With respect to an ASP, service interruptions and compromised data would be most
effectively addressed with:
A. An enterprise risk management plan.
B. A systems flowchart.
C. The steps in the accounting cycle.
D. The capability maturity model.
Consider the following partially completed flowchart as you respond to the questions:
In the partial flowchart, “B” should be replaced with:
A. Qualified
B. Position open
C. Materials received
D. Choose candidates to reject
A circle in a data flow diagram represents:
A. A data flow
B. An external entity
C. A database
D. A business process
Raj, an employee at TRS Corporation, was preparing a risk/control matrix related to the
steps in the accounting cycle. The first row of the matrix contained the following
entries: Adequate training. Assets that should be reported at historical cost are reported
at market value. Human error. Internal audits. All the columns in the risk/control matrix
are represented by those items except:
A. Comments
B. Internal control
C. Risk
D. Risk category
Consider the following flowcharting shapes as you answer the question:
SBL Corporation is preparing to expand into B2B e-business. In a flowchart of their
sales process, “take order via Web site” is most likely to be represented with:
A. Symbol A
B. Symbol B
C. Symbol C
D. Symbol D
Raj, an employee at TRS Corporation, was preparing a risk/control matrix related to the
steps in the accounting cycle. The first row of the matrix contained the following
entries: Adequate training. Assets that should be reported at historical cost are reported
at market value. Human error. Internal audits. Which two items would appear in the
same column in the matrix?
A. Adequate training and human error
B. Human error and internal audits
C. Adequate training and internal audits
D. None. For a given risk, each column can have only one entry.
Knowledge management is important to the study of accounting information systems
because, like business processes, it:
A. Represents one way to create value for stakeholders.
B. Crosses functional boundaries such as the accounting department and the purchasing
department.
C. Both represents one way to create value for stakeholders and crosses functional
boundaries such as the accounting department and the purchasing department.
D. Neither represents one way to create value for stakeholders nor crosses functional
boundaries such as the accounting department and the purchasing department.
Consider the following REA model as you answer the question:
How many database tables will be required by the preceding REA model?
A. Four
B. Five
C. Six
D. Some other number
Samantha and Josephine were preparing to start their own clothing business; they
contacted their friend David, a recent graduate from Big State University’s accounting
program, to learn about setting up their accounting information system. After some
discussion, they decided to use Quickbooks as their basic AIS software. Editing the
standard chart of accounts to fit their clothing business would be part of ___ in Steps
for Better Thinking.
A. Identifying
B. Exploring
C. Prioritizing
D. Knowing
“Diagram Y” is:
A. a decomposition of Diagram X
B. balanced with Diagram X
C. both a decomposition of Diagram X and balanced with Diagram X
D. neither a decomposition of Diagram X nor balanced with Diagram X
Consider the following short case as you respond to the question:
Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been
losing customers to MLN’s competitors; Scott and Logan believe an ERP system could
help MLN obtain more timely information that will enable them to retain old customers
and acquire new ones. They formed a six-person team with representatives from three
of MLN’s ten departments and instructed them to use the steps in the systems
development life cycle to choose and implement an ERP system. A year later, the team
had completed its work and implemented the system by transferring data from MLN’s
general ledger software to the ERP system.
Umble and Umble suggested six necessary conditions for a successful ERP
implementation. Which of them was best achieved in the case?
A. Communicating strategic goals clearly.
B. Viewing ERP as an enterprise-wide venture.
C. Ensuring data accuracy.
D. All of these.
Business risks and threats to information systems include all of the following except:
A. Error
B. Intrusions
C. Malicious software
D. Instrumentality
Consider the following short case as you respond to the question:
VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT
Corporation; credit terms were 2/10, n/30. VLC paid the outgoing freight charge of $10.
PRT paid the invoice within the discount period.
Assume VLC’s general ledger showed a balance in cash of $600 before the preceding
events; assume VLC’s balance in inventory was also $600. Which of the following
statements is most true?
A. After recording the preceding events, the balance in cash will be equal to the balance
in inventory.
B. After recording the preceding events, the balance in cash will be greater than the
balance in inventory.
C. After recording the preceding events, the balance in cash will be less than the
balance in inventory.
D. After recording the preceding events, the balance in cash will equal the balance in
accounts receivable.
Consider the following partially completed risk/control matrix as you answer the
questions:
Assume the risk/control matrix is organized like the one presented in the chapter. The
best entry for Item G is:
A. Financing process
B. Error rates less than 5% are allowable
C. Either financing process or error rates less than 5% are allowable
D. Neither financing process nor error rates less than 5% are allowable
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. The corporation has recently decided to complete its
IPO. Which of the following statements is most true?
A. If MCC has an in-house legal staff as part of its human resources department, it does
not need to hire an outside attorney for the IPO.
B. If MCC’s accounting manager and chief financial officer are licensed CPAs, it does
not need to hire an outside accounting firm for the IPO.
C. Both if MCC has an in-house legal staff as part of its human resources department, it
does not need to hire an outside attorney for the IPO and if MCC’s accounting manager
and chief financial officer are licensed CPAs, it does not need to hire an outside
accounting firm for the IPO are true.
D. Neither if MCC has an in-house legal staff as part of its human resources
department, it does not need to hire an outside attorney for the IPO nor if MCC’s
accounting manager and chief financial officer are licensed CPAs, it does not need to
hire an outside accounting firm for the IPO is true.
The journal entry to record the purchase of inventory on account is:
A. Debit inventory, credit accounts payable.
B. Debit accounts payable, credit inventory.
C. Debit inventory, credit cash.
D. Debit accounts payable, credit cash.
Langenderfer and Rockness suggested an eight-step model for resolving ethical
dilemmas. Consider each of the independent statements that follow; indicate what
would happen immediately after the action listed based on the Langenderfer and
Rockness model.
1) Arnold, having arrived at a preliminary decision about how to resolve an ethical
dilemma, discussed his alternatives with a trusted co-worker.
2) Beverly determined that a case she was investigating dealt with embezzling cash,
which would impact the company’s employees and other groups.
3) Lenise laid out three potential responses for a violation of her company’s ethics code.
4) Linda consulted the AICPA Code of Professional Conduct for an ethics issue raised
by a co-worker.
5) Maria considered what would happen to various stakeholders for each of three
alternatives she had identified.
Accounting information systems work often involves documenting business processes
through flowcharts, data flow diagrams and REA models. Briefly explain the
importance of managing knowledge about documentation techniques; also explain, in
your own words, how you would manage that knowledge.
Consider the partial data flow diagrams shown below. Match each one with the item it
most likely represents.
1> Access employee records
2> Add comments about vendor
3> Deliver goods and bill client
4> Interview applicant
5> Look up payroll information
6> Post transactions to ledger
7> Reconcile bank statement and record related journal entries
8> Review vendor quality information
9> Take customer order
10> Update employee records
Bell identified seven criteria to be a professional. Which criterion applies to each
independent situation below?
1) Albert wrote an e-mail to a prospective new client.
2) David used time value of money principles to calculate the price of a bond.
3) Hal participated in an online conference about tax law changes.
4) Jordan considered the impact of foreign currency exchange rates on an investment.
5) Joshua calculated straight-line depreciation.
6) Maria used the systems development life cycle to design a new AIS.
7) Peggy completed the annual continuing professional education requirements for her
Certified Fraud Examiner credential.
8) Robert refused to falsify a tax return.
9) Ryan prepared a written summary of tax rules for a client.
10) Samantha compared the costs and benefits of a set of internal controls.
CSB Corporation has used traditional general ledger software to maintain its accounting
records. However, the company is now growing and needs more sophisticated
information technology that will provide more comprehensive information for running
the firm. Recommend a form of information technology that will meet CSB’s need;
describe the basic nature, purpose and structure of the IT you recommend.
The use of XBRL creates some internal control issues for organizations. Match each
risk exposure on the left with the most appropriate control on the right. Use each
control only one time.
Reliable Reminder Services is a small company that, for a fee, assists its clients in
remembering important dates, purchasing and sending greeting cards and providing
specialized shopping services for occasions like birthdays and anniversaries. The
company’s owners want to use an application service provider to develop and host a
web page that will help them attract new clients. They completed the following steps to
select an ASP:
Choose an ASP from the finalists.
Conduct in-house interviews.
Contact references provided by finalists.
Develop request for proposals from ASPs.
Evaluate submitted proposals.
Negotiate a contract with the selected ASP.
Select top five proposals.
Select top three proposals.
Send thank you letters to rejected ASPs.
Send the original contract to the ASP; retain an electronic copy in the database.
Put the steps in order and prepare a systems flowchart of the ASP selection process;
assume that all steps occur in the same department. Ensure that your flowchart
conforms to the principles discussed in the text.
