Reference no: EM133115561

Question - Internal Control - Acme has retail clothing stores in the United States and Europe that transmit daily sales data to the corporate office to be posted in the general ledger. Each day, the store sales team enter the sales transactions as well as customer credit card payments into the sales system. The system will alert the user if a negative cost or an invalid stock number has been entered. At the end of the day, a batch total is created. The system summarizes the information to send and the batch total is checked again to ensure that it is still the same. The files are then encrypted and transmitted to the corporate office via the Internet. The receiver of the information checks the batch total before uploading the information to the general ledger and then sends the store a summary report of the activity received. The servers that house the general ledger system are kept in the basement of the corporate office in a locked room. Acme limits access to the information to authorized users and maintain records of all usage. The desktops used for receiving the transmissions are password protected.

a. Explain input controls, processing controls, and output controls and identify one of each in this scenario.

b. Define data encryption and describe why there is a much greater need for data encryption methods when using the Internet.

c. Identify two procedures that Acme could implement to better limit access to its physical hardware.

d. Identify two ways that Acme could limit access to its data and computer programs to authorized users.

e. How can separation of duties enhance systems security?

f. Identify two accounting system duties that should be kept separate to improve internal controls.