The following is a list of 12 control plans from this chapter:
Control Plans
A. Batch sequence check
B. Confirm input acceptance
C. Programmed edit checks
D. Manual agreement of batch totals
E. Online prompting
F. Cumulative sequence check
G. Electronic approvals
H. Document design
I. Procedures for rejected inputs
J. Compare input data with master data
K. Turnaround documents
L. Digital signatures
The following is a list of 10 system failures that have control implications:
System Failures
1. At Holeriver Company, customer orders are received in the mail in the sales department, where clerks enter individual orders online and then file the completed orders. For each order, the customer should receive an acknowledgement. When the customer fails to receive an acknowledgement, the customer calls to inquire. Inevitably, the sales clerk will find the customer’s order filed with other customer orders that had been entered into the computer.
2. At Prairie Inc., data entry clerks receive a variety of documents from many departments throughout the company. In some cases, unauthorized inputs are keyed and entered into the computer.
3. The tellers at Dixie Bank have been having difficulty reconciling their cash drawers. All customer transactions such as deposits and withdrawals are entered online at each teller station. At the end of the shift, the computer prints a list of the transactions that have occurred during the shift. The tellers must then review the list to determine that their drawers contain checks, cash, and other documents to support each entry on the list.
4. Data entry clerks at Courage Company use networked PCs to enter batches of documents into the computer. Recently, a number of errors have been found in key numeric fields. The supervisor would like to implement a control to reduce the transcription errors being made by the clerks.
5. At Dulce Inc., clerks in the accounting offices of Dulce’s three divisions prepare prenumbered general ledger voucher documents. Once prepared, the vouchers are given to each office’s data entry clerk, who keys them into an online terminal. The computer records whatever general ledger adjustment was indicated by the voucher. The controller has found that several vouchers were never recorded, and some vouchers were recorded twice.
6. Purchase orders at Etronics Corp. are prepared online by purchasing clerks. Recently, the purchasing manager discovered that many purchase orders are being sent for quantities far greater (i. e., incor-rect quantities) than would normally be requested.
7. At David Brothers, Inc., a clerk on the trading floor mistakenly entered the dollar amount of a trade into the box on the computer screen reserved for the number of shares to be sold and then trans-mitted the incorrect trade to the stock exchange’s computer.
8. At Jefferson Company, clerks in the cash applications area of the accounts receivable office open mail containing checks from customers. They prepare a remittance advice (RA) containing the customer number, invoice numbers, amount owed, amount paid, and check number. Once prepared, the RAs are sent to a clerk who keys them into the computer. The accounts receivable manager has been complaining that the RA entry process is slow and error- prone.
9. Rudolf Company enters shipping notices in batches. Upon entry, the computer performs certain edits to eliminate those notices that have errors. As a result, many actual shipments never get recorded.
10. Jamie the hacker gained access to the computer system of National Bank and entered the data to transfer funds to his bank account in the Turks and Caicos Islands. Match the 10 system failures with a control plan that would best prevent the system failure from occurring. Because there are 12 control plans, you should have two letters left over.