Fundamentals Of Auditing 1st Edition Basu - Solutions

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Given adequate security controls, PDAs are appropriate for use as remote access devices.A. True B. False
Which of the following terms means the process to decide what a user can do?A. Identification B. Authentication C. Clearance D. Authorization
Which of the following protocols is used for encrypted traffic?A. HTTPS B. SNMP C. IP D. L2TP
________ is a technique that creates a virtual encrypted channel that allows applications to use any protocol to communicate with servers and services without having to worry about addressing privacy concerns.
Which of the following protocols works well with firewalls?A. GRE B. SSTP C. L2TP D. L2F
Which of the following transmission techniques requires the entire bandwidth of a channel?A. Multiband B. Baseband C. Broadband D. Duplex
________ is a network protocol used to monitor network devices.
The use of global user accounts can simplify user maintenance.A. True B. False
Which protocol is commonly used to protect data sent to Web browsers when not using VPNs?A. IPSec B. PPTP C. GRE D. TLS
Which of the following controls would best protect sensitive data disclosure to unauthorized users using remote computers?A. Encryption B. Strong passwords C. Firewalls D. Configuration management tools
Which protocol does SNMP use to transport messages?A. TCP B. UDP C. TLS D. GRE
The main concern of data security in the System/Application Domain is integrity.A. True B. False
Because the System/Application Domain is the innermost domain, security controls are not as important.A. True B. False
A solid multilayered security plan means that an attacker will likely encounter several security controls before reaching the System/Application Domain components.A. True B. False
A(n) ________ is a subdivision or part of a network.
Which of the following is not a common feature of a data center?A. Controlled environment B. Limited physical access C. In-room generator D. Raised floor
Every disaster recovery plan should protect ________ first.
Which type of plan contains instructions on how to recover from a power failure?A. DRP B. BCP C. SLA D. TDE
Which of the following is true?A. A BCP is normally part of a DRP.B. A BCP addresses only IT issues.C. A DRP is normally part of a BCP.D. A DRP should address even minor interruptions.
Which common term originally referred to the large cabinets that housed the processing units and memory modules of early computers?A. Core rack B. Rack system C. Mainframe D. Minicomputer
A(n) ________ generally resides in the DMZ and provides the interface between remote users and an application server.
Which type of full database encryption doesn’t require any user interaction?A. TDE B. OLE C. AES D. DES
Which benefits do application performance monitoring software provide? (Select two.)A. Measure end-user response time.B. Measure senior management browsing habits.C. Measure end-user traffic volume.D. Measure application-installed code base.
According to SOX requirements, which type of user accounts are prohibited from accessing the production environment?A. Database administrators B. Software developers C. Network administrators D. End users
Which of the following is not considered a soft skill needed by IT auditors?A. Penetration testing skills B. Negotiation skills C. Business writing skills D. Behavior skills E. Communication skills F. Leadership skills
A(n) ______ of ethics for IT auditors is important for outlining clear ethical expectations.
The Sarbanes-Oxley Act does not attempt to define a code of ethics, but rather it references the code of ethics established by the IIA.A. True B. False
According to IFAC, the rules of behavior that guide the decisions of an organization should do which of the following? (Select the two best answers.)A. Contribute to the personal fortunes of IT vendors.B. Contribute to the welfare of key stakeholders.C. Respect the rights of all constituents
A thorough code of conduct would include which of the following?A. The company’s mission B. The company’s values C. Examples of ethical and unethical behavior D. All of the above
The NYSE requires that companies listed on its exchange publicly make available a code of conduct.A. True B. False
An individual holding which of the following certifications should be familiar with the (ISC)2 code of ethics?A. SSCP B. CISA C. CISSP D. Answers A and C E. None of the above
Which of the following is not a mandatory principle or canon of the (ISC)2 code of ethics?A. Protect society, the commonwealth, and the infrastructure.B. Act honorably, honestly, justly, responsibly, and legally.C. Provide diligent and competent service to principals.D. Advance and protect the
Certification and licensure are essentially the same thing.A. True B. False
Which of the following organizations provides IT-related professional certifications?A. CompTIA B. ISACA C. ANSI D. All of the above E. Answers A and B only
Which of the following is not professional guidance provided by the IIA?A. COBIT B. GAIT C. GTAG D. IPPF
A candidate for the Certified Internal Auditor certification must first achieve the Certified Information Systems Auditor certification.A. True B. False
To become an ISACA Certified Information Systems Auditor, which of the following is required?A. Successfully pass an examination B. Adhere to an ethical code C. Experience D. All of the above
The SANS Institute is a nonprofit organization that provides free certification exams across four different information security tracks.A. True B. False
Which of the following is a GIAC certification that would most likely appeal to an IT auditor?A. GSNA B. GLEG C. GCFA D. CISSP E. CISA
How does your company define a customer? What are the criteria that underlie the definition, and how will that definition change as you engage in new business practices (e.g., new products/services or distribution channels)?
If you are a public company, how is the term “customer” used and defined in your statutory reports, if at all?
How consistent are you in your definition across business units and functional areas? Is there alignment across the organization regarding the definition (and measurement)of the customer?
Are you guilty of casually throwing around statistics on the number of customers that reflect different business outcomes/objectives—but without being clear on what actually constitutes a customer?
How does your ability to measure customers drive your definition of the customer (and vice versa)?
Does the data cube reflect the kinds of conversations and analyses (e.g., product × time, customer × time) that take place for your firm?
What will it take to shift most of those conversations from focusing on the product × time face to the customer × time face?
How do you tie this fundamental understanding of data structures to the way that decisions are made and evaluated?
Can you produce the kinds of transaction tables as shown for Madrigal? If not, what are the main hurdles you will need to overcome?
How does your firm view the IT expenditures required to perform such tasks—are they seen as costs or investments?
How do you allocate fixed and variable costs to each transaction and to each customer? Are there formal written guidelines, and do you handle these issues consistently across your firm?
How easily can you access the various figures and tables highlighted here? Must they be created as a custom exercise by a specialized analyst, or can the executive team easily access them “on-demand”?
How do your Lens 1 views compare to those shown here? Do you see the same basic patterns for most of them (such as right-skewed distributions)?
What kinds of specific deviations arise, and can you explain them? Do you believe that these differences are enduring characteristics of your customer base, or perhaps transient variations?
Can your firm easily perform the multiplicative profit decomposition described above? If not, where are the bottlenecks in your reporting systems?
As you start to isolate the best (top decile) customers, do you have any sense of how they differ from your other customers (beyond their greater purchasing and profitability)?
What about the bottom-decile customers? Are you aware of their characteristics, and possible ways to bolster their profitability (e.g., by mitigating their cherry-picking behavior)?
What kinds of “like-for- like” analyses do you currently conduct on a regular basis (e.g., same-store sales)? Are any of them performed at the customer level?
Beyond the regular analyses, have you ever run a Lens 2–type project at the customer level to evaluate the impact of a particular event? Does your firm have the capability to do so?
When you see customers seemingly “disappearing” from one period to the next, are you overreacting? What explanations do you offer, and what kinds of tactics do you engage in as a result (e.g., “customer win-back” campaigns)?
Answer the same question(s) for the slight degradation in overall customer value for those customers who remain active through consecutive time periods: Are you willing to live with it, or do you take actions to try to stem the flow?
Have you ever gone a step further to decompose these changes into their underlying components (i.e., number of transactions, average spend per transaction, average margin)? How are these components differentially affecting customer profitability?
What technologies or marketing programs do you rely on to “tag and track” your newly acquired customers to facilitate a cohort analysis?
When you engage in different kinds of promotions and other kinds of customer-focused campaigns, do you evaluate them purely in a period-to- period manner (as in Lens 2), or do you look for ongoing effects that may persist over longer horizons for a given cohort?
Do you provide any regular reports (to internal or external stakeholders) that reflect cohort-level behaviors?
We have only focused on time-based cohorts. But do you examine other kinds of cohorts, grouping customers on other acquisition characteristics such as channel, product(s), or campaign associated with their first purchase in addition to their period of acquisition?
Do you try to actively measure/ manage the (apparent) one-and- done customers? How much (and for how long) do you invest in them to become ongoing repeat buyers, and at what point (if ever) do you give up on them?
Does your organization conduct RFM-based segmentation? What do you do with these segments once you create/ identify them? How does this kind of segmentation scheme compare (or interact) with other bases of segmentation that you may rely upon?
In the same way many companies conduct period-to- period analyses (e.g., same-store sales comparisons), do you conduct cohort-to- cohort analyses as routinely and regularly?
Beyond a simple aggregate comparison across two cohorts, does your firm have the discipline and analytical skills to “get below the surface” to explain the differences?
Can you connect the decomposition analysis to marketing (and other) activities to explain why these differences are occurring, and whether they are short-term “blips” or long-term trends?
When you get below the purely aggregate accounting metrics (i.e., annual revenue and profit) and into the underlying customer behavior data, what patterns jump out most readily?
Can you explain these changes in the behavioral indicators? Are they transient or persistent?Can you link them to particular marketing activities?
Do you see any offsetting trends (e.g., increased AOF but decreasing AOV) that are masked in the aggregate data?
Have you tried shifting the focal unit of time (e.g., from yearly to quarterly)? What new insights emerge as you move to a more granular level?
As you perform customer-base audits on an ongoing basis, how do they change as you gain more experience and perspective? Are they simpler or more complex?
Before contemplating a full audit, what kinds of basic analyses do you perform with this integrated dataset? What are the first “crossover” (product × customer) questions you seek to answer?
Do you regularly examine your product sales data with visibility into the customer level? Do you understand who is buying what?
Do you seek to know which products tend to be disproportionately favored by high-value customers?
Do you use decompositional analyses to understand what behavioral aspects (e.g., frequency, order size) are most strongly associated with these differences?
Do your product-focused managers (e.g., in R&D, planning, merchandising) ever ask these questions (or leverage their answers) to help make or evaluate their decisions?
What is verification of assets and liabilities?
Distinguish between verification and valuation.
Discuss the importance of verification and valuation of assets.
What is intangible asset? Give five examples of intangible assets.
What do you mean by fictitious assets? Give example.
What is meant by contingent liability? Discuss the auditor’s duty in this regard.
What is goodwill? As an auditor, how would you ascertain that an amount paid for goodwill is justified?
Do you think that verification of assets and liabilities is necessary when vouching has been done properly?
“Verification forms an important part of the whole system of audit”. Explain.
“Intangible Assets are not always Fictitious Assets”. Illustrate.
Discuss the problems in the valuation and verification of assets.
“Verification includes valuation”. Comment.
How and in what way does verification of assets and liabilities differ from vouching?
What do you mean by ‘window-dressing’ of the Balance Sheet? State the duties of an auditor in this respect.
“Information and means of information are by no-means equivalent terms”. Comment.
“An auditor is not a valuer, though he is intimately connected with values”. Discuss referring to the relevant case decisions.
“It has been stated that the valuation of investment for the Balance Sheet purpose depends largely upon the object for which investments are held”. Discuss the statement.
How do you verify the following items:(a) Raw material stock(b) Land(c) Preliminary expenses(d) Investment(e) Work-in-progress(f) Copyright(g) Machine purchased on H. P. System(h) Patterns and designs(i) Freehold properties(j) Loans and advances(k) Debtors(l) Secured loan.
How will you as an auditor deal with the following:(a) Cash(b) Provision for taxation(c) Leasehold properties(d) Unpaid dividends(e) Goods in transit(f) Disposal of plant
What are the special points to which an auditor should direct his attention for ascertaining the adequacy of provision for bad and doubtful debts in the context of proper valuation of sundry debtors?

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Fundamentals Of Auditing 1st Edition Basu - Solutions

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