A back door into a system that bypasses normal system controls is called a
A) virus.
B) logic bomb.
C) trap door.
D) data diddle.
Use the chart below to answer the following questions regarding flow chart symbols.
Which symbol would be used in a flowchart to represent the display of a report on a
computer screen?
A) #7
B) #8
C) #3
D) #11
The principle of holding individuals accountable for their internal control
responsibilities in pursuit of objectives belongs to which of the COSO’s Internal Control
Model’s component?
A) Control environment.
B) Risk assessment.
C) Control activities.
D) Information and communication.
In a document flowchart of a manual customer payment processing system, “update
customer file” will be shown by a(n) ________ symbol, and “update account
receivable” will be shown by a(n) ________ symbol.
A) input; output
B) input; manual operation
C) manual operation; output
D) manual operation; manual operation
Clemente Santiago has formed a business that sells carved gourmet coconuts. He has
hired five employees. The most senior is Mary, who manages the carving process. Jane
is the newest employee. She collects the coconuts. Joe takes calls from unhappy
customers. Tom tosses finished coconuts into the sea, sending them to the wholesaler.
Annie sends letters to the wholesaler extolling the virtues of the latest production run of
nuts that are drifting across the bay.
Which of the following functions in the value chain is Annie performing?
A) Inbound logistics
B) Operations
C) Outbound logistics
D) Marketing and sales
E) Service
The information systems audit objective that pertains to protect computer equipment,
programs, communications, and data from unauthorized access, modification, or
destruction is known as
A) overall security.
B) program development.
C) program modifications.
D) processing.
The data processing method used by FedEx to track packages is an example of
A) real-time processing.
B) batch processing.
C) online batch processing.
D) real-time batch processing.
When seeking to describes how a system should work, the most useful approach is to
A) conduct interviews.
B) make observations.
C) distribute questionnaires.
D) read system documentation.
The least effective control for preventing an organization from processing fraudulent
credit memo is to
A) match each credit memo with a receiving report.
B) require approval for each credit memo by the credit manager.
C) reconcile total of credit memos to total debits posted to customers’ subsidiary
ledgers.
D) sequentially prenumber all credit memos and perform a sequence check at the end of
each day.
What is a typical procedure for processing sales orders from new customers or
customers making a purchase that causes their credit limit to be exceeded?
A) General authorization to approve the order is given to sales clerks.
B) Specific authorization must be granted by the credit manager.
C) The sale should be rejected.
D) The sales clerk should order a report from a credit bureau before approving the
order.
Warehouse number is most likely to be a foreign key in
A) Order Inventory.
B) Disburse Cash.
C) Receive Inventory.
D) Inventory.
What is the main reason a list of potential alternative suppliers be maintained?
A) in case the primary supplier is out of stock
B) so the firm can sample different suppliers
C) in case the primary supplier is more expensive
D) to segregate purchasing suppliers
A master production schedule is used to develop detailed
A) timetables of daily production and determine raw material needs.
B) reports on daily production and material usage.
C) daily reports on direct labor needs.
D) inventory charts.
Why might outsourcing cause employee resistance?
A) Outsourcing often allows a company to better use its assets and scarce resources.
B) Outsourcing can lower a company’s overall IS costs.
C) Outsourcing often facilitates downsizing.
D) Outsourcing helps eliminate the peaks and valleys of system usage.
What is the primary difference between fraud and errors in financial statement
reporting?
A) The level of management involved
B) The intent to deceive
C) The materiality of the misstatement
D) The type of transaction effected
According to the ERM model, ________ help to deal with the effectiveness and
efficiency of company operations, such as performance and profitability goals.
A) compliance objectives
B) operations objectives
C) reporting objectives
D) strategic objectives
An auditor sets an embedded audit module to flag questionable online transactions,
display information about the transaction on the auditor’s computer, and send a text
message to the auditor’s cell phone. The auditor is using
A) the snapshot technique.
B) a system control audit review file.
C) audit hooks.
D) continuous and intermittent simulation.
The least time-consuming method of collecting data for use in a systems survey is
A) observation.
B) interviews.
C) questionnaires.
D) reviewing system documentation.
By using an ERP to merge the billing, sales, and marketing functions, the firm may be
able to
A) bill the customer right after the sale occurs.
B) market products and services on bills sent to customers.
C) use customer’s past purchase history to send information about related products and
services the customer may be interested in.
D) eliminate the need for a firm to have a billing, sales, and marketing department.
The batch processing data entry control that sums the number of items in a batch is
called
A) financial total.
B) hash total.
C) record count.
D) sequence check.
There are frequently many canned software packages available. However, many
companies choose to develop their own software. Why?
A) An organization may have unique requirements that are not addressed by canned
software packages.
B) Canned software packages are often less expensive than software developed in
house.
C) The organization’s size and complexity necessitates the in-house development of
software.
D) A and C above are correct.
Which of the following will limit a firm’s potential loss exposure from paycheck
forgery?
A) Segregation of check distribution from payroll duties.
B) Prompt redeposit of unclaimed paychecks.
C) A separate payroll bank account.
D) Direct deposit of checks.
Prototyping is often appropriate when
A) there is a low level of uncertainty.
B) it is clear which questions need to be addressed.
C) there is a high likelihood of failure.
D) there are limited financial resources available.
Audit routines that notify auditors of questionable transactions, often as they occur is an
example of
A) integrated test facility.
B) snapshot technique.
C) system control audit review file.
D) audit hooks.
To protect against malware, it is important that antivirus software automatically
examine ________ introduced into a system.
A) CDs
B) e-mail
C) flash drives
D) all of the above
This component of the fraud triangle explains the incentive or motivation for someone
to commit fraud.
A) Pressure
B) Rationalization
C) Concealment
D) Opportunity
Making payments to a vendor, with whom a credit line is already established, would be
initially recorded in which type of accounting record and as part of what transaction
cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; expenditure cycle
The process that uses automated tools to identify whether a system possesses any
well-known security problems is known as a(n)
A) intrusion detection system.
B) log analysis.
C) penetration test.
D) vulnerability scan.
A specialized journal
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual
sub-accounts.
D) contains summary-level data for every account of the organization.
Research suggests which of the following is key to improving total customer
satisfaction?
A) price of product
B) speed of shipping
C) quality and nature of customer contact after the sale
D) quality and nature of customer contact before the sale
Carly Jackson is a staff auditor for a public accounting firm. She has been asked to
document the client’s existing accounting information system so the engagement team
can assess the client’s adequacy of controls around financial reporting. She decides to
begin by examining the client’s key software applications, examining a flowchart that
illustrates the sequence of logical operations performed by the system in executing the
application. To do this, Carly should ask the client for what type of flowchart?
A) internal control flowchart
B) document flowchart
C) system flowchart
D) program flowchart
The relationship between the Disburse Cash and Issue Stock events is modeled as being
M:N for all except which of the following reasons?
A) One dividend check could be paid to shareholders that purchased stock at different
times.
B) Shareholders could receive several dividend checks over time.
C) Checks must be written to each shareholder for dividend payments.
D) Stock can be issued more than once over a period of time.
A(n) ________ system test uses copies of real transaction and file records.
A) acceptance test
B) debugging test
C) test data processing
D) walk-through