Historically, financial data used in one application was not easily transferable to other
applications. However, the problem was fixed with which one of the following?
a) XMP
b) ERP
c) XBRL
d) XMLP
Answer:
A rule of thumb in industry is that the cost to correct an error in a database is
approximately how many times the cost of entering the data initially?
a) 3
b) 5
c) 7
d) 10
Answer:
Many accountants feel that the most important part of the Sarbanes-Oxley Act is:
a) Its anti-terrorist provisions
b) Its provisions requiring the reporting of suspicious activities
c) Section 404 on internal controls
d) Section 505 on money laundering
Answer:
The letter “P” in the acronym “ERP” stands for:
a) Production
b) Planning
c) Project
d) none of these
Answer:
Another name for an Internet domain address is its:
a) URL
b) ISP
c) email address
d) IETF
Answer:
Which of the following best describes a data warehouse as discussed in Chapter 1?
a) A repository of historical information from one accounting application
b) A repository of historical information from a set of accounting applications
c) A repository of information from many business applicationssome not accounting
d) A repository of information from many businesses in the same industry
Answer:
The COSO report stresses that:
a) Internal control is a process
b) An internal control system, if properly designed, can become a substitute for
management
c) People only at high levels of an organization are an important part of an internal
control system
d) An internal control system should consist of three interrelated components: the
control environment, risk assessment, and control activities
Answer:
Suspicious activity reporting:
a) Only applies to banking transactions
b) Is mandated by state, but not federal, regulations
c) Is mostly concerned with embezzlement issues
d) Is a requirement under the Sarbanes-Oxley Law of 2002
e) none of these
Answer:
Regarding the cost-benefit concept, which of the following statements is true?
a) Every control procedure that offers benefits to a company should be implemented
into the company’s system
b) An optimal internal control package is developed for a company’s system by
implementing a standardized package of control procedures
c) A control procedure is considered cost effective if it can be determined that the cost
of operating the procedure will be cheaper in the current period compared to the
previous period
d) A control procedure is considered cost effective when its anticipated benefits exceed
its anticipated costs
Answer:
Which type of data flow diagram presents a high-level view of a system process?
a) Context diagram
b) Physical DFD
c) Logical DFD
d) Systems flowchart
Answer:
In designing a payroll system it is known that no individual’s paycheck can amount to
more than $300 for a single week. As a result, the payroll program has been written to
bypass writing a check and printing out an error message if any payroll calculation
results in more than $300. This type of control is called:
a) A limit or reasonableness test
b) Error review
c) Data validity test
d) Logic sequence test
Answer:
Which of these requires auditors to understand a client’s system of internal controls
before conducting an auditan understanding aided by documentation?
a) SAS 1
b) SAS 55
c) The Securities and Exchange Act of 1939
d) SOX Act of 2002
Answer:
The four approaches to through-the-computer auditing include all but which of the
following:
a) Use of embedded audit modules
b) Testing of outputs to verify processing
c) Computer program testing
d) Validation of computer programs
Answer:
This language allows its users to create web pages on the Internet:
a) HTTP
b) HTML
c) URL
d) COBOL
Answer:
Performance reports are:
a) Reports that compare budgets with actual performance
b) Reports that show any exception conditions in an organization
c) Never presented in an exception format
d) Transaction listings
Answer:
The largest expense item on a manufacturing organization’s income statement is most
likely to be:
a) Salaries for production workers
b) The depreciation associated with manufacturing equipment
c) The cost of direct materials
d) Cost of goods sold
Answer:
An intensive investigation of a company’s present information system in order to
discover systems weaknesses is termed a:
a) Systems study
b) Systems follow-up
c) Systems design
d) Systems survey
Answer:
Which of the following statements best describes business process outsourcing?
a) A company focuses on its core business processes and contracts with another firm to
do the other processes
b) Companies frequently outsource core business processes
c) Due to networked enterprises and advanced technology, more employees may work
from their homes or alternate locations
d) Initially, companies engaged in business process outsourcing to offer employees
more opportunities to travel and more career choices for advancement
Answer:
Menus, icons, and other graphical elements are examples of which of the following?
a) Utility programs
b) Personal productivity software
c) Virtual storage
d) Graphical user interface (GUI)
Answer:
A USB drive that uses flash memory is an example of a(n):
a) Input device
b) Output device
c) Secondary storage device
d) Web device
Answer:
If you want to require a data entry in an Access database to fall between two dates
(rather than between two numeric values):
a) You should use a select query using one line
b) You should use a select query, using two lines
c) You should use a validation rule and the word “between”
d) This is impossible to require in Access
Answer:
A poorly-planned information system can result in:
a) Employee resistance and even sabotage
b) Inflexible systems that are hard to maintain or modify
c) Systems that solve the wrong problems
e) all of these are true
Answer:
Segregation of duties is a fundamental concept in an effective system of internal
control. Nevertheless, the internal auditor must be aware that this safeguard can be
compromised through
a) Lack of training of employees
b) Collusion among employees
c) Irregular employee reviews
d) Absence of internal auditing
Answer:
The most significant difference in the AISs of retail organizations versus other vertical
market organizations is the:
a) Sophistication of the systems used
b) Type of training programs available to employees
c) Point-of-sale data capture
d) Structure of information that the system provides to managers
Answer:
Software used for preparing payrolls, maintaining accounts receivable files, or
controlling inventory best describes:
a) Communication software
b) Personal productivity software
c) Project management software
d) Accounting software
Answer:
Control procedures that provide feedback to management regarding the achievement of
operational efficiency and adherence to prescribed managerial policies are called:
a) Corrective controls
b) Preventive controls
c) Policy controls
d) Detective controls
Answer:
XBRL is a business reporting language that is used to define interactive financial data.
Answer:
Which of these is not a component of an IP address?
a) A geographic region
b) An organization number
c) A computer group
d) A specific computer number
e) A specific user number
Answer:
Information systems auditors are:
a) Auditors who are concerned with analyzing risks associated with computerized
information systems
b) Individuals who often work closely with financial auditors
c) Auditors who have a lot of technical expertise related to information technology
d) all of the above
Answer:
The process of data normalization refers to:
a) Eliminating data errors and other problems from “normal data”
b) Scaling data to values between zero and one
c) Storing data in normal storage media such as hard disks
d) none of these
Answer:
Computer programs that can scan computer disks for virus-like coding are called:
a) Antivirus software
b) Virus software
c) Detection software
d) Friendly applets
Answer:
Frequent use of process maps is for:
a) Designing new AISs
b) Documenting the logic in a computer program
c) Reengineering business processes
d) Training aids
Answer:
Three objectives of a company’s internal control system should be safeguarding assets,
checking the accuracy and reliability of accounting data, and promoting operational
efficiency. A fourth objective of a company’s internal control system should be:
a) Preventing embezzlement of assets
b) Encouraging adherence to prescribed managerial policies
c) Avoiding the payment of overtime to company employees
d) Revising standards for production costs on a weekly basis
Answer:
The best choice for the primary key in an “Employees” table would be his or her:
a) Last name
b) First name
c) Phone number
d) Employee number
Answer:
Subform data must be in a one-to-one relationship with the data on the main form.
Answer:
Dial-back systems help control unauthorized access to computer systems.
Answer:
Explain why forms have subforms.
Answer:
A useful guideline to follow when creating data fields containing text is to limit data
fields to reasonable lengths.
Answer:
The correct order of elements, from smallest to largest, in the data hierarchy is data
field, file (table), record, database.
Answer:
Worldwide, the total annual financial losses resulting from all phishing activities was
less than $1 billion in 2010.
Answer:
A turnaround document is a source document such as a utility bill that is prepared by a
company, sent to a customer, and returned for further processing.
Answer:
Define and explain BCP and its purpose.
Answer:
Extended application interfaces are middleware that allow different software
applications to share data and information.
Answer:
One major difference between financial accounting and managerial accounting is that
financial accountants prepare financial statements for external investors while
managerial accountants prepare financial statements for internal managers.
Answer:
With a just-in-time inventory approach, raw material inventories are always zero.
Answer:
For all its exposure in the popular press media, identity theft affects a relatively small
number of people and, in total, involves a small amount of losses per year.
Answer:
Formatting a report is usually a trivial task in Microsoft Access, requiring little time or
effort.
Answer:
The search for more efficient ways to serve customers is an important reason why
business organizations perform systems studies.
Answer:
A DBMS is a type of hardware.
Answer:
An example of a database cardinality is “one-to-one.”
Answer:
What can an ERP system do that middle-market accounting software cannot.
Answer:
When drawing a process map, a good idea is to meet with employees to solicit ideas,
suggestions, and comments.
Answer:
Good documentation to include when creating spreadsheets is the name of the original
developer and important assumptions made in the model.
Answer: