St. Vincent College Business School PDF

ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan...

ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan COO FORM 12 SUBJECT TITLE: AUDITING IN CIS ENVIRONMENT INSTRUCTOR: MARY JANE A. INTAO, CPA SUBJECT CODE: AT4 MODULE 1 TOPIC 1: Basic EDP Concept Learning Objectives: 1. Define data and data processing 2. Discuss the methods of data processing methods 3. Explain the components of Electronic Data Processing NOTES: INTRODUCTION TO DATA PROCESSING Data is a collection of unorganized facts and figures related to an object. Data may be in the form of text, numbers, images, sounds or even videos. Usually, the collected data is not meaningful and is not in proper format. Various operations are performed on collected data to get required results that give proper and useful meanings. Processed data are called information. Related Terms: Term Definition Bit or Binary Digit (O and 1) Used to represent characters Byte Group of bits Fields/Columns Group of bytes Record/ROWS Group of fields File Group of related records Database Group of related files This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 1  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Data processing Data processing is the collection and manipulation of items of data to produce meaningful information. Data processing usually involves the following: a. Originating they originated from source documents b. Validating means checking the accuracy and quality of source data c. Recording to set in writing/documentation and assure the preservation of the data collected d. Classifying the process of organizing data by relevant categories e. Sorting the process of arranging data into meaningful order so that you can analyze it more effectively f. Analyzing extract insights by using of statistical/logical process g. Summarizing process of reducing the complexity and volume of data sets by extracting the most relevant and meaningful information h. Reporting the process of collecting and presenting data in a structured format to facilitate data-driven decision making i. Storing keeping data in the best suitable format and in the best available medium Methods of Data Processing The common methods of data processing are: a. Manual data processing. b. Mechanical data processing. c. Electronic data processing. Manual Data Processing In manual data processing, data is entered and processed by hand without using any machine to achieve the desired results. All the calculations and logical operations are performed manually on the data. Also, data is transferred manually from one place to another. This method of data processing is very slow and errors are likely to occur in the output. Ordinarily, data is processed manually in small business firms as well as in some government offices and institutions. Mechanical Data Processing In mechanical data processing, data is processed by using different devices like typewriters, mechanical printers or other mechanical devices. This method of data processing is faster and more accurate than manual data processing. Printing press use mechanical data processing devices frequently. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 2  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Electronic Data Processing (EDP). Electronic data processing is the modern technique to process data. The data and set of instructions or programs are given to the computer as input. The computer processes data according to given instructions and generates useful information as output. Processed data (or information) is used for making decisions. Information may be further processed to meet the changing requirements of an organization. This method of processing data is very fast and accurate. For instance, in an educational institution, students' data could be analyzed and summarized using different tools. It could also be presented in graphical form. Records of the students can be sorted on the basis of their names or ratings. In banks, accounts of customers are maintained (or processed) through computers. Main Components of An Electronic Data Processing The main components of an EDP system are: a. Hardware. It refers to the physical part or equipment of a computer system such as monitor, keyboard, printer and mouse. b. Software. It refers to the programs used to direct the operation of a computer, as well as documentation giving instructions on how to use them. c. Peopleware. It refers to the human aspect of a computer system and includes the programmers, the IT personnel, and the end users. d. Data and information. It refers to the raw facts to be gathered and processed, and the resulting information to be presented to users as the basis for decision making. e. Procedures. It refers to the process of obtaining data, operating the computer, controlling computer processing, and distributing computer output. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 3  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan TOPIC 2: Basic EDP Concept Hardware and Software Learning Objectives: 1. Define hardware and its main components. 2. Discuss a the function of a Central Processing Unit (CPU) and the peripheral devices that can be attached to a CPU. 3. Explain what are software and its functions 4. Differentiate Multiprogramming from multi-processing NOTES: Hardware A hardware refers to the physical part or equipment of a computer system such as monitor, keyboard, printer and mouse. Main components of hardware Hardware can be either: a. Central processing unit (CPU). The principal hardware of a computer system. b. Peripheral equipment. An auxiliary machine that may be connected or attached to the central processing unit (CPU). Central Processing Unit The central processing unit (CPU) can be divided into: a. Control Unit (CU). The control unit (often called a control system or central controller) manages the computer's various components. Its function is to supervise, monitor, coordinate, control and manage the various operations of the computer. The control unit directs and coordinates the entire computer system in carrying out program instructions. It does not execute the instructions itself but instead directs other parts of the computer system to do so. The control unit supervises the flow of information between various units. It regulates the operations of the computer and enables it to communicate with the operator and other devices in the system. Control units act as a central nervous system for other data-manipulating components of the computer. Control unit can be compared to the brain of the human body that controls the whole body. We perform work with our hands, we can see with our eyes, we can hear with our ears, but all of these are controlled by the brain (CU). This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 4  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan b. Arithmetic and Logic Unit (ALU). The arithmetic and logic unit is the manipulating part of the CPU, where actual data processing occurs. All calculations and comparisons take place in this section. The data and instructions stored in the primary storage prior to processing are transferred as and when needed to the ALU where processing takes place. No processing is done in the primary storage unit. The arithmetic and logic unit is designed to perform the four basic arithmetic operations of addition, subtraction, multiplication and division, and logical operations or comparisons such as equal to, less than or greater than. Because of these capabilities, the ALU is considered the accountant of the computer. c. Primary Memory or Storage Unit (SU). Various types of memory, including RAM and ROM, are often considered to be part of the CPU, particularly in modern microprocessors where a single integrated circuit may contain one or more processors as well as any or all of the above types of memory. The storage unit is a device where information can be stored and from which it can be retrieved at a later time. Information stored in the memory may represent letters, numbers, or graphics; even computer instructions can be placed into memory with equal ease. Since the CPU does not differentiate between different types of information, it is the software's responsibility to give significance to what the memory sees as nothing but a series of numbers. Difference between ROM and RAM Read Only Memory (ROM) A Read Only Memory (ROM) is one in which information is permanently stored. The information from the memory can only be read and it is not possible to write new information into it. When the power supply is switched off, the information stored inside a ROM is not lost. Simply stated, data is written only once and cannot be changed thereafter but can only be retrieved (read). ROM is often used for storing programs which must be permanently held in memory so that the set of instructions is immediately available for execution when power is supplied to the equipment (e.g., operating system). In ROM, the memory device is pre- programmed during the manufacturing stage, leaving the information permanently stored for later retrieval. The concept of permanently installing essential programs into the computer's ROM is called firmware. Random Access Memory Random Access Memory (RAM) is viewed as collection of memory location in which program instructions and data are stored. Each memory location is referenced by a unique address assigned to it. The main memory of the computer is faster compared to external memory. The contents of each memory location are directly accessed in any This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 5  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan random order using the address of location. Reading and writing of data is done electronically without any mechanical movement. The contents of RAM get lost when the computer is turned off, leading to the name "volatile memory’’. The program which is currently being executed and data which is currently being manipulated are transferred from external memory to RAM. Peripheral Devices Attached To A CPU Peripheral devices include: a. Input devices. These are used to read and feed data and instructions into the computer. Common input devices include keyboard, mouse, scanner, joystick, touchscreen monitor, voice recognition, optical scanners, and point of sale (POS) devices. b. Output devices. These are used to display information from the computer or transfer data out of the computer. Examples include monitor, printer, plotter, sound card, and video card. c. Secondary storage devices. These are devices that are external to the CPU which store information that may be subsequently used. Two Types Of External Memory Devices External memory devices are subdivided into two main categories, and these are called: a. Sequential Access Memory. It involves examining all the records in sequence from the beginning to the desired records. This form of storage is non-addressable because an operator cannot directly refer to the contents of a particular storage location. For instance, if data is composed of items from 1 to 100, items 1 to 99 must be read first before reading item 100. Examples of sequential access external storage devices are: Punched paper tape. Data are coded on paper tape in the form of punched holes combination. The tape is normally one inch wide, comes in rolls, and may be used in any length up to several hundred feet. Information is recorded as holes punched in rows across the width of the tape, with one row representing one character. The paper tape media is easily torn and mutilate. Hence, the use of paper tapes as a secondary storage device is very rare nowadays. However, the storage capacity of punched paper tape is virtually unlimited, and the cost per bit stored is very low. Magnetic tape. It is one of the most popular storage mediums for large data that are sequentially accessed and processed. The tape is a plastic ribbon usually 1/2 inch wide that is coated on one side with an iron-oxide material which can be magnetized. The tape ribbon itself is stored in a small cartridge or cassette. It is similar to the tape used on a tape recorder except that it is of higher quality and is more durable. Like recorder tape, computer tape can be erased and reused This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 6  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan indefinitely (destructive media). Old data on a tape are automatically erased as new data are recorded in the same area. b. Direct Access Storage. This form of storage is addressable. A given item can be selected from any place in the storage simply by specifying the address where it is located. Examples of direct access external storage devices are: Floppy disks. This direct access secondary storage medium is very popular for micro- and mini-computers. A floppy disk is made of flexible plastic which is coated with magnetic oxide. The flexible disk is enclosed within a squire plastic of cardboard jacket. The jacket gives handling protection to the disk surface. The floppy disk can be very easily loaded into, and unloaded from, a drive unit. The capacity of diskettes varies depending on their size and type. Floppy disks are very cheap as compared to other storage devices. Magnetic disks. It is a thin, circular metal plate coated on both sides with a magnetic material. It is very similar in appearance to a gramophone record. A disk pack consists of a number of these disks. All the disks of a disk pack move simultaneously in the same direction and at equal speed. Magnetic disks are the most popular medium for direct-access secondary storage. Software Software refers to the programs used to direct the operation of a computer, as well as documentation giving instructions on how to use them. The types of software are: a. System software. A set of one or more programs, designed to control the operation of a computer system. b. Application software. A computer pre-written software that performs specific data processing tasks. Examples include word processors, spreadsheets, presentation designers, database management system, etc. System Software The types of system software are: a. Operating System (OS). Operating System (OS) is a collection of control, processing, and data management programs specially designed to manage the resources of the computer system and to facilitate the creation Of programs and control their executions. OS is comprised of a series of programs that monitor and control the overall operations Of a computer. The leading operating systems for personal computers are DOS' Windows, UNIX and Mac Operating System. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 7  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan b. Utility software. Utility programs enhance the understanding and communication of users with the computer. They handle common routine functions such as file conversion, file copying, making and listing files and folders/directories, comparison of contents, finding, sorting and deletion of files, renaming files, and sending files to printer. c. Communication software. Communication software is any software program that allows computers to connect to one another using the modem and telephone line. A MODEM, short for modulator-demodulator, transforms the computer's digital information into signals (modulate) that can be sent over ordinary phone lines. When the signal reaches its destination, another MODEM transforms the signals received from the phone lines into digital information (demodulate) that can be read by the recipient computer. Single-User vs Multi-User Operating System A single-user operating system is a type of operating system (OS) that is developed and intended for use on a computer or similar machine that will only have a single user at any given time. This is the most common type of OS used on a home computer, as well as on computers in offices and other work environments. There are two general types of single-user systems: a. Single task system. It is developed for use with a computer or electronic device that will only run one application at a time. This type of OS is ordinarily used on devices like wireless phones and two-way messaging devices. A single task operating system can only run one program or application at a time, and so it is not as useful for a computer or other devices intended to run multiple programs at once. b. Multitasking system. This type of operating system can run multiple applications and programs at once. This is often used on computers where someone may wish to browse the Internet, run a graphics editing program, play music through a media playing program, and type using a word processing program all at the same time. Although this type Of operating system can Connect to other computers through a network, it is still being used by a single user only. A multi-user operating system, on the other hand, allows multiple users to access the data and processes of a single machine from different computers or terminals. These were previously often connected to the larger system through a wired network, although wireless networking for this type of system is more common nowadays. A multi-user operating system is often used in businesses and offices where different users need to access the same resources, but these resources cannot be installed on This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 8  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan every system. In a multi-user operating system, the OS must be able to handle the various needs and requests of all of the users effectively. Multiprogramming vs Multiprocessing Multiprogramming permits the running of several programs concurrently; that is, it allows several unrelated programs, probably from many different users, to compete for the processor. Although programs are said to run concurrently, this does not mean that they run simultaneously. The programs actually take turns in using the CPU. For instance, one program could be using the CPU while another program prints a record. The operating system keeps track Of everything and ensures that the programs do not get entangled. Time-sharing is the sharing of a computing resource among many users by means of multiprogramming and multi-tasking. By allowing a large number of users to interact concurrently with a single computer' time-sharing allows a large number of users to interact concurrently with a single computer. In multiprocessing, the CPUs of several computers are linked, or the CPU of a single computer has more than one arithmetic unit. These CPUs or arithmetic units operate in parallel, thereby allowing simultaneous execution of several programs. While multiprogramming uses concurrent processing with one CPU, multiprocessing uses simultaneous processing with multiple CPUs. Programming Languages Language is defined as the communication of thoughts and feelings through a system of arbitrary signals, such as voice sounds, gestures, or written symbols. Similarly, programming languages consisting of symbols and characters are used to permit communication with or between computers. While using a computer language, a programmer instructs a computer what he wants to do. Writing sequence of instructions is called coding. Coding can occur at various levels running from computer basic language called machine language, to English-like statements called natural languages. Programming languages are of several types. These are: a. Machine Language. It is a common language for computers and does not need further translation before being executed by the computer. A program written in machine language is a sequence of 1's and 0’s. This is the fundamental language of a computer, because computer can only understand the language of zero's and one's. b. Assembly Language. Also called symbolic or low level language, assembly language uses mnemonic operation codes and symbolic addresses. A mnemonic is a word or set of letters which can represent a function code and which is easy to remember. A mnemonic (or memory aid) is any kind of mental trick we use to help us remember. Assembly language, however, is machine dependent and needs to be converted into machine language before execution using software called an assembler program. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 9  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan c. High Level or Procedure Oriented Language. It is developed in order to facilitate the programmers in using computers without the need to know in detail the internal structure of the computer. Unlike machine language or assembly language, high level languages are programmer-friendly and machine-independent because they relate to procedure being coded. High level languages use natural languages, and therefore, are easier to use. However, programs written in high level language need to be translated into machine language by using a compiler program. Common examples of high level languages include BASIC FORTRAN, COBOL, C++, Java and Pascal. d. Non Procedural Language or 4GL (4TH Generation Language). Such do not involve writing a detail procedure. In nonprocedural languages, we simply specify what is required and leave the database system to analyze the request and generate the results. 4GLs are essentially shorthanded programming languages. SHAREWARE VS FREEWARE. Shareware is commercial software offered to users without initial charge and is generally offered by established software developers. Oftentimes, it comes with some features disabled and can only be used without charge for a limited period of time. Similarly, freeware is software that is available free of charge. Freeware is distributed without charge because sometimes developers might want to see how users respond to their product, so they can make improvements in a later version. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 10  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan TOPIC 3: Personal Computers Learning Objectives: 1. Define personal computers 2. Differentiate Batch processing and On-line, Real Time (OLRT) processing 3. Discuss the types of online computer system 4. Explain what is a networks, its types and the devices used in a network. 5. Discuss Centralized processing, Decentralized processing, and Distributed processing system NOTES: Personal Computers Personal computers or PCs are economical yet powerful self-contained general purpose computers consisting typically of a central processing unit (CPU), memory, monitor, disk drives, printer cables and modems. Programs and data are stored on removable or nonremovable storage media. A personal computer can be used in various configurations. These include: a. A stand-alone workstation operated by a single user or a number of users at different times. b. A workstation which is part of a local area network of personal computers c. A workstation connected to a server. Internal Controls In A Personal Computer Environment Internal controls in personal computer environments are: a. Management Authorization for Operating Personal Computers b. Physical Security — Equipment c. Physical Security — Removable and Non-Removable Media d. Program and Data Security e. Software and Data Integrity f. Hardware, Software and Data Back-Up a. Management Authorization for Operating Personal Computers As part of the acquisition of an understanding of the control environment, and hence the IT environment for stand-alone PCs, the auditor considers the organizational structure of the entity and the allocation of responsibilities for data processing. Effective policies and procedures for the acquisition, implementation, operation and maintenance of stand-alone PCs can enhance the overall control environment. A failure to implement such policies may lead to the entity using out-of-date programs and to errors in the data and the information derived from them, and This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 11  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan may lead to an increased risk of fraud. Such policies and procedures include the following: a. Acquisition, implementation and documentation standards. b. User training. c. Security, back-up and storage guidelines. d. Password management. e. Personal usage policies. f. Software acquisition and usage standards. g. Data protection standards. h. Program maintenance and technical support. i. An appropriate level of segregation of duties and responsibilities. j. Virus protection. b. Physical Security — Equipment Because of their physical characteristics, stand-alone PCs and their storage media are susceptible to theft, physical damage, unauthorized access or misuse. They can be physically protected by: a. Locking them in a protective room, cabinet or shell. b. Using an alarm system that is activated if the PC is disconnected or moved from its location. c. Fastening the PC to a table. d. Policies outlining the proper procedures to follow when traveling with a laptop or using it off premises. e. Encryption of key files. f. Installing a locking mechanism to control access to the on/off switch. This may not prevent PC theft, but may be effective in controlling unauthorized use. g. Implementing environmental controls to prevent damages from natural disasters, such as fire, floods, etc. c. Physical Security — Removable and Non-Removable Media PC programs and data can be stored on removable or non-removable storage media. For example, CDs and flash drives can be removed physically from the stand-alone PC, while hard disks are normally contained in the PC or in a stand- alone unit attached to it. In addition, the interior components (including the hard drive) of many PCs, in particular laptops, are easily accessible. When many individuals use a particular PC, storage media are more likely to be misplaced, altered without authorization or destroyed. It is the user’s responsibility to protect removable storage media by, for example, keeping current backups of such media in a fireproof container, either on site, off site, or both. This applies equally to operating systems, application programs and data. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 12  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan d. Program and Data Security When PCs are accessible to many users, there is a risk that the operating system, programs and data may be altered without authorization, or that users may install their own versions of programs giving rise to potential software licensing liabilities. The degree of control and security features present in a PC operating system vary. Although some operating systems contain sophisticated built-in security features, those used on stand-alone PCs generally do not. Nevertheless, there are techniques to help ensure data are processed and read as authorized and that accidental destruction of data is minimized. The following techniques can limit access to programs and data to authorized personnel: Using passwords. Implementing an access control package. Using of removable storage media. Using hidden directories and files. Using encryption. Passwords An effective control technique is to use profiles and passwords, which control the level of access granted to a user. For example, a user may be given a profile protected by a password that allows data entry only, and a stand-alone PC might be configured to require a password before it can be “booted-up.” Access Control Package In some instances, an access control package can provide effective control over the access to and use of operating systems, programs and data. For example, only a specific user may have access to the password file or be allowed to install programs. Such packages can also regularly examine programs on the PC to detect whether unauthorized programs or versions of programs are being used. Removable Storage Media The use of removable storage media for critical and sensitive programs and data can provide enhanced protection by being kept off-line and under independent control until required. For example, salary data in a payroll system may be kept off-line and used only when required for payroll processing. Removing programs and data from PCs with removable storage media (for example, CDs and flash drives) is one effective way to keep them secure. The media are then placed in the custody of the file librarians or the users responsible for the data or programs. Hidden Directories and Files A hidden file or folder is just a normal file or folder with a “hidden” option set. Operating systems hide these files by default, so a person can use this trick to hide some files if he shares a computer with someone else. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 13  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Encryption Encryption is a technique that is generally used when sensitive data are transmitted over communication lines, but it can also be used on data stored on a stand-alone PC. Encryption is a process that encodes a message or file so that it can only be read by certain people. It uses an algorithm to scramble, or encrypt, data and then uses a key for the receiving party to unscramble, or decrypt, the information. e. Software and Data Integrity f. Hardware, Software and Data Back-Up In a PC environment, management typically relies on the user to ensure the continued availability of the systems in the event of a failure, loss or destruction of the equipment, operating system, programs or data. This will entail: a. The user retaining copies of the operating systems, programs and data, with at least one copy stored at a secure location away from the PC. b. Access being available to alternative equipment within a reasonable time given the use and importance of the underlying system. Batch Processing System vs Online, Real-Time (OLRT) Processing System. In a batch processing system, like or similar transactions are collected, sorted, and processed against the master files at the end of the day or some other time period. This system usually involves the production of numerous printouts. However, misstatements in a batch processing system caused by incorrect programs or data may not be detected immediately because there are time delays in processing transactions. In contrast, an on-line, real-time (OLRT) processing system is characterized by data that are assembled from more than one location and records that are updated immediately. It involves the posting of a transaction, as it occurs, to several files, without immediate printouts. Online Computer Systems On-line computer systems are computer systems that enable users to access data and programs directly through workstations. On-line systems allow users to initiate various functions directly. Such functions include: a. Entering transactions (e.g., sales transactions in a retail store, cash withdrawals in a bank and shipment of goods in a warehouse). b. Making inquiries (e.g., current bank account balance information). c. Requesting reports (e.g., a list of inventory items with negative "on hand" quantities). d. Updating master files (e.g., setting up new customer accounts). This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 14  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Workstations That May Be Used On On-Line Computer Systems The types of workstations that may be used on on-line computer systems are: a. General Purpose Terminals. the hardware used to enter, retrieve, and display electronic data Basic keyboard and monitor. Used for entering data without any validation within the terminal and for displaying data from the computer system on the monitor. Intelligent terminal. Used for the functions of the basic keyboard and monitor with the additional functions of validating data within the terminal, maintaining transaction logs and performing other local processing, Personal computers. Used for all of the functions of an intelligent terminal with additional local processing and storage capabilities. b. Special Purpose Terminals. Point of sale devices (POS). Used to record sales transactions as they occur and to transmit them to the main computer. Automated teller machines (ATM). Used to initiate, validate, record, transmit and complete various banking transactions. Types Of On-Line Computer Systems On-line computer systems may be as follows: a. On-Line / Real Time Processing (OLRT). A system where individual transactions are entered at workstations, validated and used to update related computer files immediately. b. On-Line / Batch Processing. A system where individual transactions are entered at a workstation, subjected to certain validation checks and added to a transaction file that contains other transactions entered during the period. c. On-Line / Memo Update (and Subsequent Processing). A system that combines on-line/real time processing and online/batch processing. Individual transactions immediately update a memo file containing information which has been extracted from the most recent version of the master file. d. On-Line / Inquiry. A system that restricts users at workstations to making inquiries of master files. e. On-Line Downloading Processing. It refers to the transfer of data from a master file to a workstation for, further processing by the user. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 15  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan f. On-Line Uploading Processing. It refers to the transfer of processed data from a remote workstation to the master file. NETWORK A network is a communication system that enables computer Users to share computer equipment, application software, data and voice and video transmissions. A file server is a computer with an operating system that allows multiple users on a network to access software applications and data files. It is considered a host machine. Users of the programs in the file server are called clients. Common Types Of Network There are many types of computer networks, the most common of which are: a. Home Area Network (HAN). A network contained within a user's home that connects a person's digital devices. b. Local Area Network (LAN). The computers are situated in a single geographical location, but could include many users from various floors and/or departments within a building. c. Campus Area Network (CAN). The computers are within a limited geographical area, such as a campus, family compound or military base. d. Metropolitan Area Network (MAN). A type of network that is designed for a town or a city. e. Wide Area Network (WAN). It is created to connect two or more geographically separated LANs using telephone lines or radio waves. Networking Devices. Some of the more common networking devices are: a. Gateway. A hardware and software solution that enables communications between two dissimilar networking systems or protocols. b. Bridge. A device that connects and passes packets between two network segments that use the same communication protocol. c. Router. A device that works to control the flow of data between two or more network segments. d. Repeater. A device that regenerates and retransmits the signal on a network. e. Switch. A device that forwards frames based on destination addresses. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 16  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Internal Controls In An Online Computer Environment CIS general controls include: related to the security, use, or design of computer programs. a. Access controls. Procedures designed to restrict access to programs and data. b. Controls over user IDs and passwords. Procedures for the assignment and maintenance of passwords to restrict access to authorized users. c. System development and maintenance controls. Additional procedures to ensure that controls essential to on-line applications are included in the system during its development and maintenance. d. Programming controls. Procedures designed to prevent or detect improper changes to computer programs, which are accessed through on-line workstations. e. Transaction logs. Reports, which are designed to create an audit trail, for each on-line transaction. f. Use of anti-virus software program. Virus scans can be run on every workstation daily and set to scan all files. CIS application controls include: relate to the accuracy and completeness of the data entered into the systems. a. Pre-processing authorization. Permission to initiate a transaction. b. Edit, reasonableness and other validation tests. Programmed routines that check the input data and processing results for completeness, accuracy and reasonableness. c. Cut-off procedures. Procedures which ensure that transactions are processed in the proper accounting period d. File controls. Procedures which ensure that the correct data files are used for on- line processing. e. Master file controls. Changes to master files are controlled by procedures similar to those used for controlling other input f. Balancing. The process of establishing control totals over data being submitted for processing through work stations and comparing the control totals during and after processing to ensure that complete and accurate data are transferred to each processing phase. g. Rejected data. Procedures to ensure that rejected items are complete prior to their reprocessing into the system. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 17  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan Difference Between Centralized And Decentralized Processing. In a centralized information system, processing is performed in one computer at a single location. It is usually based on a centrally situated mainframe where all processing and storage operations have effect at a central location. This kind of system is typically intended to computerize a diversity of operations within the organization. Decentralized information system is characterized by built up Of computers systems in different locations. In this system, data is processed in stand-alone or localized computers. One benefit of a decentralized system is that users have more immediate access to information and do not have to wait for processing time as they might have to with a centralized system. Distributed processing system Distributed processing refers to a variety of computer systems that use more than one computer to run an application. This includes parallel processing in which a single computer uses more than one CPU to execute programs. Usually, however, distributed processing refers to local area networks (LANs) designed so that a single program can run simultaneously at various sites. Database Management System (DBMS) A database is a collection of data that is stored in an efficient and compact manner, and that is shared and used by a number of different users for different purposes. A database management system (DBMS) is a collection of programs, which are used to define, create and maintain databases. Basically, DBMS is a general-purpose software package whose overall purpose is to create and maintain information and to make that information available on demand. DBMS software has the following major functions: a. Defining the structure of database. It involves defining tables, fields and their data types. constraints for data to be stored in the database, and the relationships among tables. b. Populating the database. It involves storing data into database. c. Manipulating the database. It involves retrieving, updating, deleting and inserting new data, and generating reports. A database administrator is usually responsible for managing the overall database management system is called the database administrator (DBA). Advantages Of Using DBMS The DBMS has a number of advantages as compared to traditional data processing systems. These are: a. Reduction of data redundancy. In DBMS, all the data of an organization is integrated into a single database. The data is recorded at only one place in the database and it is not duplicated. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 18  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan b. Data consistency. By controlling data redundancy, data consistency is obtained. If a data item appears only once, any update to its value has to be performed only once and the updated value is immediately available to all authorized users. c. Data Sharing. It means that individual pieces of data in the database can be shared among different authorized users. d. Data security. It serves as protection of the database from unauthorized users. Only authorized persons are allowed to access the database. e. Database Access Language. It is used to communicate (or to access) the data to and from the database. The users use the database access language to enter new data, change the existing data in database, and retrieve required data from databases. f. Backup and Recovery Procedures. Most DBMSs provide the 'backup and recovery' sub-systems that automatically create the backup of data and restore data if required. g. Data Independence. There is separation of data structure of database from the application program that is used to access data from database. Types of access control policies that may exist in a DBMS The types of access control policies that may exist in database systems are: a. Discretionary access control policies. It allows users to specify who can access data they own and what action privileges they have with respect to that data. ◼ Name-dependent restrictions. Users either have access to a named data resource or they do not have access to the resource. ◼ Content-dependent restriction. Users are permitted or denied access to a data resource depending on its contents, ◼ Context-dependent restriction. Users are permitted or denied access to data resource depending on the context in which they are seeking access. ◼ History-dependent restriction. Users are permitted or denied access to data resource depending on the time series of accesses to and actions they have undertaken on data resources. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 19  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan b. Mandatory access control policies. It requires a database administrator to assign security attributes to data that cannot be changed by database users. END OF MODULE. BASIC EDP CONCEPTS EXERCISES 1. In an inventory system on a database management system (DBMS), one stored record contains number, part name, part color, and part weight. These individual items are called a. Fields. c. Bytes. b. Stored files. d. Occurrences. 2. An inventory clerk, using a computer terminal, views the following on screen: part number, part description, quantity on-hand, quantity on-order, order quantity and reorder point for a particular inventory item. Collectively, these data make up a a. Field. c. Database. b. File. d. Record. 3. Banks are required to process many transactions from paper documents (e.g., checks, deposit slips) during the course of an average business day. This requires a reliable, yet economical form of input. The most common source of automation device used by banks is a. A disk pack. b. Magnetic tape. c. Magnetic ink character recognition (MICR). d. Bar coding. 4. Which of the following statements about personal computers, midrange computers, and mainframe computers is true? a. Personal computers usually cost more than midrange computers but less than mainframes. b. Because of the increased use of personal computers, there will be little need for mainframes in the near future. c. Midrange computers must be programmed directly in machine language while mainframes use higher-level language. d. The cost per transaction to process on each type of computer has decreased in recent years. 5. Which of the following measures would indicate the computational power of a microprocessor? a. Capacity of the hard disk. b. Main memory storage capacity. c. Number of bits processed per second. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 20  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan d. Read only memory. 6. Uninterruptible power supplies (UPS) are used in computer centers to reduce the likelihood of a. Failing to control concurrent access to data. b. Losing data stored in main memory. c. Dropping bits in data transmission. d. Crashing disk drive read-write heads. 7. The relationship between online, real-time database systems and batch processing systems is that a. A firm will have only one processing mode because a single computer cannot do both. b. A firm will not use batch processing if it has a large computer. c. A firm may use both processing modes concurrently. d. A firm will always prefer an online, real-time processing system because batch processing is slow. 8. A system in which the master files are updated in batch mode overnight and duplicated copies of the files are updated and queried during the day best describes which of the following online systems? a. Online updating. c. Remote job entry. b. Memo updating. d. Inquiry. 9. Data processing assigns a unique identification code or key to each data record. Which of the following statements about coding is false? a. A primary key is the main code used to store and locate records within a file. b. Records can be sorted, and temporary files created, using codes other than their primary keys. c. Secondary keys are used when the primary keys cannot be found. d. Secondary keys are used for alternative purposes, including inverted files, and a given data record may have more than one secondary key. 10. The brand managers spreadsheets tried to for import analysis. the POS Their data efforts into personal were computer unsuccessful, most likely because of a. The complexity of the mainframe data structure and the large volume of data. b. The difficulty of establishing access privileges for each subset of the mainframe data. c. Inconsistencies in the mainframe data due to lack of integrity constraints on the data files. d. Error-prone transmission links for downloading the data from the mainframe data files. 11. Which of the following is usually a benefit of using electronic funds transfer (EFT) for international cash transactions? a. Improvement of the audit trail for cash receipts and disbursements. b. Creation of self-monitoring access controls. This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 21  ST. VINCENT COLLEGE Business School Leganes Pototan Ivisan c. Reduction of the frequency of data entry errors. d. Off-site storage of source documents for cash transactions, 12. A program that edits a group of source language statements for syntax errors and translates the statements into an object program is a(n) a. Interpreter. c. Debugger. b. Compiler. d. Encrypter. 13. A computer program that produces periodic payrolls and reports. c. Report generator. a. Operating system. c. Report generator. b. Application program. d. Utility program. 14. Software offered to users on a "try before you buy" basis is called a. Shareware. C. Middleware. b. Firmware. D. Freeware. 15. A business has decided to use magnetic disks to store accounts receivable information. What data file concepts should be used to provide the ability to answer customer inquiries as they are received? a. Sequential storage and chains. b. Sequential storage and indexes. c. Record keys, indexes, and pointers. d. Inverted file structure, indexes, and internal labels. END. Suggested Answer: 1 A 6 B 11 C 2 D 7 C 12 B 3 C 8 B 13 B 4 D 9 C 14 A 5 C 10 A 15 C This is a property of St. Vincent College. Any unauthorized reproductions is prohibited. 22