The company has decided to upgrade its computer communications network with a new system that will support more timely receipt of data at corporate headquarters. The systems department at corporate headquarters is responsible for the overall design and implementation of the new system. The system will consist of a central server at the corporate offices connected to distributed terminals at each of the subsidiary sites.
The new system will allow clerks at the subsidiary sites to send financial data to the corporate office via the Internet. The system will automatically load the financial data into the corporate database thus eliminating the error-prone data entry operation.
The company’s controller is pleased with the prospects of the new system, which should shorten the reporting period by three days. He is, however, concerned about security and data integrity during the transmission. He has scheduled a meeting with key personnel from the systems department to discuss these concerns.
a. Describe the data security and integrity problems that could occur when transmitting data between the subsidiaries and the corporate office.
b. For each problem identified, describe a control procedure that could be employed to minimize or eliminate the problem.
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