BEC IT questions

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BEC IT questions
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  1. what are the disadvantages of payback period
    it ignores project profitability and there is no time value of money
  2. what is the internal rate of return
    rate interest that equates present value of cash outflows and the present value of cash inflows

    w-199-49
  3. what are advantages and disadvantages of internal rate of return
    • advantages:
    • adjusts for the time value of money
    • hurdle rate is based on market interest rates for similar investments
    • results tend to be a little more intuitive than the results of NPV method

    • limitations:
    • depending on cash flow pattern there might not be a unique pattern
    • there may be no real discount rate that equates the projects NPV to zero

    5-8
  4. what is accounting income for accounting rate of return
    net income net of all expenses, including deprecation and income taxes / initial investment amount

    5-8
  5. how are internal rate of return and net present value related
    both will lead to the same accept or reject decisions

    w-199-51
  6. what is the advantage and limitations of the accounting rate of return
    • advantage:
    • simple and intuitive

    • limitations:
    • results are affected by the depreciation method
    • makes no adjustments for project risk
    • makes no adjustments for time value of money

    5-8
  7. what does a positive net present value represent
    projects that will earn excess of return over minimum rate

    5-8
  8. what are advantages of net present value method
    • presents results in dollars which are easily understood
    • adjusts for the time value of money
    • considers total profitability of the project
    • provides direct estimate of the change in shareholder wealth from undertaking a profit
  9. what are some of the disadvantages of net present value method
    • may not be considered simple or intuitive
    • does not take into the account managements flexibility with respect to a project

    5-9
  10. what is the excess present value index (profitability index)
    computes the ratio of the present value of the cash inflows to the initial cost of the project

    if index is greater then 1, the net present value is positive

    5-9
  11. what are the difference between transaction processing systems and management reporting systems
    • transaction - computer operations that focused on relieving humans of the tedious work involved in general recordkeeping and recording
    • management - assist in the decision-making process within the organization

    6-1
  12. what are the common forms of management reporting system
    • management information system
    • decision support system
    • expert system
    • executive information system

    6-1
  13. what are the difference between:
    management information system
    decision support system
    expert system
    executive information system
    • management information system - provides information to management which may utilize it in the decision making
    • decision support system - combines models and data to help in problem solving but with extensive user interpretation needed
    • expert system - uses reasoning methods and data to render advice and recommendations in structured situations where human interpretation isn't necessary
    • executive information system - systems designed specifically to support executive work

    6-1
  14. what are the steps for the systems development life cycle
    • planning phase
    • analysis phase
    • design phase
    • testing phase
    • implementation phase
    • maintenance phase

    6-1
  15. what is the planning phase of the systems development life cycle
    • define the system to be developed
    • determine project scope
    • develop a project plan which defines the activities that will be performed and the individuals and resources that will be used

    6-1
  16. what is the steps of the analysis phase of the systems development life cycle
    • needs assessment - may be performed in determining the requirements for the system in terms of processes, data capture, information and reporting
    • analysis is performed on existing system
    • gap analysis examine the differences (gaps) between required system and existing system

    6-1
  17. what is the design phase of the systems development life cycle
    create a technical blueprint of how the proposed system will work

    6-1
  18. what is the development phase of the systems development life cycle
    blueprint is transformed into actual system

    6-1
  19. what are the different types of testing for the systems development life cycle
    • unit testing
    • system testing
    • integration testing
    • user acceptance

    6-1
  20. what is the difference between:
    unit testing
    system testing
    integration testing
    user acceptance
    • unit testing - test units or pieces of code
    • system testing - test integration of units of code
    • integration testing - test whether separate systems can work together
    • user acceptance - determines whether the system meets the business requirements and enables users to perform their jobs efficiently and effectively

    6-2
  21. what are different types of implementation methods for the systems development cycle
    • parallel implementation
    • plunge implementation
    • pilot implementation
    • phased implementation

    6-2
  22. what are the difference between:
    parallel implementation
    plunge implementation
    pilot implementation
    phased implementation
    • parallel implementation - both systems are used at the same time (more time/cost but less risk)
    • plunge implementation - use system immediately and cease using old system (less costly but more risk)
    • pilot implementation - having small group of individuals using the ne system (less costly than parallel)
    • phased implementation - installing the system in a series of phases

    6-2
  23. what are different ways processes of transactions can take place for IT
    • online, real time
    • batch processing

    6-2
  24. what is the difference between:
    online, real time
    batch processing
    • online, real time - immediate processing but requires to be on at all times
    • batch processing - gather information and enter transactions in a group to the computer periodically

    6-2
  25. what is the biggest issue with batch processing
    delay of data can result in accounting records not accurately reflecting the current situation

    6-2
  26. define the following
    remote terminal
    centralized processing
    distributed processing
    network
    file server
    • remote terminal - simply input and outputs devices that connected to one computer
    • centralized processing - all computer activity taking place on one computer
    • distributed processing - work done be multiple employees on their own computers
    • network - computers connecting to each other
    • file server - information that users can access in a multiple computer environment

    6-3
  27. what are important aspects for databases
    • provide departments with information that is appropriate
    • prevent access to inappropriate information

    6-3
  28. what are the different network configurations
    • local area network (LAN)
    • wide area network (WAN)
    • value-added network (VAN)

    6-3
  29. what are the difference between:
    local area network (LAN)
    wide area network (WAN)
    value-added network (VAN)
    • local area network (LAN) - lock computer in the same building through cables or other solid physical transmission media
    • wide area network (WAN) - link computers in different locations through use of phone lines, satellite transmissions, etc
    • value-added network (VAN) - linked different companies files together

    6-3
  30. what is wireless local area networks and what are types
    short range radio transmission allowing different computers to communicate with each other and share printers, internet connects, and other devices

    • types:
    • Wi-Fi
    • Bluetooth

    6-3
  31. what is topology
    shape of network or networks layout

    6-3
  32. what are different ways topology is accomplished
    • bus
    • star
    • ring
    • tree
    • mesh

    6-4
  33. what is the difference between:
    bus
    star
    ring
    tree
    mesh
    • bus - each computer connects to the same communication line
    • star - one computer (central hub) which all computers connect. All data is received by one computer and sent from that one computer
    • ring - each computer is connected to its two closest neighbors in a closed loop. data is sent through intermediate computers to get to intended destination
    • tree - groups of star configurations with one computer as base. stars at same place can connect to each other without going to base and computers at different locations have to go through base
    • mesh - devices are connected with many redundant interconnections between network nodes

    6-4
  34. what is the difference between:
    intranet
    extranet
    internet
    • intranet - network limited to the computers of a single company
    • extranet - similar to intranet but customers and vendors are able to participate
    • internet - worldwide network allowing virtually any computer system to link to it

    6-4
  35. what is enterprise resource planning
    manage internal and external resources including tangible assets, financial resources, materials, and human resources

    6-4
  36. define the following that has to do with the world wide web:
    hypertext transfer protocol (HTTP)
    document
    page
    uniform resource locator
    web browser
    server
    client
    upload
    download
    hypertext markup language (HTML)
    • hypertext transfer protocol (HTTP) - language understood by different computers
    • document - single files accessible through the internet
    • page - display of a single document
    • uniform resource locator - address or particular page
    • web browser - translates documents for proper display
    • server - computer that is sending pages for display
    • client - computer that is receiving pages for display
    • upload - sends information from a client to a server computer
    • download - send information from a server to a client computer
    • hypertext markup language (HTML) - specialized programming languages used to create websites


    6-5
  37. define the following that has to do with the world wide web:
    hypertext transfer protocol (HTTP)
    document
    page
    uniform resource locator
    web browser
    server
    client
    upload
    download
    hypertext markup language (HTML)
    enable a process of communications between suppliers and customers

    6-5
  38. what is value added network
    network allowing one computer to initiate an action that will have an effect on the other

    6-5
  39. what are advantages of an electronic data interchange
    company can send inventory orders at a certain level

    6-5
  40. what are advantages of electronic data interchange over internet of value added network
    permit suppliers and customers to use the system without having previously established an extranet with each other

    6-5
  41. what is translation software
    convert data between standard used for electronic data interchange and the form needed for processing internally
  42. what are special considerations related to electronic data interchange
    • strict standards
    • translation software
    • unauthorized access

    6-5
  43. what is a firewall
    program that prevents access to network without the explicit permission
  44. what is cryptography
    electronic document which uses a digital signature to bind together a public
  45. how does electronic data interchange add to the complexity of auditing
    • communication without the use of paper
    • electronic funds transfers and sales over the internet
    • simplification of record keeping process using scanning devices
    • sending information to trading partners as transactions occur


    6-6
  46. what are controls for electronic e-commerce that help with the risk of improper use of information
    • data encryption
    • controls to prevent electronic eavesdropping
    • use of e-cash such as PayPal

    6-6
  47. what is spoofing
    orders and confirmations might be sent by an imposter

    6-6
  48. what are controls for spoofing
    • echoing of transmitted documents back to the claimed sender
    • digital signatures on files and emails to prove identity of sender

    6-6
  49. define:
    virus
    Trojan horse
    worm
    hoax virus
    killer application
    phishing
    • virus - requests a computer to perform an activity that is not authorized by the user
    • Trojan horse - virus in a program appearing to behave normal
    • worm - program that duplicates itself over a network so as to infect many computers
    • hoax virus - widely distributed email message warning of a virus that does not exist
    • killer application - application that is extremely useful
    • phishing - acting like you are legitimate business

    6-7
  50. what are the different types of computer hardware
    • CRIMP FOG
    • central processing unit
    • router
    • input and output devices
    • memory
    • primary storage
    • file service
    • offline storage
    • gateway

    6-7
  51. define
    central processing unit
    router
    input and output devices
    memory
    primary storage
    file service
    offline storage
    gateway
    • central processing unit - processes programs
    • router - receives data from one unit and sends it toward its destination
    • input and output devices - allow for communication between computer and used
    • memory - internal storage space referred to as random access memory
    • primary storage - computer memory used to store programs
    • file server - computer with large internal memory used to store programs
    • offline storage - devices used to store data or programs externally
    • gateway - links one network to another

    6-9
  52. what are types of computers
    • supercomputer
    • mainframe computers
    • minicomputers
    • microcomputers - personal (desktops and laptops)
    • personal digital assistants

    6-8
  53. define:
    windowing
    utility
    application software
    algorithm
    communication software
    heuristic
    • windowing - multiples programs on a monitor
    • utility - used for sorts, mergers, and other routine finds to maintain and improve efficiency of computer system
    • application software - perform specific function
    • algorithms - instruction sets used in programs to define and control processes
    • communication software - handles transmission of data between different computers
    • heuristic - software that can learn and modify its operations

    6-9
  54. define:
    source program
    object program
    compiler
    protocol
    query program
    fourth programming languages
    • source program - language written by programmers
    • object program - language the machine understands
    • compiler - converts source programs into machine language
    • protocol - rules determining the required format and methods for transmission for data
    • query program - application that counts, sums, and retrieves items from a database based on user criteria
    • fourth programming languages - used in development of business applications

    6-9
  55. Define:
    Bit
    byte
    character
    alphanumeric
    field
    record
    file
    • Bit - single switch in computer on(1) or off(2)
    • byte - group of 8 bits representing character
    • character - letter, number, or special character
    • alphanumeric - character that is either a letter or number
    • field - group of related characters representing a unit of information (phone number
    • record - group of logically related characters (name, address, phone #
    • file - group of logically related records (contact info for all employees)

    6-10
  56. define:
    database
    table
    data definition file
    • database - group of logically related files devoted to common function (payroll database)
    • table - set of data elements that is organized using a model of vertical columns and horizontal rows
    • data definition - describes logical structure of a database, including titles and descriptions of the fields stored in each file

    6-11
  57. what are 2 types of records (IT)
    • primary key - filed in a record that can uniquely identify that record (social security #)
    • secondary key - key that might be able to locate a record when the primary key is unknown (employee name)

    6-10
  58. what is the difference between the master and detail file
    • master - permanent source that is used as an ongoing reference
    • detail - file listing a group of transactions

    6-10
  59. what is data mining
    analysis of data in a database using tolls which look for trends or anomalies without advance knowledge of the meaning data

    6-11
  60. what are embedded audit modules and what are the issues of them
    they are contained in a database of a client that allows them to get data they need easily

    they can cause independence to be argued since the auditor work on setting up the program

    6-11
  61. what is the goal of the database management system
    minimize the petition and redundancy in the database, both to enhance efficiency and remove the danger of information being stored inconsistently in different places

    6-11
  62. what is database normalization
    processes of organizing the database for minimum redundancy

    6-11
  63. what IT jobs are labeled as system database and maintenance
    • system analyst
    • application programmer
    • database administrator

    6-12
  64. what do the following jobs do:
    system analyst
    application programmer
    database administrator
    • system analyst - designs the information system using flowcharts and other tools
    • application programmer - writes, test, and debugs programs also does instructions
    • database administrator - plans and administers the database to make certain of permissions

    6-12
  65. what are the different operations in an IT function
    • data entry clerk
    • computer operator
    • program and file librarians
    • data control

    6-12
  66. define:
    data entry clerk
    computer operator
    program and file librarians
    data control
    • data entry clerk - converts data into computer readable form
    • computer operator - runs the programs on the computer
    • program and file librarians - responsible for custody of computer programs, master files, transaction files, and other records
    • data control - reviewing and testing input procedures, monitoring processing

    6-12
  67. define :
    telecommunications
    system programmer/technical support
    security administration
    • telecommunications - maintaining and enhancing computer networks and network communications
    • system programmer - updates and maintains the operating system
    • security - control of access and maintenance of user passwords

    6-12
  68. what is an operating system
    software the provides a variety of technical operations

    w-92-6
  69. what does maps stand for and what does it do
    millions of instructions per minute

    measuring execution of speed of computers

    w-92-6
  70. what is a step by step procedures used to accomplish a task referred to for computers
    algorithm

    w-93-17
  71. what compiles a complete translation of a program in a high level computer language before the program is run the first time
    compiler

    w-93-18
  72. each cell in a spreadsheet can be identified by what
    address

    w-93-21
  73. how do most computers process data
    digitally

    w-93-24
  74. what computer language interface is used by database administrator
    database definition language

    w-93-26
  75. what is the technique for joining tables for database queries
    joining

    w-93-27
  76. what is the difference between:
    general controls
    applications controls
    • general - relate to the overall integrity of the system
    • applications - specific to individual programs and uses

    6-13
  77. who does the functions in an IT environment:
    authorization
    recording
    custody
    • authorization - system analysis and programmers
    • recording - data clerks and computer operators
    • custody - control clerks and librarians

    6-13
  78. what is contingency planning and what are different things that can be done
    controls that are designed to protect the information from accidental or intentional destruction

    • backup & planned downtime controls
    • checkpoint
    • disaster recovery

    6-14
  79. what are the differences between:
    backup & planned downtime controls
    checkpoint
    disaster recovery
    • backup & planned downtime controls - copies of files and programs
    • checkpoint - creates copy of system called checkpoints and can be restarted from that point
    • disaster recovery - contingency plans for restoration of a system

    6-14
  80. what is grandfather-father-son
    periodic saving of computer data versions allows the reconstruction of records

    6-14
  81. what are different ways a company can create a disaster recovery
    • hot site - available computers and data ready to begin operations immediately
    • cold site - available space but does not have computers
    • mirrored web server

    6-14
  82. what are different hardware controls that are built into the computers by the manufacture
    • parity check
    • echo check

    6-15
  83. define:
    parity check
    echo check
    • parity - in storage of bytes one is considered a "dummy" that doesn’t represent any actual information but is turned on to make bytes odd
    • echo - checking of data sent from one computer to another to ensure it is complete and if not will be resent

    6-15
  84. what are different controls that you can use for microcomputers
    • maintain inventory listing
    • keyboard locks
    • secured to desks
    • changing passwords
    • backup data

    6-15
  85. what are different application controls
    • preventive controls
    • detective controls/ automated controls
    • user control/corrective controls

    6-16
  86. define:
    preventive controls
    detective controls/ automated controls
    user control/corrective controls
    • preventive controls -prevent errors and fraud
    • detective controls/ automated controls - detect errors and fraud
    • user control/corrective controls - allow user to follow up on detected error and fraud

    6-16
  87. what are the different input controls for application controls
    • field checks
    • validity checks
    • limit tests
    • check digits
    • record count
    • financial total
    • hash total
  88. define:
    field checks
    validity checks
    limit tests
    check digits
    • field checks - data is validate to the correct length, character types and format accepted
    • validity checks - data compared with acceptable entries to be sure each one matches
    • limit tests - numbers are computer to limits that have been set for acceptability
    • check digits - numbers with no obvious meaning such as Id numbers

    6-16
  89. what are controls total and what do they include
    data compared with computer-generated totals of entered information to ensure accuracy

    • record counts
    • financial total
    • hash total

    6-17
  90. what are the differences:
    record counts
    financial total
    hash total
    • record counts - total number of records entered into the program
    • financial total - total dollar amount of entries
    • hash total - total values which cannot be meaningfully added together

    6-17
  91. what are output controls
    ensure that the processing results are valid and monitor the distribution and use of output

    6-18
  92. what is extensible business reporting language
    market driven computer language that allows for the free electronic exchange of business and financial data

    6-18
  93. what is a benefit of extensible business reporting language
    • eliminates manual data for comparison
    • can handle data in different languages and accounting standards
    • 6-18
  94. what is prima facie credibility
    at first view appears correct

    6-18
  95. what are benefits of IT for an audit
    • consistency
    • timeliness
    • analysis
    • monitoring
    • circumvention

    6-19
  96. define:
    consistency
    timeliness
    analysis
    monitoring
    circumvention
    • consistency - computers process data the same way every time
    • timeliness - electronic processing and updating is normally more efficient
    • analysis - data can be accessed for analytical procedures more conveniently
    • monitoring - electronic controls can be monitored by the computer system itself
    • circumvention - controls are difficult to circumvent when programmed properly

    6-19
  97. what are risks of IT for an audit
    • overreliance
    • access
    • changes in programs
    • failure to change
    • manual intervention
    • loss of data
  98. define:
    overreliance
    access
    changes in programs
    failure to change
    manual intervention
    • overreliance - IT systems assumed to be working
    • access - destructions and alteration can occur if unauthorized access
    • changes in programs - sever consequences if program changes occur
    • failure to change - programs not updated for new laws/regs..
    • manual intervention - knowledgeable individuals can sometimes alter files by bypassing the appropriate programs

    6-19
  99. what is the biggest advantage of having IT for audit
    not subject to random human error

    6-19
  100. what are the biggest concerns for auditor for IT
    • unauthorized access
    • audit trail/working papers

    6-19
  101. what would a audit software package include
    • access client files
    • source code comparison - unauthorized changes
    • parallel simulation
    • produce spreadsheets for working TB

    6-20
  102. what is a parallel simulation
    auditor inputs client data to the auditors program to see if it produces the same result

    6-20
  103. what are characteristics of test data approach an auditor uses
    • includes both value and invalid data
    • valid and invalid conditions
    • only one example of valid and invalid conditions needs to be included

    6-20
  104. what is controlled reprocessing
    auditor supervises the entry of actual client data into the client program to reproduce the results of a previous run

    6-20
  105. what is the control objectives for information and related technology (COBIT)
    integration of IT with business strategy and business risk
  106. what are 7 distinct information criteria for
    • effectiveness
    • efficiency
    • confidentiality
    • integrity
    • availability
    • compliance
    • reliability

    6-22
  107. define:
    effectiveness
    efficiency
    confidentiality
    integrity
    availability
    compliance
    reliability
    • effectiveness - information relevant and pertinent to the business
    • efficiency - concerns the provision of information through optimal use of resources
    • confidentiality - protection of sensitive information
    • integrity - accuracy and completeness of information as well as its validity
    • availability - available when required
    • compliance - complying with laws, regulations, and contractual agreements
    • reliability - provision of appropriate information for management

    6-22
  108. what are the 4 responsibility domains of plan, run and monitor within COBIT
    • plan and organize
    • acquire and implement
    • deliver and support
    • monitor and evaluate

    6-23
  109. what is the formula for rate and price variance
    actual quanitity/hours X (standard price/rate - actual)

    7-3
  110. what is the formula for time and quantity variance
    standard price/rate X (standard quantity/hours - actual)

    7-3
  111. what is the calculation for variance
    spending var
    spending fix
    efficiency
    volume/non-controllable
    • spending var = actual variance - (actual quantity X standard rate
    • efficiency = same as quantity/time variance
    • spending fix = actual - budget
    • volume = budget fixed - (standard quantity X standard rate)

    w-339

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