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Consider the following table as you respond to the questions:
Which of the following is the best choice for Item F in the table?
A. Risk response
B. Internal environment
C. Information and communication
D. Monitoring
SPL Corporation is an information technology consulting firm with offices in six states.
In implementing an ERP system for its own use, management should be careful to:
A. Resolve multisite issues.
B. Select a compatible ERP system.
C. Both resolve multisite issues and select a compatible ERP system
D. Neither resolve multisite issues nor select a compatible ERP system
The chapter discussed four macro- and four micro-level factors to consider when
selecting information technology. Suppose you have been hired as a consultant to
recommend new general ledger software for a client; you have decided to conduct
interviews and focus groups as part of developing your recommendation. For each
factor listed below, indicate one question you would ask in the interviews/focus groups.
Ensure that your questions are specific to the general ledger software.
a. Need: ________________________________________________________
b. Strategic fit: ___________________________________________________
c. Personnel involvement: __________________________________________
d. Financing: _____________________________________________________
e. Cost: _________________________________________________________
f. Adaptability: ____________________________________________________
g. Training: _______________________________________________________
h. Vendor reliability: ________________________________________________
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.
Porter's value chain comprises five primary activities and four support activities. Which
of the following pairs a support activity with an example from the case?
A. information technology, reports are filed in HSO's database
B. infrastructure, HSO bills the client
C. operations, HSO manufactures golf carts
D. infrastructure, HSO designs scooters
Consider the statements below as you answer the question:
-The chief financial officer of TNL Corporation is a certified public accountant.
-OBP Corporation's internal audit manager is a certified fraud examiner.
-CPQ Corporation maintains a set of systems flowcharts that describe current business
processes.
-DKM Corporation encrypts all data transmitted over its wireless network.
Which statements relate to the second generic step in a financial statement audit?
A. TNL and OBP
B. TNL and CPQ
C. OBP and CPQ
D. TNL, OBP and CPQ
Studying AIS helps students understand business processes from an accounting
perspective. Which of the following activities would commonly be associated with the
financing process?
A. Selling goods and services on credit
B. Issuing equity securities
C. Making payments to vendors
D. Hiring employees to work in the finance department
Fill in the blanks below based on the benefits of XBRL discussed in the text.
a. Consolidates results across ___ with much greater speed and reliability.
b. Focus effort on ___, rather than on laborious tasks in gathering, compiling and
preparing data.
c. Free themselves from ___ systems and software which are difficult and costly to
replace.
d. Improve investor relations through provision of more ___ information.
e. Saves costs by preparing data in one form and automatically generating ___.
Which flowcharting symbol would be used to represent each independent item below?
a. Begin manufacturing process b. Complete initial public offering c. Electronic
applicant files d. Evaluate product quality e. Issue debt? f. Issue Form W-2 g. Job cost
sheet h. Manually assemble raw materials i. Manually file Form W-4 j. Payroll check
In connection with spreadsheets, Rivet Software and Ez-XBRL are best used for which
of the following tasks?
A. Creating XBRL instance documents.
B. Preparing presentations on XBRL.
C. Both creating XBRL instance documents and preparing presentations on XBRL.
D. Neither creating XBRL instance documents nor preparing presentations on XBRL.
Which of the following items associated with the acquisition/payment process is likely
to expose an organization to one or more forms of operational risk?
A. Purchase order prepared by hand
B. Schedule of accounts payable prepared with Excel
C. Both purchase order prepared by hand and schedule of accounts payable prepared
with Excel
D. Neither purchase order prepared by hand nor schedule of accounts payable prepared
with Excel
When employees of the City of Fenris need supplies, they fill out a purchase requisition
and send it to the city's purchasing department. The purchasing agents consolidate
requisitions for similar supplies and prepare a purchase order to send to a vendor. The
vendor ships the supplies directly to the purchasing department and then bills the city.
Accounting clerks pay vendor invoices within thirty days. Within the context of that
business process, which of the following best pairs a risk with an internal control that
will address the risk?
A. Purchasing supplies from an unauthorized vendor, separation of duties
B. Paying for supplies that were not received, document matching
C. Receiving supplies that were not ordered, limit checks
D. Requisitioning supplies that are not needed, pre-numbered purchase requisitions
Objectives of knowledge management include:
A. Creating knowledge repositories.
B. Improving knowledge access.
C. Both creating knowledge repositories and improving knowledge access.
D. Neither creating knowledge repositories nor improving knowledge access.
Which of the following statements best represents a disadvantage of using the systems
development life cycle?
A. It is the only methodology available for systems design projects.
B. Its steps should be completed in a very specific order.
C. It minimizes user involvement in the system.
D. All of these are disadvantages of the SDL
C.
Consider the following table as you respond to the questions:
Which of the following is the best choice for Item C in the table?
A. DFN wants to reduce the cost of processing purchase orders.
B. DFN's cost of processing purchase orders is too high.
C. Purchasing department employees lack instrumentality.
D. Processing purchase orders is part of the acquisition/payment process.
ABC Corporation, a US manufacturer, files its 10-K annual report with the SEC using
XBRL. Being a US manufacturer tells ABC which ___ to use; the 10-K is a(n) ___.
A. Taxonomy; instance document
B. Taxonomy; specification
C. Specification; instance document
D. Specification; taxonomy
Which of the following should be placed at the top of each page of a systems flowchart:
(i) the number of columns in the flowchart, (ii) the number of pages in the flowchart,
(iii) the name of the process depicted?
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
Consider the following short case as you respond to the question:
Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of
whom are already licensed CPAs and some of whom are still working toward licensure.
She is responsible for audits of independent bookstores in California, Nevada and
Arizona. Amanda is concerned that the less experienced professionals she supervises
are repeating the mistakes she and the more experienced professionals on her team
made when they began auditing. She therefore wants to create a knowledge
management system.
Call recommended seven steps for developing a knowledge management system, one of
which relates to defining business goals. Appropriate business goals for Amanda's
situation include:
A. Hire more auditors.
B. Cut down on relapse errors.
C. Both hire more auditors and cut down on relapse errors.
D. Neither hire more auditors nor cut down on relapse errors.
Which of the following statements about accounting and bookkeeping is most true?
A. The FASB Conceptual Framework is relevant in accounting, but not in bookkeeping.
B. The FASB Conceptual Framework is relevant in bookkeeping, but not in accounting.
C. As an element of the AIS, internal controls are irrelevant to bookkeeping.
D. As an element of the AIS, outputs are relevant to accounting.
According to COBIT's principles, information technology governance and management
should cover the enterprise:
A. from governance to management.
B. end to end.
C. inside the information systems and accounting departments only.
D. outside the information systems and accounting departments only.
The text identified four areas that link AIS with auditing: critical thinking, internal
control, business processes and information technology. Consider topics you have
studied this term other than those four; choose one, and explain how it connects AIS
with auditing.
List, in order, the steps in the acquisition/payment process discussed in the text.
Prepare a systems flowchart based on the following case: The Celebration Theatre is a
small, independent theatre that puts on 12 plays per year. 30 days before the start of
each calendar quarter, Celebration prepares advertising for the productions in the
upcoming quarter. They advertise on their web site, via e-mail to their season
subscribers and via direct mail and brochures to others. Patrons can buy tickets for a
single play; alternatively, they can subscribe to all three plays each quarter. Quarterly
subscriptions offer a 25% discount from the prices of single tickets. Patrons may
purchase tickets over the phone, at the box office or via the theatre's web site. All
tickets are held at the box office where they can be picked up as early as one week prior
to the performance. The theatre has an "open seating" plan, so patrons do not reserve a
specific seat at any performance. If tickets are purchased in person at the box office,
non-subscribers may pay with cash or a major credit card; subscribers can pay with
cash, major credit card or check. All tickets purchased over the phone or via the web
site must be paid for with a major credit card. Celebration maintains an electronic
database to track all ticket sales; paper tickets are printed at least ten days prior to a
performance.
List, in order, the seven steps to create a knowledge management system.
Several journal entries common to the sales/collection process are listed below. For
each, explain what transaction the entry is recording.
