Consequence of diminished data integrity: financial loss

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Quick Questions

Shade in the A or B circle for each question.

1. A payroll file has a corrupted pay rate, so staff are overpaid. Is this a financial loss from diminished data integrity?

A Yes - the incorrect payments cost the organisation money

B No - payroll errors only affect staff feelings

2. Which is an example of the cost of correcting data?

A Buying a new firewall before any data has been changed

B Paying staff overtime to find and fix thousands of wrong customer records

3. An online shop's database shows wrong prices, so customers are charged the wrong amount and must be refunded. What is the financial effect?

A Refunds increase profit because more transactions are processed

B Refunds and rework reduce the shop's income

4. Stock counts in an inventory system are inaccurate, so popular items show as out of stock when they are really available. Which type of loss is this?

A Lost revenue from missed sales

B A gain in revenue because stock is protected

5. True or false: financial loss from poor data integrity only happens when hackers steal money.

A False - everyday errors in corrupted or incorrect data can also cost money

B True - only theft by hackers causes financial loss

Match the Pairs

Draw a line connecting each item on the left to its match on the right.

Left column		Right column
1financial loss		Afix_cost = hours_fixing * staff_rate
2refund = price * qty		Bpaid = hours * rate # rate wrongly entered as 90
3Incorrect payments: wrong pay data means staff or suppliers are overpaid and the money is hard to recover		CLost revenue is also a financial loss. If wrong stock or price data makes customers leave, income that would have been earned is lost.
4Cost of correcting data: staff time spent finding and fixing errors is money not spent on other work		DCorrecting data takes staff time and effort, which has a real cost. Rework is a financial loss even when wages are already paid.
5Lost sales are not a financial loss because no money is actually paid out		EMoney lost when corrupted or incorrect data causes errors, rework, refunds and lost sales
6Fixing incorrect data is free because staff are already paid		FA refund paid out because wrong data led to a wrong order, so the organisation loses income

Definitions

financial loss

Fill in the Blanks

Complete each line of code by filling in the missing parts.

reworkCost = hours _ hourlyRate

totalLoss = refunds _ reworkCost

IF payment _ invoiceTotal THEN overpaid = payment - invoiceTotal

totalRefunds = ___(refundList)

netIncome = sales _ refunds

Spot the Error

Shade in the letter of the line that contains an error.

Question 1

A hours = 38

B rate = 30

C pay = hours + rate

D print(pay)

Question 2

A errors = 120

B mins = 15

C hours = errors * mins * 60

D print(hours)

Question 3

A orders = 50

B refund = 24.5

C total = orders - refund

D print(total)

Question 4

A def lost_sales(n, price)

B return n * price

C print(lost_sales(40, 12))

Question 5

A total = 100

B for fee in fees:

C total = total + fee

D print(total)

Answer Key

Consequence of diminished data integrity: financial loss

Section A: Quick Questions

A — Yes - the incorrect payments cost the organisation money

B — Paying staff overtime to find and fix thousands of wrong customer records

B — Refunds and rework reduce the shop's income

A — Lost revenue from missed sales

A — False - everyday errors in corrupted or incorrect data can also cost money

Section B: Match the Pairs

financial loss → Money lost when corrupted or incorrect data causes errors, rework, refunds and lost sales

refund = price * qty → A refund paid out because wrong data led to a wrong order, so the organisation loses income

Incorrect payments: wrong pay data means staff or suppliers are overpaid and the money is hard to recover → paid = hours * rate # rate wrongly entered as 90

Cost of correcting data: staff time spent finding and fixing errors is money not spent on other work → fix_cost = hours_fixing * staff_rate

Lost sales are not a financial loss because no money is actually paid out → Lost revenue is also a financial loss. If wrong stock or price data makes customers leave, income that would have been earned is lost.

Fixing incorrect data is free because staff are already paid → Correcting data takes staff time and effort, which has a real cost. Rework is a financial loss even when wages are already paid.

Section C: Definitions

financial loss — Money lost when corrupted or incorrect data causes errors, rework, refunds and lost sales, such as wrong payments and the cost of fixing the data.

Section D: Fill in the Blanks

reworkCost = hours * hourlyRate

totalLoss = refunds + reworkCost

IF payment > invoiceTotal THEN
  overpaid = payment - invoiceTotal

totalRefunds = SUM(refundList)

netIncome = sales - refunds

Section E: Spot the Error

C — Pay must be hours multiplied by the hourly rate. Adding them gives a wrong payment, which causes an incorrect payment and a costly correction. It should be pay = hours * rate.

C — To convert minutes to hours you divide by 60, not multiply. The cost of correcting data would be badly overstated. It should be hours = errors * mins / 60.

C — The total refunded is the number of faulty orders multiplied by the refund each. Subtracting gives the wrong figure. It should be total = orders * refund.

A — A function definition must end with a colon. Without it the code has a syntax error and the lost revenue cannot be calculated. It should be def lost_sales(n, price):

A — The running total of correction fees must start at 0. Starting at 100 adds a cost that never happened and overstates the financial loss. It should be total = 0.