Journal entries commonly processed as part of the acquisition/payment process can
include:
A. Debits to inventory.
B. Credits to accounts payable.
C. Credits to cash.
D. All of these.
According to COBIT’s principles, information technology governance and management
should meet ___ needs.
A. stakeholder
B. the AICPA Core Competency framework
C. International Accounting Standards Board
D. holistic
Please refer to the data flow diagram below in answering the question:
The preceding data flow diagram is:
A. A context diagram of the accounting cycle.
B. A
C. A
D. A
Internal controls can prevent, detect or correct a problem. Which of the following
groups includes controls that will fulfill all three with respect to the risk of an employee
embezzling money by forging a manager’s signature on a check?
A. Separation of duties, internal audit, employee bonding
B. Physical security of cash, pre-numbered documents, restrictive endorsements
C. Separation of duties, pre-numbered documents, restrictive endorsements
D. Physical security of cash, internal audit, employee bonding
Please consider these independent cases as you respond to the question:
-Austin is the managing partner of a small CPA firm. In an effort to standardize certain
internal business processes, Austin formed a team that developed a set of guidelines for
tasks such as expense reimbursements and information technology purchases. After
developing the guidelines, the team devised ways to determine if the processes are
performing as expected.
-Julie is the chief financial officer of PSC Corporation. She recently worked with a
team to develop a broad set of principles that should characterize PSC’s business
processes. The team has applied those principles to some tasks in the accounting
department; their next task is to teach other PSC employees about the principles.
-Rob is an accountant at CTR Company. The owners of CTR, Lynn and Mark, don’t
know much about accounting, so Rob completes accounting tasks in whatever way
seems best to him.
Which level of the capability maturity model best describes Rob’s company?
A. Chaotic, because Rob completes accounting tasks in whatever way seems best to
him.
B. Chaotic, because the owners don’t know much about accounting.
C. Repeatable, because Rob is likely to do the same tasks in similar ways each time.
D. Defined, because Rob has a defined methodology for completing tasks.
Consider the table below as you respond to the questions:
Which of the following is the best choice for Item C in the table?
A. Initiation/planning
B. Build
C. Implementation
D. Operations and maintenance
Which of the following is most closely associated with the second step of the
Langenderfer and Rockness model?
A. asset valuation
B. utilitarianism
C. Bernie Madoff
D. autonomy of practice
The first step in the Langenderfer and Rockness model is:
A. Decide the best course of action.
B. Identify ethics issues and stakeholders.
C. Identify the facts.
D. Determine which school of ethical thought to follow.
The purpose of the conversion process is to transform material, labor and overhead into
a finished product. Which system would an organization that manufactures decks of
playing cards use for that purpose?
A. Job order
B. Process
C. Hybrid
D. Some other system
All of the following terms are associated with financial audit reports except:
A. Unmodified.
B. Adverse.
C. Truthful.
D. Disclaimer.
Transactions associated with the financing process include all of the following except:
A. Purchase of treasury shares.
B. Issuance of equity securities.
C. Payroll for finance department employees.
D. Periodic repayments of debt.
Analyze each statement below about the relationships between AIS and auditing.
Indicate whether each statement is: (a) always true, (b) sometimes true or (c) never true.
1) Flowcharts are the most useful form of systems documentation in a financial
statement audit.
2) Strong information technology skills are essential in every type of audit.
3) A management audit requires more critical thinking skills than an investigative audit.
4) Knowledge of internal controls can be important in many different types of audits.
5) Because compliance audits are devoid of judgment, auditors do not need to
understand the organizational environment in a government organization.
Please refer to the following unadjusted trial balance in answering the below question.
When VLN completes the ninth step in the accounting cycle, all of the following
accounts will be involved except:
A. Advertising expense
B. Deferred revenue
C. Retained earnings
D. Sales
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.
If HSO maintains a relational database to track proposals and projects:
A. The primary key from the client table will be included as a foreign key in the
“prepare invoice” table.
B. The IDs of the review team members will be included as foreign keys in the
“assemble review team” table.
C. Both the primary key from the client table will be included as a foreign key in the
“prepare invoice” table and the IDs of the review team members will be included as
foreign keys in the “assemble review team” table.
D. Neither the primary key from the client table will be included as a foreign key in the
“prepare invoice” table nor the IDs of the review team members will be included as
foreign keys in the “assemble review team” table.