The following is a list of 14 control plans:
Control Plans
A. Populate inputs with master data
B. Online prompting
C. Interactive feedback checks
D. Programmed edit checks
E. Manual agreement of batch totals
F. Batch sequence check
G. Cumulative sequence check
H. Document design
I. Key verification
J. Written approvals
K. Procedures for rejected inputs
L. Compare input data with master data
M. Turnaround documents
N. Digital signatures
Listed below are 10 system failures that have control implications. On your solution sheet, list the numbers 1 through 10. Next to each number, insert the capital letter from the list above for the best control plan to prevent the system failure from occurring. (If you can't find a control that will prevent the failure, then choose a detective plan or, as a last resort, a corrective control plan.) A letter should be used only once, with four letters left over.
System Failures
1. At Datatech 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.
2. Data entry clerks at the Visitron Company use networked PCs to enter data 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.
3. Purchase orders are prepared online by purchasing clerks. Recently, the purchasing manager discovered that many purchase orders are being sent to the wrong vendor, for the wrong items, and for quantities far greater than would normally be requested.
4. The tellers at Bucks Bank have been having difficulty reconciling their cash drawers. All customer events are entered online at a teller terminal. At the end of the shift, the computer prints a list of the events that have occurred during the shift. The tellers must then review the list to determine that their drawer contains checks, cash, and other documents to support each entry on the list.
5. At Helm Inc., clerks in the accounting offices of Helm'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. Then, 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. At the Baltimore 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 an online computer terminal. The accounts receivable manager has been complaining that the RA entry process is slow and error-prone.
7. Occasionally, the order entry system at Dorsam Inc. fails to record a customer order. After failing to receive an acknowledgment, the customer will call to inquire. Inevitably, the sales clerk will find the customer's order filed with other customer orders that had been entered into the computer. In each case, all indications are that the order had been entered.
8. The Stoughton 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.
9. A computer hacker gained access to the computer system of Big Bucks Bank and entered an event to transfer funds to his bank account in Switzerland.
10. Refer to the vignette at the beginning of the chapter. It describes a botched securities trade caused by a clerk's mistakenly entering the dollar amount of a trade into the box on the computer screen reserved for the number of shares to be sold, and then transmitting the incorrect trade to the stock exchange's computer.