1. Outputs of a purchasing process normally might include all of the following except: a. purchase order b. PO inventory notification sent to the inventory system receiving report vendor invoice d. 2. What is inserted into the package and identifies the customer,the shipment destination, and the the package? a)Packing slip Picking ticket c. Customer acknowledgement d. Bill of lading 3. The Billing/AR/Cash receipt process is a. Part of the OE/S process b. Part of the purchasing process Part of the revenue cycle Part of the expenditure cycle 4. The key provisions of SOX are that SOX ) All of these choices b. Created a new accounting oversight board e. Strengthened auditor independence rules d. Increased accountability of company officers and directors 5. Elements common to definitions of intenal control include all of the following, except a. Reliability of financial reporting b. Effectiveness of operations Compliance with applicable laws and regulations utomation of business processes 6. Approvals, authorizations, verifications, reconciliations, reviews of operating performance, security procedures, superyisonudi trais, and segregation of duties are examples of a. control activities b. event identification c. monitoring d. risk response 7. For a typical OE/S process to check a customer's credit, all of the following data stores likely would be consulted except the: general ledger master data b. customer master data c. accounts receivable master data d sales order master data 8. Computer crime does not include: a. Malware b. Computer viruses @ Sequentially numbering invoices d. Hacking 9. Who usually authorizes a purchase requisition? a. the supervisor of the requisitioning department b. the purchasing manager c. a purchasing agent d. a customer 10. Activities involved in processing customer orders are known as: a. Order entry/sales (OE/S) process b. Shipping order process c. Marketing process d. Revenue process a. Tactical management b. Day to day management of the organization s Compliance GA process by which organizations select objectives, establish processes to achieve objectives, and monitor performance 12. The document one business sends to another business that identifies the goods or services to be purchased is a. request for proposal b. purchase requisition C. purchase order d. disbursement voucher 13. Enterprise Risk Management (ERM): a. Is the responsibility of an entity's board of directors, management, and other personnel b. Provides reasonable assurance regarding the achievement of entity objectives All of these choices are correct are features of an ERM Is designed to manage risk 14. Which of the following is not a potential benefit of supply chain management? a. lower costs to the customer b. reduced inventories c reduced customer orders d. reduced product defects 15. Which of the following is not one of the external entities with which the B/AR/CR process interacts? Customers Billing department c. Banks d. The B/AR/CR process interacts with All of these choices are correct. 16. Key control plans associated with OE/S processes include: a. Compare picking ticket to picked goods b. Customer credit checlk c. Independent shipping authorization All of these choices hich of the following is not true about the billing/accounts receivable/cash receipts (B/AR/CR) process? a. It supports the repetitive work routines of the credit department, the cashier, and the accounts b. It supports the decision-making processes of financial managers receivable department c. It is an interacting structure of people, equipment, activities, and controls d. All of these choices are correct 18. Describe the five master data stores employed by the OE/S process. a. Marketing data and sales order master data b. Accounts receivable master data c. Customer master data and inventory master data d. All of these choices are correct 19. Which data store contains a record of each item that is stocked in the warehouse or is regularly ordered from a vendor? a. Inventory master data b. Customer master data c. Marketing data d. Sales order master data 20. Which of the following is not true concerning accounts receivable master data? a. All of these choices are correct are true concerning accounts receivable master data b. It is updated at the time that the customer makes a c. It is created as sales returns, bad debt write-offs, estimated doubtful accounts, or similar adjustments are processed d. It is a repository of all umpaid invoices issued by an organization and waiting final disposition 21. Which data store contains a record of every customer with whom the company is authorized to regularly do business? a. Customer master data b. Sales order master data c. Inventory master data d. Marketing data 22. Who is legally responsible for establishing and maintaining an adequate system of internal control? a the board of directors b. stakeholders c. investors d. management 23. In a purchasing process receiving goods but not a vendor invoice, from a supplier typically results in an update to all of the following data stores exeept the: a inventory master data b. vendor master data c. accounts payable master data d. purchase order master data 24. The threc major processes of the OE/S process are a Complete picking ticket b. Execute shipping notice c. All of these choices are correct d. Validate sales order 25. A document that is used to notify the customer of the order's acceptance and the expected shipment date is called a a. shipping order b. customer acknowledgment c. sales order notification d. blind authorization 26. The OE/S process interacts with the following entities a. Customers, recruitment, marketing, finance b. Customers, marketing, finance, research and development c. Customers, marketing, finance, logistics d. Customers, marketing, finance, purchasing 27. Risk responses do not include: a. Accepting a risk by taking no action b. Staying in the activity that is giving rise to the risk c. Sharing a risk by, for example, buying insurance or outsourcing the activity d. Reducing a risk by taking actions that reduce the likelihood of an event 28. In a database containing (among others) six relations-VENDORS, PURCHASE REQUISITIONS, PURCHASE ORDERS, PURCHASE RECEIPTS, INVENTORY, and EMPLOYEES -you would expect that the attribute Vend No (vendor number) would be the primary key in the relation. . VENDORS b. PURCHASE ORDERS c. PURCHASE RECEIPTS d. EMPLOYEES 29. Below is a list of control goals followed by a list of short scenarios describing system failures (i.e., control goals not met) and'or instances of successful control plans (i.e, plans that helped to achieve control goals). Reguired: matches the situsation described. HINT: Some letters may be used more than once. Conversely, some letters may not apply at all. Control Goals Ensure effectiveness of operations. Ensure efficient employment of resources E. Ensure input accuracy F. Ensure input completeness. G. Ensure update accuracy H. Ensure update completeness. C. Ensure security of resources. D. Ensure input validity F. Compare vendors for prices, terms, quality, and product availability L. Inspect goods Required Listed below are 10 system failures that indicate weaknesses in control. On the answer line to the left of each description, insert the capital letter (from the list above) of the best control plan to address the system deficiency described. A letter should be used only once. Two letters will not be used. Answers SYSTEM FAILURES 1. Ordered goods are often of a different quality and price than requested. 2. Data on the RFID tags are not compared to the existing purchase order to ensure 3. Purchase orders are sometimes prepared on the basis of purchase requisitions that we have received the goods that we ordered from departments with no budget to pay for the ordered goods. The computer does not automatically identify erroneous or suspect data on purchase orders before they are printed for signing and mailing. 4. Inventory is being discarded or sold at a reduced price due to damage or quality Bill the buyer often prepares purchase orders for vendors owned by his relatives. 6. Clerks in the purchasing department enter purchase order data from forms given to them by the buyers. They spend a considerable amount of time typing in the vendor name and address, and item descriptions and prices. 7. The vendor has no way of knowing if the electronic purchase order was sent by authorized personnel of the buyer 8. The purchasing manager has not informed the requisitioning department in a timely manner to let them know that their requests were processed. 9. Certain vendors have been favored in the selection process. 10. Answers SCENARIOS 1. A batch of documents sent by the mail room to the accounts receivable department were lost in the intercompany mail and never recorded. 2. A flaw in the processing logic of a computer program resulted in cash received from customers being added to their accounts receivable balances rather than subtracted. 3. A mail room clerk fabricated a phony document for a friend to make it look like the friend had paid his account receivable balance. The phony document got recorded. An accounts receivable clerk made a copy of the company's accounts receivable master data and sold this customer information to a competing company 5. Customer checks received in the mail room are batched and sent to the cashier 6. In a manual bookkeeping system, an accounts receivable clerk failed to post an 7In a manual bookkeeping system, cash receipts recorded correctly in the cash several times a day so that they can be deposited as fast as possible. entire page of transactions from the cash reccipts journal to the accounts receivable subsidiary ledger. receipts journal but some were inadvertently posted to the wrong customer accounts In keying remittance advices into his computer terminal, an accounts receivable elerk entered a receipt of $100 as $1,000. 8. The cost of the people and computers needed to process incoming checks is less than the benefit obtained from the incoming funds 9. 10. The company's accounts receivable system was infiltrated by a hacker 30. The following is a list of 12 control plans. Control Plans A. Populate input screens with master data B. Programmed edit checks Approve purchase orders Confirm purchase order to requesting department H. I. Digital signatures J Enter receipt data in receiving department K. C. Approve purchase requisitions D. Requisition audit data E. Use authorized vendor data Independent authorization to record receipt