The CEO and CFO of TNS Corporation wanted to expand into e-business, but the
company’s board of directors was unwilling to approve their plan. Which of the
following theories will best help the CEO and CFO persuade the board of directors to
support their idea?
A. Capability maturity model
B. Systems development life cycle
C. Expectancy theory
D. COSO enterprise risk management framework
Consider the following examples of computer crime as you answer the question:
i. Social Security numbers are stolen from a company’s database.
ii. A fraudster uses a computer to identify people over the age of 80 with annual
incomes of $250,000 or more.
iii. An employee receives threats from a co-worker via e-mail.
iv. An unhappy customer launches a denial-of-service attack.
Carter’s taxonomy of computer crime comprises four categories. Which of the
following pairs includes items from different categories?
A. I and IV
B. II and III
C. Both I and IV and II and III
D. Neither I and IV nor II and III
Consider the following short case as you respond to the question:
Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of
whom are already licensed CPAs and some of whom are still working toward licensure.
She is responsible for audits of independent bookstores in California, Nevada and
Arizona. Amanda is concerned that the less experienced professionals she supervises
are repeating the mistakes she and the more experienced professionals on her team
made when they began auditing. She therefore wants to create a knowledge
management system.
Amanda’s firm has set a goal that all audits be completed within seven days, regardless
of the size and nature of the client. Thus, Amanda’s team may be experiencing
information overload due to:
A. Task and process parameters.
B. Information characteristics.
C. Both task and process parameters and information characteristics.
D. Neither task and process parameters nor information characteristics.
Please refer to the following short case as you respond to the question:
A painter accepts orders for original works from customers in person or via the Internet.
Based on the order, the painter creates an initial sketch, which must be approved by the
customer; the customer may make changes to the initial sketch. After customer
approval, the painter selects appropriate materials and gives the customer a price quote.
If the customer accepts the price quote, the painter creates the original work; if not, the
project is abandoned. The painter stores data about customers, previous orders and
previously completed works in an electronic database.
A data flow diagram of the case contains three items: create initial sketch, initial sketch,
finalize sketch. How are those three items likely to be represented in the data flow
diagram?
A. A circle and a set of parallel lines connected by a line
B. Two circles with a set of parallel lines
C. Some other way
D. A circle and a rectangle connected by a line
two circles connected by a line
In the Audit Clarity Project, which section specifies what the auditor is trying to achieve
in the audit with respect to a specific school of ethical thought?
A. introduction
B. definitions
C. objective
D. none of these
Which of the following statements best demonstrates a difference between AIS and
other areas of study in accounting?
A. General ledger software can only be used in AIS.
B. The matching principle is less important in AIS than in other areas of accounting.
C. AIS often looks at the “big picture” of accounting.
D. Topics studied in AIS courses are not typically included on accounting professional
exams.
Information technology controls, such as a password rotation policy, can be used in:
A. View-driven AIS.
B. Event-driven AIS.
C. Both view-driven AIS and event-driven AIS.
D. Neither view-driven AIS nor event-driven AIS.
Which of the following is most reflective of deontology?
A. In making ethical decisions, Annie strives to be true to her basic ethical nature.
B. Jeff inflated his division’s sales to get a bigger bonus for himself.
C. Michelle reported fraud she had discovered because she believes that lying is always
wrong.
D. Shan agreed to coach as many CPA exam candidates as possible, in spite of his busy
schedule.
Consider the following independent situations as you answer the questions:
a. Irene, a freshman accounting major, thought she would benefit from reading an
intermediate accounting text while taking introductory financial accounting.
b. Bradley developed a plan to study for all four parts of the CPA exam during his last
semester at college, thus making himself ready to take the exam immediately after
graduation.
c. Jorge met weekly with a group of five students, all of whom were preparing their
resume for the very first time.
d. Every time Maria encountered a topic she did not understand in her accounting
information systems course, she did a Google search for it.
Bradley would benefit from which of the following countermeasures for information
overload?A. Allow more time to complete important tasks.B. Use graphs and other
visual aids.C. Both allow more time to complete important tasks and use graphs and
other visual aids.D. Neither allow more time to complete important tasks nor use graphs
and other visual aids.
Call recommended a seven-step process for creating a knowledge management system.
The first step could be completed by:
A. Making knowledge management a component of performance evaluation.
B. Requiring managers to conduct focus groups with their employees about the
importance of knowledge management.
C. Both making knowledge management a component of performance evaluation and
requiring managers to conduct focus groups with their employees about the importance
of knowledge management.
D. Neither making knowledge management a component of performance evaluation nor
requiring managers to conduct focus groups with their employees about the importance
of knowledge management.
Joe talked to two friends who had recently worked on different business process
management projects; one project was successful, but the other was not. Several actions
taken in each project are listed below. Based on the generalized model of BPM
discussed in the text, determine which actions were associated with the successful
project; then, put them in the correct order.
a. According to published benchmarking studies, most companies spend between $2.00
and $5.00 to process a transaction of this type.
b. Here’s a diagram I drew that illustrates how the process works now.
c. I found this generic description of the process in an accounting textbook.
d. I’m glad that project is done–now we don’t have to think about it again.
e. Just pick something off the list and let’s try it.
f. Let’s figure out a better way to purchase assets.
g. Let’s focus first on the first item in the ranked list; if that doesn’t work, we can try
something else.
h. Look at this list of one hundred ways to improve the process that was published in a
practitioner journal two years ago.
i. The cost of issuing one check is roughly $3.00.
j. There are five ways to improve this process; here’s a ranked list of them.
k. We need to make the process of paying dividends more efficient.
l. We should collect ongoing data about transaction processing costs to see if we’ve
achieved our goal.
Please consider these independent cases as you respond to the question:
-Austin is the managing partner of a small CPA firm. In an effort to standardize certain
internal business processes, Austin formed a team that developed a set of guidelines for
tasks such as expense reimbursements and information technology purchases. After
developing the guidelines, the team devised ways to determine if the processes are
performing as expected.
-Julie is the chief financial officer of PSC Corporation. She recently worked with a
team to develop a broad set of principles that should characterize PSC’s business
processes. The team has applied those principles to some tasks in the accounting
department; their next task is to teach other PSC employees about the principles.
-Rob is an accountant at CTR Company. The owners of CTR, Lynn and Mark, don’t
know much about accounting, so Rob completes accounting tasks in whatever way
seems best to him.
Which level of the capability maturity model best describes Julie’s company?
A. Repeatable
B. Defined
C. Managed
D. Optimized
Jon is a new employee at ADX Corporation. He was working late one night when he
saw Beatrice, a long-time ADX employee, leaving the building with a company
computer. Determining whether Beatrice is an ethical egoist or deontologist is relevant
in the ___ step of the Langenderfer and Rockness model.
A. third
B. fifth
C. seventh
D. none of these
Pauline was injured on the job and applied for workers’ compensation insurance; she
was initially authorized for eight weeks of benefits. Although her doctor released her to
return to work after six weeks, Pauline did not go back to work until the full eight
weeks had elapsed. Internal controls to address this situation would include: (i)
insurance and bonding, (ii) internal audits.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
A systems flowchart:
A. Can help an auditor understand an organization’s business processes as part of the
third generic step of a financial statement audit.
B. Can help an auditor verify all five financial statement assertions as part of the fourth
generic step of a financial statement audit.
C. Both can help an auditor understand an organization’s business processes as part of
the third generic step of a financial statement audit and can help an auditor verify all
five financial statement assertions as part of the fourth generic step of a financial
statement audit.
D. Neither can help an auditor understand an organization’s business processes as part
of the third generic step of a financial statement audit nor can help an auditor verify all
five financial statement assertions as part of the fourth generic step of a financial
statement audit.
CGI Corporation uses a process costing system to manufacture its product. Which of
the following internal controls should CGI use to ensure its human resources employees
correctly apply federal laws related to employee performance evaluation?
A. Adequate supervision
B. Periodic training
C. Use of information technology
D. None of these; since CGI uses a process costing system, it is not likely to have a
human resources process.
Nestor and Maureen are partners in a small consulting firm located in the Republic of
Bufflufia; the firm has six employees. For the last five years, the firm has focused on
tax planning and tax return preparation. But, Nestor and Maureen are now interested in
expanding the firm’s scope of services. They are considering risk management
consulting, fraud examination and business valuation as potential areas to expand the
firm. They are sure at least three of their six employees would put effort into at least
one of those three areas, but expanding the firm’s services would require additional
training for everyone.
Based on the short case above, which of the following statements is most true?
A. After the expansion, Nestor and Maureen may be able to use expectancy theory to
sell new services to their old clients.
B. Regardless of the area into which the firm expands, the basic principles of business
process management may be useful to new clients.
C. Both after the expansion, Nestor and Maureen may be able to use expectancy theory
to sell new services to their old clients and regardless of the area into which the firm
expands, the basic principles of business process management may be useful to new
clients are true.
D. Neither after the expansion, Nestor and Maureen may be able to use expectancy
theory to sell new services to their old clients nor regardless of the area into which the
firm expands, the basic principles of business process management may be useful to
new clients is true.
Consider the following illustration as you respond to the questions:
Is Diagram X balanced with Diagram Y?
A. No, because X includes only one process while Y includes two.
B. No, because Y includes more data flows than X.
C. Yes, because the one process in X has been properly decomposed in Y.
D. Yes, because the data flows into and out of the external entity are the same.
An accounting information system transforms inputs into outputs via processes such as:
A. Journalizing transactions and posting them to the ledger
B. Identifying the elements of the FASB Conceptual Framework
C. Always utilizing information technology
D. Recognizing and adapting to the cost-benefit constraint