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In contrast with other areas of accounting, AIS more frequently involves problems with
non-deterministic answers. Which questions in the list below have non-deterministic
answers?
a. How do you calculate depreciation using the straight-line method?
b. How many accountants should ITI Corporation hire?
c. Should ITI Corporation expand its operations to other countries?
d. Should ITI Corporation reconcile its bank statement at least once a month?
e. Should ITI Corporation use Quickbooks or Peachtree for transaction processing?
f. Should Thai use information from textbooks as one source in a paper for her AIS
course?
g. What is the journal entry to record a cash sale?
h. Which inventory cost flow assumption (FIFO, LIFO) does ITI Corporation use?
i. Which local bank should ITI Corporation do business with?
j. With respect to financial reporting, is relevance more important than reliability?
Consider the following table as you respond to the questions:
Which of the following is the best choice for Item H in the table?
A. To reduce the risk, DFN will offer financial incentives for long-time employees to
retire.
B. To share the risk, any cost savings will defray the cost of an annual purchasing
department employee retreat.
C. Both to reduce the risk, DFN will offer financial incentives for long-time employees
to retire and to share the risk, any cost savings will defray the cost of an annual
purchasing department employee retreat.
D. Neither to reduce the risk, DFN will offer financial incentives for long-time
employees to retire nor to share the risk, any cost savings will defray the cost of an
annual purchasing department employee retreat.
The chapter discussed three major ideas from management and their relationship to
accounting information systems: COSO's enterprise risk management framework,
business process management and expectancy theory. Which of the following
statements is most true?
A. The three ideas are unrelated to one another.
B. The generalized model of business process management could be used to develop a
system for managing risk.
C. The generalized model of business process management should be used to analyze
employee motivation.
D. All organizations should include the risk of non-motivated employees in their COSO
risk management plan.
The accounting cycle comprises ten steps. Companies that use XBRL do not have to:
A. Prepare journal entries.
B. Close the nominal accounts.
C. Both prepare journal entries and close the nominal accounts.
D. Neither prepare journal entries nor close the nominal accounts.
XBRL is structured into taxonomies which reside in namespaces. All of the following
are namespaces except:
A. http://xbrl.us/country/2008-10-31
B. http://xbrl.us/rr/2008-12-31
C. http://xbrl.us/mda/2008-10-31
D. http://xbrl.org
Tagging software is used to prepare XBRL:
A. Instance documents
B. Taxonomies
C. Namespaces
D. Internal controls
Consider the following statements as you respond to the question:
i. Ask managers to think of one hundred uses for a brick, other than for building things.
ii. Assess the educational background and organizational experience of employees.
iii. Conduct a one-day seminar on how business processes can create value in the
marketplace.
iv. Encourage managers to suggest ideas, even if they are impractical.
v. Hold weekly meetings to update interested parties on the BPM project; ensure at least
one member of top management attends each meeting.
vi. Ignore opinions and insights from people not directly involved with a business
process.
The text discussed seven basic principles of business process management. Which one
is not illustrated by any of the six statements?
A. Understand how business processes interact with organizational strategy.
B. Be open to alternatives.
C. Make sure tasks for external consultants are well defined.
D. Communicate early, communicate often.
Please consider the following short case as you respond to the question:
Sue and Sally are partners in a small local bakery specializing in wedding and birthday
cakes. They use a simple Excel spreadsheet to record journal entries and prepare
financial statements and tax returns. Robert, the owner of a consulting company that
installs and maintains ERP systems, has recently approached them about the possibility
of implementing an ERP system in their operations. If they accept his offer, Robert will
provide a series of online tutorials to help them learn about the new system. Sue and
Sally believe the implementation of the ERP system will make it easier for them to
borrow money to expand the bakery.
Based on the information in the case, all parties need to be concerned with which of the
following common causes of ERP implementation failure?
A. Inaccurate data in the system
B. Unrealistic expectations
C. Both inaccurate data in the system and unrealistic expectations
D. Neither inaccurate data in the system nor unrealistic expectations
Please consider the following short case as you respond to the question:
Sue and Sally are partners in a small local bakery specializing in wedding and birthday
cakes. They use a simple Excel spreadsheet to record journal entries and prepare
financial statements and tax returns. Robert, the owner of a consulting company that
installs and maintains ERP systems, has recently approached them about the possibility
of implementing an ERP system in their operations. If they accept his offer, Robert will
provide a series of online tutorials to help them learn about the new system. Sue and
Sally believe the implementation of the ERP system will make it easier for them to
borrow money to expand the bakery.
Which of the following best pairs a fact from the case with an appropriate cause of ERP
system failures?
A. Sue and Sally are partners in a small local bakery; poor leadership from top
management
B. They use a simple Excel spreadsheet; inadequate training and education
C. The ERP system will make it easier for them to borrow money; unrealistic
expectations
D. All of these
Organizations can benefit from XBRL by obtaining quicker responses from
counterparties. Examples of counterparties include:
A. The SEC.
B. Lenders.
C. Both the SEC and lenders.
D. Neither the SEC nor lenders.
Which generic element of the AIS is focused on master files, transaction files and
junction files?
A. Inputs
B. Processes
C. Outputs
D. Storage
In an auditing course, students develop their decision making skills, learn how to
conduct a financial statement audit and learn the various types of audit reports. Which
of the following therefore links AIS with auditing?
A. Communication skills
B. Professional judgment
C. Both communication skills and professional judgment
D. Neither communication skills nor professional judgment
Bell's characteristics of a professional include the ability to recognize the influence of:
A. Political and social forces.
B. Economic forces.
C. Legal and regulatory forces.
D. All of these.
Consider the following statements as you respond to the question:
i. Based on my research and reading, I'm sure I want to pursue a career in fraud
examination.
ii. Good grades and leadership skills generally lead to a good job.
iii. I am sure I'll pass the CPA exam on my first attempt.
iv. I can definitely complete my accounting degree within four years.
v. I've spoken to several friends and family members who work for large corporations.
Which group of statements combines all three variables in expectancy theory?
A. III, II, I
B. III, IV, V
C. II, III, IV
D. None of these
The fundamental purpose of the sales/collection process is to:
A. Provide goods and services to clients.
B. Collect payment from them.
C. Both provide goods and services to clients and collect payment from them.
D. Neither provide goods and services to clients nor collect payment from them.
Soares identified five types of Big Data. Which of the following best pairs one type
with an example?
A. machine-to-machine, GPS data transmitted from a company vehicle to its
information system
B. biometric, employees' social security numbers
C. biometric, GPS data transmitted from a company vehicle to its information system
D. machine-to-machine, employees' social security numbers
According to the Audit Clarity Project, the auditor's report must explain management's
responsibilities for:
A. the board of directors and other parties.
B. ensuring that the financial statements are fairly presented.
C. financial statements and internal controls.
D. paying the auditor when the engagement is finished.
Consider the flowchart below as you respond to the question:
Systems flowcharts can be used in AIS work to recommend process improvements.
Which of the following statements is most true based on the systems flowchart above?
A. The company may benefit from implementing online order taking.
B. The company may benefit from implementing a lockbox system.
C. Both the company may benefit from implementing online order taking and the
company may benefit from implementing a lockbox system.
D. Neither the company may benefit from implementing online order taking nor the
company may benefit from implementing a lockbox system.
