Information Systems Questions
Question: What are the two major premises of internal control processes? Explain these premises and the importance of these premises.
Answer:
The two major premises of internal control processes are responsibility and reasonable assurance. Responsibility has to do with management and the board of directors being responsible for establishing and maintaining the internal control process. Even though specific duties will be delegated to subordinates, the ultimate responsibility remains with management and the board of directors. The control over internal processes and to make sure it is implemented is the management and board of director’s responsibility. Reasonable assurance has do to with the relative costs and benefits of controls. Management should not spend more on controls than the benefits to be received from these controls. If the cost of the control exceeds revenue than it is not rational to implement this control. It is often difficult to measure costs and benefits when there are intangible factors that are considered, such as reputation of a company. Management must exercise its judgment to attain reasonable assurance that its control objectives are being met. Management must remember they are responsible for internal controls and they must take reasonable assurance when making control decisions.
Question: What is the attribute rating approach to vendor selection and what steps are needed to be taken when using this approach? When is attribute rating most useful?
Answer:
Attribute rating is an approach to vendor selection that identifies, lists, and evaluates several different aspects concerning a vendor. It is used whenever an objective evaluation of the opinions of several independent evaluators is desired. The steps involved are identify and list the attributes, assign a weight to each attribute based on the relative importance and objectivity, have individual evaluators rank...
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