Chapter 16—IT Controls Part II: Security and Access

TRUE/FALSE 1. In a computerized environment, the audit trail log must be printed onto paper documents. ANS: F 2. Disguising message packets to look as if they came from another user and to gain access to the host’s network is called spooling. ANS: F 3. Access controls take on increased importance in a computerized environment because all of the records may be found in one place. ANS: T 4. Computer viruses usually spread throughout the system before being detected. ANS: T 5. A worm is software program that replicates itself in areas of idle memory until the system fails. ANS: T 6. Viruses rarely attach themselves to executable files. ANS: F 7. Subschemas are used to authorize user access privileges to specific data elements. ANS: F 8. A recovery module suspends all data processing while the system reconciles its journal files against the database. ANS: F 9. The Database Management System controls program files. ANS: F 10. Operating system controls are of interest to system professionals but should not concern accountants and auditors. ANS: F 11. The most frequent victims of program viruses are microcomputers. ANS: T

Firewalls are special materials used to insulate computer facilities ANS: F 17. ANS: T 15. ANS: T 21.12. A value added network can detect and reject transactions by unauthorized trading partners. Audit trails in computerized systems are comprised of two types of audit logs: detailed logs of individual keystrokes and event-oriented logs. ANS: F 14. ANS: T 18. The message authentication code is calculated by the sender and the receiver of a data transmission. ANS: F 20. ANS: F 24. ANS: T 16. Electronic data interchange translation software interfaces with the sending firm and the value added network. ANS: T 22. Operating system integrity is not of concern to accountants because only hardware risks are involved. line errors can be detected by using an echo check. ANS: T . To preserve audit trails in a CBIS environment. ANS: T 13. A firewall is a hardware partition designed to protect networks from power surges. In a telecommunications environment. Access controls protect databases against destruction. The request-response technique should detect if a data communication transmission has been diverted. ANS: T 23. transaction logs are permanent records of transactions. The audit trail for electronic data interchange transactions is stored on magnetic media. ANS: T 19. Electronic data interchange customers may be given access to the vendor's data files. loss or misuse through unauthorized access.

The operating system performs all of the following tasks except a. a hacker gaining access to the system because of a security flaw b. Which of the following is considered an unintentional threat to the integrity of the operating system? a. ANS: T MULTIPLE CHOICE 1. A software program that replicates itself in areas of idle memory until the system fails is called a a. authorizes user access d. assign and control user passwords d. a virus that formats the hard drive d. logic bomb d. intermittent backup . install public-domain software from reputable bulletin boards ANS: D 6. back door ANS: D 5. worm d. translates third-generation languages into machine language b. the systems programmer accessing individual user files ANS: B 3. staggered backup approach c. install antivirus software b. worm c. direct backup d. grandfather-father-son approach b. Examining programmer authority tables for information about who has access to Data Definition Language commands will provide evidence about who is responsible for creating subschemas. a hardware flaw that causes the system to crash c.25. A software program that allows access to a system without going through the normal logon procedures is called a a. schedules job processing ANS: C 2. remote site. All of the following will reduce the exposure to computer viruses except a. Which backup technique is most appropriate for sequential batch systems? a. Trojan horse c. none of the above ANS: B 4. install factory-sealed application software c. assigns memory to applications c. Trojan horse b. logic bomb b.

processing a transaction file against a maser file creates a backup file c. the greater the number of backup versions ANS: D 8. c. voice prints ANS: A 11. password b. protesting users from each other c. the number of backup versions retained depends on the amount of data in the file b. All of the following are objectives of operating system control except a. antivirus software b. it cannot be reconstructed ANS: C 10. spoofing. the more significant the data. backups are created using the grandfather-father-son approach b. Which of the following is not an access control in a database system? a. protecting the OS from users b. database authority table ANS: D 13. In a direct access file system a. dual-homed.ANS: A 7. b. voice prints d. passwords d. screening. Hackers can disguise their message packets to look as if they came from an authorized user and gain access to the host’s network using a technique called a. a. off-site backups are not required c. backup files can never be used for scratch files d. d. Which is not a biometric device? a. database authorization table c. protecting the environment from users . checkpoint b. transaction log d. protecting users from themselves d. Which of the following is not a basic database backup and recovery feature? a. files are backed up immediately before an update run d. if the master file is destroyed. When creating and controlling backups for a sequential batch system. ANS: A 9. spooling. signature characteristics ANS: A 12. retina prints c. backup database c.

Which method will render useless data captured by unauthorized receivers? a. Passwords are secret codes that users enter to gain access to systems. public key encryption d. promote personal accountability ANS: C 16. encryption c. echo check b. detect unauthorized access to systems b. vertical parity bit d. Which control will not reduce the likelihood of data loss due to a line error? a. failure to change passwords on a regular basis b. Audit trails cannot be used to a. horizontal parity bit ANS: B 17. facilitate reconstruction of events c. Which method is most likely to detect unauthorized access to the system? a. message transaction log b. message sequencing ANS: C 18. selecting passwords that can be easily detected by computer criminals ANS: B 15. vertical parity check d. the recipient's application software can validate the password after the transaction has been processed ANS: D 20.ANS: D 14. Security can be compromised by all of the following except a. value added networks can compare passwords to a valid customer file before message transmission b. data encryption standard c. parity bit c. In an electronic data interchange environment. request-response technique ANS: A 19. the recipient's application software can validate the password prior to processing d. All of the following techniques are used to validate electronic data interchange transactions except a. the translation software of the receiving company can compare the password against a validation file in the firm's database c. reduce the need for other forms of security d. customers routinely access . recording passwords in obvious places d. using obscure passwords unknown to others c. prior to converting the message. echo check b.

verifying that only authorized software is used on company computers b. attempting to retrieve unauthorized data via inference queries ANS: B 24. they are testing which audit objective? a. detection and correction of message loss due to equipment failure b. illegal access to the system is prevented and detected ANS: D 26. c. incompatible functions have been segregated b. All of the following tests of controls will provide evidence that adequate computer virus control techniques are in place and functioning except a. In an Electronic Data Interchange (EDI) environment. All of the following tests of controls will provide evidence that access to the data files is limited except a. the vendor's price list file the vendor's accounts payable file the vendor's open purchase order file none of the above ANS: A 21. d. a complete audit trail is maintained . Audit objectives for communications controls include all of the following except a. confirming that antivirus software is in use d. procedures that render intercepted messages useless d. physical security measures are adequate to protect the organization from natural disaster d.a. examining the password policy including a review of the authority table ANS: B 22. reviewing system maintenance records c. application programs are protected from unauthorized access c. the auditor is testing which audit objective? a. b. When auditors examine and test the call-back feature. comparing job descriptions with access privileges stored in the authority table d. ensuring that authorized users access only those files they need to perform their duties d. prevention and detection of illegal access to communication channels c. all of the above ANS: D 25. inspecting biometric controls b. confirming that backup procedures are adequate c. unauthorized trading partners cannot gain access to database records c. Audit objectives for the database management include all of the following except a. verifying that unauthorized users cannot access data files ANS: A 23. all EDI transactions are authorized b. reconciling program version numbers c. verifying that the security group monitors and reports on fault tolerance violations b. authorized trading partners have access only to approved data d. when the auditor compares the terms of the trading partner agreement against the access privileges stated in the database authority table.

unauthorized trading partners cannot gain access to database records c. a complete audit trail of EDI transactions is maintained d.ANS: C 27. and processed by the system c. access the vendor's price list file with read/write authority c. customers routinely a. the policy on the purchase of software only from reputable vendors b. biometric controls b. one-time passwords c. access the vendor's accounts receivable file with read/write authority b. consists of pointers and indexes within the database ANS: B 32. all of the following policies are relevant except a. is an electronic log of all transactions received. encryption controls c. In an electronic data interchange environment. backup controls d. is a computer resource authority table d. the policy that current versions of antivirus software should be available to all users d. firewalls b. the policy that all software upgrades are checked for viruses before they are implemented c. backup procedures are in place and functioning properly ANS: D 28. hardware access procedures b. is a printout of all incoming and outgoing transactions b. All of the following are designed to control exposures from subversive threats except a. data encryption ANS: C 33. all EDI transactions are authorized b. access the vendor's inventory file with read-only authority d. In an electronic data interchange environment. translated. the audit trail a. antivirus software . Audit objectives in the Electronic Data Interchange (EDI) environment include all of the following except a. the policy that permits users to take files home to work on them ANS: D 29. Many techniques exist to reduce the likelihood and effects of data communication hardware failure. One of these is a. inference controls ANS: C 30. Which of the following is not a test of access controls? a. access the vendor's open purchase order file with read-only authority ANS: C 31. field interrogation d. In determining whether a system is adequately protected from attacks by computer viruses.

a system that enforces access control between two networks c. Briefly define an operating system. c. user view. c. An integrated group of programs that supports the applications and facilitates their access to specified resources is called a (an) a. user manual. access controls c. e. special materials used to insulate computer facilities b. ANS: A SHORT ANSWER 1. facility system. ANS: An integrated group of programs that supports the applications and facilitates their access to specified resources. The database attributes that individual users have permission to access are defined in a. utility system d. 2. d. Describe one benefit of using a call-back device. What is a virus? ANS: A virus is a program that attaches itself to another legitimate program in order to penetrate the operating system. . e. ANS: D 37. Which of the following deal with transaction legitimacy? a. none of the above ANS: B 36. object system. data encryption ANS: C 34. all of the above ANS: D 35. EDI audit trail d.c. transaction authorization and validation b. Firewalls are a. b. operating system. 3. parity checks d. b. application listing. operating system. database management system. database schema. special software used to screen Internet access d.

8. 5. data encryption. Contrast the Private Encryption Standard approach with the Public Key Encryption approach to controlling access to telecommunication messages. and electronically displays. Discuss the key features of the one-time password technique: ANS: The one-time password was designed to overcome the problems associated with reusable passwords. the receiver is the only one with access to the key to decode the message. Explain how transactions are audited in an electronic data interchange environment. easy-to-guess passwords 9. 4. This technology employs a credit card-sized smart card that contains a microprocessor programmed with an algorithm that generates. message authentication codes. This reduces the chance of an intruder gaining access to the system from an unauthorized remote location. List three methods of controlling unauthorized access to telecommunication messages. message transaction logs. a new and unique password every 60 seconds. ANS: call-back devices. Describe two ways that passwords are used to authorize and validate messages in the electronic data interchange environment. both the sender and the receiver use the same key to encode and decode the message. and request-response technique 6. Verification of the entries in the log is part of the audit process. the recipient of the message can validate the password prior to translating the message.ANS: Access to the system is achieved when the call-back device makes contact with an authorized user. message sequence numbering. ANS: In the Private Encryption Standard approach. ANS: value-added networks use passwords to detect unauthorized transactions before they are transmitted to recipients. displaying passwords where others can see them. In the Public Key Encryption approach all senders receive a copy of the key used to send messages. ANS: Firms using electronic data interchange maintain an electronic log of each transaction as it moves from receipt to translation to communication of the message. the recipient of the message can validate the password prior to processing the transaction 7. failure to change passwords frequently. using simple. . The user’s password changes continuously. Describe are some typical problems with passwords? ANS: users failing to remember passwords. This transaction log restores the audit trail that was lost because no source documents exist.

verify that database administration employees have exclusive responsibility for creating authority tables and designing user subschemas. which only the legitimate user is likely to know. What are biometric devices? ANS: Biometric devices measure various personal characteristics such as fingerprints. that no unauthorized organizations gain access to records. databases. the auditor's primary concerns are related to ascertaining that EDI transactions are authorized. a special scanning device captures his or her biometric characteristics. When an individual attempts to access the database. validated. What is event monitoring? ANS: Event monitoring summarizes key activities related to system resources. which is used to verify the user’s action requests. Each user is granted certain privileges that are coded in the authority table. Each user’s card is synchronized to the authentication software. Describe two tests of controls that would provide evidence that the database management system is protected against unauthorized access attempts. so that at any point in time both the smart card and the network software are generating the same password for the same user. 13. 15. printers. These user characteristics are digitized and stored permanently in a database security file or on an identification card that the user carries. the security procedure asks a series of personal questions (such as the user’s mother’s maiden name). and that adequate controls are in place to maintain a complete audit trail. the time and duration of a user’s session. Event logs typically record the IDs of all users accessing the system. which it compares with the profile data stored internally or on the ID card. What is a user-defined procedure? ANS: A user-defined procedure allows the user to create a personal security program or routine to provide more positive user identification than a password can.The card works in conjunction with special authentication software located on a mainframe or network server computer. . and the files. For example. in addition to a password. retina prints. 14. access is denied. What is a database authorization table? ANS: The database authorization table contains rules that limit the actions a user can take. 10. If the data do not match. What are the auditor's concerns in testing EDI controls? ANS: When testing EDI controls. 12. that authorized trading partners have access only to approved data. or signature characteristics. and other resources accessed. ANS: compare job descriptions with authority tables. and in compliance with organization policy. programs that were executed during a session. voiceprints. evaluate biometric and inference controls 11.

to protect it from itself. By detecting unauthorized access to the system. security breaches. It controls user sharing of applications and resources such as processors. to protect itself from its environment. Michelangelo's birthday. 3. A logic bomb is a destructive program triggered by some "logical" condition–a matching date.. Masquerading is a technique where a user is made to believe that he/she has accessed the operating system and therefore enters passwords. 5. A virus is a program that attaches itself to legitimate software to penetrate the operating system. Common PC operating systems include Windows 2000. By monitoring system performance. and processing errors. that can later be used for unauthorized access.ESSAY 1. 4. What is an operating system? What does it do? What are operating system control objectives? ANS: An operating system is a computer’s control program. Systems administrators and systems programmers require unlimited access to the operating system to perform maintenance and to recover from system failures. Operating systems have five basic control objectives: 1. . Windows NT. ANS: Browsing involves searching through areas of main memory for password information. Most are destructive. 4. and Linux.g. and 5. Individuals both internal and external to the organization who browse the operating system to identify and exploit security flaws. 3. allocating computer resources to users. A formal log-on procedure is the operating system’s first line of defense. ANS: Audit trails support system security objectives in three ways. 2. There are many techniques for breaching operating system controls. What are the three security objectives of audit trails? Explain. etc. the ability to monitor user activity can support increased personal accountability. changes in the system may be detected.. ANS: 1. Such individuals may use this authority to access users’ programs and data files. 2. to protect users from themselves. to protect itself from users. and managing job scheduling and multiprogramming. Discus three sources of exposure (threats) to the operating system. the audit trail protects the system from outsiders trying to breach system controls. and peripherals such as printers. and applications. 3. 2. Privileged personnel who abuse their authority. Explain this works. Discuss three. workgroups. databases. The audit trail can also contribute to reconstructing events such as system failures. e. Individuals who intentionally (or accidentally) insert computer viruses or other forms of destructive programs into the operating system. In addition. An operating system carries out three primary functions: translating high level languages into machine language using modules called compilers and interpreters. A worm is software that replicates itself in memory. memory. to protect users from each other.

may grant read-only privileges to a manager in the budgeting department. The use of discretionary access control needs to be closely supervised to prevent security breaches because of its liberal use. In distributed systems. a new and unique password every 60 seconds. The card works in conjunction with special authentication software located on a mainframe host or network server computer. Resource owners in this setting may be granted discretionary access privileges. which allow them to grant access privileges to other users. To access the network. For example. the log-on attempt fails and a message is returned to the user. the password or ID is entered incorrectly. The database authorization table contains rules that limit what a user can do.e. insert. resources may be controlled (owned) by end users. But this ease of sharing can also jeopardize security. Network communication poses some special types of risk for a business. the user’s password changes continuously. or change the general ledger will be denied. 9. 8. the controller.. however. After a specified number of attempts (usually no more than five). 6. may be granted both read and write permissions to the ledger. To protect the data in a database. and visually displays. many systems use data encryption to make it unreadable by intruders. then the log-on attempt is authenticated. To access the operating system. ANS: Under this approach. Explain how the one-time password approach works. The accounts payable manager. however. Discuss at least three forms of access control designed to reduce this risk. i. The system compares the ID and password to a database of valid users. read. delete. the user enters the PIN followed by the current password displayed on the card. What are the two broad areas of concern? Explain. The system should allow the user to reenter the log-on information. One purpose of a database system is the easy sharing of data. A newer technique uses biometric devices to authenticate users. Explain the concept of discretionary access privileges. ANS: In centralized systems system administrator usually determines who is granted access to specific resources and maintains the access control list. he or she is presented with a dialog box requesting the user’s ID and password. A user-defined procedure adds additional queries to user access to prevent others from accessing in a specific user’s place. The message should not reveal whether the password or the ID caused the failure. If. A user view is a subset of a database that limits a user’s “view” or access to the database. At any point in time both the smart card and the network software are generating the same password for the same user. ANS: Many types of access control are possible. modify. who is the owner of the general ledger.ANS: When the user logs on. the user must provide both a secret reusable personal identification number (PIN) and the current one-time only password for that point in time. however. the system should lock out the user from the system. . 7. The password can be used one time only. delete. ANS: Two general types of risk exist when networks communicate with each other–risks from subversive threats and risks from equipment failure. One technology employs a credit-card-sized device (smart card) that contains a microprocessor programmed with an algorithm that generates. If the system finds a match. Any attempt by the budgeting manager to add.

Equipment failure can be the result of line errors. and denial-of-service attacks from remote locations on the Internet.Subversive threats include interception of information transmitted between sender and receiver. The buying company’s purchasing system creates and transmits a purchase order electronically in an agreed format. and call-back devices. The problems can be minimized with the help of echo checks. encryption. . digital signatures. Methods for controlling these risks include firewalls. and good backup control. This can be compensated for through the use of transaction logs which can be reconciled. digital certificates. and it is converted electronically into a sales order. either directly or through a value-added network. computer hackers gaining unauthorized access to the organization’s network. The selling company receives the information. parity checks. 10. message transaction logs. The absence of paper documents in an EDI transaction disrupts the traditional audit trail. What is EDI? How does its use affect the audit trail? ANS: Electronic data interchange is an arrangement which links the computer systems of two trading partners to expedite sales/purchases.

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