1. For each occurrence below identify the policy(ies), practice(s), or procedure(s) that would be most effective in addressing the error or irregularity. For each control you identify, indicate (1) if it is a preventive, detective, or corrective control, and (2) which of the four internal control objectives is addressed. a. A computer hardware component malfunctions during a processing run, causing many of the accounts receivable records to be lost. b. A five-minute power failure causes the computer system to cease functioning, thus resulting in the loss of data being transmitted from several terminals. c. During a violent electrical storm, an employee was keying data at one of the computers in the order entry department. After about an hour of data entry, lightning caused a company-wide power failure. When power was restored, the employee had to re-key all the data from scratch. d. An inexperienced computer operator mounts the accounts receivable master file (on magnetic tape reel) for the daily updating run. However, he inadvertently designates the tape drive on which it is mounted as an output drive and erases many of the customers’ records. e. The computer users at the Less-Than-Quick Company do not know how to use the computer very well. f. A tornado severely damages the IT Center of a firm resulting in system failure. A “cold-site” backup system agreement has been arranged but the current IT staff is unprepared for the switch over and the system remains down for several days until the staff configures the cold site for processing.
1. For each occurrence below identify the policy(ies), practice(s), or procedure(s) that would be most effective in addressing the error or irregularity. For each control you identify, indicate (1) if it is a preventive, detective, or corrective control, and (2) which of the four internal control objectives is addressed.
a. A computer hardware component malfunctions during a processing run, causing many of the
b. A five-minute power failure causes the computer system to cease functioning, thus resulting in the loss of data being transmitted from several terminals.
c. During a violent electrical storm, an employee was keying data at one of the computers in the order entry department. After about an hour of data entry, lightning caused a company-wide power failure. When power was restored, the employee had to re-key all the data from scratch.
d. An inexperienced computer operator mounts the accounts receivable master file (on magnetic tape reel) for the daily updating run. However, he inadvertently designates the tape drive on which it is mounted as an output drive and erases many of the customers’ records.
e. The computer users at the Less-Than-Quick Company do not know how to use the computer very well.
f. A tornado severely damages the IT Center of a firm resulting in system failure. A “cold-site” backup system agreement has been arranged but the current IT staff is unprepared for the switch over and the system remains down for several days until the staff configures the cold site for processing.
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