Solution Manual - Accounting Information Systems
16th Edition by Romney; Steinbart
Asymmetric encryption systems - ANSWER: uses to keys: a public key that is publicly
available and a private key that is kept secret and known only by the owner of that
pair of keys
availability - ANSWER: the information must be available whenever needed.
Availability objectives and key controls - ANSWER: (1) To minimize risk of system
downtime: preventive maintenance, fault tolerance, data center location and design,
training, and patch management and antivirus software (2) Quick and complete
recovery and resumption of normal operations: backup procedures, disaster
recovery plan (DRP), and business continuity plan (BCP)
Batch input controls - ANSWER: Batch processing and batch totals (compare input to
output totals)
Bill of lading - ANSWER: A legal contract that defines responsibility for goods while
they are in transit. It identifies the carrier, source, destination, shipping instructions,
and the party that most pay the carrier
Billing - ANSWER: 1.Invoicing 2.Updating accounts receivable
Billing Controls - ANSWER: Separation of billing and shipping functions, periodic
reconciliation of invoices with sales orders, picking tickets, and shipping documents,
configuration of system to automatically enter pricing data, restriction of access to
pricing master data, data entry edit controls, reconciliation of shipping documents,
reconciliation of batch totals, mailing of monthly statements to customers,
segregation of duties of credit memo authorization from both sales order entry and
customer account maintenance, and configuration of system to block credit memos
unless there is either corresponding documentation of return of damaged goods or
specific authorization of management
Billing Threats - ANSWER: Failure to bill, billing errors, posting errors in accounts
receivable, inaccurate or invalid credit memos
Business continuity plan (BCP) - ANSWER: a plan the specifies how to resume all
business processes in the event of a major calamity
Cash Collection Controls - ANSWER: Separation of cash handling function from
accounts receivable and credit functions, Regular reconciliation of bank account with
recorded amounts by someone independent of cash collections procedures, Use of
EFT, FEDI, and lockboxes to minimize handling of customer payments by employees,
Prompt, restrictive endorsement of all customer checks, Having two people open all
, mail likely to contain customer payments, Use of cash registers, Daily deposit of all
cash receipts, Lockbox arrangements, EFT, or credit cards, Discounts for prompt
payment by customers, Cash flow budgets
Cash Collection Threats - ANSWER: 1.Theft of cash 2.Cash flow problem
Cash Disbursement Threats - ANSWER: Failure to take advantage of discounts for
prompt payment, paying for items not received, duplicate payments, theft of cash,
check alternation, and cash flow problems
Change Control - ANSWER: Formal process used to ensure that modifications to
hardware, software, or processes do not reduce systems reliability
check digit verification - ANSWER: recalculating a check digit to verify that an error
has not been made
close-loop verification - ANSWER: an input validation method that uses data entered
into the system to retrieve and display other related information so the accuracy of
the input data can be verified
Cloud computing - ANSWER: Purchasing software, storage, infrastructure, or
platforms from a third-party on a pay-for-use or subscription basis. The resulting
economics of scale mean that organizations can often cut their total costs for IT with
cloud computing and transforms IT into utility.
COBIT Governance - ANSWER: Direct, Monitor, and Evaluate (business needs and
management feedback)
COBIT key criteria - ANSWER: effectiveness, efficiency, confidentiality, integrity,
availability, compliance, reliability
COBIT Management (enterprise IT) - ANSWER: Plan (align, plan and organize), Build
(build, acquire and implement), Run (deliver, service and support), Monitor
(monitor, evaluate and assess)
COBIT Principles - ANSWER: 1.meeting stakeholder needs 2.covering the enterprise
end-to-end 3.applying a single integrated framework 4.enabling a holistic approach
5.separating governance from management
Cold Site - ANSWER: a location that provides everything necessary to quickly install a
computer equipment in the event of a disaster
completeness check - ANSWER: an online data entry control in which the computer
determines whether all data required for a particular transaction have been entered
compliance - ANSWER: controls must ensure compliance with internal policies and
with external legal and regulatory requirements.
16th Edition by Romney; Steinbart
Asymmetric encryption systems - ANSWER: uses to keys: a public key that is publicly
available and a private key that is kept secret and known only by the owner of that
pair of keys
availability - ANSWER: the information must be available whenever needed.
Availability objectives and key controls - ANSWER: (1) To minimize risk of system
downtime: preventive maintenance, fault tolerance, data center location and design,
training, and patch management and antivirus software (2) Quick and complete
recovery and resumption of normal operations: backup procedures, disaster
recovery plan (DRP), and business continuity plan (BCP)
Batch input controls - ANSWER: Batch processing and batch totals (compare input to
output totals)
Bill of lading - ANSWER: A legal contract that defines responsibility for goods while
they are in transit. It identifies the carrier, source, destination, shipping instructions,
and the party that most pay the carrier
Billing - ANSWER: 1.Invoicing 2.Updating accounts receivable
Billing Controls - ANSWER: Separation of billing and shipping functions, periodic
reconciliation of invoices with sales orders, picking tickets, and shipping documents,
configuration of system to automatically enter pricing data, restriction of access to
pricing master data, data entry edit controls, reconciliation of shipping documents,
reconciliation of batch totals, mailing of monthly statements to customers,
segregation of duties of credit memo authorization from both sales order entry and
customer account maintenance, and configuration of system to block credit memos
unless there is either corresponding documentation of return of damaged goods or
specific authorization of management
Billing Threats - ANSWER: Failure to bill, billing errors, posting errors in accounts
receivable, inaccurate or invalid credit memos
Business continuity plan (BCP) - ANSWER: a plan the specifies how to resume all
business processes in the event of a major calamity
Cash Collection Controls - ANSWER: Separation of cash handling function from
accounts receivable and credit functions, Regular reconciliation of bank account with
recorded amounts by someone independent of cash collections procedures, Use of
EFT, FEDI, and lockboxes to minimize handling of customer payments by employees,
Prompt, restrictive endorsement of all customer checks, Having two people open all
, mail likely to contain customer payments, Use of cash registers, Daily deposit of all
cash receipts, Lockbox arrangements, EFT, or credit cards, Discounts for prompt
payment by customers, Cash flow budgets
Cash Collection Threats - ANSWER: 1.Theft of cash 2.Cash flow problem
Cash Disbursement Threats - ANSWER: Failure to take advantage of discounts for
prompt payment, paying for items not received, duplicate payments, theft of cash,
check alternation, and cash flow problems
Change Control - ANSWER: Formal process used to ensure that modifications to
hardware, software, or processes do not reduce systems reliability
check digit verification - ANSWER: recalculating a check digit to verify that an error
has not been made
close-loop verification - ANSWER: an input validation method that uses data entered
into the system to retrieve and display other related information so the accuracy of
the input data can be verified
Cloud computing - ANSWER: Purchasing software, storage, infrastructure, or
platforms from a third-party on a pay-for-use or subscription basis. The resulting
economics of scale mean that organizations can often cut their total costs for IT with
cloud computing and transforms IT into utility.
COBIT Governance - ANSWER: Direct, Monitor, and Evaluate (business needs and
management feedback)
COBIT key criteria - ANSWER: effectiveness, efficiency, confidentiality, integrity,
availability, compliance, reliability
COBIT Management (enterprise IT) - ANSWER: Plan (align, plan and organize), Build
(build, acquire and implement), Run (deliver, service and support), Monitor
(monitor, evaluate and assess)
COBIT Principles - ANSWER: 1.meeting stakeholder needs 2.covering the enterprise
end-to-end 3.applying a single integrated framework 4.enabling a holistic approach
5.separating governance from management
Cold Site - ANSWER: a location that provides everything necessary to quickly install a
computer equipment in the event of a disaster
completeness check - ANSWER: an online data entry control in which the computer
determines whether all data required for a particular transaction have been entered
compliance - ANSWER: controls must ensure compliance with internal policies and
with external legal and regulatory requirements.
