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Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the
firm recently changed hands and the new owners are conducting an audit of the
financial records. The audit has been unable to reproduce financial reports that were
prepared by Sam. While there is no evidence of wrongdoing, the auditors are concerned
that the discrepancies might contribute to poor decisions. Which of the following
characteristics of useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Which of the following is an example of data 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.
Segregation of duties controls dictates that the collection and recording functions be
kept separate from each other. However, the accounts receivable department needs to
know when customers pay their invoices. What is a solution to this potential internal
control problem?
A) Establish a lockbox arrangement with a bank.
B) Have customers send a remittance advice with their payment.
C) Have mailroom personnel prepare a remittance list which can be forwarded to
accounts receivable.
D) all of the above
It has been discovered that credit sales have been made to customers with a poor credit
rating. If this continues, the company will face increasing uncollectible receivables and
losses due to bad debts. Separation of duties between ________ and ________ should
help resolve the problem.
A) shipping; billing duties
B) credit approval; marketing
C) billing; credit approval
D) marketing; accounts receivable
Petty cash is disbursed by the Manuela Luisina in the Cashier's Office. Manuela also
maintains records of disbursements, places requests to the Finance Department to
replace expended funds, and periodically reconciles the petty cash balance. This
represents a(n) ________ segregation of duties.
A) ideal
B) effective
C) ineffective
D) limited
Which of the following is not an information systems audit test of controls?
A) Observe computer-site access procedures.
B) Investigate how unauthorized access attempts are handled.
C) Review logical access policies and procedures.
D) Examine the results of disaster recovery plan simulations.
________ is one tool used to document source data controls.
A) An input control matrix
B) A flowchart generator program
C) A program algorithm matrix
D) A mapping program
In November of 2005 it was discovered that many of the new CDs distributed by Sony
BMG installed software when they were played on a computer. The software was
intended to protect the CDs from copying. Unfortunately, it also made the computer
vulnerable to attack by malware run over the Internet. The scandal and resulting
backlash was very costly. The software installed by the CDs is a
A) virus.
B) worm.
C) rootkit.
D) squirrel.
What is one of the best ways to improve the overall efficiency and effectiveness of the
receipt and storage of ordered items?
A) requiring all suppliers to have the carrier verify quantities and item numbers before
shipment
B) requiring all suppliers to include RFID tags on their items
C) requiring all suppliers to use EDI to expedite the receiving department function
D) requiring all delivery trucks to have satellite data terminals to expedite the receiving
department function
Identify the notation below that is not used to represent cardinality information.
A) UML.
B) (Min, Max).
C) DFD.
D) Maximums only.
From the choices below, identify the attribute below that would make the best primary
key.
A) On campus mailbox number.
B) GPA.
C) Credit hours.
D) Student ID number.
Checksums is an example of a(n)
A) data entry control.
B) data transmission control.
C) output control.
D) processing control.
Consideration of risk factors and materiality is most associated with which audit stage?
A) Collection of audit evidence.
B) Communication of audit results.
C) Audit planning.
D) Evaluation of audit evidence.
A hacker who changed the voice mail greeting of a company to say that it is offering
free products by asking customers to dial a different phone number to claim their gifts
is engaging in
A) diddling.
B) phreaking
C) phishing.
D) hacking.
Refer to the table below, which shows the results of payback, net present value, and
internal rate of return analysis of four projects. Which is preferred by the net present
value criterion?
A) Project A
B) Project B
C) Project C
D) Project D
Walk-throughs are system tests that involve
A) managers observing the operation of the system by "walking through" the IT
department.
B) processing hypothetical data that are designed to identify errors in the system.
C) processing copies of real transactions in order to determine whether or not the
system meets requirements.
D) a thorough review of the procedures and program logic of the system.
Which of the following tradeoffs between characteristics of useful information is least
objectionable?
A) incomplete information received on a timely basis
B) irrelevant information received in an understandable format
C) unreliable information easily accessible
D) verifiable information received in unreadable format
Identify the system below where development would not likely benefit from treating a
prototype.
A) Decision support systems.
B) Executive information systems.
C) Expert systems.
D) Systems that cross a number of organizational boundaries.
Which of the following is not a product design objective?
A) Design a product that meets customer requirements.
B) Design a quality product.
C) Minimize production costs.
D) Make the design easy to track for cost accounting purposes.
What is a key decision that needs to be made with regards to paying vendors for goods
and services?
A) which credit cards to accept
B) which employees to hire
C) which vendors to pay
D) how much capital to acquire
The average annual management salary at Iyov Management is $100,000. If the average
turnover rate for employees is six per year, what is the approximate average annual cost
of turnover?
A) $100,000.
B) $400,000
C) $600,000.
D) $900,000.
Use the chart below to answer the following questions regarding flow chart symbols.
Which symbol would be used in a flowchart to represent a general ledger master file
kept on magnetic disk?
A) #2
B) #11
C) #7
D) #8
Implementation of an ERP system requires effective segregation of responsibility for
A) recording, risk assessment, and control procedures.
B) authorization, monitoring, and risk assessment.
C) recording and monitoring of organizational assets.
D) authorization, recording, and custody of organizational assets.
Which fraud scheme involves stealing customer receipts and applying subsequent
customer cash payments to cover the theft?
A) kiting
B) laundering
C) lapping
D) bogus expense
Who prepares a systems analysis report?
A) Computer analysts.
B) Management.
C) The project development team.
D) The steering committee.
When using an REA diagram to develop a database, a many-to-many relationship must
be
A) broken into two, one-to-one relationships.
B) combined into a single one-to-one relationship.
C) combined into a one-to-many relationship.
D) broken into two, one-to-many relationships.
A Business Process Diagram (BPD) provides the reader an easily understood ________
of what takes place in a business process.
A) narrative
B) decision flow
C) pictorial view
D) data flow
Each specific data item in an XBRL document is called a(n)
A) taxonomy.
B) element.
C) instance.
D) schema.
________ is a process used to uncover and eliminate program errors.
A) Black box testing
B) Debugging
C) Desk checking
D) White box testing
Moneka Jones is the CIO for Noela Incorporated. Moneka wants to replace the firm's
existing system. However, she wants to spend as little time as possible preparing and
evaluating RFPs. When preparing an RFP, Moneka should probably
A) disclose exact hardware and software specifications.
B) disclose specific performance objectives and requirements.
C) disclose general software requirements.
D) disclose general performance objectives and requirements.
A set of unauthorized computer instructions in an otherwise properly functioning
program is known as a
A) logic bomb.
B) spyware.
C) trap door.
D) Trojan horse.
