Information Technology Auditing 4e James A Hall

Information Technology Auditing 4th Edition James A Hall

Chapter 11—Enterprise Resource Planning Systems

 

TRUE/FALSE

 

1. The primary goal of installing an ERP system is reducing system maintenance costs.

 

ANS:  F                    PTS:   1

 

2. The recommended data architecture for an ERP includes separate operational and data warehouse databases.

 

ANS:  T                    PTS:   1

 

3. A closed database architecture shares data easily.

 

ANS:  F                    PTS:   1

 

4. ERP systems support a smooth and seamless flow of information across organizations.

 

ANS:  T                    PTS:   1

 

5. OLAP stands for on-line application processing.

 

ANS:  F                    PTS:   1

 

6. Almost all ERP implementations involve an outside consultant.

 

ANS:  T                    PTS:   1

 

7. Day-to-day transactions are stored in the operational database.

 

ANS:  T                    PTS:   1

 

8. Data mining typically focuses on the operational databases.

 

ANS:  F                    PTS:   1

 

9. Companies are more likely to modify an ERP to accommodate the company than to modify company processes to accommodate the ERP.

 

ANS:  F                    PTS:   1

 

10. If a chosen ERP cannot handle a specific company process bolt-on software may be available.

 

ANS:  T                    PTS:   1

 

11. Core applications are also called OLAP.

 

ANS:  F                    PTS:   1

 

12. The client/server model is a form of network topology in which user computers, called clients, access ERP programs and data via a host computer called a server.

 

ANS:  T                    PTS:   1

 

13. A data warehouse is a relational or multi-dimensional database that may require hundreds of gigabytes of storage.

 

ANS:  T                    PTS:   1

 

14. Drill-down capability is an OLAP feature of data mining tools.

 

ANS:  T                    PTS:   1

 

15. Supply-chain management software is a type of program that supports efforts relative to moving goods from the raw material stage to the customer.

 

ANS:  T                    PTS:   1

 

16. In two-tier architecture, the database and application functions are separated.

 

ANS:  F                    PTS:   1

 

17. Slicing and dicing permits the disaggregation of data to reveal underlying details.

 

ANS:  F                    PTS:   1

 

18. Data entered into the data warehouse must be normalized.

 

ANS:  F                    PTS:   1

 

19. OLAP includes decision support, modeling, information retrieval, and what-if analysis.

 

ANS:  T                    PTS:   1

 

20. Efficient supply-chain management provides firms with a competitive advantage.

 

ANS:  T                    PTS:   1

 

21. The big-bang approach involves converting from old legacy systems to the new ERP in one implementation step.

 

ANS:  T                    PTS:   1

 

22. In a two-tier architecture approach is used primarily for wide area network (WAN) applications.

 

ANS:  F                    PTS:   1

 

 

 

23. Data cleansing is a step performed by external auditors to identify and repairing invalid data prior to the audit.

 

ANS:  F                    PTS:   1

 

24. Organizations using ERP systems employ an internal control tool called a role.

 

ANS: T                    PTS:   1

 

 

25. In spite of the high technology employed in ERP systems, critical business controls such as a three way match always performed manually.

 

ANS:  F                    PTS:   1

 

 

26. The role model assigns specific access privileges directly to individuals.

 

ANS:  F                    PTS:   1

 

27. An access control list specifies the user-ID, the resources available to the user, and the level of permission granted.

 

ANS:  T                    PTS:   1

 

 

28. RBAC assigns access permissions to the role an individual plays in the organization rather than directly to the individual.

 

ANS:  T                    PTS:   1

 

 

29. A problem with RBAC is that managers tend to create unnecessary roles

 

ANS:  T                    PTS:   1

 

 

30. The implementation of an ERP creates an environment with a single point of failure, which places the organization at risk.

 

ANS:  T                    PTS:   1

 

 

 

 

 

 

 

 

 

 

MULTIPLE CHOICE

 

1. Goals of ERP include all of the following except

a.	improved customer service
b.	improvements of legacy systems
c.	reduced production time
d.	increased production

 

 

ANS:  B                    PTS:   1

 

2. Core applications are

a.	sales and distribution
b.	business planning
c.	shop floor control and logistics
d.	all of the above

 

 

ANS:  D                    PTS:   1

 

3. Data warehousing processes does not include

a.	modeling data
b.	condensing data
c.	extracting data
d.	transforming data

 

 

ANS:  B                    PTS:   1

 

4. Which of the following is usually not part of an ERP’s core applications?

a.	OLTP applications
b.	sales and distribution applications
c.	business planning applications
d.	OLAP applications

 

 

ANS:  D                    PTS:   1

 

5. Which of the following is usually not part of an ERP’s OLAP applications?

a.	logistics
b.	decision support systems
c.	ad hoc analysis
d.	what-if analysis

 

 

ANS:  A                    PTS:   1

 

6. Which of the following statements is least likely to be true about a data warehouse?

a.	It is constructed for quick searching and ad hoc queries.
b.	It was an original part of all ERP systems.
c.	It contains data that are normally extracted periodically from the operating databases.
d.	It may be deployed by organizations that have not implemented an ERP.

 

 

ANS:  B                    PTS:   1

 

 

 

 

7. Which of the following statements is not true?

a.	In a typical two-tier client server system, the server handles both application and database duties.
b.	Client computers are responsible for presenting data to the user and passing user input back to the server.
c.	In three-tier client server architecture, one tier is for user presentations, one is for database and applications, and the third is for Internet access.
d.	The database and application functions are separate in the three-tier model.

 

 

ANS:  C                    PTS:   1

 

8. Which statements about data warehousing is not correct?

a.	The data warehouse should be separate from the operational system.
b.	Data cleansing is a process of transforming data into standard form.
c.	Drill-down is a data-mining tool available to users of OLAP.
d.	Normalization is an requirement of databases included in a data warehouse.

 

 

ANS:  D                    PTS:   1

 

9. Which statement about ERP installation is least accurate?

a.	For the ERP to be successful, process reengineering must occur.
b.	ERP fails because some important business process is not supported.
c.	When a business is diversified, little is gained from ERP installation.
d.	The phased-in approach is more suited to diversified businesses.

 

 

ANS:  C                    PTS:   1

 

10. Which statement is true?

a.	ERPs are infinitely scalable.
b.	Performance problems usually stem from technical problems, not business process reengineering.
c.	The better ERP can handle any problems an organization can have.
d.	ERP systems can be modified using bolt-on software.

 

 

ANS:  D                    PTS:   1

 

11. Legacy systems are

a.	old manual systems that are still in place.
b.	flat file mainframe systems developed before client-server computing became standard.
c.	stable database systems after debugging.
d.	advanced systems without a data warehouse.

 

 

ANS:  B                    PTS:   1

 

12. A data mart is

a.	another name for a data warehouse.
b.	a database that provides data to an organization’s customers.
c.	an enterprise resource planning system.
d.	a data warehouse created for a single function or department.

 

 

ANS:  D                    PTS:   1

 

 

13. Most ERPs are based on which network model?

a.	peer to peer
b.	client-server
c.	ring topology
d.	bus topology

 

 

ANS:  B                    PTS:   1

 

14. On-line transaction processing programs

a.	are bolt-on programs used with commercially available ERSs.
b.	are available in two models–two-tier and three-tier.
c.	handle large numbers of relatively simple transactions.
d.	allow users to analyze complex data relationships.

 

 

ANS:  C                    PTS:   1

 

15. Supply chain management software

a.	is typically under the control of external partners in the chain.
b.	links all of the partners in the chain, including vendors, carriers, third-party firms, and information systems providers.
c.	cannot be integrated into an overall ERP.
d.	none of the above

 

 

ANS:  B                    PTS:   1

 

16. The setup of a data warehouse includes

a.	modeling the data
b.	extracting data from operational databases
c.	cleansing the data
d.	all of the above

 

 

ANS:  D                    PTS:   1

 

17. Extracting data for a data warehouse

a.	cannot be done from flat files.
b.	should only involve active files.
c.	requires that the files be out of service.
d.	follows the cleansing of data.

 

 

ANS:  C                    PTS:   1

 

18. Data cleansing involves all of the following except

a.	filtering out or repairing invalid data
b.	summarizing data for ease of extraction
c.	transforming data into standard business terms
d.	formatting data from legacy systems

 

 

ANS:  B                    PTS:   1