Accounting Information Systems
Exam Materials
Course Introduction
Accounting Information Systems focuses on the study of computerized systems used to process financial transactions and manage accounting data within organizations. The course covers the design, implementation, and control of accounting systems, emphasizing their role in supporting business operations and decision-making. Topics include system development life cycles, internal controls, data security, the integration of enterprise resource planning (ERP) systems, and the impact of emerging technologies on accounting processes. Students will gain practical experience with popular accounting software and learn how to assess and improve the efficiency and reliability of information systems in accounting environments.
Recommended Textbook
Accounting Information Systems 11th Edition by
Marshall B. Romney Paul J. Steinbart
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Chapter 1: Accounting Information Systems
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Q1) Which of the following is not an example of a common activity in an AIS?
A)buy and pay for goods and services
B)sell goods and services and collect cash
C)summarize and report results to interested parties
D)recording of sales calls for marketing purposes
Answer: D
Q2) Goal conflict may result when
A)A decision or action of a subsystem is inconsistent with the system as a whole.
B)A subsystem achieves its goals while contributing to the organization's overall goal.
C)Duplicate recording,storage and processes are eliminated.
D)The data exceeds the amount the human mind can absorb and process.
Answer: A
Q3) 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)Software and hardware
Answer: D
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Chapter 2: Overview of Business Processes
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Q1) The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky.Since 1996,the owner,Glamdring Elfthrall,has leveraged computer technology to provide a superior level of customer service.In particular,the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible.Price information and condition are also provided for each inventory item.In this database,an individual figure is a(an) A)entity.
B)attribute.
C)field.
D)record.
Answer: A
Q2) In transaction processing,generally which activity comes first?
A)recording data in a journal
B)posting items to special journals
C)capturing data on source documents
D)posting data to a ledger
Answer: C
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Chapter 3: Systems Development and Documentation Techniques
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Q1) An entity that sends or receives data used or produced by the system is called a A)data source or destination.
B)data store.
C)data flow.
D)data transformation.
Answer: A
Q2) Which symbol would be used in a flowchart to represent a connection to another part of the flowchart on a different page?
A)#4
B)#13
C)#14
D)#15
Answer: D
Q3) P62 50)What are the various ways to document a system?
Answer: Data flow diagrams,document flowcharts,system flowcharts,program flowcharts,and narrative documentation are the various ways to document a system.
Q4) P71 56)What are the four categories of flowcharting symbols?
Answer: The four categories of flowcharting symbols are: input/output,processing,storage,flow and miscellaneous.
Page 5
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Chapter 4: Relational Databases
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Sample Questions
Q1) Dana Halsey is chair of the Purebred Marmoset Society,which maintains a database of registered purebred marmosets and their breeding history.Originally,the database was stored on index cards,but recently Dana has been exploring the use of a computerized system.One file in the system will store the name,birth date,and other characteristics of all of the marmosets that have been registered.Each marmoset is uniquely identified by a registration number.A second file will contain data that link each marmoset to its male and female parents by means of their serial numbers.The primary key in the first file is:
A)Name
B)Birth date
C)A foreign key in the second file.
D)The primary key in the second file.
Q2) A well-structured or "normalized" database imposes several requirements on the structure of tables.The constraint that ensures the consistency of the database is known as
A)the entity integrity rule.
B)the referential integrity rule.
C)the logical view.
D)the physical view.
Q3) What is the difference in logical view and physical view?
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Chapter 5: Computer Fraud and Security
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Q1) Which situation below makes it easy for someone to commit a fraud?
A)the organization placing excessive trust in key employees
B)inadequate staffing within the organization
C)company policies within the organization are unclear
D)All of the above situations make it easy for someone to commit a fraud.
Q2) Fraud is any and all means a person uses to gain an unfair advantage over another person.Current and former employees of an organization are much more likely to perpetrate fraud than external parties.The act by a person or group of persons resulting in materially misleading financial statements is called a(n)
A)misappropriation of assets.
B)employee fraud.
C)fraudulent financial reporting.
D)theft of assets.
Q3) A simple method for catching or preventing many types of employee fraud is to
A)monitor all employee behavior using video cameras.
B)require all employees to take annual vacations.
C)explain to employees that fraud is illegal and that it will be severely punished.
D)monitor employee bank accounts and net worth.
Q4) What are the two kinds of fraud in business?
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Chapter 6: Control and Accounting Information Systems
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Q1) What are the two categories of internal controls?
Q2) The Director of Information Technology for the city of Bumpkiss,Minnesota,formed a company to sell computer supplies and software.All purchases made on behalf of the City were made from his company.He was later charged with fraud for overcharging the City,but was not convicted.The control issue in this case arose because the Director had both _______ and _______ duties.
A)custody; authorization
B)custody; recording
C)recording; authorization
D)management; custody
Q3) Generally in a risk assessment process,the first step is to
A)identify the threats that the company currently faces.
B)estimate the risk probability of negative events occurring.
C)estimate the exposure from negative events.
D)identify controls to reduce all risk to zero.
Q4) Why was the Foreign Corrupt Practices Act of interest to accountants?
Q5) Discuss the internal (control)environment.
Q6) Provide three reasons why AIS threats are increasing.Briefly discuss each one.
Q7) What is COSO?
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Q8) What is a weakness of the internal control concept of the separation of duties?
Chapter 7: Infromation System Controls for Systems
Reliability
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Q1) When new employees are hired by Folding Squid Technologies,they are assigned user names and passwords and provided with laptop computers that have an integrated fingerprint reader.In order to log in,the user's fingerprint must be recognized by the reader.This is an example of a(an)
A)authorization control.
B)biometric device.
C)remote access control.
D)defense in depth.
Q2) Multi-factor authentication
A)Involves the use of two or more basic authentication methods.
B)Is a table specifying which portions of the systems users are permitted to access.
C)Provides weaker authentication than the use of effective passwords.
D)Requires the use of more than one effective password.
Q3) These are established to deal with major security breaches.
A)CERTs
B)CSOs
C)FIRSTs
D)Intrusion detection systems
Q4) What are three ways users can be authenticated?
Page 9
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Chapter 8: Auditing Computer-Based Information Systems
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Q1) This batch processing data entry control sums the number of items in a batch.
A)Batch total
B)Hash total
C)Record count
D)Sequence check
Q2) Visual scanning is an example of
A)Data entry controls
B)Output controls
C)Processing controls
D)Source data controls
Q3) Every organization should have a disaster recovery plan so that data processing capacity can be restored as smoothly and quickly as possible.Which item below would not typically be part of an adequate disaster recovery plan?
A)a system upgrade due to operating system software changes
B)uninterruptible power systems installed for key system components
C)scheduled electronic vaulting of files
D)backup computer and telecommunication facilities
Q4) Identify four useful procedures for controlling access to system outputs.
Q5) What is fault tolerance?
Q6) Describe some steps you can take to minimize your risk of identify theft.
Page 10
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Chapter 9: Auditing Computer-Based Informtion Systems
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Q1) One way to document the review of source data controls is to use
A)a flowchart generator program.
B)a mapping program.
C)an input control matrix.
D)a program algorithm matrix.
Q2) Comparison of budgets and operating objectives with performance reveals material discrepancies.This is an application of which of the following five internal audit scope standards?
A)Operating and financial information integrity
B)Policy compliance verification
C)Asset security verification
D)Resource use efficiency
E)Operational effectiveness
Q3) The use of a secure file library and restrictions on physical access to data files is a control procedure used in conjunction with
A)computer processing controls.
B)data files.
C)program modification procedures.
D)program development.
Q4) Discuss the disadvantages of test data processing.
Page 11
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Chapter 10: The Revenue Cycle: Sales an Cash Collections
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Q1) Sad Clown Pajamas is an Internet-based wholesaler.Customers enter their orders online.The manager of Callow Youth Clothing was entering an order when the following error message popped up: Did you mean to enter a quantity of 1000 for your order? This message is the result of a
A)validity check.
B)reasonableness test.
C)limit check.
D)completeness test.
Q2) Responding to customer inquiries and general customer service is an important aspect in the revenue cycle.Since customer service is so important,software programs have been created to help manage this function.These special software packages are called
A)EDI systems.
B)POS systems.
C)VMI systems.
D)CRM systems.
Q3) How does a company avoid overbilling customers for items not yet shipped?
Q4) In billing and accounts receivable,what documents are commonly used?
Q5) What is a CRM system?
Q6) Why is credit approval an important part of the revenue cycle?
Page 12
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Chapter 11: The Expenditure Cycle: Purchasing and Cash
Disbursements
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Q1) From a legal standpoint,when does the obligation to pay a vendor arise?
A)when the goods are requisitioned
B)when the goods are ordered
C)when the goods are received by the purchaser
D)when the goods are billed
Q2) The management at Sad Clown Pajamas,an Internet-based wholesaler,is considering a new inventory control system.The current system is inadequate because it results in stockouts that interrupt production and excess stocks of some materials that result in markdowns and high carrying costs.The new system,which will focus on reducing or completely eliminating carrying costs,will employ
A)a just-in-time inventory system.
B)the economic order quantity.
C)a reorder point.
D)materials requirements planning.
Q3) a)What is the major cost driver in the purchasing function?
b)How can information technology be used to control this cost driver?
Q4) a)Define expenditure cycle.
b)What are the basic expenditure cycle activities?
Page 13
Q5) Under what conditions is MRP preferable to JIT and vice versa?
Q6) Briefly discuss the differences among EOQ,MRP,and JIT.
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Chapter 12: The Production Cycle
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Q1) MRP-II and JIT manufacturing systems both plan production in advance.What is the main difference between these two systems?
A)the length of the planning horizon
B)JIT uses long-term customer demand for planning purposes
C)MRP-II relies on EDI
D)There are no differences between the two systems.
Q2) __________ represent testing to identify defective units before they are ready for sale.
A)External failure costs
B)Inspection costs
C)Internal failure costs
D)Prevention costs
Q3) Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using __________ but an AIS enhancement is to use __________ to record and track direct labor costs.
A)job-time tickets; coded identification cards
B)move tickets; coded identification cards
C)employee earnings records; job-time tickets
D)time cards; electronic time entry terminals
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Chapter 13: The Human Resources Managementpayroll Cycle
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Q1) Some companies have created a position called "director of intellectual assets." What is the objective of this position?
A)measurement and development of intellectual assets and human resources
B)implementation of a more integrated HRM/payroll system
C)improvement of the hiring and firing procedures in the company
D)All of the above are correct.
Q2) What are the control objectives in an HRM/payroll cycle?
Q3) The employer pays a portion of some payroll taxes and employee benefits.Both the employee and employer pay which benefit or tax listed below?
A)social security taxes
B)federal income taxes
C)state income taxes
D)none of the above
Q4) A manufacturing company is likely to use __________ to collect employee time data for payroll and job time.
A)badge readers
B)supervisor's entries
C)preprinted time cards
D)retina scanning
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Chapter 14: General Ledger and Reporting System
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Q1) Adjusting entries to the general ledger are typically provided by the A)budget department.
B)controller.
C)treasurer.
D)chief executive officer.
Q2) Corrections are entries made to correct errors found in __________.
A)all journals.
B)special journals.
C)the general ledger.
D)the financial statements.
Q3) Concerning XBRL,which of the following statements is not true?
A)XBRL is a variant of XML.
B)XBRL is specifically designed for use in communicating the content of financial data.
C)XBRL creates unique tags for each data item.
D)XBRL's adoption means accountants and systems professionals must know how to write XBRL code to take advantage of its benefits.
Q4) What is a journal voucher file? What is the purpose of this file?
Q5) How is a balanced scorecard used to assess organizational performance?
Q6) What is a general ledger and reporting system?
Page 17
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Chapter 15: Data Modeling and Database Design
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Q1) Concerning the development of an REA model,which of the following statements is true?
A)Events that pertain to the entry of data are included in the REA model.
B)The objective is to model the basic value-chain activity.
C)REA diagrams model individual transactions and data collections.
D)Information retrieval events are modeled as events in the REA model.
Q2) How many types of relationships are possible between entities?
A)one
B)two
C)three
D)an infinite number
Q3) Nonfinancial information should be collected because
A)it may indicate events that may affect resources.
B)it can be used to plan other activities.
C)it can be used in transaction processing.
D)both A and B
Q4) What are the three steps in developing an REA diagram?
Q5) Define minimum and maximum cardinalities.
Q6) What is an REA data model?
Q7) List the five stages in the database design process.
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Chapter 16: Implementing an Rea Model in a Relational Database
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Q1) Which entity is likely to be part of both the revenue cycle and the expenditure cycle?
A)Receive Goods
B)Customer
C)Receive Cash
D)Inventory
Q2) Concerning tables for M:N relationships,which of the following statements is false?
A)Non-key attributes may be included.
B)Multiple attribute primary keys are used.
C)Single attribute primary keys may be used.
D)Concatenated keys are used.
Q3) In order to integrate separate REA diagrams into an integrated organizational REA model,what must the designer understand?
Q4) Which entity is likely to be part of both the payroll cycle and the revenue cycle?
A)Cash
B)Customer
C)Receive Goods
D)Inventory
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Chapter 17: Special Topics in Rea Modeling
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Q1) Warehouse number is most likely to be a foreign key in:
A)Order Goods
B)Pay for Goods
C)Receive Goods
D)Warehouse
Q2) The minimum cardinality from the Take Order event to the Call on Customer event is _____ and the maximum cardinality is _____.
A)0;0
B)0;1
C)1;0
D)1;1
Q3) The __________ entity stores much of the data typically found in the employee (payroll)master file:
A)Accounting
B)Employee
C)HR
D)Payroll
Q4) What are the benefits of an integrated enterprise-wide data model?
Q5) Why might an REA diagram show relationships between resources and agents?
Q6) Why is the event Issue Debt often modeled as a separate event entity?
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Chapter 18: Introduction to Systems Development and Systems Analysis
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Q1) What is the planning horizon for the master plan?
A)one year
B)three years
C)five years
D)seven years
Q2) There are several important aspects to be considered during a feasibility study.The aspect that asks the question,"Can people use the system and will they use it?" is called
A)economic feasibility.
B)operational feasibility.
C)scheduling feasibility.
D)technical feasibility.
Q3) When is a proposal to conduct a systems analysis prepared?
A)after a written request for systems development is prepared
B)after the development team completes the survey of the existing AIS
C)after the initial investigation of the project is approved
D)before the initial investigation
Q4) What four strategies can be used for determining user requirements?
Q5) Who makes up the project development team and what is the team's purpose?
Q6) Name the five phases of the systems development life cycle.
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Chapter 19: Ais Development Strategies
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Q1) The least costly approach to systems acquisition is
A)canned software.
B)custom software.
C)modified software.
D)prototyping.
Q2) Since the introduction of the computer,there has been an astronomical demand for information systems.Such demand has resulted in many users becoming involved in the hands-on development,control,and employment of information systems.What term is used to refer to this phenomenon?
A)amateur user computing (AUC)
B)competitive intra-organization systems development approach (CIOSDA)
C)end-user computing (EUC)
D)novice information systems development (NISD)
Q3) What is a disadvantage of using CASE?
A)cost savings
B)improved control procedures
C)improved program quality
D)incompatibility
Q4) Explain the business processing reengineering principle: "Require those who produce information to process it."
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Chapter 20: Systems Design, Implementation and Operation
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Q1) The initial visual and mental review to discover keying or programming errors is called
A)desk checking.
B)desk correction.
C)desk debugging.
D)desk imaging.
Q2) Performing revisions to existing program code is an example of
A)debugging.
B)structured programming.
C)program maintenance.
D)hierarchical program design
Q3) The project team wants to find the most efficient way to collect data in order to prepare a report on sales per store.Which element in design specifications will deal with the decision?
A)data collection
B)input
C)output
D)processing procedures
Q4) What factors does a steering committee consider when evaluating different system designs?
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