From an accountant’s perspective, one of the benefits of XBRL is the ability to obtain
more rapid and reliable data and information on company financial performance. Such
items would include:
A. General purpose financial statements.
B. Chart of accounts.
C. Both general purpose financial statements and chart of accounts.
D. Neither general purpose financial statements nor chart of accounts.
Consider the following list of items that might appear in a risk/control matrix:
i. At least twice a week
ii. Corrective
iii. Human error
iv. Inability to access class materials due to network outage
v. Insufficient time to study
vi. Local data backup
vii. Maximum budget = $50
viii. Preventive
ix. Systems
x. Time management software
Which of the following items are most likely to be grouped on a single row?
A. I, II, III, IV, V
B. I, II, IV, VI, IX
C. II, III, IV, V, VI
D. VI, VII, VIII, IX, X
BSP Corporation wrote a check to RSR Corporation, one of its vendors. On the
remittance advice, BSP indicated which invoices it was paying. Which of the following
statements is most true?
A. BSP Corporation uses the open invoice method.
B. RSR Corporation uses the open invoice method.
C. BSP Corporation uses the balance forward method.D. If RSR uses the open invoice
method, BSP must also use the open invoice method.
Rivet Software is one option for creating XBRL-tagged documents. Many organizations
follow the six steps listed below to do so; number the steps in the order of their
occurrence.A. Set up an entity profile.B. Mark up the data.C. Open tagging software
and the file to be tagged.D. Export the data as an XBRL document.E. Download
taxonomies.
F. Validate the document.
Internal control relates to an organization’s achievement of objectives in three major
categories. Which of the following best pairs one of the categories with a specific
example?
A. Judging, reconciling the bank statement at least monthly
B. Reporting, following the COSO internal control framework
C. Compliance, following the COSO internal control framework
D. Compliance, fulfilling the requirements of the Foreign Corrupt Practices Act
Consider the following flowchart symbols as necessary as you respond to the remaining
questions in this chapter:
According to ANSI, flowchart symbols can be divided into four main groups. Which of
the following symbols belong to the same group?
A. Symbols C and E
B. Symbols A and F
C. Symbols A and C
D. Symbols E and F
Transactions commonly associated with the financing process include: (a) issuance of
capital stock for cash, (b) declaration of cash dividends and (c) issuance of long-term
debt. In your own words, explain how each of those transactions affects each section of
a corporate balance sheet. Focus your explanation at a conceptual level; do not explain
the effects by indicating journal entries.
According to ISACA, which COBIT enabler focuses on an often underestimated
success factor in governance and management activities?
A. principles, policies and frameworks
B. culture, ethics and behavior
C. services, infrastructure and applications
D. people, skills and competencies
The COSO enterprise risk management framework comprises eight sections, one of
which is objective setting. COSO identified five types of objectives most organizations
should consider in developing an ERM plan. “Ensuring that the corporation fulfills the
requirements of the Sarbanes-Oxley Act” is an example of a ___ objective.
A. Strategic
B. Reporting
C. Compliance
D. Risk management
A remittance advice is an example of which generic element of an accounting
information system?
A. Document
B. Storage
C. Both document and storage
D. Neither document nor storage
Consider the statements below as you answer the question:
-The chief financial officer of TNL Corporation is a certified public accountant.
-OBP Corporation’s internal audit manager is a certified fraud examiner.
-CPQ Corporation maintains a set of systems flowcharts that describe current business
processes.
-DKM Corporation encrypts all data transmitted over its wireless network.
Which corporation is most likely to receive an unmodified report on its financial
statements?
A. TNL
B. DKM
C. Either CPQ or OBP
D. Cannot be determined from the information given
XBRL’s global ledger taxonomy can be used for transaction processing, while the US
financial reporting taxonomy is focused on output reports. Which of the following
XBRL tags would you expect to find as part of the US financial reporting taxonomy?
A. <documentType>invoice</documentType>
B. <totalAssets>10000</totalAssets>
C. Both <documentType>invoice</documentType> and
<totalAssets>10000</totalAssets>
D. Neither <documentType>invoice</documentType> nor
<totalAssets>10000</totalAssets>
A firewall is an example of which type of control?
A. Physical security
B. Technical security
C. Administrative security
D. Enterprise security
Consider the following partially completed flowchart as you respond to the questions:
In the partial flowchart, “A” should be replaced with:
A. human resources department
B. applicant
C. human resources process
D. Any of these
After drawing a rough draft of a flowchart by hand, Sue should:
A. Determine which computer program she wants to use to prepare a final copy.
B. Ask for feedback on the flowchart from her supervisor.
C. Both determine which computer program she wants to use to prepare a final copy
and ask for feedback on the flowchart from her supervisor.
D. Neither determine which computer program she wants to use to prepare a final copy
nor ask for feedback on the flowchart from her supervisor.
Using the format illustrated in the text, create a risk/control matrix for PTW
Corporation’s acquisition/payment process. The matrix should have three entries.
PTW Corporation sells computer peripherals and related devices, such as printers, ink,
flash drives and cables. PTW has a staff of three purchasing agents, each of whom is in
charge of a specific set of inventory items. Each purchasing agent uses his/her
discretion in making decisions about when to order inventory, how much inventory to
order and which vendor to purchase from. When ordered inventory arrives at PTW, one
of two receiving clerks matches the items, quantities and vendors against a copy of the
purchase order, then either stocks the merchandise on the shelves or puts it in the
storeroom. PTW’s accountant receives a copy of the invoice from the vendor, as well as
an e-mail from one of the receiving clerks indicating that merchandise has been
received. The e-mail also includes the relevant purchase order number. The accountant
files the invoice by date in a filing cabinet; once a week, the accountant removes
invoices from the filing cabinet and pays them by check. To cut down on clutter in the
office, the accountant shreds the vendor invoice after the check has been paid by the
bank. The accountant also completes a bank reconciliation within two weeks of
receiving the bank statement in the mail.
List five weaknesses associated with view-driven accounting information systems.
List five kinds of audits you are likely to encounter in your professional career.
Prepare a narrative description of the sales/collection process depicted in the systems
flowchart below. Then, identify three risk exposures for the company’s sales/collection
process; for each risk exposure, suggest one internal control you would implement.
Helena, the chief financial officer of TRM Corporation, attempted to explain the role
and purpose of financial statements to employees in the production department with no
prior training in accounting. Suggest two causes of information overload the production
employees might experience; for each cause, suggest one countermeasure.
Indicate which of the following items are advantages of using the systems
development life cycle to design and implement an accounting information system.
__ Always has the same set of seven steps
__ Does not allow an organization to purchase off-the-shelf software
__ Ensures an organization’s process is at least “defined” using the capability maturity
model
__ Is less expensive than other systems development methodologies
__ Is less rigid than other systems development methodologies
__ Is organized in a very structured way
__ Promotes strong control of systems projects
__ Provides multiple opportunities for user input
__Provides some flexibility in the implementation stage
__ Takes less time than other systems development methodologies
Consider the list of terms below. Select those that are fundamental to understanding
XBRL; explain the meaning of each fundamental term.
Business process management
Capability maturity model
Extensible
Flowcharting
Form 10-K
Instance document
Internal control
Namespace
Specification
Taxonomy
Prepare a REA model of the following business process. When the CEO of NTL
Corporation resigned, the board of directors hired a recruitment firm to look for a
replacement. The recruitment firm prepared several job announcements, then presented
them to the board of directors. The board of directors approved one of the job
announcements; the recruitment firm used it to advertise the position on the Internet and
in relevant newspapers and professional publications. After receiving several
applications, the recruitment firm selected a pool of ten to pass on to NTL’s board of
directors. The board of directors, with the assistance of the recruitment firm, went
through three rounds of interviews, narrowing the pool from ten to three. Each of the
three finalists prepared a presentation on the strategic future of NTL and delivered the
presentation at a meeting of NTL shareholders. The board of directors then made the
final choice for a new CEO.
Olivia was a finalist for the CEO position at NTL Corporation. She wanted to focus her
presentation on improving internal control in the company’s financing process. Use the
five elements of the COSO internal control framework to outline the main points of
Olivia’s presentation.