CPA Isc Quiz: Master Data And Data Controls

Question 1

1. Master data quality problem - duplicate and inconsistent records across systems indicate a lack of master data governance and a single authoritative source.
2. System integration failure caused by API connectivity issues.
3. User access control problem requiring additional access restrictions.
4. Data encryption failure exposing customer data to unauthorized modification.

Question 2

1. Encrypting all vendor records in the vendor master file.
2. Running monthly reports of all active vendors for management review.
3. Requiring that all new vendor additions be approved by an authorized manager who is independent of the accounts payable processing function, with supporting documentation.
4. Requiring vendors to sign a confidentiality agreement before being added.

Question 3

1. Delete all inactive customer records immediately to clean up the database.
2. Encrypt the inactive records to protect them from unauthorized access.
3. Move all inactive records to a separate, unauthorized-access database.
4. Review inactive records against retention policies and applicable regulatory requirements, archiving or inactivating records as appropriate while maintaining required records for the mandated period.

Question 4

1. An automated report comparing all vendor master file changes to approved change requests, with unexplained changes escalated to management for investigation.
2. Encrypting all vendor records to prevent unauthorized modifications.
3. Requiring all vendors to confirm their information annually by mail.
4. Restricting access to vendor master data to read-only for all employees.

Question 5

1. The HR system has insufficient capacity to process all employee changes.
2. The access management system does not support automated updates.
3. An interface or automated provisioning control failure - the HR-to-access management integration did not consistently update access rights when employees changed departments.
4. A minor documentation issue that can be resolved with a memo from the HR department.

Question 6

1. A formal change control process requiring documentation, business justification, and appropriate management approval for all additions, modifications, or deletions of GL accounts.
2. Encrypting the chart of accounts to prevent unauthorized viewing.
3. Requiring all employees to verify the chart of accounts annually.
4. Running an automated comparison of the COA to industry benchmarks each quarter.

Question 7

1. Encrypt all customer records to comply with data privacy regulations.
2. Back up the customer database on a daily basis.
3. Monitor and enforce data quality standards, resolve duplicate and inconsistent records, and serve as the accountable party for the accuracy and integrity of customer master data.
4. Restrict access to customer data to the sales department only.

Question 8

1. Payroll staff may change bank accounts for legitimate employees who lost access to their accounts.
2. Bank account changes will cause payroll processing to run slower.
3. Employees will have difficulty receiving their pay if accounts are changed incorrectly.
4. Payroll staff could redirect payroll funds to personal accounts by changing bank account numbers for other employees, a form of payroll diversion fraud.

Question 9

1. A data quality control failure - negative prices are likely data entry errors or unauthorized modifications that could result in customers being paid to purchase products, causing revenue and financial reporting errors.
2. A system configuration setting allowing price promotions.
3. Normal pricing variations within acceptable business rules.
4. A minor finding since only 0.25% of products are affected.

Question 10

1. The customer management system will require additional storage capacity.
2. Customer service staff will have difficulty navigating the customer database.
3. Billing errors, shipments to wrong addresses, incorrect tax calculations, and inaccurate accounts receivable records could result from using stale customer data in transactions.
4. Marketing campaigns will be less effective due to outdated customer preferences.

Question 11

1. A processing control that validates bank account numbers after payments are made.
2. An output control that generates alerts about suspicious vendor payments.
3. An access control restricting which users can update vendor bank accounts.
4. An input/master data validation control that prevents duplicate bank account numbers in the vendor master file - directly blocking a common fictitious vendor fraud technique.

Question 12

1. The inventory system will display items in the wrong location.
2. Inventory quantities and values will be materially misstated - the correct count is 1,200 units but the system records 100, significantly understating inventory and potentially COGS.
3. The warehouse will have difficulty physically locating the items.
4. The purchasing department will order too much inventory in future periods.

Question 13

1. Segregation of duties requiring that pay rate changes be initiated by HR and approved by management, with a separate reviewer comparing authorized rates to processed payroll.
2. Encrypting all pay rate data to prevent unauthorized reading of salary information.
3. Requiring employees to confirm their pay rate each month via a self-service portal.
4. Archiving all historical pay rate data for regulatory compliance.

Question 14

1. Delete all 340 unused accounts to simplify the financial reporting structure.
2. No action required since unused accounts do not create risks.
3. Review the unused accounts, inactivate those with no legitimate future business purpose, and document the disposition - reducing the COA complexity and eliminating potential vehicles for unauthorized transaction recording.
4. Transfer all unused accounts to a contingency reserve category.

Question 15

1. Encrypting vendor bank account numbers in the vendor master file.
2. Limiting vendor access to the accounts payable system.
3. Sending payment confirmation emails to vendors after each payment.
4. Requiring that changes to vendor bank account information be verified by calling the vendor using a phone number from the original vendor contract (not the number provided in the change request).

Question 16

1. Normal vendor onboarding activity for a new geographic market.
2. Automatic vendor creation triggered by EDI purchase orders.
3. A potential fictitious vendor fraud scheme warranting detailed investigation of the new vendors, their payments, and the clerk's authorization.
4. A data quality issue causing vendor records to be duplicated.

Question 17

1. Improve system performance by recording changes in a separate database.
2. Ensure master data backups include a complete change history.
3. Allow IT staff to roll back unauthorized changes automatically.
4. Create an unalterable record of all changes to master data, including who made changes, when, and what was changed - supporting investigation, accountability, and regulatory compliance.

Question 18

1. The vendor master file contains 50 inactive vendor records from suppliers that are no longer used.
2. The same individual can add vendors, approve invoices for those vendors, and release payments - with no system-enforced segregation of duties.
3. Vendor contact information is not verified annually by the AP team.
4. The vendor master file does not include vendor tax classification information.

Question 19

1. The inventory system will display incorrect location codes for affected items.
2. Inventory balances and cost of goods sold will be materially misstated - overstated inventory and understated COGS (or vice versa) resulting from incorrect standard costs flowing through inventory valuation.
3. The purchasing team will pay too much for the component in future periods.
4. The system will trigger a variance alert that IT staff will need to investigate.

Question 20

1. Assigning accountability for the accuracy, completeness, and appropriate use of a master data domain to a specific business leader who is responsible for defining standards and resolving quality issues.
2. Tracking which users last modified each master data record.
3. Restricting read access to master data to the department that creates it.
4. Ensuring each record has a unique identifier assigned by the IT department.