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The third generic step in a financial statement audit has the strongest relationship to one
of the ___ standards in GAAS.
A. General
B. Field work
C. Reporting
D. Environmental
Which of the following statements about database tables and REA models is most true?
A. Every box in a REA model requires the creation of exactly one table.
B. Cardinalities help ensure that database tables are in third normal form.
C. Both every box in a REA model requires the creation of exactly one table and
cardinalities help ensure that database tables are in third normal form are true.
D. Neither every box in a REA model requires the creation of exactly one table nor
cardinalities help ensure that database tables are in third normal form is true.
Which generic element of the AIS is most closely associated with each of the following
questions?
a. Beyond the general-purpose financial statements, what other reports will managers
and system users need?
b. How many copies of each source document will be required?
c. How should the AIS be designed to facilitate the production of other reports?
d. If computer-based tools are used in the AIS, which software and hardware packages
should be implemented?
e. Should AIS tools be manual, computer-based or both?
f. Under what conditions can/should data be destroyed?
g. What behavioral effects are controls likely to have?
h. What controls are necessary to promote information integrity in the AIS?
i. What kinds of source documents will system users need?
j. Where should data be stored?
Transactions involved in the acquisition/payment process include:
A. Debit inventory, credit cash
B. Debit inventory, credit accounts payable
C. Debit accounts payable, credit cash
D. All of these
Which of the following is an example of a deferred revenue?
A. A university receives cash from students prior to the start of classes.
B. A convenience store sells newspapers to its customers.
C. Both a university receives cash from students prior to the start of classes and a
convenience store sells newspapers to its customers.
D. Neither a university receives cash from students prior to the start of classes nor a
convenience store sells newspapers to its customers.
Which of the following best pairs an element of the COSO enterprise risk management
framework with an example of that element?
A. Objective setting, determining which elements of the COSO framework to use
B. Event identification, identifying needed internal controls
C. Risk assessment, annual management retreats focused on the ERM plan
D. Risk response, diversifying risk by expanding internationally
The nature and complexity of topics in accounting information systems can lead to
information overload. Consider the situations below; for each situation, indicate one
countermeasure from the list suggested by Eppler and Mengis.
a. Ray attempted to design relational database tables for his company's
acquisition/payment process before lunch.
b. Employees at TRM Corporation listened to Susan's two-hour presentation on the
COSO internal control model.
c. Peter prepared a report for the board of directors explaining each inventory purchase
for the previous six months.
d. Juanita, the chief financial officer of TRM Corporation, attempted to explain the role
and purpose of financial statements without using the proper accounting terminology.
e. After receiving a report evaluating various prospective ERP vendors, Sam decided to
delay making a choice for three weeks.
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.
Consider the process from HSO's point of view. In a systems flowchart of the process
described, all of the following would be represented with the same symbol except:
A. The office manager assembles a team of employees.
B. The team determines if HSO can accept the order.
C. The client decides whether to accept HSO's proposal.
D. HSO determines whether to complete the final work on the project.
Consider the following REA diagram as you respond to the question:
The numbers and symbols in parentheses in the model are called:
A. Cardinalities
B. Database construction tools
C. Internal controls
D. Relationship descriptors
Consider the table below as you answer the questions:
In the table, "A" would most appropriately be replaced with:
A. Name
B. Namespace prefix
C. Data type
D. Some other label
The table is a replica of the one in the chapter's "AIS in the Business World."
Consider the table below as you respond to the questions:
Which of the following is the best choice for Item D in the table?
A. Initiation/planning
B. Build
C. Implementation
D. Operations and maintenance
