An ERP system is a sophisticated form of relational database software; within each
module, data are stored in tables. In which modules would you expect to find
“employee ID” as a field in one or more tables: (i) customer relationship management,
(ii) human resource management, (iii) supply chain management?
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
Consider the following REA diagram as you respond to the question:
Which of the following is an internal agent in the model?
A. Vendor
B. Purchasing agent
C. Both vendor and purchasing agent
D. Neither vendor nor purchasing agent
Raul was leading a team charged with developing a new system for budgeting. The
formation of the team indicates that which step of the SDLC has been completed?
A. Initiation/planning
B. Requirements analysis
C. Design
D. Build
Data flow diagrams can be used in which of the following steps of the systems
development life cycle: (i) requirements analysis, (ii) design, (iii) implementation.
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
Consider the following table as you respond to the questions:
Which of the following is the best choice for Item A in the table?
A. Risk response
B. Control environment
C. Expectancy theory
D. Generic responses
As an input to the accounting information system, a properly completed sales invoice
can help an auditor with which of the following financial statement assertions?
A. Existence or occurrence
B. Completeness
C. Both existence or occurrence and completeness
D. Neither existence or occurrence nor completeness
According to COBIT 5, an organization’s information technology governance and
management should separate governance from management. In that context, examples
of governance include:
A. developing a comprehensive organizational budget.
B. deciding the dollar amount of an upcoming dividend.
C. Both developing a comprehensive organizational budget and deciding the dollar
amount of an upcoming dividend.
Flowcharts can impact the design, implementation and evaluation of an accounting
information system. Determine whether each statement below is: (i) always true, (ii)
sometimes true or (iii) never true.
a. Accounting information systems have five generic elements; a flowchart can be an
example of at least one of the elements.
b. All aspects of an AIS should always be represented in a single flowchart of no more
than three pages.
c. Flowcharts are required if a company wants to use the COSO internal control
framework.
d. Flowcharts are useful to auditors.
e. Flowcharts can be used as part of a business process management project for an AIS.
Separation of duties can promote strong internal control in the conversion process.
Which three duties should be separated?
A. Physical custody, authorization and recordkeeping
B. Direct material, labor and overhead processing
C. Assets, liabilities and equity
D. Job order, process and hybrid
SRE Corporation is a software development company; it uses block coding in its chart
of accounts. Which of the following statements is most true?
A. Information technology may not be necessary to assign new account numbers.
B. Human judgment may be involved in assigning new account numbers.
C. Both information technology may not be necessary to assign new account numbers
and human judgment may be involved in assigning new account numbers.
D. Neither information technology may not be necessary to assign new account
numbers nor human judgment may be involved in assigning new account numbers.
Dale is an employee of Big State University who also does some independent
consulting to supplement income. Because consulting engagements are infrequent, Dale
has not purchased insurance for the company. If Dale requires consulting clients to pay
in cash, which of the following risk exposures is most serious?
A. Directors’ and officers’ liability risk
B. Systems risk
C. Credit risk
D. Consulting risk
OTA Corporation completed the following events as part of its acquisition/payment
process. Record each one in general journal format; if an event does not require a
journal entry, write “not applicable.”
a. Received request to order 300 units of inventory with an expected cost of $1,400.
b. Purchased inventory on account, $1,500.
a. not applicable
b. Debit Inventory, Credit Accounts Payable, $1500.
c. Debit Inventory, Credit Cash $300.
d. not applicable
e. Debit Accounts Payable, Credit Inventory $200.
f. Debit Accounts Payable, Credit Cash $1300. ($1500 original amount less $200
return)
As a form of internal control, a bank reconciliation is most closely related to which step
in the sales/collection process?
A. Second
B. Fourth
C. Fifth
D. Sixth
As a processing tool in the AIS, general ledger software can be useful in:
A. A management audit.
B. An investigative audit.
C. Both a management audit and an investigative audit.
D. Neither a management audit nor an investigative audit.
Consider the flowchart below as you respond to the question:
Flowcharts should be organized in columns based on areas of responsibility. The
process depicted would benefit from reorganization into __ departments within the
company.
A. Two
B. Three or four
C. Five or six
D. More than six
A company engaged in B2C e-business needs to create a new computer network. The
process of creating the network would benefit most from:
A. The capability maturity model.
B. The systems development life cycle.
C. The use of expectancy theory.
D. Re-ordering the steps in the accounting cycle.
Consider the following flowchart symbols as necessary as you respond to the remaining
questions in this chapter:
Symbol C depicts:
A. An off-page connector.
B. An on-page connector.
C. A manual process.
D. A database.
Critical thinking is important in:
A. The design of accounting information systems.
B. The implementation of accounting information systems.
C. Auditing.
D. All of these.