EDP AUDITING
Which of the following is typically not part of ERP’s OLAP
MIDTERM EXAMINATION
111... Which of the following statements is correct?
a. TCP/IP is the basic protocol that permits communication
between Internet sites.
b. TCP/IP controls Web browsers that access the Web
c. TCP/IP is the document format used to produce Web
pages
d. TCP/IP is used to transfer text files, programs,
spreadsheets, and databases across the Internet
e. TCP/IP is a low-level encryption scheme used to secure
transmissions in higher-level (HTTP) format
222... Which of the following best describes a system of computers
that connects the internal users of organization that is
distributed over a wide geographic area?
a. LAN
b. Internet
c. decentralized network
d. multidrop network
e. intranet
333... Which of the following statements about the client-server
model is correct?
a. It is best suited to the token-ring topology because the
random-access method used by this topology detects
data collisions
b. It distributes both data and processing tasks to the
server node. The client-server model can use the bus or
ring topology
c. It is most effective when used as a bus. topology
because its deterministic access method avoids
collisions and prevents data loss during transmissions
d. It is more efficient than the bus or ring topologies
because it transmits an entire file of records to the
requesting node rather than only a single record
e. It is not used in conjunction with either the bus or ring
topologies
444... Which of the following statements is correct?
a. A bridge is used to connect a LAN and a WAN
b. Packet switching combines the messages of multiple
users into a "packet" for transmission. At the receiving
end, the packet is disassembled into individual
messages and distributed to the user
c. The decision to partition a database assumes that no
identifiable primary user exists in the organization
d. Message switching is used to establish temporary
connections between network devices for the duration of
a communications session
e. A deadlock is a temporary phenomenon that disrupts
transaction processing. It will resolve itself when the
primary computer completes processing its transaction
and releases the data needed by the other nodes
555... Closed database architecture is
a. a control technique intended to prevent unauthorized
access from trading partners
b. a limitation inherent in traditional information systems that
prevents data sharing
c. a data warehouse control that prevents unclean data from
entering the warehouse
d. a technique used to restrict access to data marts
e. a database structure used by many of the leading ERPs to
support OLTP applications
666...
Which of the following is typically not part of an ERP's core
applications?
a. OLTP applications
b. sales and distribution applications
c. business planning applications
d. OLAP applications
e. shop floor control applications
777...
applications?
a. decision support systems
b. information retrieval
c. ad hoc reporting/analysis
d. logistics
e. what-if analysis
888... Which of the following comments describes a data warehouse
least well?
a. It is constructed for quick searching and ad hoc queries
b. It contains data that are normally extra ·periodically from
operational databases
c. It contains data from a public information service
d. It is an integral part of all ERP systems
e. It may be deployed by organizations that have not
implemented an ERP
999... Which statement is not true?
a. In a typical two-tier client-server architecture, the server
handles both application and database duties
b. Client computers are responsible for presenting data to the
user and passing user input back to the server
c. Two-tier architecture is for local area network (LAN)
applications where the demand on the server is restricted to
a relatively small population of users
d. The database and application functions are separated in
the three-tier model
e. In three-tier client-server architectures, one tier is for user
presentation, one is for database and applications access,
and the third is for Internet access
111000... Which statement is not true?
a. Drill-down capability is an OLAP feature of data mining
tools available to the user
b. The data warehouse should be separate from operational
systems
c. Denormalization of data involves dividing the data into very
small tables that support detailed analysis
d. Some decisions supported by a data warehouse are not
fundamentally different from those that are supported by
traditional databases
e. Data cleansing involves transforming data into standard
business terms with standard data values
111111... Which statement is least accurate?
a. Implementing an ERP system has more to do with
changing the way an organization does· business than it
does with technology
b. The phased-in approach to ERP implementation is
particularly suited to diversified organizations whose units
do not share common processes and data
c. Since the primary reason for implementing an ERP is to
standardize and integrate operations, diversified
organizations whose units o not share common processes
and data do or benefit and tend not to implement ERPs
d. Process reengineering will be necessary in order for the
organization to take full advantage of the ERP
e. A common reason for ERP failure is that the ERP does not
support one or more important business processes of the
organization
111222... Which statement is least true?
a. A defining feature of ERP’s is that they are infinitely
scalable
b. The reengineering of business processes that often
accompanies ERP implementation is the most commonly
attributed cause of performance problems
c. No single ERP system is capable of solving all the
problems of all organizations
d. When a business's processes are truly unique, the ERP
system must be modified to accommodate industry-specific
(bolt-on) software or to work with custom-built legacy
systems
e. Scalability is the system's ability to grow smoothly and
economically as user requirements increase takes place in
an online mode as transactions
111333... Auditors of ERP systems 222111... An employee in the receiving department keyed in a shipment
from a remote terminal and inadvertently omitted the purchase
a. need not be concerned about segregation of duties order number.The best systems control to detect this would be a
because these systems possess strong computer controls
b. focus on output controls such as independent verification to a. batch total
reconcile batch totals b. completeness test
c. may be concerned that the data in the data warehouse are c. sequence check
too clean and free from errors d. reasonableness test
d. do not see the data warehouse as an audit or control issue e. compatibility test
at all because financial records are not stored there
e. need not review access levels granted to users since these 222222... In an automated payroll processing environment, a department
are determined when the system is configured and never manager substituted the time card for a terminated employee
change with a card for a fictitious employee. The fictitious employee had
the same pay rate and hours worked as the terminated
111444... Which statement is most correct? employee. The control technique to detect this action employee
a. SAP is more suited to service industries than manufacturing identification numbers would be a
clients
b. J.D. Edwards' ERP is designed to accept the best practices a. batch total
modules of other vendors b. record count
c. Oracle evolved from a human resources system c. hash total
d. PeopleSoft is the world's leading supplier of software for d. subsequent check
information management e. financial total
e. Baan's Evergreen Delivery policy ensures free upgrades of
bolt-on software 222333... The reporting of accounting information plays a central role in
the regulation of business operations. The importance of sound
111555... Routines that use the computer to check the validity and internal control practices is underscored by the Foreign
accuracy of transaction data during input are called Practices Act of 1977, which requires publicly owned U.S.
a. operating systems corporations to maintain systems of internal control that meet
b. edit programs certain minimum standards. Preventive controls are an integral
c. compiler programs part of virtually all accounting processing systems, and much of
d. integrated test facilities the information generated by the accounting system is used for
e. compatibility tests preventive control purposes. Which one of the following is not an
essential element of a sound preventive control system?
111666... An edit of individual transactions in a direct access file
processing system usually a. separation of responsibilities for the recording, custodial,
and authorization functions
a. takes place in a separate computer run b. sound personnel practices
b. takes place in an online mode as transactions are entered c. documentation of policies and procedures
c. takes place during a backup procedure d. implementation of state-of-the-art software and hardware
d. is not performed due to time constraints e. physical protection of assets
e. is not necessary
222444... Which of the following is not a test for identifying application
111777... An example of an input control is errors?
a. making sure that output is distributed to the proper people a. reconciling the source code
b. monitoring the work of programmers b. reviewing test results
c. collecting accurate statistics of historical transactions while c. retesting the program
gathering data d. testing the authority table
d. recalculating an amount to ensure its accuracy
e. having another person review the design of a business form 222555... Which of the following is not a common type of white-box test of
controls?
111888... A control designed to validate a transaction at the point of data a. completeness tests
entry is b. redundancy tests
a. recalculation of a batch total c. inference tests
b. a record count d. authenticity tests
c. a check digit
d. checkpoints 222666... The following are examples of source document control except
e. recalculation of a hash total a. pre-numbering source documents
b. limiting access to source documents
111999... In a manual system, records of current activity are posted from a c. supervising the bursting of source documents
journal to a ledger. In a computer system, current records from d. checking the sequence of numbers to identify missing
a(n) documents

a. table file are updated to a transaction file
b. index file are updated to a master file
c. transaction file are updated to a master file
d. master file are updated to a year-to-date file
e. current balance file are updated to an index file
222000... The primary functions of a computerized information system
include
a. input, processing, and output
b. input, processing, output, and storage
c. input, processing, output, and control
d. input, processing, output, storage, and control
e. collecting, sorting, summarizing, and reporting
222777... The correct purchase order number, 123456, was incorrectly
recorded as shown in the solutions. All of the following are
transcription errors except
a. 1234567
b. 12345
c. 124356
d. 123457
222888... Which of the following is correct?
a. Check digits should be used for all data codes
b. Check digits are always placed at the end of data codes
c. Check digits do not affect processing efficiency
d. Check digits are designed to detect transcription errors
222999... Which statement is NOT correct? The goal of batch controls is 444000... A computer operator was in a hurry and accidentally used the
to ensure that during processing wrong master file to process a transaction file. As a result, the
a. transactions are not omitted accounts receivable master file was erased. Which control
b. transactions are not added would prevent this from happening?
c. transactions are processed more than once a. header label check
d. an audit trail is created b. expiration date check
c. version check
333000... The data control clerk performs all of the following duties except d. validity check
a. maintaining the batch control log
b. computing (or recomputing) batch control data 444111... Which of the following is NOT a component of the Generalized
c. reconciling the output results to the batch control log Data Input System?
d. destroying batch control logs when reconciled a. generalized validation module
b. validated data file
333111... An example of a hash total is c. updated master file
a. total payroll checks - $12,315 d. error file
b. total number of employees - 10
c. sum of the social security numbers - 12,555,437,251. 444222... Advantages of the Generalized Data Input System include all of
d. none of the above the following except
a. control over quality of data input
333222... Which statement is NOT true? A batch control log b. automatic calculation of run-to-run totals
a. is prepared by the user department c. company-wide standards for data validation
b. records the record count d. development of a reusable module for data validation
c. indicates any error codes
d. is maintained as a part of the audit trail 444333... Run-to-run control totals can be used for all the following except
a. to ensure that all data input is validated
333333... Which of the following is an example of a field interrogation? b. to ensure that only transactions of a similar type are being
a. reasonableness check processed
b. sign check c. to ensure the records are in sequence and are not missing
c. sequence check d. to ensure that no transaction is omitted
d. numeric/alphabetic check
444444... Methods used to maintain an audit trail in computerized
333444... Which of the following is an example of record interrogation? environment include all of the following except
a. sequence check a. transaction logs
b. zero value check b. unique transaction identifiers
c. limit check c. data encryption
d. range check d. log of automatic transactions

333555... Which input validation check would detect a payment made to a 444555... Risk exposures associated with creating an output file as an
nonexistent vendor? intermediate step in the printing process (spooling) include all of
a. missing data check the following actions by a computer criminal except
b. numeric/alphabetic check a. gaining access to the output file and changing critical data
c. range check values
d. validity check b. using a remote printer and incurring operating inefficiencies
c. making a copy of the output file and using the copy to
333666... The employee entered "40" in the "hours worked per day" field. produce illegal output reports
Which check would detect this unintentional error? d. printing an extra hard copy of the output file
a. numeric/alphabetic check
b. sign check 444666... Which statement is NOT correct?
c. limit check a. Only successful transactions are recorded a transaction log
d. missing data check b. Unsuccessful transactions are recorded in error file
c. A transaction log is a temporary file
333777... A specific inventory record indicates that there are 12 items on d. A hard copy transaction listing is provide users
hand and a customer purchased two of the items. When
recording the order, the data entry clerk mistakenly entered 20 444777... In an inventory system on a database management system, one
items sold. Which check would detect this error? stored record contains part number, part name, part color, and
a. numeric/alphabetic check part weight. These individual items are called
b. sign check
c. sequence check a. Fields
d. range check b. Stored files
c. Bytes
333888... Which check is not a file interrogation? d. occurrences
a. header label
b. expiration date check 444888... The use of pointers can save time when sequentially updating a
c. sequence check
d. version check a. master file
b. database management system
333999... Which statement is not correct? c. batch file
a. The purpose of file interrogation is to ensure that the d. random file
correct file is being processed by the system.
b. File interrogation checks are particularly important for 444999... It is appropriate to use a sequential file structure when
master files
c. Header labels are prepared manually and affixed to the a. records are routinely inserted
outside of the tape or disk b. a large portion of the file will be processed in one operation
d. An expiration date check prevents a file from being deleted c. records need to be scanned using secondary keys
before it expires d. single records need to be retrieved
555000... Which statement is not correct? 666000... Which term is not associated with the relational database
a. The sequential file structure is appropriate for payroll model?
records a. Tuple
b. An advantage of a sequential index is that it can be b. Attribute
searched rapidly c. Collision
c. The index sequential access method performs record d. Relation
insertion operations efficiently
d. The principal advantage of the hashing structure is speed 666111... In the relational database model,
of access a. relationships are explicit
b. the user perceives that files are linked using pointers
555111... Which of the following statements is not true?
c. data are represented on two-dimensional tables
a. Indexed random files are dispersed through-out the storage d. data are represented as a tree structure
device without regard for physical proximity with related
records 666222... In the relational database model, all of the following are true
b. Indexed random files use disk storage space efficiently except
c. Indexed random files are efficient when processing a large a. data are presented to users as tables
portion of a file at one time b. data can be extracted from specified rows from specified
d. Indexed random files are easy to maintain terms of adding tables
records c. a new table can be built by joining two tables
555222... Which statement is not correct? The indexed sequential access d. only one-to-many relationships can be supported
method 666333... In a relational database,
a. is used for very large files that need both direct access and
batch processing a. the user's view of the physical database is the same as the
b. may use an overflow area for records physical database
c. provides an exact physical address for ea record b. users perceive that they are manipulating a single table
d. is appropriate for files that require few insertions or c. a virtual table exists in the form of rows and columns of a
deletions table stored on the disk
d. a programming language (COBOL) is used to create a
555333... Which statement is true about a hashing structure user's view of the database
a. The same address could be calculated two records
666444... The update anomaly in unnormalized databases
b. Storage space is used efficiently
a. occurs because of data redundancy
c. Records cannot be accessed rapidly b. complicates adding records to the database
d. A separate index is required c. may result in the loss of important data
d. often results in excessive record insertions
555444... In a hashing structure,
a. two records can be stored at the same address 666555... The most serious problem with unnormalized databases is the
b. pointers are used to indicate the location all records a. update anomaly
c. pointers are used to indicate the location of a record with b. insertion anomaly
the same address as another record c. deletion anomaly
d. all locations on the disk are used for record storage d. none of the above
555555... Pointers can be used for all of the following except 666666... The deletion anomaly in unnormalized databases
a. to locate the subschema address of the record a. is easily detected by users
b. to locate the physical address of the record b. may result in the loss of important data
c. to locate the relative address of the record c. complicates adding records to the database
d. to locate the logical key of the record d. requires the user to perform excessive updates
555666... An advantage of a physical address pointer is that
666777... Automated technique that enables the auditor to test an
a. it points directly to. the actual disk storage location
b. it is easily recovered if it is inadvertently lost. application’s logic and controls during its normal operations
c. it remains unchanged when disks are reorganized
d. all of the above are advantages of the physical address a. Embedded audit module
pointer b. Integrated test facility
c. Internal control system
555777... Pointers are used d. Electronic data interchange
a. to link records within a file
b. to link records between files 666888... A branch of ERP that includes decision support, modeling,
c. to identify records stored in overflow information retrieval, ad hoc reporting/analysis, and what-if
d. all of the above analysis
a. Online transaction processing
555888... In a hierarchical model, b. Electronic data interchange
a. links between related records are implicit c. Embedded audit module
b. the way to access data is by following a predefined data d. Online analytical processing
path
c. an owner (parent) record may own just one member (child) 666999... Popular technique for establishing communication sessions in
record WANs
d. a member (child) record may have more than one owner a. Privacy c. Protocol
(parent) b. Peer-to-peer d. Polling
555999... In a network model 777000... Rules and standards governing the degree of hardware and
a. there is one predefined path to a particular record. software that permit users of networks manufactured by different
b. many-to-many relationships are supported in a simple vendors to communicate and share data
network a. Privacy
c. management can track and report information by one b. Parity check
criterion only c. Network protocols
d. link files are used to connect records in different files d. Network topology
ANSWER KEY: 36. C
37. B
1. A 38. C
2. E 39. C
3. B 40. A
4. A
5. B 41. C
6. D 42. B
7. D 43. A
8. D 44. C
9. E 45. B
10. C 46. C
47. A
11. C 48. D
12. A 49. B
13. C 50. C
14. B
15. B 51. C
16. B 52. C
17. D 53. A
18. C 54. C
19. C 55. A
20. D 56. A
57. D
21. B 58. B
22. C 59. D
23. D 60. C
24. D
25. C 61. C
26. C 62. D
27. C 63. B
28. D 64. A
29. C 65. C
30. D 66. B
67. B
31. C 68. D
32. A 69. D
33. D 70. C
34. A
35. D