Answered: the outbreak of the COVID-19 pandemic…

the outbreak of the COVID-19 pandemic impacts on the accounting information system as a natural disaster and the strategies businesses can adopt to maintain current business operations.

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter14: Auditing It Controls Part I: Sarbanes-oxley And It Governance

Section: Chapter Questions

Problem 2MCQ

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Question 1The accounting information systems designed and installed in organizations are exposed not only to risks that emanate from users such as fraud, terrorisms, theft and other intentional acts for which control measures must be installed to check and minimize these risks, but also risks that emanate from natural disasters such as widespread flood, earthquake, fire, hurricanes, pandemic outbreak etc. which in most cases are uncontrollable or prevented. In this regard, organizations must have a disaster recovery plan (contingency plan) in place so that the full impact of a naturally occurring disaster can be absorbed to ensure business continuity.Discuss the contingency plans that must be in place before, during and after the outbreak of COVID-19 so that businesses can fully absorbed the pandemic to ensure business continuity.
Please answer all 3 subparts Question 1 (i) Which of the following is not an example of internal control risk?A. Risks of errors or fraud in accounting systems and accounting and finance activities.B. Risks that important laws and regulations will not be complied with properly.C. Risks that arise in the business environment and markets in which the company operatesD. The risk of losses resulting from inadequate or failed internal processes, people and systems or external events. (ii) Which of the following is NOT a statutory duty of a director?A. Duty to disclose any money received in connection of a transfer of company property.B. Duty to exercise due diligence in their work C. Duty to contribute an appropriate sum of money to the board on joining the companyD. Duty to keep proper accounting records and make such records available for inspection. (iii) Which of the following would be the best way for a shareholder (not being an institutional shareholder) to become involved in the…
DESCRIBE WITH EXAMPLES 6 CONTROLS THAT AN ORGANIZATIONS CAN UTILIZE TO FORTIFY THEIR ACCOUNTING SYSTEMS DURING A CRISIS SUCH AS COVID-19
Explain how the outbreak of the COVID-19 pandemic impacts on the accounting information system as a natural disaster and the strategies businesses can adopt to maintain current business operations
Question 1 (i) Which of the following will NOT be a likely ground to blow the whistle?A. When there are serious breaches of company rules and regulationsB. When somebody feels personally aggrievedC. When there are threats to human safetyD. When there are serious concerns about a possible fraud (ii) Which of the following is not an example of internal control risk?A. Risks of errors or fraud in accounting systems and accounting and finance activities.B. Risks that important laws and regulations will not be complied with properly.C. Risks that arise in the business environment and markets in which the company operatesD. The risk of losses resulting from inadequate or failed internal processes, people and systems or external events. (iii) Which of the following is NOT a statutory duty of a director?A. Duty to disclose any money received in connection of a transfer of company property.B. Duty to exercise due diligence in their work C. Duty to contribute an appropriate sum of money to the…
QUESTION 2 (a). ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment requires auditors to obtain an understanding of control activities relevant to the audit. Control activities are the policies and procedures which help ensure that management directives are carried out. Required: Describe FOUR different types of control activities and, for each type, provide an example of control a company may implement. (b) Diamond Medical Company manufactures nose mask and hand sanitizer. Its main customers are retailers who then sell to the general public. The company’s manufacturing is spread across five sites and goods are stored in its nine warehouses located across the country. You are an audit supervisor of Reynolds & Associate and in preparation for the forthcoming audit for the year ending 30 June 2019, you are reviewing the following notes your audit manager has provided you with in relation to the company’s internal…
Question 1 (i) Operational controls are designed to prevent failures in operational procedures caused by: i. Machine breakdown and human error ii. Failures in the performance of systems and weaknesses in procedures. iii. Poor management iv. Risks of errors or fraud in accounting systems and accounting and finance activities. A. i and ii onlyB. i, ii and iii onlyC. i, ii and iv onlyD. All of the above (ii) Risk tolerance refers to A. The amount of risk the company is prepared to accept in order to achieve its financial objectives.B. The amount of risk the company could accept without a serious threatto its financial stability. C. The level of risk a company (or any other organisation) is willing to take in the pursuit of its objectives. D. The combination of the desire to take on risk in order to ontain a financial return and its risk capacity. (iii) The main objective of an external audit is to A. Protect the interests of shareholdersB. Detect fraud and irregularities in the company's…
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Question 18 According to the PCAOB, during the audit of internal controls for an issuer (public company), the ultimate objective of testing the design effectiveness of internal controls is to: Determine whether the company's controls are processing data effectively. Determine whether the company's controls will satisfy control objectives and prevent or detect errors or fraud that could result in material misstatements to the financial statements. Determine that the company's employees are processing the controls according to policy and procedures manuals at the company. None of the answers provided are correct..
Describe with examples 6 (SIX) controls that an organizations can utilize tofortify their accounting systems during a crisis such as Covid-19.
Internal controls are critical for any organization's risk of fraudulent activity. Additionally, new technology assists accountants in minimizing fraud. Demonstrate how an advanced technology transaction processing system may help any organization minimize fraudulent activity.
answer all A company was audited and one major issueraised was the lack of a disaster recovery plan. In your opinionwhat measures do you recommend to address with referenceto the following key issues; namely;(a) Clear disaster recovery plan; (b) Strong Security Policy and (c) Use of Security Controls.