Question: Kroger Co., a large, nationwide grocery chain,

> Why is it true that increasing the number of LANs or wireless networks within an organization increases risks?

> Why should accountants be concerned about risks inherent in a complex software system such as the operating system?

> Why do you think the uppermost managers should serve on the IT governance committee?

> What kinds of duties should be segregated in IT systems?

> What is the difference between business continuity planning and disaster recovery planning? How are these two concepts related?

> What kinds of risks exist in wireless networks that can be limited by WEP, WPA, and proper use of SSID?

> How does encryption assist in limiting unauthorized access to data?

> How is an extranet different from the Internet?

> A firewall should inspect incoming and outgoing data to limit the passage of unauthorized data flow. Is it possible for a firewall to restrict too much data flow?

> Why should an organization be concerned about repudiation of sales transactions by the customer?

> Explain the general controls that can be used to authenticate users.

> What kinds of risks or problems can occur if an organization does not authenticate users of its IT systems?

> Is it necessary to have both general controls and application controls to have a strong system of internal controls?

> What is the difference between general controls and application controls?

> What does section 404 of the Sarbanes– Oxley Act require of management regarding internal control systems?

> Distinguish between the Trust Services Principles of privacy and confidentiality.

> Identify and describe the five categories of the AICPA Trust Services Principles.

> What does it mean when information flows “down, across, and up the organization”?

> Why is data contained in the data warehouse called nonvolatile?

> Why is a policies and procedures manual considered an element of internal control?

> Name and distinguish among the three types of internal controls.

> Distinguish between Internet spoofing and e‐mail spoofing.

> Describe three popular program manipulation techniques.

> Identify and explain the three types of internal source computer fraud.

> Distinguish between internal and external sources of computer fraud.

> Do you think it is possible that a business manager may perpetrate fraud and still have the company’s best interest in mind? Discuss.

> What are the advantages to using some form of IT systems for input, rather than manual input?

> Why would accounting software development companies be interested in expanding their software products into other market segments?

> What are some of the differences between ERP systems and accounting software for small companies?

> How would accounting software requirements for large corporations differ from requirements for small companies?

> Why might it be important to have internal documents produced as an output of the accounting information system?

> What are the distinguishing characteristics of cloud computing?

> How do internal reports differ from external reports?

> How does client–server computing divide the processing load between the client and server?

> Why might the time lag involved in batch processing make it unsuitable for some types of transaction processing?

> What is the difference between general controls and application controls?

> In what ways are the characteristics of e-business different from those of e-commerce?

> How is e-business a broader concept than e-commerce?

> The Gas and Java Mart (G & J) is a gas station and convenience market similar to any BP, Shell, or Speedway gas and convenience stores. G & J is a regional chain located in eastern Missouri, with 14 locations. Required: The section of this chapter ide

> The following description is excerpted from “Coupon Accounting Abuse,” Management Accounting, January 1993, p. 47. It’s November 15, and Gary, brand manager for a major consumer products firm, is contemplating his year‐end bonus. It is becoming increasi

> Explain why random access files would be preferable to sequential access files when payroll personnel are changing a pay rate for a single employee.

> At the old city hall, mail was sorted in a glorified closet—not the sort of place you’d expect to be frequented by a high‐ranking city official with multiple degrees. However, the city of Weston’s chief financial officer, Steve Kaufmann, had an unusual i

> Refer to case 48. Describe which parts of the design phase Miller should undertake to ensure that the purchased software matches with the business processes that it will use. From case 48: Miller International Corp. is in the process of purchasing a new

> Miller International Corp. is in the process of purchasing a new accounting software system. Miller is in a very specialized industry, with an international market. The company manufactures specialized parts to sell to companies in the oil exploration an

> The ElectroShock is a retailer of electronics such as cell phones, satellite radios, mp3 players, and highend LCD and plasma TVs. The ElectroShock is a large chain with stores in strip shopping centers throughout the United States. However, each store is

> Putnam Sound, Inc. (PSI) is a manufacturer of stereo speaker systems. The company prepares special journals and subsidiary ledgers for its revenue, expenditures, payroll, and conversion processes. For administrative processes, however, journal vouchers a

> Clouse Analytics is a financial services consulting firm that assists its clients with financial analyses surrounding proposed business ventures. John Y. Clouse is the firm’s founder and project director. As such, he is responsible for preparing most of

> Trudy’s Trendy Threads (TTT) is a regional wholesaler of women’s casual attire. The company is located in Jacksonville, Florida, and it sells to retail stores in resort communities in Florida, Georgia, and the Carolinas. TTT employs six salespeople, with

> The screen capture that follows shows the relation‑ ships in a Microsoft Access database. For each relationship, explain the following: a. The type of parent–child relationship it represents. b. Which attributes in t

> Zip Shuttle Service operates airport shuttle vans in 12 large cities: Los Angeles, San Diego, San Francisco, Phoenix, Las Vegas, Houston, Dallas, Chicago, New York City, Washington DC, Miami, and Orlando. Zip operates passenger vans to shuttle travelers

> Explain the differences between a field, a record, and a file.

> Bentley Dynamics, Inc., produces computer chips for personal electronic devices used to record music. The chips are sold primarily to large manufacturers; however, occasional production overruns may be discounted and sold to small manufacturers. Since Be

> Sole Footwear, Inc., is a manufacturer of a popular line of casual shoes and sandals that has experienced significant growth within the past 18 months. The unique design of its product line has always been the key to the company’s success. It is currentl

> Ski Slope, Inc. is a manufacturer of equipment used for snow skiing and snow boarding. The company’s products are sold under two brand names, one comprising its top‐of‐the‐line equipment and the other comprising its line of moderately priced equipment an

> Bloomington Enterprises is a manufacturer of model trains that sell under the name Bloomington Toy Trains in toy stores and hobby shops throughout the United States and Europe. The company employs 160 people in its home office and sole manufacturing and

> Rider Co. makes automobile parts for sale to major automobile manufacturers in the United States. The following information is available regarding internal controls over machinery and equipment: When a departmental supervisor needs a new item of machine

> The Crishner Company has the following processes related to fixed assets: When a department manager determines a need for a new fixed asset, he prepares a purchase requisition, which is forwarded to the chief financial officer. If the requested fixed ass

> Wilson Enterprises is a midsize manufacturing company with 120 employees and approximately $45 million in sales. Management has established a set of processes to purchase fixed assets, described in the following paragraphs: When a user department determ

> Rossi Industries has payroll processes as described in the following paragraphs: When a new employee is hired, the human resources department completes a personnel action form and forwards it to the payroll department. The form contains information such

> Glazer Company is a small manufacturing firm with 60 employees in seven departments. When the need arises for new workers in the plant, the departmental manager interviews applicants and hires on the basis of those interviews. The manager has each new em

> The document flowchart on the next page shows part of the purchasing and cash disbursement processes for Wilson, Inc., a small manufacturer of gadgets and widgets. Some of the flowchart symbols are labeled to indicate operations, controls, and records.

> Why do you think a company would benefit from using cloud computing rather than client– server computing?

> The United States General Accounting Office (GAO) Office of Special Investigations was responsible for investigating a potential purchase fraud case. The man who allegedly committed the fraud was Mark J. Krenik, a former civilian employee of the U.S. Air

> Krandolph Metals, Inc., is a manufacturer of aluminum cans for the beverage industry. Krandolph purchases aluminum and other raw materials from several vendors. The purchasing process at Krandolph occurs as follows: When inventory of any raw material se

> Melcher Enterprises is a wholesaler that purchases consumer merchandise from many different suppliers. Melcher then sells this merchandise to many different retail chain stores. The following paragraphs describe the expenditures processes at Melcher: Wa

> Notting, Inc., has the following processes related to purchasing: When it is determined that an item should be ordered, the purchasing department prepares a three‐copy PO. The first copy is mailed to the vendor, the second copy is filed by PO number in t

> Radleigh, Inc., processes its sales and cash receipts documents in the following manner: Cash Receipts Each morning a mail clerk in the sales department opens the mail containing checks and remittance advices, which are then forwarded to the sales depar

> Niagara Pediatrics is a partnership of 6 pediatrician owners, 2 nurse practitioners, 10 nurses, 3 accounting clerks, 2 receptionists, and an office manager. The office manager and all of the accounting clerks have their own PCs, and the receptionists sha

> Lewis LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Holden, Inc., is an independent information technology consultant who is assisting Lewis with the project. James has de

> Inner Artist is a retailer of arts and craft supplies in the suburban Chicago area. It operates a single retail store and also has extensive catalog sales on account to area schools, churches, and other community organizations. Retail customers pay for s

> Katrupi, Inc., has five departments that handle all sales, billing, and collection processes. The five departments are sales, billing, accounts receivable, warehouse, and general ledger. These processes occur as follows: a. A customer mails a purchase or

> At Kingston Industries, the revenue processes are conducted by five employees. The five employees are the sales clerk, warehouse clerk, accountant 1, accountant 2, and the collection clerk. A description of their duties is as follows: a. The sales clerk

> How do you think the World Wide Web (WWW) has led to business process reengineering at companies such as Lands’ End or J. Crew?

> Sensible CDs is a regional retail chain that sells used CDs. The company has eight stores throughout the Philadelphia region. At each store, customers can bring in used CDs to sell to Sensible or to trade for used CDs already in stock. Also, customers ca

> Ryan McGuire is an auditor for a large CPA firm. McGuire was recently assigned to perform a financial statement audit of Kraft Brewery, Inc., a brewery and distributor of German specialty foods. McGuire’s firm is auditing Kraft for the first time. The au

> Kyle Sanders was auditing the financial statements of World Wholesale Industries when she was presented with a curious situation. A member of World’s top management team approached her with an anonymous note that had been retrieved from the company’s sug

> Chacon University is a Midwest university with 16,000 students, using various legacy systems for student records, financial systems, human resources, and financial aid. The president of Chacon heard a presentation about ERP systems at a seminar for unive

> Michael Michner Industries (MMI) is a manufacturer of warehouse and inventory tracking systems. MMI has four U.S. plants and three warehouses. The company employs 3,500 workers at these facilities and the corporate headquarters. MMI is using legacy syste

> In the early days of computers, Chris Schuler was a very enterprising young man who, while attending UCLA, was also conducting a major fraud against Continental Telephone and Telegraph Company (CT&T). At the height of his fraud in 2015, he was collecting

> Gleason, Inc., is a manufacturer of plastic knobs for lawn and garden tractors and lawn mowers. The company has always used traditional paper based systems to conduct transactions with its customers. For example, when a customer ordered knobs, Gleason pe

> The EnviroPlan Company, a small business with 100 employees, sells environmental consulting services to large companies around the United States. It employs 40 consultants who travel the United States, assisting clients with environmental compliance. To

> Cody Chambers agreed to help his fraternity obtain sponsors for its annual charitable event to be held during Homecoming week. He accepted this responsibility at the recommendation of last year’s fundraiser, who told Cody that the task would require appr

> Lynn Roberts frequently makes purchases from mail order catalogs. Recently, she ordered a dress she intended to wear to her cousin’s wedding. Unfortunately, she did not receive the package on time, and on the evening before the wedding, Lynn went shoppin

> Why is it sometimes necessary to change business processes when IT systems are applied to business processes?

> The CEO of Missouri Motor Company, Jason Bell, resigned on November 1, 2014. His resignation had been negotiated with the Board of Directors of Missouri Motor after it was revealed that Mr. Bell violated the company’s corporate ethics policy by having an

> Cooper’s Cues Company is a small manufacturing operation that makes and sells pool cues for sporting goods stores and billiard halls in Baltimore, Maryland, and the surrounding local area. Rob Cooper and his wife, Stacy are the owners and only employees

> Consider any recent purchase you made at a department store such as Target, Walmart, or Kmart. A business process that occurred was the sale of a product to you. However, to make that sale, the department store had to engage in many other processes that

> The fast food industry has been dramatically altered through IT enablement. However, IT enablement has not completely eliminated manual processes in fast food franchise restaurants such as McDonald’s, Wendy’s, and Burger King. Required: Using your expe

> Explain the importance of user authentication and network break-in controls in extranets.

> Describe the differences between B2C and B2B.

> Describe the activities that take place in the supply chain of a manufacturing firm.

> Describe the benefits to the consumer of B2C sales.

> How does the use of HTML, URLs, domain names, and SSL contribute to an Internet that can be used worldwide?

> Categorize each of the following as one‐to-one, one‐to‐many, or many‐to‐many: • Subsidiary ledgers and general ledgers • Transactions and special journal • General ledgers and trial balances

> How do you think a company may be able to influence a supplier to meet its business processing requirements?

> Suppose that a large company uses batch processing for recording its inventory purchases. Other than its slow response time, what would be the most significant problem with using a batch processing system for recording inventory purchases?

> Think of a database that would be needed at a professional service firm to maintain the contact list of clients/patients at the office of a CPA, attorney, or medical doctor. Identify the fields likely to be used in this database. If you were constructing

> Describe why there may be two authorizations related to revenue, expenditures, and conversion processes before they are posted to the general ledger.

> Describe the steps in a manual accounting cycle.

> Explain the internal control environment of source of capital and investment processes.