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Accounting information systems have five basic elements. Which of the following is an
output of the human resources process?
A. A payroll check
B. A written performance evaluation
C. Both a payroll check and a written performance evaluation
D. Neither a payroll check nor a written performance evaluation
Consider the following diagram as you answer the questions:
Every "Event B" is completed by exactly one employee, but an individual employee
may complete no "Event B" transactions. If employees who do complete "Event B"
transactions may do so without limit, which of the following is the most appropriate for
"C?"
A. (0,1)
B. (1,1)
C. (0,*)
D. (1,*)
Which of the following best summarizes "authority," as the term is used in information
evaluation?
A. Only people with college degrees have true authority to publish.
B. An author cannot evaluate information.
C. The author's credentials should be described as clearly and completely as possible.
D. The more authors a paper has, the more authoritative it is.
Professional codes of ethics in accounting set out non-changing principles developed
through reasoning; those principles constitute a universal code of ethics. Therefore,
professional codes of ethics in accounting are most closely related to which school of
ethical thought?
A. ethical egoism
B. utilitarianism
C. deontology
D. virtue ethics
As a form of internal control to address the risk of inappropriate/missing authorizations,
internal audit review of selected transactions is best described as:
A. A general control.
B. An application control.
C. A behavioral control.
D. A financial control.
Violating the provisions of the Foreign Corrupt Practices Act most directly subjects an
organization to what kind of risk from Brown's taxonomy?
A. Financial
B. Operational
C. Strategic
D. Inherent
Consider the following illustration as you respond to the questions:
The most appropriate label for Symbol B is:
A. Send rejection letter
B. Rejection letter
C. New employee materials
D. Some other label
A department manager at TRS Corporation attended a seminar on internal control;
afterward, the manager formed a five-person departmental team to create an internal
control plan for the department. After a one-day off-site meeting, the team produced a
document titled "Departmental Internal Control Plan." It was formatted as a risk/control
matrix. One member of the team commented that, although the work was interesting,
the team was glad the task was complete and wouldn't have to be redone. Which
element of COSO's internal control framework does the department's plan lack?
A. Risk assessment
B. Control activities
C. Information and communication
D. Monitoring
Internal controls:
A. Have four broad purposes.
B. Are key elements of the third step in a financial statement audit.
C. Both have four broad purposes and are key elements of the third step in a financial
statement audit.
D. Neither have four broad purposes nor are key elements of the third step in a financial
statement audit.
Consider the following short case as you respond to the question:
When the CEO of NTL Corporation resigned, the board of directors hired a recruitment
firm to look for a replacement. The recruitment firm prepared several job
announcements, then presented them to the board of directors. The board of directors
approved one of the job announcements; the recruitment firm used it to advertise the
position on the Internet and in relevant newspapers and professional publications. After
receiving several applications, the recruitment firm selected a pool of ten to pass on to
NTL's board of directors. The board of directors, with the assistance of the recruitment
firm, went through three rounds of interviews, narrowing the pool from ten to three.
Each of the three finalists prepared a presentation on the strategic future of NTL and
delivered the presentation at a meeting of NTL shareholders. The board of directors
then made the final choice for a new CEO.A. Applicant database.
B. Hire recruitment firm.
C. Interview applicants.
D. All of these would be labels for circles in the DF
D.
Consider the following examples of risk:
i. A corporation is unable to issue bonds because its credit rating is too low.
ii. A U.S. auto manufacturer tries to market a car in Mexico. The car does not sell
because the Spanish translation of its name means "it doesn't go."
iii. An employee receives insufficient training in how to use specialized software.
iv. Due to employee theft, a corporation spends more than anticipated buying new tools.
The risks listed above contain examples of all the categories in Brown's risk taxonomy
except:
A. Financial
B. Operational
C. Strategic
D. Hazard
Consider the following case as you respond to the questions:
HSO Corp. designs, manufactures and sells golf carts, scooters and similar vehicles.
When a prospective client contacts one of their seven corporate offices, the office
manager fills out an "intake questionnaire" to determine if HSO can meet the
prospective client's needs. The office manager assembles a team of employees with
expertise in design, production, marketing and accounting; the team reviews the intake
questionnaire and determines if HSO can take on the order. If so, the office manager
prepares a three-page written proposal for the prospective client; the proposal explains
the responsibilities of both HSO and the client, along with a timeline and a budget. The
proposal is forwarded to the prospective client electronically, and the client has ten
calendar days to accept it. If HSO cannot take on the order, the prospective client
receives an automatically generated form letter; if the prospective client does not accept
the proposal within ten calendar days, they receive a different form letter. The new
client remits half of the fee at the time the proposal is accepted, and HSO prepares
weekly progress reports as the project moves forward. The reports are filed in HSO's
database; a hard copy is sent to the client. On a monthly basis, HSO's office manager
prepares a comprehensive status report for all current engagements. One week before
each project is concluded, HSO bills the client for half of the remaining amount due;
after the client has paid all outstanding invoices, HSO completes the work and bills the
client for all remaining amounts. HSO delivers the finished product; the client must pay
the full amount due within 30 days of the final invoice date. If the client pays within 15
days, HSO gives a 3% discount off the amount due.
On April 1 of the current year, EPL Corporation accepted a three-page written proposal
from HSO to design and build 10 customized golf carts for EPL's internal use. The total
price for the order was $3400. If EPL pays the final invoice 20 days after it is received,
the total dollar amount debited to inventory for the golf carts will be:
A. less than $3400.
B. exactly $3400.
C. more than $3400.
D. the amount cannot be determined from the information given.
At the end of 2014, CNC Corporation's accounting information system produced the
following trial balance:
CNC completed the following transactions in January 2015:
a. Purchased inventory on account, $300.
b. Collected cash from customers for prior year sales, $500.
c. Paid current month's wages, $900.
d. Had land appraised. Cost of doing the appraisal (paid in cash), $700. Appraised value
of land, $3,000.
e. Sold inventory with a cost basis of $200 on account, $800.
f. Declared dividends, $50.
g. Hired additional sales staff. Expected monthly salaries, $80.
h. Purchased supplies for cash, $150.
i. Paid creditors for previous purchases, $150.
j. Signed a contract for annual employee retreat, $450.
CNC's operations are currently confined to a single state, but management is
considering expanding to additional states. Which of the following statements is most
true?A. After the expansion, sequential numbering of source documents will no longer
be an effective internal control.
B. After the expansion, the chart of accounts may need to use hierarchical coding.
C. After the expansion, CNC will add at least two steps to the accounting cycle.
D. After the expansion, CNC must employ more information technology in its
accounting information system.
Which kind of flowchart shows relationships between computers, printers, monitors and
similar devices?
A. Systems
B. Program
C. Document
D. Hardware
One of the steps in the generalized model of business process management discussed in
the text focuses on collecting process-related data. If Laurie and Milton are concerned
about the risks created by inefficiency in the company's current fixed asset purchasing
process, they could collect data related to: (i) the average length of time between an
order for a fixed asset and its delivery, (ii) the costs incurred in the fixed asset
purchasing process.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
