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Falk Noam is the internal auditor for Matan Incorporated. Before investigating the
HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of
duties regarding payroll disbursement processes. For strongest segregation of duties, the
________ should periodically observe the paycheck distribution process.
A) accounts payable department
B) cashier
C) internal audit department
D) external auditor
Which of the following is an example of processor 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.
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 payback
criterion?
A) Project A
B) Project B
C) Project C
D) Project D
Whose responsibility is it to determine the amount of time an organization can afford to
be without its information system?
A) The board of directors.
B) Senior management.
C) External auditors.
D) COBIT.
Sales order number is most likely to be a primary key in which entity of an expanded
revenue cycle REA diagram?
A) Call on Customers.
B) Fill Customer Order.
C) Ship Order.
D) Take Customer Order.
Receiving goods from vendors is part of which cycle?
A) the revenue cycle
B) the financing cycle
C) the expenditure cycle
D) the payroll cycle
The "give" event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
D) reduces the organization's liabilities.
Groups of related business activities such as the acquisition of merchandise and
payment of vendors are called
A) transaction cycles.
B) economic cycles.
C) business events.
D) transactions.
The existence of multiple systems which provide information can result in all of the
following except
A) redundancies.
B) discrepancies.
C) integration issues.
D) efficiency.
The document that lists each employee's gross pay, payroll deductions, and net pay in a
multicolumn format is called
A) an employee earnings statement.
B) the payroll register.
C) a deduction register.
D) an employee time sheet summary.
Identify the statement below that is false with regards to the development of an AIS.
A) A newly designed AIS always meets user needs for a time period.
B) Changes to the AIS are often difficult to make after requirements have been frozen
into specifications.
C) The development process can take so long that the system no longer meets company
needs.
D) Users are sometimes unable to specify their needs adequately.
The acronym "RFP" stands for what?
A) Request for Project
B) Request for Processing
C) Request for Proposal
D) Request for Purchase
Which of the following transactions is represented by the diagram below?
A) A lumber yard where customers may pay with cash for all purchases.
B) A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to
the dealer.
C) A consulting firm that offers a variety of consulting services to other businesses.
D) A department store that allows customers to carry a balance and to make installment
payments, if they choose.
New employees of Baker Technologies are assigned user names and appropriate
permissions. Their credentials are then entered into the company's information system's
access control matrix. This is an example of a(n)
A) authentication control.
B) biometric device.
C) remote access control.
D) authorization control.
One way a firm could reduce the risk of problems with supplier dependability is to
A) purchase inventory from only U.S.-based suppliers.
B) use an ERP system for purchases.
C) require suppliers to be ISO 9000 certified.
D) automate the purchasing function.
A software development methodology where a team works together in an intense but
relatively short iterative and incremental scrum process to reach a common
development goal, with team members meeting daily in face-to-face communication,
until development is concluded is called
A) agile development.
B) scrum methodology.
C) scrum development.
D) user stories.
Which of the following factors is not a reason forensic investigators are increasingly
used in accounting?
A) The Sarbanes-Oxley Act.
B) New accounting rules.
C) Audit fee increases.
D) Pressure from boards of directors.
Terrell and Monique Anderson run an antique store in their hometown of Dayton, Ohio.
To find items to sell in their shop, they travel around the United States and Europe
buying unique artifacts. Within an hour of making a purchase, they use their
smartphone to take a picture of the item and post a short tweet about the item on
Twitter. Which symbol should be used to represent the remote server that stores the
tweets (i.e., the Twitter posts) data?
A)
B)
C)
D)
________ is/are an example of a preventive control.
A) Continuous monitoring
B) Encryption
C) Emergency response teams
D) Log analysis
Modest Expectations Investment Services (MEIS) allows customers to manage their
investments over the Internet. If customers attempt to sell more shares of a stock than
they have in their account, an error message is displayed. This is an example of a
A) reasonableness test.
B) field check.
C) validity check.
D) limit check.
What is the most prevalent opportunity within most companies to commit fraud?
A) Lack of internal controls designed by management.
B) Failure by management to enforce the internal controls.
C) Weaknesses in the design of internal controls.
D) Management's belief that most employees would not commit fraud.
A major cost in the purchasing function is the number of purchase orders processed.
One technique that may reduce purchasing-related expenses is to have suppliers
compete with each other to meet demand at the lowest price. The name of this
technique is
A) an EDI auction.
B) a trading exchange.
C) a reverse auction.
D) a supplier consortium.
Which of the following factors is not of key importance when selecting inventory
suppliers?
A) product price
B) vendor corporate structure
C) product quality
D) vendor delivery dependability
An effective way an organization can eliminate paper paychecks while maintaining
adequate accounting records is to
A) pay in cash only.
B) pay with money orders.
C) use direct deposit.
D) use Electronic Funds Transfer.
Which of the following is not one of the components of an AIS?
A) internal controls and security measures
B) people
C) procedures and instructions
D) hardware
When the AIS provides information in a timely and accurate manner, it stands as an
example of
A) improved decision making.
B) improving the quality and reducing the costs of products or services.
C) improving efficiency.
D) all of the above
The quality assurance department at a large manufacturing business enters data into the
AIS that is used to produce a weekly report that summarizes the proportion of defective
units in each product line. This is an example of
A) internal financial information.
B) internal nonfinancial information.
C) external financial information.
D) external nonfinancial information.
Which of the following is not one of the types of internal audits?
A) A review of the corporate organizational structure and reporting hierarchies.
B) An examination of procedures for reporting and disposing of hazardous waste.
C) A review of source documents and general ledger accounts to determine integrity of
recorded transactions.
D) A comparison of estimates and analysis made before purchase of a major capital
asset to actual numbers and results achieved.
Preimer Life Company is a life insurance company that collects, stores, prepares and
provides customerized life insurance policy to customers in the Midwest. When a
customer's information is received, it is recorded in a database and a ticket is provided
to the policy underwriter . When the life insurance policy is issued, the database is
updated so that it always reflects the correct amount of life insurance coverage and the
length of the policy available to the customers. In a data flow diagram, which type of
symbol would be used to represent the flow of data provided by the customers into the
system?
A)
B)
C)
D)
Source data automation refers to
A) using devices to capture transaction data in machine-readable form at the time the
transaction is initiated.
B) using the internet as the operating platform of an accounting information system.
C) using an accounting information system to electronically bill customers.
D) using an accounting information system to automate a previously manual transaction
process.
