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Debra and Dexter are CPAs specializing in tax planning and preparation. Recently,
Debra stated that, in her view, her highest responsibility is to do what's right for herself.
Which school of ethical thought does Debra follow?
A. ethical egoism
B. utilitarianism
C. deontology
D. virtue ethics
How does the FASB Conceptual Framework link accounting information systems with
auditing?
A. Auditors must discuss whether the outputs of the AIS fulfill each of the qualitative
characteristics in detail.
B. Auditors prepare a report on some of the outputs of the AIS; those outputs contain
the elements of financial statements from the conceptual framework.
C. The purpose of accounting as stated in the conceptual framework is the same as the
purpose of an AIS and the purpose of auditing.
D. The conceptual framework does not link AIS with auditing.
Erin has maintained a very high GPA throughout her accounting education, but wonders
if that GPA will ensure that she gets a good job. In terms of expectancy theory, Erin is
most concerned about:
A. Expectancy
B. Instrumentality
C. Valence
D. Utility
As a form of internal control within the acquisition/payment process, internal auditors
are most likely to:
A. Prevent or detect a problem.
B. Prevent or correct a problem.
C. Detect or correct a problem.
D. None of these; internal auditors are not a form of internal control for the
acquisition/payment process.
Consider the following diagram as you answer the questions:
The most appropriate label for "D" is:
A. applicant
B. application materials
C. verify application materials
D. some other label
STC Corporation's enterprise resource planning system contains a cash payments table,
a cash receipts table and a cash table. The cash table is most likely to be part of which
ERP module?
A. CRM
B. HRM
C. SCM
D. Financial management
Which of the following is likely to require at least one junction table if present in a REA
model?
A. Purchasing goods from suppliers
B. Sending an order to a supplier
C. Both purchasing goods from suppliers and sending an order to a supplier
D. Neither purchasing goods from suppliers nor sending an order to a supplier
Supply the missing words/phrases below based on the definition of ethics in the text.
Ethics is a set of (a) that differentiates (b), is established by (c), and is imposed on
members of the group to (d). Ethics is a discipline that studies (e) for living and
considers the (f) (or lack of it) for those values.
Jon continually worked on a team that experienced a lot of non-productive conflict.
Which of the following best describes Jon's behavior?
A. Satisficing
B. Bounded rationality
C. Relapse errors
D. Knowledge management
Consider the following illustration as you respond to the questions:
Which of the following is the most appropriate symbol for "qualified applicants
database?"
A. circle
B. set of parallel lines
C. database cylinder
D. rectangle
Consider the following partially completed risk/control matrix as you answer the
questions:
Assume the risk/control matrix is organized like the one presented in the chapter. The
best entry for Item A is:
A. Brown
B. Risk
C. COSO
D. some other entry
Consider the following set of symbols and the ELM case as you respond to the
question:
ELM Corporation sells durable medical equipment, such as wheelchairs and hospital
beds; each salesperson at ELM specializes in a specific type of medical equipment.
When a prospective client comes into their store, a greeter does a preliminary needs
assessment to determine what type(s) of equipment the client requires. Based on that
preliminary assessment, the greeter will match the client with a member of the sales
staff. The staff specialist does a more detailed needs assessment, the results of which go
into a computerized database along with the client's name, address, phone number and
other related information. After the needs assessment, the staff specialist determines the
client's budget, as well as whether the client has insurance coverage for the desired
equipment; clients without insurance coverage receive a 10% discount on all equipment
purchased up to $1,000, and a 20% discount for any sales over $1,000. The staff
specialist makes recommendations based on the client's needs and budget. If the client
chooses to purchase from ELM, the store fills out any necessary insurance paperwork
and collects the client's portion of the bill. For example, if an insured client purchases a
wheelchair with a price of $2,000 and the insurance covers 80%, ELM collects $400
from the client at the time of the sale. ELM accepts cash, checks and major credit cards
from clients. Insurance payments go directly to ELM's bank account and normally
arrive within 60 days of the sale. If the client needs more than one type of durable
medical equipment, the first staff specialist introduces the client to a subsequent staff
specialist, who repeats the process until all the client's equipment needs are met.
In a systems flowchart of ELM's sales/collection process, Symbol C could be labeled
with any of the following except:
A. Insurance coverage.
B. Needs assessment.
C. Make sale.
D. Additional equipment needed.
At the end of 2014, CNC Corporation's accounting information system produced the
following trial balance:
CNC completed the following transactions in January 2015:
a. Purchased inventory on account, $300.
b. Collected cash from customers for prior year sales, $500.
c. Paid current month's wages, $900.
d. Had land appraised. Cost of doing the appraisal (paid in cash), $700. Appraised value
of land, $3,000.
e. Sold inventory with a cost basis of $200 on account, $800.
f. Declared dividends, $50.
g. Hired additional sales staff. Expected monthly salaries, $80.
h. Purchased supplies for cash, $150.
i. Paid creditors for previous purchases, $150.
j. Signed a contract for annual employee retreat, $450.
CNC uses block coding for its chart of accounts. The balance in account #101 at the end
of January 2015 will be:A. $5000 on the debit side.
B. $5000 on the credit side.
C. Some other amount on the debit side.
D. Some other amount on the credit side. $6400 + $500 - $900 - $700 - $150 - $150 =
$5000
Which type of audit is a "basket" of the other types?
A. Financial
B. Operational
C. International
D. Management
Beverly determined that a case she was investigating dealt with embezzling cash, which
would impact the company's employees and other groups. Based on the Langenderfer
and Rockness model, what should she do next?
A. Consult the company's code of ethics.
B. Talk with a trusted co-worker.
C. Develop a list of alternative actions.
D. Look up the definition of embezzlement.
Consider the following short case as you respond to the next nine questions:
ABC Consulting's employees include management, consultants and office staff. The
company accepts engagements related to internal control design and evaluation, as well
as enterprise risk management plans. A customer can purchase the two services
independently of one another. The office staff bills clients on a monthly basis with
terms of 2/10, n/30. All consulting clients must sign a contract, which is also signed by
an ABC manager. One member of ABC's management team assigns at least one
consultant to work with the customer until the engagement is complete. Consultants can
be assigned to multiple engagements simultaneously, but every consultant must always
be working on at least one engagement. Each client may have only one contract with
ABC at a time.
In a REA model of the case, how many boxes would you expect to see in the second
column?
A. One
B. Two
C. Three or four
D. More than four
Consider the following table as you respond to the questions:
Which of the following is the best choice for Item E in the table?
A. Risk response
B. Internal environment
C. Information and communication
D. Monitoring
Claudia borrowed money from her bank, signing a five-year note payable. She then
calculated the monthly payment needed to pay off the loan within three years. Which of
the following statements is/are most true?
A. The required monthly payment is an example of "information," as the term is used in
the definition of an accounting information system.
B. The five-year note payable would be considered a "technology" if it were prepared
with computer software.
C. Both the required monthly payment is an example of "information," as the term is
used in the definition of an accounting information system and the five-year note
payable would be considered a "technology" if it were prepared with computer software
are true.
D. Neither the required monthly payment is an example of "information," as the term is
used in the definition of an accounting information system nor the five-year note
payable would be considered a "technology" if it were prepared with computer software
is true.
Nancy talked to two friends who had recently worked on developing enterprise risk
management plans; one project was successful, but the other was not. Determine which
statements in the list below were associated with the successful project; then, identify
the element of the COSO enterprise risk management framework that most clearly
applies.
a. Backup power supplies and adequate insurance are good ideas.
b. I'd say the risk is moderate to high at an inherent level, but we can probably reduce it
if we implement some new procedures.
c. I'm glad the president let us bring in a speaker about ERM before the project got
started.
d. If we have a power outage, our cooling systems could fail, leading to damaged
inventory.
e. Let's put together a memo that explains the work we've done to everyone in the
company.
f. Our costs are out of control, so let's cut them by 10%.
g. Our goal is to lose no more than 1% of our inventory due to spoilage.
h. Should we simply accept the risk? Or should we try another way of reacting to it?
i. The operations manager and inventory control clerks can let us know how the process
is working.
j. We need to make the company more profitable.
k. Why would anyone outside inventory control need to know what we've done?
Consider the following flowcharting shapes as you answer the question:
SBL Corporation is preparing to expand into B2B e-business. A flowchart of their sales
process should definitely include which of the following symbols?
A. Symbol A
B. Symbol B
C. Symbol C
D. Symbol D
