Information Systems Control

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Questions and Answers

Which type of control primarily focuses on ensuring data is delivered accurately and consistently to users?

Physical Component Controls

Communication Controls

Output Controls (correct)

Cryptographic Controls

What is the primary purpose of using cryptographic controls in data processing?

To prevent accidental data loss on storage media

To manage physical access to IT equipment

To secure transaction data before it's processed (correct)

To validate file integrity during data transfers

What category of controls is designed to mitigate risks associated with the hardware and physical aspects of data processing?

Communication Controls

Software Controls

Physical Component Controls (correct)

Output Controls

What is the main aim of implementing software controls in data processing?

To validate checks and maintain data integrity (B) Signup and view all the answers

What is the purpose of line error controls within communication systems?

To detect and correct errors of data transmissions (D) Signup and view all the answers

Which of the following is NOT a primary function of incident response?

Modifying system reboot procedures. (A) Signup and view all the answers

In what context are 'rerun procedures' usually categorized?

Contingency planning (C) Signup and view all the answers

What is the primary purpose of directive controls?

To provide specific directions to staff. (C) Signup and view all the answers

Which action best describes a directive control in practice?

Providing guidelines for handling a security breach (B) Signup and view all the answers

Which of these characteristics is NOT typical of directive controls?

They are complex to implement as it involves decision making (A) Signup and view all the answers

What is a key step for management when implementing directive controls?

Ensuring that directives are approved for compliance (C) Signup and view all the answers

How do corrective controls differ from directive controls?

Corrective controls aim to rectify damage, whereas directives give instructions (D) Signup and view all the answers

What would be an immediate response that directive controls help facilitate?

Responding to a detected risk event (B) Signup and view all the answers

Which of the following is NOT a primary objective of controls within an information system?

Predictive (C) Signup and view all the answers

Which control type primarily focuses on preventing errors or irregularities from occurring in the first place?

Preventive (D) Signup and view all the answers

Which of the following control classifications is related to how information systems resources are physically accessed?

Physical Access (D) Signup and view all the answers

Which of the following is considered a management control framework?

Management Control Framework (B) Signup and view all the answers

According to the provided information, which type of software did ABC Multispecialty Hospital start using in the early 90s?

Specific software for recording daily financial transactions (C) Signup and view all the answers

What is the approximate number of total employees, including doctors and administrative staff, at ABC Multispecialty Hospital?

3000 (C) Signup and view all the answers

What is the term used for the type of controls that focus on taking actions to minimize or eliminate the impact of an error after it has been identified?

Corrective controls (C) Signup and view all the answers

Besides critical care, what other two service lines are mentioned as areas where ABC Multispecialty Hospital has been a market leader?

Ambulatory care and home health care (A) Signup and view all the answers

Which method provides the most secure user authentication based on risk assessment?

Biometric Authentication and/or Digital Certificates (D) Signup and view all the answers

What is a critical security measure for managing stored passwords in an operating system?

Using one-way hashing algorithms and encrypting the password file (B) Signup and view all the answers

Which user should primarily have access to system utilities?

System administrator only (A) Signup and view all the answers

What is the primary function of a duress alarm in a system?

To alert authorities when a user is forced to perform an action (D) Signup and view all the answers

What is the purpose of a 'terminal time out' security measure?

To log out a user if their terminal is inactive for a period to prevent misuse (D) Signup and view all the answers

What is the main control provided by 'Limitation of connection time'?

To limit or deny system access outside specific schedules (B) Signup and view all the answers

How does an application's menu interface contribute to information access restriction?

It limits access to specific functions and information based on user roles. (D) Signup and view all the answers

What should be the primary consideration when designing a duress alarm?

It must be simple enough to operate under stressful conditions. (A) Signup and view all the answers

What is a significant risk associated with portable computers in an organization?

Theft of data from the hard drive. (A) Signup and view all the answers

Which of the following security measures is NOT mentioned as critical for portable computing devices?

GPS tracking of devices. (C) Signup and view all the answers

Why is implementing a Virtual Private Network (VPN) recommended for employees working from home?

To establish a secure channel for data sharing with remote workers. (B) Signup and view all the answers

What is the primary focus of the Management Control Framework in IT?

Reviewing and securing management functions for information systems. (C) Signup and view all the answers

According to the provided text, what is the responsibility of top management regarding IT controls?

To determine the sufficiency of IT controls in meeting business objectives. (C) Signup and view all the answers

What does the scope of control include for Top Management, as outlined in the text?

Formulating high-level IT policies and procedures to establish a sound internal control framework. (A) Signup and view all the answers

Which of these options BEST describes the role of the Management Control Framework?

To ensure management functions are reviewed and controlled in a planned manner. (A) Signup and view all the answers

What is the primary goal of having top management controls on IT systems?

To ensure IT functions correctly and meets strategic objectives. (B) Signup and view all the answers

What is the primary purpose of an emergency power-off switch in a data center?

To allow quick and safe shutdown of equipment in emergency situations. (C) Signup and view all the answers

Why are redundant power links important for data centers?

To ensure a consistent supply of power to all equipment even when one source fails. (C) Signup and view all the answers

Where should water detectors typically be placed in a computer room?

Under raised floors, near drain holes, and around unattended equipment. (D) Signup and view all the answers

Why is it generally not advisable to place a computer room in the basement of a multi-story building?

To reduce vulnerability to floods and water damage. (D) Signup and view all the answers

Apart from physical barriers, what is another method to protect an installation from water damage in flood-prone areas?

Locating the installation on upper floors while avoiding the top floor. (D) Signup and view all the answers

What is the most significant pollutant within a computer installation, which can cause physical damage to the hardware?

Dust accumulation on storage devices. (C) Signup and view all the answers

Why are eating, drinking, and smoking typically prohibited within an information processing facility?

To keep the environment free from potential pollutants that can harm the equipment. (A) Signup and view all the answers

What are Physical Access Controls Primarily intended to safeguard?

The physical and digital assets of an information processing facility. (B) Signup and view all the answers

Study Notes

UNIT - III INFORMATION SYSTEMS' CONTROLS

Information systems controls are a crucial aspect of any organization
Understanding the Internal Control Framework and its components is essential
Various control types exist, categorized by different parameters
Controls are classified based on the 'Objective of Controls', 'Nature of information system resources', and 'Audit Perspective'
Auditors play a key role in inspecting and evaluating these controls
A detailed understanding of control activities is vital

CHAPTER 8 INFORMATION SYSTEMS' CONTROL AND ITS CLASSIFICATION

Learning Outcomes:
- Establish an understanding of Internal Control Framework and its components
- Build a detailed understanding of various control types
- Comprehend controls based on 'Objective of Controls'
- Classify controls based on 'Nature of information system resources'
- Understand controls based on 'Audit perspective'
- Understand controls based on 'Control Activities'
- Know the role of auditors while inspecting controls

CHAPTER OVERVIEW

Objectives of Controls:
- Preventive
- Detective
- Corrective
- Directive
Nature of IS Resources:
- Environmental
- Physical Access
- Logical Access
Classification Criteria
Audit Perspective
Application Control Framework
Management Control Framework
Information Technology
Control Activities
Physical Activities

ILLUSTRATION: ABC MULTISPECIALTY HOSPITAL

ABC Multispecialty Hospital is a prominent national hospital and medical college
Has 250 patient beds and over 3000 employees
Market leader in critical care, ambulatory care, and home health care
Used specific software for daily financial transactions, upgraded regularly
Faced challenges in regulatory compliances and market factors leading to falling annual profits
Implemented a Business Process Re-engineering effort to reduce operating costs by 10%

PROBLEM RAISED

Falling annual profits due to regulatory changes and market factors
Increasing competition, pressure to reduce operating costs

SOLUTION FOUND

Formed ten groups (finance, information systems, nursing, ancillary services, laboratory, administrative, pharmacy, radiology, supportive services, and physician services) to review overall hospital operations
Conducted a three-day orientation and training session for the groups, with a management consulting company
The Accounts department studied and improved the Financial Accounting System; Reduced staff by removing unnecessary positions
Resolved vendor payment issues and resolved conflict over slow payments
Found a qualified candidate to fill a vacant position, who was the son of existing hospital staff

ISSUES FOUND BY STAKE HOLDERS

Internal audit department (CISA) conducts internal audits on various hospital business processes, including finance
This identified that Mr. Mahesh's father worked in hospital as well
The situation in the accounts department conflicted with the hospital's policy against nepotism

DISCOVERY OF FRAUD

CFO discovered six cash disbursements totaling ₹80,000 made to Mr. Mahesh
Internal Audit Manager, Mr. Pankaj, investigated
Mr. Mahesh had forged six cash disbursement forms, including vendor invoices
Mr. Mahesh input fraudulent data into the accounts payable module under his own vendor account
Assigned responsibility for semi-weekly cash disbursement and created fraudulent cheques
Successfully performed this fraud by utilizing hospital’s standard operating procedure for all employees in the IT and Finance departments

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Dive into Chapter 8 of Information Systems' Control and its Classification. This quiz will test your understanding of the Internal Control Framework and the various types of controls based on purpose, resources, and audit perspectives. Get ready to explore the essential role of auditors in evaluating control activities.

Information Systems Control - Chapter 8

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