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Consider the flowchart below as you respond to the question:
Refer to the previously presented set of flowcharting symbols labeled Symbol A
through Symbol J. Which of the following statements about the systems flowchart
above is most true?
A. Symbol B may be inserted between "approve credit" and "deliver goods."
B. Symbol B may be inserted between 'start" and "take order."
C. Both symbol B may be inserted between "approve credit" and "deliver goods" and
symbol B may be inserted between 'start" and "take order" are true.
D. Neither symbol B may be inserted between "approve credit" and "deliver goods" nor
symbol B may be inserted between 'start" and "take order" is true.
Data flow diagrams can be used for: (i) completing the steps in the accounting cycle,
(ii) making business processes more efficient and effective, (iii) completing one or more
steps of the systems development life cycle.
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
In the systems development life cycle, which step immediately precedes
implementation?
A. Build
B. Test
C. Maintain
D. Planning
Supply the correct word for each lettered item below to complete the American
Accounting Association's definition of accounting. Accounting is the process of (a), (b),
and (c) economic information to permit (d), (e) and decisions by (f) of the information.
a. __________________
b. __________________
c. __________________
d. __________________
e. __________________
f. __________________
Consider the following diagram as you answer the questions:
The most appropriate label for "B" is:
A. perform initial screening
B. record receipt of application materials
C. either perform initial screening or record receipt of application materials
D. some other label
Which of the following internal controls could be applied to the creation of Form W-2
in the human resources process?
A. Use of information technology
B. Internal audits
C. Both use of information technology and internal audits
D. Neither use of information technology nor internal audits
Booksellers of Bufluffia is a small, independent bookstore that both publishes and sells
very specialized titles. They currently have about 50 clients; they publish and sell 30
different books at present. The company's management has asked you to create database
tables to support their operations. Any database tables that are in third normal form
should:
A. Eliminate repeating groups.
B. Eliminate redundant data.
C. Eliminate columns not dependent on the primary key.
D. All of these.
An accountant received a stack of sales invoices. Which of the following statements is
most true?
A. The stack of sales invoices can help the accountant identify economic information,
which is part of both accounting and bookkeeping.
B. The accountant is a "user of information" as the phrase is used in the definition of
bookkeeping only.
C. The accountant is a "user of information" as the phrase is used in the definition of
accounting only.
D. The stack of sales invoices can help the accountant identify economic information,
which is part of bookkeeping, but not accounting.
As professionals, accountants often use a specialized knowledge base. That specialized
knowledge base can come from:
A. FASB pronouncements.
B. Textbooks in accounting and other fields.
C. Both FASB pronouncements and Textbooks in accounting and other fields.
D. Neither FASB pronouncements nor Textbooks in accounting and other fields.
Which generic AIS element is exemplified by each item below?
a. Balance sheet
b. Customer's check
c. General ledger software
d. Requiring two signatures on checks over $500
e. Sales invoice
f. Sales transaction file
g. Spreadsheet software
h. Statement of cash flows
i. Storing accounting records in a locked filing cabinet
j. Vendor master file
Consider the table below as you answer the questions:
In the table, "C" would most appropriately be replaced with:
A. Data type
B. Balance type
C. Period type
D. Some other label
The table is a replica of the one in the chapter's "AIS in the Business World."
Fill in the blanks below according to the principles and enablers of the COBIT
framework.
a. ___, policies and frameworks.
b. Applying a ___.
c. Covering the enterprise ___.
d. Culture, ___ and behavior.
e. Enabling a ___ approach.
f. Meeting ___ needs.
g. Organizational ___.
h. People, ___ and ___.
i. Separating ___ from ___.
j. Services, infrastructure and ___.
The chapter discussed four schools of ethical thought: (a) ethical egoism, (b)
utilitarianism, (c) deontology and (d) virtues. Which school best describes each of the
following independent items?
1> After being convicted of fraud, NRN Corporation's net assets were distributed to
shareholders in proportion to their original investments.
2> Ethical actions are a natural outgrowth of being a fundamentally ethical person.
3> Everyone has an ethical obligation to pursue their own best interest.
4> In a merger, the CEO of ATN Corporation inflated net income to get a better sales
price for ATN.
5> Jeff makes all ethics decisions based on the principles of his religion.
6> People should never be used as a means to an end.
7> Sally sees herself as an honest person; her actions are a result of that characteristic.
8> The most ethical decision is the one that promotes the greatest good for the greatest
number of stakeholders.
A company's business processes were at the managed level of the capability maturity
model in 2011 and at the optimized level of the capability maturity model in 2012.
Which of the following statements is most true?
A. Based on the generally accepted auditing standard of consistency, the auditors must
disclose the change.
B. The auditors must issue an unmodified report since the organization's processes are
not chaotic.
C. Both based on the generally accepted auditing standard of consistency, the auditors
must disclose the change and the auditors must issue an unmodified report since the
organization's processes are not chaotic are true.
D. Neither based on the generally accepted auditing standard of consistency, the
auditors must disclose the change nor the auditors must issue an unmodified report
since the organization's processes are not chaotic is true.
A company controller set up a fictitious subsidiary office to which he shipped
inventories and then approved the invoice for payment. The inventories were sold and
the proceeds deposited to the controller's personal bank account. Which of the
following internal controls would be most effective in preventing that situation?
A. Separation of duties
B. Bank reconciliations
C. Conflict of interest policy
D. Limit checks
Decision makers can analyze Big Data using all of the following techniques except:
A. descriptive analytics.
B. predictive analytics.
C. decision making analytics.
D. prescriptive analytics.
Rivet Software is one option for creating XBRL-tagged documents. Many organizations
follow the six steps listed below to do so; prepare a systems flowchart of the six steps.
(Assume all six steps are completed in the same department.) 1. Download taxonomies.
2. Open tagging software and the file to be tagged. 3. Set up an entity profile. 4. Mark
up the data. 5. Validate the document. 6. Export the data as an XBRL document.
Consider the following REA model as you answer the question?
Which of the following tables is indicated by the preceding REA model:
A. Supplier/employee table
B. Supplier/purchase inventory table
C. Employee/purchase inventory table
D. Inventory/purchase inventory table
Each numbered item below indicates one action an auditor might take as part of a
financial statement audit. Which of the two lettered alternatives would be the immediate
next step based on the five generic financial statement audit steps presented in the text?
1) Ask employees about the ethical tone management sets in the organization.
a. Prepare a risk/control matrix.
b. Examine the CEO's resume.
2) Discuss the educational background of each member of the upper management team.
a. Outline the client's risk exposures.
b. Verify balances in accounts receivable.
3) Determine if adequate separation of duties exists.
a. Prepare a systems flowchart of the sales/collection process.
b. Compute depreciation on plant assets.
4) Choose transactions to verify as part of the audit.
a. Question management about their knowledge of COSO models.
b. Issue an audit report.
5) Examine a systems flowchart to determine who reconciles the bank statement.
a. Verify that business processes are adequately documented.
b. Reconcile the latest bank statement.
