The audit committee of the board of directors
A) is usually chaired by the CFO.
B) conducts testing of controls on behalf of the external auditors.
C) provides a check and balance on management.
D) does all of the above.
Because information about temporal imbalances between two ________, such as
accounts receivable and accounts payable, is needed so frequently, such calculated
values are sometimes stored as ________ in the appropriate tables.
A) events; agents
B) events; attributes
C) resources; agents
D) resources; attributes
Economic Order Quantity (EOQ) includes several variables that must be taken into
consideration when calculating the optimal order size. One variable, the costs
associated with holding inventory, is referred to as
A) ordering costs.
B) carrying costs.
C) the reorder point.
D) stockout costs.
Which symbol would be used in a flowchart to indicate the process started with the
accounting department?
A) #1
B) #10
C) #12
D) #16
Jerry Schneider was able to amass operating manuals and enough technical data to steal
$1 million of electronic equipment by
A) scavenging.
B) skimming.
C) Internet auction fraud.
D) cyber extortion.
Baggins Incorporated identifies new product development and product improvement as
the top corporate goals. An employee developed an innovation that will correct a
shortcoming in one of the company’s products. Although Baggins current Return on
Investment (ROI) is 10%, the product innovation is expected to generate ROI of 15%.
As a result, awarding bonuses to employees based on ROI resulted in
A) goal conflict.
B) information overload.
C) goal congruence.
D) decreased value of information.
Whitewater Rapids provides canoes to tourists eager to ride Whitewater river’s rapids.
Management has determined that there is one chance in a thousand of a customer being
injured or killed. Settlement of resulting lawsuits has an average cost of $850,000.
Insurance with a $100,000 deductible is available. It covers the costs of lawsuits, unless
there is evidence of criminal negligence. Based on cost-benefit analysis, what is the
most that the business should pay for the insurance?
A) $100
B) $500
C) $750
D) $850
If available, a 1% discount for payment within 10 days instead of 30 days represents an
approximate savings of ________% annually.
A) 1
B) 12
C) 18
D) 36
Which of the following accurately represents typical cardinalities for two entities in the
finance cycle?
A)
B)
C)
D)
In a private key system the sender and the receiver have ________, and in the public
key system they have ________.
A) different keys; the same key
B) a decrypting algorithm; an encrypting algorithm
C) the same key; two separate keys
D) an encrypting algorithm; a decrypting algorithm
An auditor manually calculates accumulated depreciation on a delivery van and
compares her calculation with the accounting records. The auditor is performing
A) vouching.
B) confirmation.
C) reperformance.
D) analytical review.
Which of the following transactions is represented by the diagram below?
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not
accept or allow installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments
may apply to multiple purchases.
For the payroll register below, all the following data entry controls would be useful
except
A) Validity check on Fed. Tax.
B) Sequence check on Employee No.
C) Limit check on Hours.
D) Field check on Pay Rate.
Which step below is not considered to be part of the data processing cycle?
A) data input
B) feedback from external sources
C) data storage
D) data processing
The accounting department at Aglaya Telecom records an average of 8,000 transactions
per hour and have a recovery time objective of 240 minutes. Aglaya recently suffered a
hardware malfunction and it took the company 16 hours to recover their lost data. How
many transactions did Aglaya recover?
A) 52,000 transactions.
B) 5,200 transactions.
C) 32,000 transactions.
D) 3,200 transactions.
What control procedure(s) should be used to reduce the risk of the destruction of
financial statement master data?
A) Multifactor authentication.
B) Backup and disaster recovery.
C) Encryption.
D) All of the above.
In many cases of fraud, the ________ takes more time and effort than the ________.
A) concealment; theft
B) theft; concealment
C) conversion; theft
D) conversion; concealment
The principle of obtaining or generating relevant, high-quality information to support
internal control belongs to which of the COSO’s Internal Control Model’s component?
A) Control environment.
B) Risk assessment.
C) Control activities.
D) Information and communication.
Once a vendor is selected for a product, the vendor’s identity is recorded in the
A) purchase requisition transaction file.
B) purchase requisition master file.
C) inventory transaction file.
D) inventory master file.
As a result of an internal risk assessment, Berryhill Insurance decided it was no longer
profitable to provide flood insurance in the southern states. Berryhill apparently chose
to ________ the risk of paying flood claims in the southern states.
A) reduce
B) share
C) avoid
D) accept
A facility that is pre-wired for necessary telecommunications and computer equipment,
but doesn’t have equipment installed, is known as a
A) cold site.
B) hot site.
C) remote site.
D) subsidiary location.
Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a
purchase, the company records the suppliers name, address, date, specific items
purchased, price paid for each, and the total amount spent. Helge later researches the
inventory items to set the customer price. The company assigns an inventory number to
each item purchased and records the customer price for each item. Helge buys price
tags and display supplies from Alwin Incorporated, a company that sells them at all
trade conventions. All inventory and supplies purchases are immediately paid for with
cash or with checks from a bank account in Helge’s name. All cash received from sales
are also deposited to the same bank account. Several times a year Helge rents display
space at dealer conventions. A deposit is always required, and the entire fee is due the
day the convention starts. Helge records the deposit and final payment, along with the
convention’s name and address, in the same worksheet on which purchases of inventory
and supplies are recorded.
Consider Helge’s processes regarding the purchasing inventory and supplies, renting
display space, and paying for purchased items. A well-designed REA diagram would
A) reflect nine 1:N relationships.
B) reflect two M:N relationships.
C) reflect ten 1:N relationships.
D) include two 1:1 relationships.
In which phase of the systems development life cycle are the broad needs of the users
converted into detailed specifics that are coded and tested?
A) Conceptual design.
B) Implementation and conversion.
C) Physical design.
D) Systems analysis.
In an integrated REA diagram, every resource must be linked to
A) at least two events.
B) at least two agents.
C) at least one other resource.
D) at least two other resources.
Lauren Smith was relaxing after work with a colleague at a local bar. After a few
drinks, she began expressing her feelings about her company’s new control initiatives. It
seems that as a result of controls put in place by the company, she now has to find ways
to help her staff to better understand the company’s vision and core values. The level of
control that the company is using in this case is a(n)
A) boundary system.
B) diagnostic control system.
C) interactive control system.
D) belief system.
Which of the following is not one of the ways in which a Business Process
Management System can improve internal control?
A) Innovative technology allows access and authorization controls to be programmed at
the transaction level.
B) Documents or transactions that require approval can be electronically routed to a
manager.
C) Process rules are used to alert users when actions must be taken.
D) All actions and processes are monitored and documented in a process log for
periodic review.
Which of the following diagrams represents the cardinality pairs for a repair shop where
supervisors place items that need repair in a common area where any available
employee can work on the item? Naturally, employees are always repairing more than
one item at a time, and more than one supervisor can drop off items that need repair.
A)
B)
C)
D) All of the above.
The best example of an effective payroll transaction file financial total would most
likely be
A) sum of net pay.
B) total number of employees.
C) sum of hours worked.
D) total of employees’ social security numbers.
In creating an entity-relationship diagram, ________ is anything about which an
organization wants to collect and store information.
A) a data model
B) an entity
C) a schema
D) a tuple
Which COBIT5 management practice addresses the importance of locating and
designing the data centers housing mission-critical servers and databases so as to
minimize the risks associated with natural and human-caused disasters?
A) DSS01.04
B) DSS04.07
C) DSS03.05
D) DSS04.04
Which of the following is not an example of misappropriation of assets?
A) A warehouse employee takes home two units of electronic entertainment inventory
each week without authorization.
B) The chief financial officer of the company falsely adds $20 million to the accounts
receivable and revenue accounts.
C) The president of the company utilizes the organization’s cash to add a floor to her
15,000 square foot house.
D) The treasurer of the company makes an unauthorized wire transfer from the
organization’s bank to a personal account in Grand Cayman.
A value chain typically consists of five primary activities that can directly provide value
to customers. The activities that help to provide post-sale support to customers
represent
A) service.
B) outbound logistics.
C) marketing and sales.
D) operations.