An accounting information system captures data that are eventually grouped by
account, and then used to prepare general purpose financial statements. The system
could be described as:
A. A view-driven AIS.
B. An event-driven AIS.
C. Either a view-driven AIS or an event-driven AIS.
D. Neither a view-driven AIS nor an event-driven AIS.
Langenderfer and Rockness proposed:
A. that deontology is the best ethical viewpoint for professional accountants.
B. an eight-step model for dealing with ethical dilemmas.
C. the Sarbanes-Oxley Act of 2002.
D. standards of professionalism for accountants.
According to ISACA, one of COBIT’s enablers is required for successful completion of
all activities. Which of the following is most closely related to that enabler?
A. AICPA Core Competency framework
B. COSO internal control framework
C. COSO enterprise risk management framework
D. Capability Maturity Model
Consider the following short case as you respond to the question:
Abruzzi’s Italian Kitchen is a small family restaurant with an administrative staff of four
people. Giuseppi Abruzzi is the chief executive officer; his wife Maria is the chief
financial officer. Their son Antonio is responsible for all transactions dealing with
kitchen supplies, including the raw materials for menu items; their son Carlo is
responsible for all transactions dealing with dining room supplies, such as eating
utensils. The restaurant’s administrative practices have developed over the ten years of
its existence with minimal reliance on information technology and formal procedures
and a stronger emphasis on interpersonal relationships with a few reliable vendors.
Once a month, Antonio places orders for kitchen supplies with one of four vendors
based on price; the supplies are usually received within ten calendar days. On receipt of
the supplies, Antonio pays the vendor with a company check. Carlo follows a similar
process for dining room supplies, but works with a set of three vendors, none of which
sell kitchen supplies.
Internal control would be strengthened at Abruzzi’s Italian Kitchen if:
A. The company broadened its pool of vendors for kitchen and dining room supplies.
B. Maria took over the responsibility of paying vendors.
C. Both the company broadened its pool of vendors for kitchen and dining room
supplies and Maria took over the responsibility of paying vendors.
D. Neither the company broadened its pool of vendors for kitchen and dining room
supplies nor Maria took over the responsibility of paying vendors.
Data analytics involves three broad categories. Which of the following comprises
examples from a single category?
A. average age of people who bought video games, prediction of whether men or
women are more likely to buy a specific video game
B. prediction of whether men or women are more likely to buy a specific video game,
historic data on whether men or women purchased a specific video game
C. average age of people who bought video games, historic data on whether men or
women purchased a specific video game
D. average age of people who bought video games, historic data on whether men or
women purchased a specific video game, prediction of whether men or women are
more likely to buy a specific video game
As specified by the Audit Clarity Project, the introductory paragraph of an audit report
must identify: (i) the organization, (ii) the financial statements audited, (iii) related
information.
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
In accounting, ethics issues can arise in:
A. Determining the best school of ethical thought.
B. Asset valuation.
C. Both determining the best school of ethical thought and asset valuation.
D. Neither determining the best school of ethical thought nor asset valuation.
Please consider these independent cases as you respond to the question:
-Austin is the managing partner of a small CPA firm. In an effort to standardize certain
internal business processes, Austin formed a team that developed a set of guidelines for
tasks such as expense reimbursements and information technology purchases. After
developing the guidelines, the team devised ways to determine if the processes are
performing as expected.
-Julie is the chief financial officer of PSC Corporation. She recently worked with a
team to develop a broad set of principles that should characterize PSC’s business
processes. The team has applied those principles to some tasks in the accounting
department; their next task is to teach other PSC employees about the principles.
-Rob is an accountant at CTR Company. The owners of CTR, Lynn and Mark, don’t
know much about accounting, so Rob completes accounting tasks in whatever way
seems best to him.
For Julie to move her company’s business processes forward one level in the capability
maturity model, she should:
A. Make sure all PSC employees can list the principles her team developed.
B. Develop a written procedures manual that will help manage the processes.
C. Set benchmarks for each business process related to cost and time.
D. None of these; PSC’s business processes are already at the highest level of the
capability maturity model.
Consider the following short case as you respond to the question:
Abruzzi’s Italian Kitchen is a small family restaurant with an administrative staff of four
people. Giuseppi Abruzzi is the chief executive officer; his wife Maria is the chief
financial officer. Their son Antonio is responsible for all transactions dealing with
kitchen supplies, including the raw materials for menu items; their son Carlo is
responsible for all transactions dealing with dining room supplies, such as eating
utensils. The restaurant’s administrative practices have developed over the ten years of
its existence with minimal reliance on information technology and formal procedures
and a stronger emphasis on interpersonal relationships with a few reliable vendors.
Once a month, Antonio places orders for kitchen supplies with one of four vendors
based on price; the supplies are usually received within ten calendar days. On receipt of
the supplies, Antonio pays the vendor with a company check. Carlo follows a similar
process for dining room supplies, but works with a set of three vendors, none of which
sell kitchen supplies.
Internal control would be strengthened at Abruzzi’s Italian Kitchen if:
A. Kitchen supplies were ordered more than once a month.
B. Non-family members were hired in key positions.
C. Both kitchen supplies were ordered more than once a month and non-family
members were hired in key positions.
D. Neither kitchen supplies were ordered more than once a month nor non-family
members were hired in key positions.
Accounting information systems has links with other areas of accounting study,
including financial accounting. Which of the following combines an example of an AIS
output with information you would expect to find in the output?
A. Income statement, net sales broken down by product line
B. Journal entries, accounts to debit and credit
C. Balance sheet, listing of current asset accounts with their balances
D. All of these
Which of the following documents associated with the acquisition/payment process is
most likely to lead to a journal entry that debits inventory and credits accounts payable?
A. Purchase requisition, purchase order and receiving report
B. Purchase order, receiving report and invoice
C. Purchase requisition, receiving report and invoice
D. None of these
Please refer to the data flow diagram below in answering the question:
Which of the following statements about the data flow diagram is most true?
A. “External stakeholders” will be decomposed in subsequent levels.
B. “Ledger” must be maintained electronically.
C. Process 3.0 will be decomposed in subsequent levels.
D. All of these statements are true.
Which of the following statements would you expect to read in a company memo
advocating the use of the systems development life cycle to select general ledger
software?
A. There are ten steps in the accounting cycle.
B. Using the SDLC can help ensure reliable financial reporting.
C. Most accounting information systems have five generic parts.
D. General ledger software assists more with bookkeeping than it does with accounting.
In the first generic step of financial statement audits, the auditor should assess:
A. The internal control system.
B. Management’s integrity.
C. Both the internal control system and management’s integrity.
D. Neither the internal control system nor management’s integrity.
When a decision maker reaches the point where the amount of information actually
integrated into a decision begins to decline, the decision maker is experiencing:
A. Information asymmetry.
B. Information overload.
C. Enterprise risk.
D. Relapse errors.
Following the model presented in the text, the second generic step in a financial
statement audit is:
A. Assess management’s integrity.
B. Evaluate management’s credentials.
C. Review the internal control system.
D. Uphold generally accepted auditing standards.
A journal entry in a view-driven AIS debits equipment for $10,000, credits cash for
$2,000 and credits notes payable for $8,000. Which of the following pieces of data
would you expect to see in an event-driven AIS but not in the view-driven AIS?
A. The transaction date
B. The expected life of the equipment
C. Both the transaction date and the expected life of the equipment
D. Neither the transaction date nor the expected life of the equipment
Consider the following set of flowcharting symbols along with the case as you respond
to the question:
When the CEO of NTL Corporation resigned, the board of directors hired a recruitment
firm to look for a replacement. The recruitment firm prepared several job
announcements, then presented them to the board of directors. The board of directors
approved one of the job announcements; the recruitment firm used it to advertise the
position on the Internet and in relevant newspapers and professional publications. After
receiving several applications, the recruitment firm selected a pool of ten to pass on to
NTL’s board of directors. The board of directors, with the assistance of the recruitment
firm, went through three rounds of interviews, narrowing the pool from ten to three.
Each of the three finalists prepared a presentation on the strategic future of NTL and
delivered the presentation at a meeting of NTL shareholders. The board of directors
then made the final choice for a new CEO.
If the “recruiting firm” column of a systems flowchart includes a predefined process
labeled “receive applications,” it is likely to be connected to:
A. Symbol H or Symbol J
B. Symbol H or Symbol I
C. Symbol I or Symbol J
D. Symbol A
The sales/collection process is important in organizations because:
A. Without it, an organization may soon cease to exist.
B. It is the only method an organization has for generating cash flow.
C. Both without it, an organization may soon cease to exist and it is the only method an
organization has for generating cash flow.
D. Neither without it, an organization may soon cease to exist nor it is the only method
an organization has for generating cash flow.