Lauren wants to open a floral shop in a downtown business district. She doesn’t have
funds enough to purchase inventory and pay six months’ rent up front. Lauren
approaches a good friend, Jamie, to discuss the possibility of Jamie investing funds and
becoming a 25% partner in the business. After a lengthy discussion, Jamie agrees to
invest. Eight months later, Jamie discovered that Lauren has not be honest with her
regarding some aspects of the business financial operation. In order for Jamie to sue
Lauren for fraud, all the following must be true except
A) Jamie’s decision to invest was primarily based on Lauren’s assertion that she had
prior floral retail experience.
B) Jamie has suffered a substantial loss in her investment because of Lauren’s
deception.
C) Jamie trusted and relied on Lauren’s representation of the business financial
operation.
D) Jamie found Lauren dishonest because she does not always reconcile the business
cash account on a timely basis.
A customer’s check is received and sent to the accounting office for processing. The
customer’s account receivable file, stored on a hard drive, is updated. Which one of the
following diagrams represents this activity?
A)
B)
C)
D)
Why does Pepsi create most of the software it uses in business operations?
A) Pepsi does not trust canned software.
B) Using canned software actually cost Pepsi more than using custom software.
C) Pepsi could not find canned software sophisticated enough to meet its needs.
D) There is no canned software available in Pepsi’s industry.
Using the database depicted above, “Item #” is best described as
A) an attribute.
B) a primary key.
C) a foreign key.
D) A, B, and C
Which of the following would not be one of the well-structured tables in a
well-designed relational database used to generate this sales invoice?
A) Customer Order
B) Customer
C) Sales
D) Sales Order
The REA data model
A) is used in many areas of business and science.
B) was developed specifically for use in designing accounting information systems.
C) classifies data into relationships, entities and accounts.
D) is a graphical technique for portraying a database schema.
All of the following are controls that should be implemented in a payroll process,
except
A) supervisors distribute paychecks since they should know all employees in their
department.
B) someone independent of the payroll process should reconcile the payroll bank
account.
C) sequential numbering of paychecks and accounting for the numbers.
D) restrict access to blank payroll checks and documents.
A disbursement voucher contains
A) a list of outstanding invoices.
B) the net payment amount after deducting applicable discounts and allowances.
C) the general ledger accounts to be debited.
D) All of the above are correct.
A way to incorporate the advantages of Electronic Data Interchange with the Electronic
Funds Transfer is
A) Financial Electronic Data Interchange.
B) e-commerce.
C) to use procurement cards.
D) an electronic lockbox.
When canned software is used for systems acquisition, the maintenance aspect of the
operations and maintenance phase of the systems development life cycle (SDLC)
A) is more costly.
B) is often difficult to predict.
C) is usually the responsibility of the vendor.
D) requires trained personnel.
Which of the following is not a way to make fraud less likely to occur?
A) Adopt an organizational structure that minimizes the likelihood of fraud.
B) Create an organizational culture that stresses integrity and commitment to ethical
values.
C) Create an audit trail so individual transactions can be traced.
D) Effectively supervise employees.
In the expenditure cycle, Financial Electronic Data Interchange (FEDI) increases
efficiency by
A) eliminating the need for receiving reports.
B) eliminating the need for vendor invoices.
C) eliminating the need for purchase orders.
D) eliminating the need to prepare and mail checks.
Is it best practice for an organization to practice periodically restoring a system from its
backup files?
A) No, doing so might introduce errors into the system’s data.
B) No, doing so takes the system offline and prevents customers from being able to
access the system.
C) Yes, doing so verifies the procedure and backup media are working correctly.
D) Yes, doing so improves the efficiency of the system.
A growing number of companies require some of their upper level executives to spend
time performing job duties of rank-and-file employees. When the CEO of Loews Hotels
assumed the role of bellman, he discovered
A) that the company’s polyester uniform caused him to sweat a great deal.
B) evidence of fraud in several hotel locations.
C) instances where company employees fell asleep on the job.
D) situations where employees were not treating customers properly.
Which of the statements below is incorrect?
A) Semantic data modeling facilitates the efficient design of databases.
B) Semantic data modeling facilitates communicating with the intended users of the
system.
C) Semantic data modeling allows a database designer to use knowledge about business
processes to design the database.
D) Semantic data modeling follows the rules of normalization in the design of a
database.
A report of employer’s quarterly federal tax return (showing all wages subject to tax and
amounts withheld for income tax and FICA) is called
A) form W-2.
B) form W-3.
C) form 1099-Misc.
D) form 941.
An auditor sets an embedded audit module to record all credit transactions in excess of
$5,000 and stores the data in an audit log. The auditor is using
A) audit hooks.
B) the snapshot technique.
C) a system control audit review file.
D) continuous and intermittent simulation.
Which of the following accurately represents typical cardinalities for two entities in the
HR/Payroll cycle?
A)
B)
C)
D)
Which of the following statements is false regarding REA diagrams?
A) Each organization will have its own unique REA diagram.
B) An REA diagram for a given organization will change over time.
C) Data modeling and REA diagram development involve complex and repetitive
processes.
D) Redrawing an REA diagram several times during development is uncommon.
When displayed on a monitor, data output is referred to as
A) reports.
B) hard copy.
C) soft copy.
D) financials.
Although Gillette uses canned software in its business operations, it does so with the
intention of creating a competitive advantage. Identify how Gillette aims to gain a
greater competitive advantage from using canned software.
A) From deciding how the software should be used.
B) From deciding what software should be used.
C) From the cost savings it gains by using canned software.
D) From deciding when software should be used.
A well-planned and drawn level 0 data flow diagram for the payroll cycle would show
which of the following processes?
A) 0.1 Update employee/payroll file; 0.2 Pay employee; 0.3 Prepare Reports; 0.4 Pay
taxes; 0.5 Update general ledger.
B) 0.1 Update employee/payroll file; 0.12 Pay employee; 0.13 Prepare Reports; 0.14
Pay taxes; 0.15 Update general ledger.
C) 1.0 Update employee/payroll file; 1.2 Pay employee; 1.3 Prepare Reports; 1.4 Pay
taxes; 1.5 Update general ledger.
D) 1.0 Update employee/payroll file; 2.0 Pay employee; 3.0 Prepare Reports; 4.0 Pay
taxes; 5.0 Update general ledger.
A well-known hacker started her own computer security consulting business. Many
companies pay her to attempt to gain unauthorized access to their network. If she is
successful, she offers advice as to how to design and implement better controls. What is
the name of the testing for which the hacker is being paid?
A) Penetration test.
B) Vulnerability scan.
C) Deep packet inspection
D) Buffer overflow test.
All of the following are advantages of an ERP system except
A) in an ERP, data input is captured or keyed once.
B) ERPs permit management to gain greater visibility into every area of the enterprise.
C) it takes considerable experience and training to use an ERP system effectively.
D) ERPs permit manufacturing plants to receive new orders in real time.
A low-level view of the database that describes how the data are actually stored and
accessed is the
A) conceptual-level schema.
B) subschema.
C) internal-level schema.
D) external-level schema.
Refer to the table below, which shows the results of payback, net present value, and
internal rate of return analysis of four projects. Which is preferred by the internal rate of
return criterion?
A) Project A
B) Project B
C) Project C
D) Project D
You are the head of the IT department at Panther Designs, Inc. A systems review reveals
that your firm has poor control procedures for preventing inadvertent programming
errors. However, you are not concerned because you feel Panther Designs has strong
compensating controls. What control likely exists to give you this confidence?
A) The internal audit department processes test data at Panther Designs.
B) Panther Designs pays its employees well, decreasing the likelihood of errors.
C) Panther Designs only hires competent programmers, decreasing the likelihood of
errors.
D) All of Panther Design’s IT applications are less than 2 years old.
Identify a party below who was involved with developing the Trust Services
Framework.
A) FASB
B) COSO
C) AICPA
D) PCAOB
This protocol specifies the procedures for dividing files and documents into packets to
be sent over the Internet.
A) access control list
B) Internet protocol
C) packet switching protocol
D) transmission control protocol
Which of the following controls can minimize the threat of mistakes in counting
incoming inventory?
A) The use of positive pay.
B) Do not inform receiving employees about quantity ordered.
C) The use of ERS.
D) Perpetual inventory system.
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. A well-designed REA diagram would
A) include eight unique entities.
B) include nine unique entities.
C) include seven unique entities.
D) include ten unique entities.
Three months after Modern Helpdesks Incorporated began accepting e-mail service
requests, several service advisors had never checked their e-mail accounts. This is an
example of dealing with change by
A) deterrence.
B) projection.
C) avoidance.
D) aggression.