mid-size companies        normally have revenue between 50 million to 500 million dollars.  One of Johnson’s        responsibilities is to solicit new client companies, and.
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162. Ceemco is a small, privately owned manufacturing company in Cincinnati, Ohio.  Ceemco        manufactures custom products as well as store display products to sell to other companies such        as retailers.  Using an Internet search engine, do a search using the search terms of Ceemco        and Cincinnati.  Examine.
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CHAPTER 6 - PROBLEMS 159. Mega Corporation just became a public corporation when shares of stock were sold to the public        three months ago.  A new board of directors has been appointed to govern the corporation.         Assume that you will be giving a presentation to the board on their responsibilities.
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CHAPTER 6 – SHORT ESSAY 151. Describe the role that the Board of Directors should play in IT governance.  152. Two feasibility studies occur during the SDLC; one during Systems Planning, and one during        Systems Design.  Describe the differences between these two feasibility studies.  153. There are four methods of data.
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21.Non-audit services are now prohibited because of the potential to impair the auditor’s objectivity. 22.Even though non-audit services are prohibited by Sarbanes-Oxley, the auditor may perform income tax services for their audit clients if they are pre-approved by the CEO. 23.The auditors report directly to the Board of Directors. 24.The Audit Committee is.
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86.This section of the Sarbanes-Oxley Act requires management assessment and reporting of the company’s internal controls. A.Section 404 B.Section 409 C.Section 301 D.Section 201 87.This section of the Sarbanes-Oxley Act requires that auditors include, as part of their audit procedures, an attestation to the internal control report prepared by management. A.Section 404 B.Section 409 C.Section 301 D.Section 201 88.This section.
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CHAPTER 5 – SHORT ESSAY 131. Why are shareholders sometimes considered internal stakeholders and sometimes considered        external stakeholders? 132. Is it possible for financial information to be accurate but not transparent?  Similarly, is it possible        for financial information to be transparent but not accurate?  Explain. 133. Earnings management involves lying about.
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161. Assume that you are the project team manager that is engaged in a Systems Analysis.  The        company is a large, national retailer with several stores and warehouses located throughout the        United States.  The corporate headquarters are in Atlanta, Georgia, and substantially all major        accounting takes place at the corporate.
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101.The purpose of this phase of systems design is to create the entire set of specifications necessary to build and implement the system. A.Detailed design B.Evaluation and selection C.Operational design D.Detailed analysis               102.In the detailed design stage of systems design it is necessary that the various parts of the system be designed.  The parts.
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66.A special obligation of trust, especially with respect to the finances of another, is called: A.Financial Stewardship B.Fiscal Transparency C.Fiduciary Duty D.Internal Controls 67.Within the corporate environment, this term means that management has been entrusted with the power to manage the assets of the corporation, which are owned by the shareholders. A.Fiscal Transparency B.Fiduciary C.Stewardship D.Accuracy 68.The manner in which.
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56.This governing group is the federal regulatory agency responsible for protecting the interests of investors by making sure that public companies provide complete and transparent financial information: A.COSO B.SEC C.FASB D.IASB 57.This governing group created the framework for internal controls evaluations: A.COSO B.SEC C.FASB D.IASB 58.It is necessary that certain stakeholders remain independent related to the corporation’s financial reporting.  Which.
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TRUE / FALSE 1.IT governance is an issue for executives and top management.  Lower level managers and the board of directors are outsiders in the process. 2.In order to meets it obligation of corporate governance, the board of directors must oversee IT. 3.In order to match company strategy to IT systems, the company.
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142. Using an Internet search engine (such as Google, Dogpile, Lycos), search for the terms “guilty        as charged” + “California Micro Devices” in order to find an article about the company, California        Micro Devices.  Identify the related corporate governance issues. 143. There are five types of management earnings techniques.
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120. How has the Sarbanes-Oxley Act increased the importance of audit committees in the corporate        governance process?  121. Identify the six financial matters that must be certified by a company’s top officers under the        requirements of Section 302 of the Sarbanes-Oxley Act. 122. Explain the relationship between Section 401 of.
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160. Blutarch MultiMedia Stop is a regional retailer of consumer electronics with warehouses and        stores located in several large cities in California.  The board and top management of Blutarch        are considering updating their accounting, inventory, and retail sales software and hardware.         Their current systems are approximately 15 years old. .
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140. Identify the costs and benefits of complying with the Sarbanes-Oxley Act of 2002.  Do you think        the costs are justified? 141.  Using an Internet search engine (such as Google, Dogpile, Lycos), determine who was the     whistleblower at Enron.  Summarize the circumstances. What was the relationship of this     person.
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CHAPTER 6 - MULTIPLE CHOICE 51.The process of determining the strategic vision for the organization, developing the long-term objectives, creating the strategies that will achieve the vision and objections, and implementing those strategies is referred to as A.IT Governance B.Strategic Governance C.Strategic Management D.IT Management 52.A structure of relationships and processes to direct and control the.
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CHAPTER 5 – SHORT ANSWER QUESTIONS 106. Why is tone at the top so important to corporate governance?  107. Why do you think companies that practice good corporate governance tend to be successful in        business?  108. Which stakeholder group (internal or external) is more likely to be affected by corporate        governance,.
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76.The establishment of the SEC and the enactment of securities laws were responses to: A.The stock market crash of 1929 and the Great Depression of the 1930s B.Market pressures during the 1980s C.Increased inflation and cost of capital during the 1970s D.High-profile accounting scandals in the early 2000s 77.This legislation was enacted in an effort.
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CHAPTER 5 - MULTIPLE CHOICE 36.Which of the following groups would use factors such as those that affect the supply and demand of corporate leaders and tend to emphasize the importance of motivating leaders through the use of incentive programs as part of their definition of corporate governance? A.Financiers B.Economists C.Accountants D.Lawyers 37.This group of business.
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136. Describe at least three ways that the Sarbanes-Oxley Act and the increased emphasis on        corporate governance have put more attention on the role of those responsible for the        company’s accounting information systems. 137. Why do you think it is particularly challenging for companies to maintain ethical behavior during        difficult.
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124. Explain why Section 409 of the Sarbanes-Oxley Act has placed more pressure on members of IT        departments within public companies.  125. How is the Sarbanes-Oxley Act forcing corporations to become more ethical? 126. Why do corporate leaders see their jobs as more risky since the Sarbanes-Oxley Act became        effective?  127..
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CHAPTER 5 – Problems 138. List the six steps for establishing internal controls and describe how this process leads to        stronger overall corporate governance. 139. List the items that must be certified by corporate management in accordance with the        provisions of the Sarbanes-Oxley Act.  Discuss how these responsibilities have likely changed.
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31.Regardless of the results of the control testing, some level of substantive testing must take place. 32.The use of generalized audit software is especially useful when there are large volumes of data and when there is a need for accurate information. 33.All of the risks and audit procedures that apply to a.
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147. Why is user acceptance important?  148. Why is post-implementation review undertaken?  Answer: It is undertaken to help those involved in the SDLC to learn from any mistakes they made during the process. 149. How does the SDLC serve as an internal control?  150. What ethical obligations do employees have as.
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71.The process of designing the outputs, inputs, user interfaces, databases, manual procedures, security and controls, and documentation of the new system is referred to as: A.Conceptual Design B.Software Selection C.Systems Design D.Detailed Design 72.When attempting to prioritize IT projects, the IT governance committee needs to consider: A.The assessment of IT systems and their match to strategic.
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91.The many sets of activities within the organization performed to accomplish the functions necessary to continue the daily operations are referred to as: A.Business Systems B.Business Processes C.Business Activities D.Business Functions 92.The systems analysis report, which is sent to the IT governance committee, will inform the committee of all of the following, except: A.The results of.
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154. Describe the purpose of Business Process Reengineering during the System Design phase. 155. There are four methods of system conversion; parallel, direct cutover, pilot, and phase-in.        Describe these four methods and how they differ.  156. Operation and maintenance is the longest and costliest part of the SDLC.  Describe why this       .
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CHAPTER 6 – SHORT ANSWER QUESTIONS 131. At the beginning of the chapter, the real world example of Allstate’s IT expenditure is        mentioned.  Prior to the implementation of their IT Governance Committee, "whoever spoke the        loudest or whoever had the biggest checkbook," got to select IT Projects.  What do you.
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134. Describe how the characteristics of the financial markets in the 1980s eventually led to the        creation of the Sarbanes-Oxley Act of 2002. 135. Although the Sarbanes-Oxley Act of 2002 applies to public companies, many private business        organizations have been impacted by this legislation, especially if they are suppliers to.
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110. Why is the Board of Directors considered an internal stakeholder group, when it is required to        have members who are independent of the company?  111. How can internal auditors maintain independence, since they are employees of the company? 112. Identify the four functions of the corporate governance process.  113. Describe.
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CHAPTER 5 – END OF CHAPTER QUESTIONS 94.Which of the following is not considered a component of corporate governance? A.Board of Directors Oversight B.IRS Audits C.Internal Audits D.External Audits 95.Good corporate governance is achieved when the interests of which of the following groups are balanced? A.Internal auditors and external auditors B.Shareholders and regulators C.Shareholders, the corporation, and the community D.Regulators.
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11.The remoteness of information, one of the causes of information risk, can relate to geographic distance or organizational layers. 12.The most common method for decision makers to reduce information risk is to rely on information that has been audited by an independent party. 13.Auditors have the primary responsibility to make sure that.
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CHAPTER 6 – END OF CHAPTER QUESTIONS:               119.IT governance includes all but which of the following responsibilities? A.Aligning IT strategy with the business strategy B.Writing programming code for IT systems C.Insisting that an IT control framework be adopted and implemented D.Measuring IT’s performance               120.Which phase of the system development life cycle includes determining user.
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61.The study of the current system to determine the strengths and weaknesses and the user needs of that system is called: A.Systems Analysis B.Systems Design C.Systems Planning D.Systems Implementation 62.This phase of SDLC requires the collection of data about the system and the careful scrutiny of those data to determine areas of the system that.
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31.In general, purchased software is more costly but more reliable than software designed in-house. 32.While it is not necessary to hire a consulting firm, many organizations find that the special expertise of consulting firms is most beneficial in the design and implementation of accounting system software. 33.When in the systems design phase.
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141. Within the System Design phase, what is the purpose of the Evaluation and Selection?  142. Which part of the System Design phase would include designing rows and columns of output        reports?  Why is it important to design reports?  143. What is the purpose of software testing?  Answer: The purpose.
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21.Risk can be inherent in the client’s business, due to things such as the nature of operations, or may be caused by weak internal controls. 22.Auditors do not need to concern themselves with risks unless there is an indication that there is an internal control weakness. 23.The auditor’s understanding of internal controls.
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46.The internal stakeholders who own a portion of the corporation are called: A.Directors B.Shareholders C.Audit Board D.Executives 47.This group of stakeholders should have the highest level of authority related to the company’s objectives and strategies.  Elected by the shareholders, it’s role is to align the interests of the shareholders and management. A.Audit Committee B.Internal Auditors C.Board of.
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163. There are several approaches to applying an SDLC methodology to IT system change.  Using an        Internet search engine, search for these terms: SDLC, waterfall, JAD (Joint Application        Development), RAD (Rapid Application Development), Build and Fix, and Spiral Model.  For        example, you might try entering these search terms:.
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