What control would best mitigate the threat of paying an invoice twice?
A) never authorizing payment of a photocopy of an invoice
B) double-checking mathematical accuracy of invoices
C) approval of purchase orders
D) maintaining adequate perpetual inventory records
In 2015, Singh Manufacturing implemented a Web-based information system that
allows all employees to access mission-critical information. The intention was to
increase production efficiency. Unfortunately, it had the opposite effect, as deliveries
fell behind schedule and costs increased. Shaman Gupta, the director of information
technology services, asked Ashlee Wells to come in and talk with him about the system.
Ashlee is a long-time employee of Singh, and her opinion is valued by her peers and by
her supervisor.
“So Ashlee, how’s it going down there in the shop?”
“Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
production. Now, we got that computer system. Most of the time we can’t get all of the
information that we need. Is there some way to print out a list that has everything that
we need?”
Shaman thought for a while before responding. “Well, Ashlee, to tell you the truth, I’m
not so sure how to do it myself, but there must be a way. We’ll bring in the consultants
that helped us build the system. Maybe they can help.”
Which of the following characteristics of useful information is absent in the situation
described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
________ and ________ are approaches to evaluating vendor proposals that do not
incorporate dollar estimates of costs or benefits.
A) Benchmark problem; point scoring
B) Point scoring; requirements costing
C) Requirements costing; benchmark problem
D) Point scoring; prototyping
In a data flow diagram, a triangle represents
A) an internal control.
B) document filing.
C) on page connection.
D) document processing.
Several types of documentation must be prepared for a new system. The type of
documentation that includes a system description; copies of output, input, and file and
database layouts; program flowcharts; test results; and user acceptance forms is called
A) development documentation.
B) operations documentation.
C) reference documentation.
D) user documentation.
Control risk is defined as the
A) susceptibility to material risk in the absence of controls.
B) risk that a material misstatement will get through the internal control structure and
into the financial statements.
C) risk that auditors and their audit procedures will not detect a material error or
misstatement.
D) risk auditors will not be given the appropriate documents and records by
management who wants to control audit activities and procedures.
Identify the preventive control below.
A) Reconciling the bank statement to the cash control account.
B) Approving customer credit prior to approving a sales order.
C) Maintaining frequent backup records to prevent loss of data.
D) Counting inventory on hand and comparing counts to the perpetual inventory
records.
When programmers are working with program code, they often employ utilities that are
also used in auditing. For example, as program code evolves, it is often the case that
variables defined during the early part of development become irrelevant. The
occurrences of variables that are not used by the program can be found using
A) program tracing.
B) scanning routines.
C) mapping programs.
D) embedded audit modules.
Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers,
chart of accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a
give-get economic exchange.
What role should an auditor play in system development?
A) an independent reviewer only
B) a developer of internal controls
C) an advisor and developer of internal control specifications
D) A and B above
What type of conversion changes the old system to a new one by operating both
systems simultaneously until the organization is confident the new system is
functioning correctly?
A) Direct conversion.
B) Parallel conversion.
C) Phase-in conversion.
D) Pilot conversion.
Which of the following would probably be the least effective control to mitigate the risk
of paying a phony invoice payable for inventory purchases that were never made?
A) Only pay from original invoices.
B) Require three-way match for all inventory purchase invoices.
C) Cancel all invoices and supporting documentation when paid.
D) Establish strict access and authorization controls for the approved vendor master
file.
Which of the following is an example of a preventive control?
A) The creation of a “security-aware” culture.
B) The creation of a “Log user friendly” culture.
C) The creation of a “continuous monitoring” culture.
D) The creation of a chief information security officer position.
Identify the department below that should not be able to submit a purchase requisition.
A) Marketing
B) Production
C) Inventory Control
D) None of the above
Which group of individuals listed below can be the most effective in generating
employee support and encouraging the development and acceptance of an AIS project?
A) Accountants.
B) Information systems steering committee.
C) Management.
D) Project development team.
The major benefits of using the REA model as the basis for designing an AIS include all
of the following except
A) the REA data model integrates non-financial and financial data in the AIS.
B) the REA data model makes both non-financial and financial data easily accessible to
management.
C) the REA data model provides the basis for building the kind of flexible AIS that is
responsive to management’s changing information needs.
D) the REA data model reduces the need for accountants to understand the underlying
accounting journals and ledgers.
The accounting department at Aglaya Telecom records an average of 5,000 transactions
per hour and have a recovery time objective of 120 minutes. Aglaya recently suffered a
hardware malfunction and it took the company 20 hours to recover their lost data. How
many transactions did Aglaya recover?
A) 20,000 transactions.
B) 30,000 transactions.
C) 40,000 transactions.
D) 50,000 transactions.
Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area.
Antia uses computer technology to provide superior customer service. The store’s
database system was designed to make detailed information about each Japanese fan
easily accessible to her customers. Accordingly, the fan price and condition are
provided for each fan, along with many pictures of each fan. In Antia’s database, the
data about each Japanese fan represents a(n)
A) entity.
B) attribute.
C) field.
D) record.
A prototype
A) is expensive to create and is therefore only created once user needs are well-defined.
B) is making an internal and external review of the system to be analyzed, noting that
users may not use the existing AIS as intended.
C) is typically created during the physical design phase of systems development.
D) can be used to help users identify and communicate their system needs.
When using electronic documents, ________ increase(s) the accuracy of data entry.
A) access controls
B) separation of duties
C) general controls
D) application controls
Financial Institution number is most likely to be a foreign key in
A) Cash.
B) Disburse Cash.
C) Receive Inventory.
D) Warehouse.
Who is responsible for planning and monitoring a project to ensure timely and
cost-effective completion?
A) Information systems steering committee.
B) Management.
C) Project development team.
D) Accountants.
Which attribute below is not an aspect of the COSO ERM Framework internal
environment?
A) Enforcing a written code of conduct.
B) Holding employees accountable for achieving objectives.
C) Restricting access to assets.
D) Avoiding unrealistic expectations.
The payroll transaction file should contain
A) entries to add new hires.
B) time card data.
C) changes in tax rates.
D) All of the above are correct.
Hiring qualified personnel is an example of a ________ control, and procedures to
resubmit rejected transactions are an example of a ________ control.
A) corrective; detective
B) detective; corrective
C) preventive; corrective
D) detective; preventive
Which of the following statement is true about master file?
A) Individual master file records are permanent.
B) Individual master file records may change frequently.
C) Individual master file records are sometime being referred to as date value.
D) Individual master file records are sometime being referred to as entity.
________ is a method of comparing systems based on the cost of all required features;
when software does not meet all requirements, the cost of developing unavailable
features is estimated and added to its cost.
A) Benchmarking
B) Point scoring
C) Requirement costing
D) Prototyping
Use the chart below to answer the following questions regarding flow chart symbols.
Which symbol would be used in a flowchart to represent a connection to another part of
the flowchart on a different page?
A) #4
B) #9
C) #14
D) #15
________ is an efficient way to track and process information about raw materials used
in production.
A) A just-in-time inventory system
B) Identifying materials with bar codes or RFID tags
C) A materials resources planning inventory system
D) Job-order costing
Which control would be most appropriate to address the problem of inaccurate payroll
processing?
A) Segregation of duties: HRM department updates master data, but only payroll
department issues paychecks.
B) Redepositing unclaimed paychecks and investigating cause.
C) Cross-footing of the payroll register.
D) An imprest payroll checking account.
Identify six physical access controls.
Describe the major business activities and key decisions that must be made in the
production cycle, the threats to accomplishing production cycle objectives, and the
controls that can mitigate those threats.
Describe the physical design stage of the systems development life cycle.
In a supplier audit, what are some of the red flags that could indicate potential supplier’s
problems?
How can information technology be used to improve the vendor invoice approval
process?
Describe how to communicate information and monitor control processes in
organizations.
How can an AIS become part of the firm’s value chain and add value to the business?
How can a well-designed AIS improve the efficiency and effectiveness of a company’s
value chain?
Define data, information, and how the value of information is determined.
Explain the types of attributes that tables possess in a relational database.
Define and describe the EOQ approach to inventory management.
Explain the key decisions and information needs in planning and scheduling
production, the threats to those activities, and the controls that can mitigate those
threats.
Discuss the advantage and disadvantage of the open-invoice method.
Identify the individuals who make up the project development team and describe the
team’s purpose.
Explain how security and the other four principles in the Trust Services Framework
affect systems reliability.