A company uses the method for tracking accounts receivable where customers pay
according to individual sales invoices. This describes the ________ method.
A) monthly statement
B) open-invoice
C) balance forward
D) cycle billing
Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a
purchase, the company records the suppliers name, address, date, specific items
purchased, price paid for each, and the total amount spent. Helge later researches the
inventory items to set the customer price. The company assigns an inventory number to
each item purchased and records the customer price for each item. Helge buys price
tags and display supplies from Alwin Incorporated, a company that sells them at all
trade conventions. All inventory and supplies purchases are immediately paid for with
cash or with checks from a bank account in Helge’s name. All cash received from sales
are also deposited to the same bank account. Several times a year Helge rents display
space at dealer conventions. A deposit is always required, and the entire fee is due the
day the convention starts. Helge records the deposit and final payment, along with the
convention’s name and address, in the same worksheet on which purchases of inventory
and supplies are recorded.
Consider Helge’s processes regarding the purchasing inventory and supplies, renting
display space, and paying for purchased items. In a well-designed REA diagram, what
entities would reflect economic duality?
A) Purchases and Cash Disbursements
B) Display Space Rental and Cash Disbursements
C) Inventory and Purchases
D) Cash and Cash Disbursements
Employee number is most likely to be a foreign key in
A) Perform Job Operations.
B) Perform Machine Operations.
C) Machine Operations List.
D) Work in Process.
________ of software development costs should be allocated to testing, debugging, and
rewriting software.
A) 5% to 10%
B) 10% to 20%
C) 20% to 30%
D) More than 30%
According to the COSO Enterprise Risk Management Framework, the risk assessment
process incorporates all of the following components except
A) reporting potential risks to auditors.
B) identifying events that could impact the enterprise.
C) evaluating the impact of potential events on achievement of objectives.
D) establishing objectives for the enterprise.
The COBIT5 framework primarily relates to
A) best practices and effective governance and management of private companies.
B) best practices and effective governance and management of public companies.
C) best practices and effective governance and management of information technology.
D) best practices and effective governance and management of organizational assets.
Identify the element below that is not an objective of the output design phase of the
physical systems design stage of the SDLC.
A) Determining the nature of reports.
B) Determining the timing of reports.
C) Determining the content of reports.
D) Determining the cost of reports.
Which of the following is not part of a “final accuracy check” when creating relational
tables from an REA diagram?
A) Every attribute in every table is single-valued (i.e., each table is a flat file).
B) Every event must be linked to at least one resource.
C) Every table must have a primary key.
D) Other non-key attributes in each table must be either a fact about the thing
designated by the primary key or foreign keys used to link that table to another table.
Which of the following descriptions is not associated with symmetric encryption?
A) A shared secret key.
B) Faster encryption.
C) Lack of authentication.
D) Separate keys for each communication party.
Assume that you are looking at a REA diagram that depicts only one event. Which of
the following must be on the REA diagram?
A) An external agent.
B) An internal agent.
C) both A and B
D) neither A nor B
A ________ is similar to a ________, except that it is a program rather than a code
segment hidden in a host program.
A) worm; virus
B) Trojan horse; worm
C) worm; Trojan horse
D) virus; worm
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the
following error message while making an adjusting entry to the general ledger: “Your
journal entry must be a numeric value. Please reenter.” This is an example of a
A) validity check.
B) field check.
C) zero-balance check.
D) completeness test.
Use the chart below to answer the following questions regarding flow chart symbols.
Which symbol would be used in a flowchart to represent a flow of data or documents?
A) #12
B) #13
C) #11
D) #15
The Gwallter Reece Chihuahua Sweater Co. (GRCCo) was established in 2013. It
recently signed a large contract with PetCo pet stores. GRCCo will be required to track
and forecast sweater sales. The technology that is used for communication between
GRCCo and PetCo is
A) electronic data interchange.
B) vendor-managed inventory.
C) sales force automation.
D) optical character recognition.
Individuals who use telephone lines to commit fraud and other illegal acts are typically
called
A) phreakers.
B) crackers.
C) phishers.
D) hackers.
Encryption has a remarkably long and varied history. The invention of writing was
apparently soon followed by a desire to conceal messages. One of the methods, was the
simple substitution of numbers for letters, for example A = 1, B = 2, etc. This is an
example of
A) a hashing algorithm.
B) symmetric key encryption.
C) asymmetric key encryption.
D) a public key.
Helen Fume is a recruiter with The Ladders in Nome, Alaska. The Ladders success is
largely attributable to its accounting information system. When a client is hired by an
employer, Helen creates a record that identifies the employment relationship. Helen
follows up on placements by surveying both employers and clients about the
employment experience and then entering the results into the AIS. Clients are uniquely
identified by social security number. In records that contain client survey data, the
social security number is likely to be
A) the primary key.
B) a foreign key.
C) combined with other data fields to form a primary key.
D) null.
Upon notification from the receiving department that the goods have been returned, the
manager issues a(n) ________ , which authorizes the adjustment of the customer’s
account.
A) debt memo
B) credit memo
C) adjusting entry
D) bill of lading
Andile Uzoma is the CEO of Chibuzo Incorporated. The board of directors has recently
demanded that they receive more assurance that Chibuzo Incorporated is operating in
an efficient, effective manner. Which type of audit would best suit the demands of the
board of directors?
A) Financial audit.
B) Information system audit.
C) Operational audit.
D) Sustainability audit.
A typical source document could be
A) some type of paper document.
B) a computer data entry screen.
C) the company’s financial statements.
D) both A and B
An auditor might use ________ to examining large data files.
A) Excel
B) Access
C) IDEA
D) SQL
Which of the following is not a risk associated with the data input process?
A) Data is invalid.
B) Data is incomplete.
C) Data is inaccurate.
D) Data is corrupted.
Which of the statements below is false when comparing the REA model to the
traditional AIS model?
A) Traditional AISs contain only data about the financial aspects of transactions.
B) A major advantage of the REA data model is that it integrates non-financial and
financial data in the AIS and makes both types of data easily accessible to management.
C) In the REA model, many financial statement items can be displayed by querying a
single table.
D) Accounts in the traditional AIS are analogous to resources in the REA-based
relational database.
Applying the COBIT5 framework, planning is the responsibility of
A) the CEO.
B) the CFO.
C) the board of directors.
D) all of the above
For strongest segregation of duties, a sales representative should never be allowed to
A) discuss the company’s products.
B) negotiate the sales price.
C) approve a sale on credit.
D) send a customer a gift.
Identify the item below which is not a piece of legislation passed to protect individuals
against identity theft or to secure individuals’ privacy.
A) The Health Insurance Portability and Accountability Act (HIPAA).
B) The Health Information Technology for Economic and Clinical Health Act
(HITECH).
C) The Gramm––Leach––Bliley Act.
D) The Dodd-Frank Act.
The steps that criminals take to study their target’s physical layout to learn about the
controls it has in place is called
A) scanning and mapping the target.
B) social engineering.
C) research.
D) reconnaissance.
Which of the following is not an example of one of the basic types of fraud?
A) While straightening the store at the end of the day, a shoe store employee finds and
keeps an expensive pair of sunglasses left by a customer.
B) An executive devised and implemented a plan to accelerate revenue recognition on a
long-term contract, which will allow the company to forestall filing for bankruptcy. The
executive does not own any stock, stock options or grants, and will not receive a bonus
or perk because of the overstated revenue.
C) A purchasing agent places a large order at higher-than-normal unit prices with a
vendor that gave the agent tickets to several football games.
D) A salesperson approves a large sales discount on an order from a company owned
partially by the salesperson’s sister.
Pre-numbered shipping documents and pre-numbered invoices are examples of
A) sequence codes.
B) block codes.
C) group codes.
D) mnemonic codes.
An important control that can be used to reduce the risk of employee kickbacks is
A) surveillance cameras.
B) job rotation.
C) off-site restrooms.
D) use of ID badges.
Describe the major business activities, key decisions, and information needs in the
HRM/payroll cycle, the general threats to those activities, and the controls that can
mitigate those threats.
Describe at least four ways a company can make fraud less likely to occur.
Explain the relational database data model.
Describe computer-aided software (or systems) engineering (CASE) and identify the
advantages and disadvantages of CASE?
Describe computer audit software, and explain how it is used in the audit of an AIS.
Explain the billing process, key decisions that need to be made, and threats to that
process, and describe the controls that can be used to mitigate those threats.
Discuss the internal environment and identify the elements that comprise the internal
environment.
Describe an audit trail.
Explain a completeness check.
Describe the post-implementation review activity.
How can Electronic Data Interchange (EDI) facilitate the billing and accounts
receivable process?
Discuss the differences between EOQ, MRP, and JIT.
What is the purpose of source documents? What controls are embedded in source
documents? Give two examples of source documents.
Describe the five components of the COSO’s Internal Control Model.
Describe the differences between a worm and a virus.