A Recent Audit Uncovered a Key Finding Regarding the Use

question 291

Multiple Choice

A recent audit uncovered a key finding regarding the use of a specific encryption standard in a web application that is used to communicate with business customers. Due to the technical limitations of its customers, the company is unable to upgrade the encryption standard. Which of the following types of controls should be used to reduce the risk created by this scenario?

• A) Physical
• B) Detective
• C) Preventive
• D) Compensating

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Definitions:

Aging of Receivables Method

An accounting technique used to estimate the amount of and provision for doubtful accounts by categorizing receivables according to the length of time they have been outstanding.

Direct Write-off Method

An accounting method in which uncollectible accounts receivable are directly written off against income at the time they are deemed irrecoverable.

Aging Report

A financial report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding.

Balance Sheet

A balance sheet is a financial statement that portrays a company's financial position at a specific point in time, listing assets, liabilities, and shareholders' equity.