The following questions concern the characteristics of IT systems and their impact on
internal controls. Choose the best response.
a. Which of the following is an advantage of a computer-based system for transaction processing over a manual system? A computer-based system:
(1) Does not require as stringent a set of internal controls.
(2) Will produce a more accurate set of financial statements.
(3) Will be more efficient in generating financial statements.
(4) Eliminates the need to reconcile control accounts and subsidiary ledgers.
b. Which of the following is an example of an application control?
(1) The client uses access security software to limit access to each of the accounting applications.
(2) Employees are assigned a user ID and password that must be changed every quarter.
(3) The sales system automatically computes the total sale amount and posts the total to the sales journal master file.
(4) Systems programmers are restricted from doing applications programming functions.
c. Which of the following is generally not considered a category of IT general controls?
(1) Controls that determine whether a vendor number matches the pre-approved vendors in the vendor master file.
(2) Controls that restrict system-wide access to programs and data.
(3) Controls that oversee the acquisition of application software.
(4) Controls that oversee the day-to-day operation of IT applications.
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