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978-1133934400 Chapter 1 Solution Manual Part 1
CHAPTER 1 THE INFORMATION SYSTEM: AN ACCOUNTANT’S PERSPECTIVE REVIEW QUESTIONS 1. Operational, operations management, middle management, and top management. Horizontal flows support operation-level tasks. The information is highly detailed about the day-to-day operations. 2. Data are facts that are collected […]
978-1133934400 Chapter 1 Solution Manual Part 2
DISCUSSION QUESTIONS 1. The reporting requirements of external users such as lending institutions, the IRS, the SEC, and stockholders are subject to stringent reporting standards. Thus, firms have historically placed a very high emphasis on the accuracy of the AIS […]
978-1133934400 Chapter 1 Solution Manual Part 3
PROBLEMS 1. USERS OF INFORMATION a. S i. T j. S 2. GENERAL MODEL FOR AIS Redraw the diagram presented for Problem 2. Label each element in the diagram and briefly describe its role and key features. ANS: b. I […]
978-1133934400 Chapter 1 Solution Manual Part 4
8. COMMUNICATIONS Because businesspeople were not able to adequately express their needs and much of what they did express was not fully understood by the systems analysts, many new systems projects produced ineffective systems. Most business students now study the […]
978-1133934400 Chapter 10 Solution Manual Part 1
CHAPTER 10 THE REA APPROACH TO DATABASE MODELING REVIEW QUESTIONS 2. It is framework for designing accounting information systems that captures the operational meaning of the user’s data and provides a concise description of it. 3. It is a unique […]
978-1133934400 Chapter 10 Solution Manual Part 2
PROBLEMS 1. REA DIAGRAMS The three differences between REA diagrams and ER diagrams: 1) Entities on REA diagrams are divided into three classes (Resources, Events, and Agents) and organized into constellations by class on the 2) ER diagrams present a […]
978-1133934400 Chapter 11 Solution Manual Part 1
CHAPTER 11 ENTERPRISE RESOURCE PLANNING SYSTEMS 1. REVIEW QUESTIONS Chapter 1 Page 2 1. ERP systems are multiple module software packages that evolved primarily from traditional manufacturing resource planning (MRP) systems. The purpose 2. The closed database architecture is similar […]
978-1133934400 Chapter 11 Solution Manual Part 2
1. MULTIPLE CHOICE 1. B 2. E 3. D 2. 4. E 5. E 6. C 7. C 8. D 9. C 10. B Chapter 1 Page 2 3. problems 1. DATA WAREHOUSE ACCESS CONTROL Merit: The primary reason for […]
978-1133934400 Chapter 11 Solution Manual Part 3
7. Who is to blame for ERP failure? By Barry Calogero. Barry Calogero is executive vice president for Robbins-Gioia, Inc. He has had extensive experience in program control, financial management and cost management. Enterprise Resource Planning (ERP) tools, or enterprise-wide […]
978-1133934400 Chapter 12 Solution Manual Part 1
CHAPTER 12 ELECTRONIC COMMERCE SYSTEMS 1. REVIEW QUESTIONS Chapter 1 Page 2 1. Packet switching refers to a communication technology whereby messages are first 3. The Internet uses three types of addresses for communications: (1) email addresses, (2) Web site […]
978-1133934400 Chapter 12 Solution Manual Part 2
Chapter 1 Page 2 1. MULTIPLE CHOICE 2. 1. B 2. B 3. C 4. D 5. E 6. A 7. B 8. D 9. C 10. E Chapter 1 Page 3 3. PROBLEMS 1. ENCRYPTION Key = +3 Decoded […]
978-1133934400 Chapter 13 Solution Manual Part 1
CHAPTER 13 MANAGING THE SYSTEMS DEVELOPMENT LIFE CYCLE 1. REVIEW QUESTIONS 1. Systems Strategy. The first step in the SDLC is to develop a systems strategy, which requires an understanding the strategic business needs of the organization. Project Initiation. Project […]
978-1133934400 Chapter 13 Solution Manual Part 2
1. DISCUSSION QUESTIONS Chapter 1 Page 2 1. Oral communication skills are very important. The users of the system need to be able to accurately and effectively articulate their needs to the systems analysts. Also, the systems analysts need to […]
978-1133934400 Chapter 13 Solution Manual Part 3
6. SYSTEMS SELECTION Information about escapable costs may be found in a review of contracts. It may be Several sources exist that tie interest rates to risks and industries. A search for such sources must be taken and the cited […]
978-1133934400 Chapter 14 Solution Manual Part 1
CHAPTER 14 CONSTRUCT, DELIVER, AND MAINTAIN SYSTEMS PROJECTS 1. REVIEW QUESTIONS Chapter 1 Page 2 1. Prototypes are typically limited to user input screens and output reports. Actual processing procedures are not included. The prototype may be discarded in those […]
978-1133934400 Chapter 14 Solution Manual Part 2
1. DISCUSSION QUESTIONS Chapter 1 Page 2 1. When DFDs are said to be exploded from one level to the next, this means that a specific process is shown in greater detail at the next level. Example: A process at […]
978-1133934400 Chapter 14 Solution Manual Part 3
9. PERT CHART a. See drawing on the following page. The critical path is A-B-E-F-D-I-J-K-L. b. The project will be completed one week late. c. Assuming that workers are not distracted from other tasks, then the project should still be […]
978-1133934400 Chapter 15 Solution Manual Part 1
CHAPTER 15 AUDITING IT CONTROLS PART I: SARBANES-OXLEY AND IT GOVERNANCE 1. REVIEW QUESTIONS 2. Chapter 1 Page 2 2. Audit risk is the probability that the auditor will render an unqualified (clean) opinion on financial statements that are, in […]
978-1133934400 Chapter 15 Solution Manual Part 2
1. DISCUSSION QUESTIONS 1. Section 302 requires that corporate management (including the CEO) certify quarterly and annually their organization’s internal controls over financial reporting. The certifying officers are required to: a. have designed internal controls. b. disclose any material changes […]
978-1133934400 Chapter 15 Solution Manual Part 3
1. MULTIPLE CHOICE 1. D 2. D 2. problems 1. SERVICE PROVIDER AUDIT — The Harvey Manufacturing Company Explain how the Harvey Manufacturing auditors will assess the relevant internal controls related to these mission critical transactions. The auditor would either: […]
978-1133934400 Chapter 15 Solution Manual Part 4
9. DISASTER RECOVERY PLAN – Hexagon a. The internal control weaknesses at Hexagon include: The building is constructed with fire prone exterior wooden shingles with exposed end of the week. A midweek fire could destroy the most current backup data. […]
978-1133934400 Chapter 16 Solution Manual Part 1
CHAPTER 16 IT CONTROLS PART II: SECURITY AND ACCESS 1. REVIEW QUESTIONS 1. a. The operating system must protect itself from users. 2. a. Translates high-level languages into the machine-level language b. Allocates computer resources c. Manages job scheduling and […]
978-1133934400 Chapter 16 Solution Manual Part 2
1. Multiple Choice 1. E 2. C 3. A PROBLEMS 1. NETWORK CONTROL The controls needed to mitigate the risks of unauthorized remote access to the system include the following: a. Application level firewall with transmission logging to detect unauthorized […]
978-1133934400 Chapter 16 Solution Manual Part 3
9. SECURITY AND CONROL ASSESSMENT The potential risks in BBC new computer-based information system are as follows: Security BBC should hold a training seminar since most employees will be using the computer system. The purpose of the seminar is to […]
978-1133934400 Chapter 17 Solution Manual Part 1
CHAPTER 17 IT CONTROLS PART III: SYSTEMS DEVELOPMENT, PROGRAM CHANGES, AND APPLICATION CONTROLS 1. REVIEW QUESTIONS 1. Systems development controls: a. systems authorization activities b. user specification activities 2. All program modules must be thoroughly tested before they are implemented. […]
978-1133934400 Chapter 17 Solution Manual Part 2
Chapter 17 page 1. MULTIPLE CHOICE 1. A 2. A 3. D 2. PROBLEMS 4. C 5. A 6. C 7. B 8. C 9. E 10. E Chapter 17 page 1. DESIGN TESTS OF APPLICATION CONTROLS The auditor will […]
978-1133934400 Chapter 17 Solution Manual Part 3
4. AUDIT PLAN One area to examine is whether Golden Gate has purchased and received a material amount of inventory and/or machinery in the last month and not yet received or paid the invoice. One plan would be to trace […]
978-1133934400 Chapter 17 Solution Manual Part 4
11. AUDIT OF SYSTEMS DEVELOPMENT a. Systems Authorization Activities All systems should be properly authorized to ensure their economic User Specification Activities Users need to be actively involved in the systems development process. User involvement should not be stifled by […]
978-1133934400 Chapter 2 Solution Manual Part 1
CHAPTER 2 INTRODUCTION TO TRANSACTION PROCESSING REVIEW QUESTIONS 3. The physical component includes the acquisition of goods, while the financial component includes the recognition of a liability owed to the supplier and the transfer of the payment to the supplier. […]
978-1133934400 Chapter 2 Solution Manual Part 2
DISCUSSION QUESTIONS 1. Cash flows into the firm from sales made to customers. The sales order processing subsystem of the revenue cycle captures the intent of customers to exchange cash for services or goods manufactured. Typically sales are made on […]
978-1133934400 Chapter 2 Solution Manual Part 3
PROBLEMS 1. TRANSACTION CYCLE IDENTIFICATION a. Expenditure cycle-payroll subsystem. b. Conversion cycle-production system subsystem. 2. TYPES OF FILES a. master file b. transaction file c. reference file d. archive file e. master file f. transaction file g. reference file h. […]
978-1133934400 Chapter 2 Solution Manual Part 4
12. SYSTEM DOCUMENTATION – EXPENDITURE CYCLE See the drawings on this and the following page. Chapter 2 Page 37 Chapter 2 Page 38 13. SYSTEM DOCUMENTATION – CASH RECEIPTS Chapter 2 Page 39 14. SYSTEM DOCUMENTATION PAYROLL See drawings on […]
978-1133934400 Chapter 2 Solution Manual Part 5
17. SYSTEM DOCUMENTATION EXPENDITURE CYCLE Chapter 2 Page 37 Chapter 2 Page 38 18. Soluon to Problem 2-18 – Cash Receipts Centralized DP System Chapter 2 Page 39 19. Solution to Problem 2-19 Purchases System Centralized Data Processing Chapter 2 […]
978-1133934400 Chapter 3 Solution Manual Part 1
CHAPTER 3 ETHICS, FRAUD, AND INTERNAL CONTROL REVIEW QUESTIONS Chapter 1 Page 2 2. Business ethics concern the issue of how managers determine what is considered to be right in their business conduct. Further, once this correct business conduct is […]
978-1133934400 Chapter 3 Solution Manual Part 2
DISCUSSION QUESTIONS 1. Some acts may not be against the law, but they may be considered unethical. For example, it 2. The costs of socially responsible behavior include those associated with environmental protection, improving worker safety, and affirmative action. In […]
978-1133934400 Chapter 3 Solution Manual Part 3
MULTIPLE CHOICE 1. D 2. C 3. A 4. B 5. B 6. C 7. C 8. A 9. D 10. B 11. A 12. B 13. C 14. B 15. D 16. C 17. C 18. C 19. B […]
978-1133934400 Chapter 3 Solution Manual Part 4
12. Evaluation of Internal Controls: The Never Sink Canoe (NSC) Company Segregations of Duties Issues Control Weakness 1: Transaction authorization should be separated from transaction Control Weakness 2: Asset custody should be separate from record keeping responsibility. The accounting clerk […]
978-1133934400 Chapter 3 Solution Manual Part 5
17. EVALUATION OF CONTROLS a) Mary Jane’s dedication to her job from which she has not taken a vacation in many years is a red flag that she may be engaged in something illegal. This concern is reinforced by her […]
978-1133934400 Chapter 4 Solution Manual Part 1
CHAPTER 4 THE REVENUE CYCLE REVIEW QUESTIONS 2. The packing slip travels with the goods to the customer, and it describes the contents on the order. Upon filling the order, the shipping department sends the shipping notice to the billing […]
978-1133934400 Chapter 4 Solution Manual Part 2
PROBLEMS 1. System Description and Internal Controls a. Prepare a flowchart of the cash receipts procedures described Chapter 3 Page 83 b. Describe the risks, if any,that are inherent in the current system configuration. 1) Risk of Cash misappropriation in […]
978-1133934400 Chapter 4 Solution Manual Part 3
9. INTERNAL CONTROL Iris needs to consider whether she wishes to purchase one microcomputer system or three. Assuming that she only wishes to purchase one microcomputer for the central shop, she should definitely consider an accounting software package that has […]
978-1133934400 Chapter 4 Solution Manual Part 4
2. Solution to Tight Lines Fishing and Camping a, b, and d, see pages that follow c) Internal Control Weaknesses. The following tie to the numbered circles on the flowchart. 2) Warehouse should not update the inventory subsidiary and General […]
978-1133934400 Chapter 4 Solution Manual Part 5
4. SOLUTION TO DISCOUNT TOOLS d) IT Controls a), b), d) See diagrams on the following pages. c) Internal Control Weaknesses 1) Transaction is recorded in Sales Journal before goods are shipped. 2) Warehouse and Shipping functions are combined. This […]
978-1133934400 Chapter 4 Solution Manual Part 6
Chapter 4 page 130 8. SOLUTION TO PERFORMANCE WATER PUMPS a), b) See diagrams on the following pages. c) Internal Control Weaknesses d) 1) The sales clerk who processes the orders also performed the credit check. This creates internal control […]
978-1133934400 Chapter 4 Solution Manual Part 7
7. SOLUTION TO CUSTOM FABRICATIONS a), b) and e) See diagrams on the following pages. c) Internal Control Weaknesses Risk: The GL accounts may be corrupted with unauthorized transactions. 1. The customer should not be billed until the goods are […]
978-1133934400 Chapter 5 Solution Manual Part 1
CHAPTER 5 THE EXPENDITURE CYCLE Part I: Purchases and Cash Disbursements Procedures REVIEW QUESTIONS 1. A purchase requisition is completed by the inventory control department when a need for inventory items is detected. Purchase requisitions for office supplies and other […]
978-1133934400 Chapter 5 Solution Manual Part 2
Chapter 4 page 130 PROBLEMS 1. UNRECORDED LIABILITIES Term FOB shipping point: Term FOB destination: e. No f. N/A g. July 5 h. July 15 2. INVENTORY ORDERING ALTERNATIVES a. A purchase requisition is created when an item of inventory […]
978-1133934400 Chapter 5 Solution Manual Part 3
Chapter 4 page 130 8. PHYSICAL CONTROLS Accounting Records. Inventory records are updated based on the purchase order rather than the Receiving Report or Invoice. Accounting Records. The Accounts Payable Subsidiary ledger is updated based only on the Invoice. There […]
978-1133934400 Chapter 5 Solution Manual Part 4
Chapter 4 page 130 3. SOLUTION TO TVR CLASSICS a), b), See diagrams on the following pages. c) Internal Control Weaknesses Purchases Procedures 1) The inventory clerk in the warehouse department has asset 2) The receiving clerk prepares the receiving […]
978-1133934400 Chapter 5 Solution Manual Part 5
Chapter 4 page 130 6. SOLUTION TO GREEN PRODUCTS GARDEN SUPPLY a), b) see the following pages c) Internal Control Weaknesses 1) Purchasing approves and executes purchases. The company needs an inventory control function. 2) Purchasing updates inventory records for […]
978-1133934400 Chapter 5 Solution Manual Part 6
Chapter 5 page 205 8. SOLUTION TO PERFOMANCE WATER PUMPS a), b), see the diagrams on the following pages. c) Internal Control Weaknesses: 2. The clerk in the warehouse updates the inventory subsidiary ledger. This violates the segregation of duties, […]
978-1133934400 Chapter 6 Solution Manual Part 1
CHAPTER 6 THE EXPENDITURE CYCLE PART II: PAYROLL PROCESSING AND FIXED ASSETS PROCEDURES Chapter 1 Page 2 REVIEW QUESTIONS 1. Job tickets capture the time spent on each job during the day and are 3. A form of payroll fraud […]
978-1133934400 Chapter 6 Solution Manual Part 2
1. PROBLEMS 1. PAYROLL FRAUD a. An employee action report from the personnel department should list b. An independent paymaster should distribute the paychecks to the employees. If an employee is not present to receive the paycheck, it will be […]
978-1133934400 Chapter 6 Solution Manual Part 3
1. Internal Control Cases 1) Solution to Holly Company Payroll System Part a) Payroll DFD Part b) Payroll System Flowchart Chapter 1 Page 2 Part C. Uncontrolled Risks: 2) Accounting Department approves, prepares, and signs paychecks, which allows payroll fraud […]
978-1133934400 Chapter 6 Solution Manual Part 4
3. TRV CLASSICS. (MANUAL AND STAND-ALONE COMPUTER PROCESSING) a, b, see following pages. c, Uncontrolled Risks Payroll Fixed Assets 1. Unnecessary &xed assets may be ordered because requests for &xed assets are informally submied. 2. The &rm may pay for […]
978-1133934400 Chapter 6 Solution Manual Part 5
5. TURNER PATIO FURNITURE (MANUAL AND STAND-ALONE PC SYSTEM) a), b) see diagrams on the following pages. c) Uncontrolled Risks. Payroll Fixed Assets 1. The $rm may pay for assets that are incorrect, damaged, or not actually received because the […]
978-1133934400 Chapter 7 Solution Manual Part 1
CHAPTER 7 THE CONVERSION CYCLE REVIEW QUESTIONS 1. A company’s conversion cycle transforms (converts) input resources, such as raw 2. The batch processing system consists of four basic processes: plan and control production, perform production operations, maintain inventory control, and […]
978-1133934400 Chapter 7 Solution Manual Part 2
MULTIPLE CHOICE 1. B 2. D PROBLEMS 1. DOCUMENT FLOWCHART See diagram below 3. B 4. D 5. E. Safety Stock is represented by the line segment from point E down to the zero value point on the vertical axis. […]
978-1133934400 Chapter 7 Solution Manual Part 3
INTERNAL CONTROL CASES 1. PERFOMANCE WATER PUMPS (CENTRALIZED SYSTEM WITH DISTRIBUTED TERMINALS) Part A and B see following pages Chapter 1 Page 2 Chapter 1 Page 3 Part C. Risks in Current System Part D. Controls Needed to Reduce Risks […]
978-1133934400 Chapter 7 Solution Manual Part 4
Chapter 7 page 62 5. VOLTEC WELDING MACHINES, INC. Part A and B, See diagrams on the pages that follow. Chapter 7 page 63 Chapter 7 page 64 Part C. Risks in Current System Part D. Controls Needed to Reduce […]
978-1133934400 Chapter 8 Solution Manual Part 1
CHAPTER 8 FINANCIAL REPORTING AND MANAGEMENT REPORTING SYSTEMS 1. REVIEW QUESTIONS Chapter 1 Page 2 1. A journal voucher is used to make entries into the general ledger accounts. The 2. Journal vouchers must be approved by an authorized person, […]
978-1133934400 Chapter 8 Solution Manual Part 2
1. DISCUSSION QUESTIONS Chapter 1 Page 2 1. Since general ledger clerks have access to the general ledger, they should not have access to the journal vouchers in the source departments. If these journal vouchers are acquired by the general […]
978-1133934400 Chapter 8 Solution Manual Part 3
1. 2. 1. general ledger system overview Chapter 1 Page 2 2. FINANCIAL REPORTING PROCESS 1 Capture the transaction TPS 2 Record transaction in special journal TPS 3 Post to the subsidiary ledger TPS 3. XBRL a. Yes it is […]
978-1133934400 Chapter 8 Solution Manual Part 4
11. ORGANIZATION STRUCTURE AND SPAN OF CONTROL a. 1. Organization structure A. Advantages include: The disadvantages include: Lack of flexibility and employee creativity. Lack of global knowledge of the organizational objectives. Increased labor costs. 2. Management will tightly control a […]
978-1133934400 Chapter 9 Solution Manual Part 1
CHAPTER 9 DATABASE MANAGEMENT SYSTEMS 1. REVIEW QUESTIONS 3. The primary difference between the network and hierarchical models is in the parent-child relationship. The network model allows a child file to have multiple parents. The hierarchical model permits a child […]
978-1133934400 Chapter 9 Solution Manual Part 2
1. MULTIPLE CHOICE 1. B 2. A PROBLEMS 1) DISTRIBUTED DATABASES 3. C 4. D 5. A 6. C 7. C 8. E 9. C 10. E 11. D 12. B 13. B 14. B 15. E 16. A 17. […]
978-1133934400 Chapter 9 Solution Manual Part 3
6. DATABASE DESIGN Response: Below are the database table needed for the PGP system. Student responses will vary based upon assumptions made. Sales Invoice Cash Receipt Customer Supplier SI Line Item State SI Number (PK) Zip Code Product Number (PK) […]
978-1133934400 Chapter 9 Solution Manual Part 4
17. ENTITY RELATIONSHIP DIAGRAM Business Rules Represented by Problem 17 ERD. •Specific inventory items are ordered from predetermined suppliers. Each inventory class (type) is purchased from one and only one supplier, but that supplier may supply many different classes of […]
AC 280
The PCAOB′s standard No. 5 specifically requires auditors to understand transaction flows in designing their test of controls. What steps does this entail? Discuss the assumptions of the economic order quantity (EOQ) model and its objective. Answer: 1) Demand for […]
AC 680 Quiz 3
The big bang approach a. is more ambitious and risky than the phased in approach. b. is a popular alternative to the phase-in approach. c. reduces the change of system failure. d. all of the above. e. none of the […]
ACC 121 Quiz 1
A company’s board of directors should, at a minimum, adopt the provisions of SOX. Discuss three of the six established best practices that a board should also follow. Explain the role of accountants in systems selection. Answer: The economic feasibility […]
ACC 263
Define fault tolerance. The general ledger function receives the AP account summary from cash disbursements. Answer: F What are the four characteristics of a properly designed database table? Answer: 1) The value of at least one attribute in each tuple […]
Acc 526 Quiz 1
Many financial reports produced by organizations are nondiscretionary – publicly traded firms have no choice but to prepare income statements, tax returns, etc. Management reporting is often called discretionary reporting because it is not mandated, as is financial reporting. Is […]
Acc 645 Test 1
Explain how Take Order can be either an economic or a support event. Discuss common risks to consumers from cyber criminals that impact electronic commerce. Answer: The perception that the Internet is not safe for credit card purchases is considered […]
Acc 812 Quiz
List specific jobs that should be segregated to prevent misappropriation of cash and inventory. How is a database deadlock usually resolved? What are factors that influence the decision made regarding the transactions? Answer: Resolving a deadlock usually involves sacrificing one […]
Accounting 531
The normalization process involves identifying and removing structural dependencies from the tables being modeled. Lead time times daily demand is a. the economic order quantity b. safety stock c. the reorder point d. total inventory Answer: C Which symbol represents […]
Acct 335 Homework
An internal audit department€s independence is compromised when the department reports to: a. the company controller b. the audit committee of the board of directors c. Both a. and b. d. Neither a. nor b. XRLB reporting: a. must be […]
ACT 311 Final
Explain industry and competency analysis. Foreign keys physically connect logically related tables to achieve the associates described in the data model. Answer: T The most common audit types are ____________________, ____________________, and ____________________ auditors. Answer: internal (operational), external (attestation), fraud […]
ACT 810 Final
Discuss a PERT chart and its principal features. Selecting a specific record from a master file containing millions of records requires a direct access file environment. Answer: T What are the six classes of physical internal controls? What is the […]
MET MG 187 Test 1
When should inventory be purchased? Discuss three specific physical controls to mitigate the risk of inaccurate record keeping. Answer: transaction authorization – AP authorizes cash disbursements to make payment accounting records – audit trail documents, journals, accounts and files independent […]
MET MG 660 Quiz 2
What are some of the risks of placing the decision of what, when and where to buy solely at the discretion of the purchasing agent? Name and explain the purpose of the three major subsystems of the AIS: Answer: Discuss […]
SMG AC 652 Midterm 2
Use the internal control procedures listed below to complete the statements. A clerk reorders 250 items when the inventory falls below 25 items. This is an example of ————————–. Use the internal control procedures listed below to complete the statements. […]
SMG AC 699 Test 1
Use the internal control procedures listed below to complete the statements. Using cameras to monitor the activities of cashiers is an example of ————————–. What are the benefits and risks of making Internet sales? Answer: Internet sales opens an organization‘s […]