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Consider the following independent situations as you answer the questions:
a. Irene, a freshman accounting major, thought she would benefit from reading an
intermediate accounting text while taking introductory financial accounting.
b. Bradley developed a plan to study for all four parts of the CPA exam during his last
semester at college, thus making himself ready to take the exam immediately after
graduation.
c. Jorge met weekly with a group of five students, all of whom were preparing their
resume for the very first time.
d. Every time Maria encountered a topic she did not understand in her accounting
information systems course, she did a Google search for it.
Which decision makers share at least one common cause of information overload?A.
Irene and MariaB. Irene and BradleyC. Bradley and MariaD. None of these Irene,
information characteristics.
Macro-level factors to consider when choosing information technology for the
accounting information system include: (i) need, (ii) cost, (iii) strategic fit.
A. I and II only
B. II and III only
C. I and III only
D. I, II and III
Verifying the frequency of bank reconciliations and reconciling the latest bank
statement are examples of actions an auditor might take in which generic steps of the
financial statement audit process?
A. First and second
B. Second and third
C. Third and fourth
D. Second and fourth
Which of the following violates the generally accepted auditing standard indicated?
A. Opinion: Auditors issued an adverse report on financial statements.
B. Consistency: An auditor explained inconsistencies between a client's application of
GAAP over the last two years.
C. Evidence: An auditor used last year's report as the only evidence for the current
year's report.
D. All of these violate the standards indicated.
According to COBIT's principles, information technology governance and management
should:
A. focus on the four purposes of internal control.
B. address systems risk only.
C. apply a single integrated framework.
D. apply an end-to-end framework.
Which of the following steps in the Langenderfer and Rockness model comes first?
A. Identify the alternative courses of action.
B. Reach a decision as to the appropriate course of action.
C. Discuss the alternative with a trusted person.
D. Define the norms, principles and values related to the situation.
Analyze the flowchart below and the statements which follow. Determine which
statements are true based on the flowchart.
a. All customers have a credit limit.
b. Because the customer is outside the company, the customer is also outside the system
boundary.
c. Customers can place orders in person or over the phone.
d. Flowcharting symbols are used appropriately.
e. Internal control in the process depicted would be strengthened by introducing a filing
system.
f. Journal entries associated with the process depicted would include debits to cost of
goods sold and credits to inventory.
g. The company does not use any form of information technology in the process
depicted.
h. The company has weak separation of duties in the process depicted.
i. The company is not exposed to credit risk.
j. The flowchart could be appropriately titled "Document flowchart of the
sales/collection process."
The generic model of business process management discussed in the text is likely to be
most useful in which type of audit?
A. Operational
B. Financial
C. Management
D. Investigative
NTR Corporation has offices in both Los Angeles and San Francisco. In the Los
Angeles office, the account number for cash is 001.101. In San Francisco, the account
number for cash is 002.101. The account number for accounts receivable in the Los
Angeles office is therefore likely to be:
A. 001.102
B. 002.102
C. 102.002
D. 002.110
The primary purpose of the acquisition/payment process is to:
A. Obtain the resources the organization needs.
B. Pay for the resources the organization needs.
C. Both obtain the resources the organization needs and pay for the resources the
organization needs.
D. Neither obtain the resources the organization needs nor pay for the resources the
organization needs.
Which of the following generally accepted auditing standards suggests that an auditor
should not have a financial interest in an audit client?
A. Professional care
B. Disclosure
C. Independence
D. Some other standard
COSO's Enterprise Risk Management--Integrated Framework comprises all the
following sections except:
A. Brown's risk taxonomy
B. Objective setting
C. Event identification
D. Monitoring
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.
Which of the following statements would be most true in a systems flowchart of the
Celebration Theatre case?
A. One of the flowchart columns would have "patrons" as its heading.
B. One of the flowchart columns would have "theatre personnel" as its heading.
C. Both one of the flowchart columns would have "patrons" as its heading and one of
the flowchart columns would have "theatre personnel" as its heading are true.
D. Neither one of the flowchart columns would have "patrons" as its heading nor one of
the flowchart columns would have "theatre personnel" as its heading is true.
NTR Corporation has offices in both Los Angeles and San Francisco. In the Los
Angeles office, the account number for cash is 001.101. In San Francisco, the account
number for cash is 002.101. Which of the following statements is most true?
A. NTR uses sequential coding for its chart of accounts.
B. One of the offices should change its account number for cash to promote consistency
and efficiency.
C. The first set of digits denotes the office.
D. The second set of digits denotes the office.
McDonald wrote that professionals utilize complex skills. Complex skills in accounting
include:
A. Totaling the columns in a trial balance.
B. Listing the three sections of a balance sheet.
C. Recommending internal controls for a business process.
D. Filing tax returns electronically.
To answer the question, consider the following partial REA model in the context of the
case:
ABC Consulting's employees include management, consultants and office staff. The
company accepts engagements related to internal control design and evaluation, as well
as enterprise risk management plans. A customer can purchase the two services
independently of one another. The office staff bills clients on a monthly basis with
terms of 2/10, n/30. All consulting clients must sign a contract, which is also signed by
an ABC manager. One member of ABC's management team assigns at least one
consultant to work with the customer until the engagement is complete. Consultants can
be assigned to multiple engagements simultaneously, but every consultant must always
be working on at least one engagement. Each client may have only one contract with
ABC at a time.
If Box A is labeled "assign employees," Box B could be labeled:
A. Management
B. Consultants
C. Complete engagement
D. Any of these
Call suggested seven steps for creating a knowledge management system. How are
those seven steps similar to the COSO internal control framework?
A. They both involve organizational culture.
B. They both require some form of system documentation, such as a flowchart.
C. Both involve organizational culture and require some form of system documentation,
such as a flowchart
D. Neither involve organizational culture nor require some form of system
documentation, such as a flowchart
BLP Company is a consulting firm with offices in Atlanta and San Diego; it provides
consulting services in three main areas: finance, marketing and operations. Selected
account titles from BLP's accounting information system appear below:
In addition to its overall company financial statements, BLP wants to report selected
financial data by geographic location and/or by consulting area. Use the principles of
hierarchical coding to assign account numbers to the items listed above to facilitate
BLP's financial reporting for marketing consulting in San Diego.
Missouri Can Corporation (MCC) manufactures and sells a variety of can types, such as
soft drink cans, oil cans and many others. MCC has adopted a functional organization
structure that includes departments for accounting, marketing, manufacturing, human
resources and information systems. Which of the following appropriately pairs a
document with one of MCC's business processes?
A. production cost report, conversion
B. Form 940, human resources
C. Both production cost report, conversion and Form 940, human resources
D. Neither production cost report, conversion nor Form 940, human resources
Nancy and Mei were designing a system for tracking continuing professional education
units for accountants in their firm. They completed the tasks listed below; rearrange the
tasks in the proper order based on the steps in the systems development life cycle.A.The
new system was introduced gradually throughout the accounting
department.B.Employees began using the new system and provided periodic feedback
about making it better.C.Nancy and Mei created tables and forms using relational
database software.D.On paper, Nancy and Mei thought about how they wanted the new
system to look.E.Several employees complained that the old system was difficult to use.
F.Paul, a co-worker of Nancy and Mei, gave permission for his continuing professional
education records to be used to determine if the system would work properly.
G.Employees wanted the new system to track hours, dates and topics of continuing
professional education.
