Cloud computing involves:
A. delivering hosted services over the Internet.
B. only a few business processes in most organizations.
C. no human intervention.
D. fewer internal controls than traditional computing.
One mark of a professional is adherence to a code of ethical behavior. Which of the
following statements is most true?
A. As the phrase is used in accounting, “code of ethical behavior” refers to
utilitarianism and ethical egoism.
B. As the phrase is used in accounting, “code of ethical behavior” refers to deontology
and virtue ethics.
C. Both as the phrase is used in accounting, “code of ethical behavior” refers to
utilitarianism and ethical egoism and as the phrase is used in accounting, “code of
ethical behavior” refers to deontology and virtue ethics are true.
D. Neither as the phrase is used in accounting, “code of ethical behavior” refers to
utilitarianism and ethical egoism nor as the phrase is used in accounting, “code of
ethical behavior” refers to deontology and virtue ethics is true.
The chapter discussed four types of flowcharts; flowcharts can impact the design,
implementation and evaluation of an accounting information system. Determine
whether each statement below is: (i) always true, (ii) sometimes true or (iii) never true.
a. A document flowchart should be used as part of developing an enterprise risk
management plan based on the COSO framework.
b. A hardware flowchart can be a guide in recommending technology-related internal
controls.
c. Because the “S” in AIS stands for ‘system,” only systems flowcharts are useful in AIS
work.
d. Program flowcharts are never relevant in accounting information systems.
e. Since most documents in an AIS are electronic, document flowcharts are rarely
relevant in designing, implementing and evaluating accounting information systems.
According to ISACA, one of COBIT’s enablers is an organized set of practices and
activities to achieve certain objectives. That enabler is most closely related to:
A. the steps in the accounting cycle
B. Brown’s risk taxonomy
C. Carter’s taxonomy
D. none of these
The text discussed five terms related to the structure of XBRL. Which of the following
pairs of items includes two examples of the same term?
A. Balance sheet, Form 10-K
B. Global Ledger, International Financial Reporting
C. Both balance sheet, Form 10-K and global Ledger, International Financial Reporting
D. Neither balance sheet, Form 10-K nor global Ledger, International Financial
Reporting
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. A REA model of EPL’s process will include which of the
following in the first column: (i) cash, (ii) equipment, (iii) inventory?
A. I and II only
B. II and III only
C. I and III only
D. I, II and III
Consider the following REA model as you answer the question:
A field labeled “transaction ID” is likely to appear in which of the following tables
based on the REA model above?
A. Purchase inventory table
B. Inventory/purchase inventory table
C. Both purchase inventory table and inventory/purchase inventory table
D. Neither purchase inventory table nor inventory/purchase inventory table
The purpose of the conversion process is to transform raw materials into finished
products with:
A. Direct labor.
B. Overhead.
C. Both direct labor and overhead.D. Neither direct labor nor overhead.
Examples of XBRL tagging software include:
A. Internet Explorer
B. PowerPoint
C. Both Internet Explorer and PowerPoint
D. Neither Internet Explorer nor PowerPoint
The accounting staff at NSR Corporation have compiled a list of risks the company
needs to address for its information technology; they plan to prepare a report
recommending internal controls that address each risk. They have located the five
sources of information listed below, but want to use no more than three in their report.
Use the UMUC criteria to explain which sources they should use.
a. A software documentation manual for the general ledger system used at NSR
Corporation. The manual contains a section on troubleshooting the software, which
briefly discusses common risks and problems associated with its installation. The
manual’s title page lists the software company as its author.
b. A web site, first published in 2009 and last updated in 2014, for an information
technology consulting firm. The web site lists and discusses twenty common internal
controls for information technology based on the firm’s past clients.
c. An article published in Information Security, a practitioner journal. The article,
published in 2013, was co-authored by a university professor and the chief information
officer of a Fortune 100 corporation. It analyzes five common internal controls for
information technology, including a description of each control, the costs of
implementing it and the benefits of implementing it.
d. The American Institute of CPAs list of “top ten technologies” for 2014, published on
the AICPA web site. The list was developed via a survey of practicing CPAs throughout
the United States; it includes several items related to information technology control,
and also provides suggestions about where to find additional information.
e. The third edition of a management information systems textbook. It was published in
1999 and includes two chapters on information technology security. The textbook was
written by a team of three authors: one information systems auditor with three years’
experience, and two university professors with advanced degrees but little experience.
Refer to the following case as you respond to the question:
The Celebration Theatre is a small, independent theatre that puts on 12 plays per year.
30 days before the start of each calendar quarter, Celebration prepares advertising for
the productions in the upcoming quarter. They advertise on their web site, via e-mail to
their season subscribers and via direct mail and brochures to others.
Patrons can buy tickets for a single play; alternatively, they can subscribe to all three
plays each quarter. Quarterly subscriptions offer a 25% discount from the prices of
single tickets. Patrons may purchase tickets over the phone, at the box office or via the
theatre’s web site. All tickets are held at the box office where they can be picked up as
early as one week prior to the performance. The theatre has an “open seating” plan, so
patrons do not reserve a specific seat at any performance.
If tickets are purchased in person at the box office, non-subscribers may pay with cash
or a major credit card; subscribers can pay with cash, major credit card or check. All
tickets purchased over the phone or via the web site must be paid for with a major credit
card. Celebration maintains an electronic database to track all ticket sales; paper tickets
are printed at least ten days prior to a performance.
Any paid tickets that are not claimed at least thirty minutes prior to the performance are
sold on a “first-come, first-serve” basis at a 50% discount.
Refer to the previously presented set of flowcharting symbols labeled Symbol A
through Symbol J. Which symbol would represent the ticket sales database?
A. Symbol C
B. Symbol F
C. Symbol H
D. Symbol J
The sales/collection process can be related to which form of risk from Brown’s
taxonomy?
A. Credit risk
B. Liquidity risk
C. Both credit risk and liquidity risk
D. Neither credit risk nor liquidity risk
Consider the following short case as you respond to the question:
Abruzzi’s Italian Kitchen is a small family restaurant with an administrative staff of four
people. Giuseppi Abruzzi is the chief executive officer; his wife Maria is the chief
financial officer. Their son Antonio is responsible for all transactions dealing with
kitchen supplies, including the raw materials for menu items; their son Carlo is
responsible for all transactions dealing with dining room supplies, such as eating
utensils. The restaurant’s administrative practices have developed over the ten years of
its existence with minimal reliance on information technology and formal procedures
and a stronger emphasis on interpersonal relationships with a few reliable vendors.
Once a month, Antonio places orders for kitchen supplies with one of four vendors
based on price; the supplies are usually received within ten calendar days. On receipt of
the supplies, Antonio pays the vendor with a company check. Carlo follows a similar
process for dining room supplies, but works with a set of three vendors, none of which
sell kitchen supplies.
Abruzzi’s Italian Kitchen is exposed to:
A. Systems risk and human error risk.
B. Human error risk and liquidity risk.
C. Liquidity risk and systems risk.
D. Human error risk, systems risk and liquidity risk.
Please refer to the following case as you answer the question:
Comprehensive Waste Management (CWM) provides trash hauling services for several
communities in southern California. When a new client wants to establish service, the
client calls the company’s main office on the phone. A CWM employee collects the
following information from the client: name, street address, city, state, ZIP code, area
code, telephone number, e-mail address. The employee gives the new client information
regarding regular weekly service dates, special services provided by the company, fees
and billing procedures. CWM bills its clients every two months in advance of the
service; for example, bills are sent to clients at the beginning of January for the months
of January and February. Initially, CWM does all its billing manually; they send out
paper bills and collect payment from clients via check. Once service is established, a
client can create an online account; the online account provides an option for paperless
billing and a separate option for charging a credit card rather than paying with a mailed
check. To create an online account, the client creates login credentials (user name and
password); they provide their CWM account number (provided on the invoice) and
relevant credit card data (type of card, name, billing address, and security code).
CWM’s database uses the account number to look up the client’s original information,
then merges the new information with it.
Assume CWM wants no more than three processes shown on itsA. Perform intake
interview
B. Bill client and collect payment
C. Establish online account
D. Update client database
Factory workers at OMI Corporation are scheduled to work forty hours per week, but
frequently work forty-five hours per week, leading to increased payroll costs for OMI.
Which of the following statements is most true?
A. OMI is exposed to liquidity risk.
B. OMI should consider expanding its workforce as a form of internal control.
C. Both OMI is exposed to liquidity risk and OMI should consider expanding its
workforce as a form of internal control are true.
D. Neither OMI is exposed to liquidity risk nor OMI should consider expanding its
workforce as a form of internal control is true.
Consider the following systems flowchart as you respond to the question:
Assuming the actual process works exactly as depicted in the flowchart, ___ is in a
position to steal from the company.
A. The inventory manager only
B. The accounting manager only
C. Either the inventory manager or the accounting manager
D. Neither the inventory manager nor the accounting manager
The central feature of e-business is:
A. Transacting business over a computer network.
B. Using XBRL for required SEC filings.
C. Implementing general ledger software.
D. Ensuring that the company is no lower than