Merlin Frodo has been doing custom piercings and tattoos for over thirty years. His
home and place of business is a garage in the harbor district of Seattle, Washington. He
keeps meticulous records of every job he has ever completed. These have been entered
into a computerized accounting information system that his accountant refers to as a
“data warehouse.” Merlin is considering adding scarification to his service offerings and
has asked his accountant to identify past customers who might be likely candidates for
this service. Merlin wants his accountant to engage in
A) customer auditing.
B) customer resource management.
C) data mining.
D) enterprise resource planning.
The SEC, PCAOB, and FASB are best described as external influences that directly
affect an organization’s
A) hiring practices.
B) philosophy and operating style.
C) internal environment.
D) methods of assigning authority.
The ________ should always be included with a merchandise shipment to a customer.
A) picking ticket
B) packing slip
C) sales invoice
D) remittance advice
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the
following error message while making an adjusting entry to the general ledger: “The
data you have entered does not include a source reference code. Please enter this data
before saving.” This is an example of a
A) validity check.
B) field check.
C) zero-balance check.
D) completeness test.
Which of the following is an example of input fraud?
A) A man used desktop publishing to prepare bills for office supplies that were never
ordered or delivered and mailed them to local companies. The invoices were for less
than $300, an amount that often does not require purchase orders or approvals. A high
percentage of the companies paid the bills.
B) Two accountants without the appropriate access rights hacked into Cisco’’s stock
option system, transferred over $6.3 million of Cisco stock to their brokerage accounts,
and sold the stock. They used part of the funds to support an extravagant lifestyle,
including a $52,000 Mercedes-Benz, a $44,000 diamond ring, and a $20,000 Rolex
watch.
C) The office manager of a Wall Street law firm sold information to friends and
relatives about prospective mergers and acquisitions found in Word files. They made
several million dollars trading the securities.
D) A fraud perpetrator scanned a company paycheck, used desktop publishing software
to erase
the payee and amount, and printed fictitious paychecks.
An analyst who asks the question, “Does the system produce actual and complete data?”
is investigating what post implementation factor?
A) Accuracy.
B) Compatibility.
C) Goals and objectives.
D) Reliability.
Which of the following is not considered a source document?
A) A copy of the company’s financial statements.
B) A copy of the company’s shipping document.
C) A copy of the company’s sales journal.
D) A copy of the company’s ledger.
In which of the following cases is outsourcing likely to be the best solution to the firm’s
data processing needs?
A) Peterson International is a trenchcoat wholesaler to retailers around the world. Sixty
percent of sales orders are taken during the months of August and September. Peterson
needs a system to manage online ordering and fulfillment.
B) Battlegoat Investment Strategies manages investors’ portfolios and provides services
to wealthy customers. The firm needs a system that will pull together selected
investment data from a variety of sources and that allows account managers to prepare
customized reports.
C) Yachtman Limited is in the business of buying businesses, managing them for a few
years, then selling them for a profit. The firm requires a flexible system that will allow
it to manage the types of businesses it controls.
D) Desalinas LLC, manages the construction of desalinization plants. It needs a system
that will allow it to manage the construction process from bid to billing.
Implementation of this REA diagram into a relational database would require how
many tables?
A) 12
B) 13
C) 8
D) 9
In which transaction cycle would customer sales transaction information be most likely
to pass between internal and external accounting information systems?
A) the revenue cycle
B) the expenditure cycle
C) the human resources / payroll cycle
D) the financing cycle
Emma Kolb is a system analyst at a manufacturing company located in the Midwest.
She has been asked to analyze the company’s accounting information system and to
recommend cost-effective improvements. After noting that the production and sales
departments use database systems that are entirely separated, she recommends that they
be combined. Implementation of her recommendation would benefit the company by
contributing to data
A) independence.
B) integration.
C) redundancy.
D) qualifications.
A subsidiary ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual
sub-accounts.
D) contains summary-level data for every account of the organization.
Why are threats to accounting information systems increasing?
A) Many companies have invested significant resources to protect their assets.
B) Many companies do not realize that data security is crucial to their survival.
C) Many companies believe that protecting information is a vital strategic requirement.
D) Computer control problems are often overestimated and overly emphasized by
management.
________ is a performance evaluation approach that evaluates systems based on the
weighted score of criteria and points.
A) Benchmarking
B) Point scoring
C) Prototyping
D) Requirements costing
How many tables are needed to implement an REA data model that has five distinct
entities, five M:N relationships and three 1:N relationships in a relational database?
A) 5
B) 7
C) 8
D) 10
Which of the following is not a human trait social engineers take advantage of to entice
people to reveal information they should keep confidential?
A) Compassion
B) Sloth
C) Sex Appeal
D) Authority
Identify the piece of information below that is typically needed to acquire inventory.
A) job descriptions
B) vendor performance
C) market coverage
D) capacity needs
The receiving clerk at Wattana Technologies examines incoming shipments and checks
their purchase order numbers. A receiving report is then sent to accounts payable, where
it is reconciled with the relevant purchase orders and invoices and payment is
authorized. Which of the following would correct control weaknesses related to the
clerk’s activities?
A) Controls are adequate under the current system.
B) Vendor invoices should be approved for payment by the purchasing manager.
C) Purchase orders and receiving reports should be reconciled by the purchasing
manager.
D) Vendor invoices should be approved for payment by the shipping clerk after the
purchase order and receiving report are reconciled.
To ensure compliance with copyrights and to protect itself from software piracy
lawsuits, companies should ________.
A) periodically conduct software audits
B) update the operating system frequently
C) buy software from legitimate suppliers
D) adopt cloud operating platforms
Which of the following is not a component of the COSO Enterprise Risk Management
Integrated Framework (ERM)?
A) Monitoring.
B) Ethical culture.
C) Risk assessment.
D) Control environment.
Several types of documentation must be prepared for a new system. The type of
documentation that includes a procedures manual and training materials is called
A) development documentation.
B) operations documentation.
C) reference documentation.
D) user documentation.
Identify one potential outcome of the delete anomaly.
A) inconsistent data
B) inability to add new data
C) unintentional loss of data
D) none of the above
________ is a simple, yet effective, method for catching or preventing many types of
employee fraud.
A) Requiring all employees to take annual vacations
B) Monitoring all employees computer usage activities
C) Requiring all employees to take a fraud prevention awareness course
D) Explaining that fraud is illegal and will be severely punished to employees
The control that verifies accuracy by comparing two alternative ways of calculating the
same total is called
A) concurrent update controls.
B) cross-footing balance test.
C) data conversion controls.
D) recalculation of batch totals.
In which transaction cycle would information for paying dividends be most likely to
pass between internal and external accounting information systems?
A) the revenue cycle
B) the expenditure cycle
C) the human resources / payroll cycle
D) the financing cycle
Sabotage is an example of a(n) ________ threat.
A) natural and political disasters
B) software errors and equipment malfunctions
C) unintentional acts
D) intentional acts (computer crimes)
Which symbol would be used in a flowchart to indicate a wireless connection between a
laptop and the mainframe?
A) #13
B) #12
C) #11
D) #14
To minimize the risk of system downtime, Grizzly Corporation stores its data on
multiple disk drives simultaneously. This practice is called
A) downtime minimization plan.
B) redundant arrays of independent drives.
C) redundant arrays of independent backups.
D) patch backup management.
In a program flowchart, branching to alternative paths is represented by
A) a terminal.
B) data/information flow.
C) computer operation.
D) decision diamond.
Performance reports for cost centers should compare actual versus budget ________
costs.
A) controllable
B) uncontrollable
C) fixed
D) variable
Which type of work listed below is not typical of internal auditors?
A) Operational and management audits.
B) Information system audits.
C) Financial statement audit.
D) Financial audit of accounting records.
Suppose a state law mandates that the firm maintained certain sales information. Where
should this requirement be considered in a feasibility study?
A) Economic feasibility.
B) Legal feasibility.
C) Operational feasibility.
D) Technical feasibility.