ISTM 410 CORE REVIEWS ANSWERS AND
QUESTIONS SET A+
✔✔T/F: Business managers often prefer the predictability of their monthly IT bills along
with a true‐up process over the relative unpredictability of being charged actual costs
each month - ✔✔True
✔✔T/F: In the corporate budget funding method, because bills are not generated on a
regular cycle to the businesses, concerns are raised less often by the business
managers - ✔✔True
✔✔T/F: Corporate budget funding method also technologies because learners are not
charged for exploration and inefficient system use. - ✔✔True
✔✔Direct costs - ✔✔can be clearly linked to a particular process or product, such as the
components used to manufacture the product and the assembler's wages for time spent
building the product.
✔✔Indirect costs - ✔✔the overhead costs, which include everything from the electric
bill, the salary of administrative managers, and the expenses of the administrative
function to the wages of the supervisor overseeing the assembler, the cost of running
the factory, and the maintenance of machinery used for multiple products
✔✔IT consumerization - ✔✔the process whereby the changing practices and
expectation of consumers, shaped by the wide adoption of digital technologies in
everyday life, will influence the IT‐related activities of workers and managers in
organizations.
✔✔traditional perspective of IT governance - ✔✔focuses on how decision rights can be
distributed to facilitate centralized, decentralized, or hybrid modes of decision making;
organization structure plays a major role
✔✔T/F: the increasingly global nature of many businesses makes complete
centralization impossible - ✔✔True
,✔✔T/F: Mismatches in decision rights and accountability result in either an oversupply
of IT resources or the inability of IT to meet business demand - ✔✔True
✔✔five generally applicable categories of IT decisions: - ✔✔IT principles, IT
architecture, IT infrastructure strategies, business application needs, and IT investment
and prioritization
✔✔IT principles - ✔✔How to determine IT assets that are needed
✔✔IT architecture - ✔✔How to structure IT assets
✔✔IT infrastructure strategies - ✔✔How to build IT assets
✔✔Business application needs - ✔✔How to acquire, implement, and maintain IT
(insource or outsource)
✔✔IT investment and prioritization - ✔✔How much to invest and where to invest in IT
assets
✔✔the most popular mechanism for governance - ✔✔policies and standards
✔✔Business Monarchy - ✔✔A group of, or individual, business executives (i.e., CxOs).
Includes committees comprised of senior business executives (may include CIO).
Excludes IT executives acting independently
✔✔IT Monarchy - ✔✔Individuals or groups of IT executives
✔✔Feudal - ✔✔Business unit leaders, key process owners or their delegates
✔✔Federal - ✔✔C‐level executives and at least one other business group (e.g., CxO
and BU leaders)—IT executives may be an additional participant. Equivalent to a
country and its states working together
✔✔IT Duopoly - ✔✔IT executives and one other group (e.g., CxO or BU leaders)
✔✔Anarchy - ✔✔Each individual user
✔✔steering committee/IT governance council - ✔✔composed of key stakeholders or
experts who provide guidance on important IT issues; work especially well with the
federal archetype
, ✔✔Upper level steering committees - ✔✔provides strategic direction and funding
authority for major IT projects and ensures that adequate resources be allocated to the
IS organization for achieving strategic goals
✔✔Lower level steering committees - ✔✔allocating scarce resources effectively and
efficiently; provide a forum for business leaders to present their IT needs and to offer
input and direction about the support they receive from IT operations
✔✔digital ecosystem - ✔✔self‐interested, self‐organizing, and autonomous digital
entities; nourished by the significant impacts of the large variety of resources available
from individuals, organizational units, and outside services
✔✔Five IT control weaknesses repeatedly uncovered by auditors: - ✔✔-Failure to
segregate duties within applications, set up new accounts, and terminate old ones in a
timely manner.
-Lack of proper oversight for making application changes, including appointing a person
to make a change and another to perform quality assurance on it.
-Inadequate review of audit logs to ensure that systems are running smoothly and that
there is an audit of the audit log.
-Failure to identify abnormal transactions in a timely manner.
-Lack of understanding of key system configurations.
✔✔Committee of Sponsoring Organizations of the Treadway Commission (COSO). -
✔✔created three control objectives for management and auditors that focused on
addressing risks to internal control
✔✔three control objectives for management and auditors that focused on addressing
risks to internal control - ✔✔- Operations: To help the company maintain and improve
its operating effectiveness and protect the assets of shareholders
- Compliance: To ensure that the company is in compliance with relevant laws and
regulations
- Financial reporting: To ensure that the company's financial statements are produced in
accordance with generally accepted accounting principles (GAAP). SoX is focused on
this control objective.
✔✔Five essential control components for managers and auditors: - ✔✔(1) create a
control environment that addresses the overall culture of the company
(2) assess the most critical risks to internal controls
QUESTIONS SET A+
✔✔T/F: Business managers often prefer the predictability of their monthly IT bills along
with a true‐up process over the relative unpredictability of being charged actual costs
each month - ✔✔True
✔✔T/F: In the corporate budget funding method, because bills are not generated on a
regular cycle to the businesses, concerns are raised less often by the business
managers - ✔✔True
✔✔T/F: Corporate budget funding method also technologies because learners are not
charged for exploration and inefficient system use. - ✔✔True
✔✔Direct costs - ✔✔can be clearly linked to a particular process or product, such as the
components used to manufacture the product and the assembler's wages for time spent
building the product.
✔✔Indirect costs - ✔✔the overhead costs, which include everything from the electric
bill, the salary of administrative managers, and the expenses of the administrative
function to the wages of the supervisor overseeing the assembler, the cost of running
the factory, and the maintenance of machinery used for multiple products
✔✔IT consumerization - ✔✔the process whereby the changing practices and
expectation of consumers, shaped by the wide adoption of digital technologies in
everyday life, will influence the IT‐related activities of workers and managers in
organizations.
✔✔traditional perspective of IT governance - ✔✔focuses on how decision rights can be
distributed to facilitate centralized, decentralized, or hybrid modes of decision making;
organization structure plays a major role
✔✔T/F: the increasingly global nature of many businesses makes complete
centralization impossible - ✔✔True
,✔✔T/F: Mismatches in decision rights and accountability result in either an oversupply
of IT resources or the inability of IT to meet business demand - ✔✔True
✔✔five generally applicable categories of IT decisions: - ✔✔IT principles, IT
architecture, IT infrastructure strategies, business application needs, and IT investment
and prioritization
✔✔IT principles - ✔✔How to determine IT assets that are needed
✔✔IT architecture - ✔✔How to structure IT assets
✔✔IT infrastructure strategies - ✔✔How to build IT assets
✔✔Business application needs - ✔✔How to acquire, implement, and maintain IT
(insource or outsource)
✔✔IT investment and prioritization - ✔✔How much to invest and where to invest in IT
assets
✔✔the most popular mechanism for governance - ✔✔policies and standards
✔✔Business Monarchy - ✔✔A group of, or individual, business executives (i.e., CxOs).
Includes committees comprised of senior business executives (may include CIO).
Excludes IT executives acting independently
✔✔IT Monarchy - ✔✔Individuals or groups of IT executives
✔✔Feudal - ✔✔Business unit leaders, key process owners or their delegates
✔✔Federal - ✔✔C‐level executives and at least one other business group (e.g., CxO
and BU leaders)—IT executives may be an additional participant. Equivalent to a
country and its states working together
✔✔IT Duopoly - ✔✔IT executives and one other group (e.g., CxO or BU leaders)
✔✔Anarchy - ✔✔Each individual user
✔✔steering committee/IT governance council - ✔✔composed of key stakeholders or
experts who provide guidance on important IT issues; work especially well with the
federal archetype
, ✔✔Upper level steering committees - ✔✔provides strategic direction and funding
authority for major IT projects and ensures that adequate resources be allocated to the
IS organization for achieving strategic goals
✔✔Lower level steering committees - ✔✔allocating scarce resources effectively and
efficiently; provide a forum for business leaders to present their IT needs and to offer
input and direction about the support they receive from IT operations
✔✔digital ecosystem - ✔✔self‐interested, self‐organizing, and autonomous digital
entities; nourished by the significant impacts of the large variety of resources available
from individuals, organizational units, and outside services
✔✔Five IT control weaknesses repeatedly uncovered by auditors: - ✔✔-Failure to
segregate duties within applications, set up new accounts, and terminate old ones in a
timely manner.
-Lack of proper oversight for making application changes, including appointing a person
to make a change and another to perform quality assurance on it.
-Inadequate review of audit logs to ensure that systems are running smoothly and that
there is an audit of the audit log.
-Failure to identify abnormal transactions in a timely manner.
-Lack of understanding of key system configurations.
✔✔Committee of Sponsoring Organizations of the Treadway Commission (COSO). -
✔✔created three control objectives for management and auditors that focused on
addressing risks to internal control
✔✔three control objectives for management and auditors that focused on addressing
risks to internal control - ✔✔- Operations: To help the company maintain and improve
its operating effectiveness and protect the assets of shareholders
- Compliance: To ensure that the company is in compliance with relevant laws and
regulations
- Financial reporting: To ensure that the company's financial statements are produced in
accordance with generally accepted accounting principles (GAAP). SoX is focused on
this control objective.
✔✔Five essential control components for managers and auditors: - ✔✔(1) create a
control environment that addresses the overall culture of the company
(2) assess the most critical risks to internal controls
