Accounting Information Systems
Exam Questions
Course Introduction
Accounting Information Systems is a course that explores the integration of accounting principles and information technology to manage and process financial data within organizations. Students will learn about the design, implementation, and control of computerized accounting systems, including topics such as data management, internal controls, cybersecurity, and systems development. The course also covers the role of accounting software, enterprise resource planning (ERP) systems, and emerging technologies in streamlining business operations and supporting decision-making processes. By the end of the course, students will understand how to evaluate, maintain, and improve accounting information systems to enhance organizational efficiency, accuracy, and compliance with regulations.
Recommended Textbook
Accounting Information Systems 10th Edition by James A. Hall
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Chapter 1: The Information System: an Accountants Perspective
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Sample Questions
Q1) Motivations for IT outsourcing include each of the following except
A)IT's highly technical nature
B)long term contracts in IT outsourcing
C)expense of IT
D)dynamically changing nature of IT
Answer: B
Q2) What factors motivate management to outsource IT?
Answer: Management may be motivated to outsource IT because the IT segment of an organization comprises highly technical,dynamically changing,and expensive activities.The administrative burden and high costs associated with managing and maintaining IT functions are also motivations.
Q3) What are the three primary functions performed by the transaction processing system?
Answer: The primary functions are converting economic events into financial transactions,recording financial transactions in the accounting records (journals and ledgers),and distributing essential financial information to operations personnel to support daily operations.
Q4) These tests focus on data rather than process:
Answer: substantive tests
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Chapter 2: Introduction to Transaction Processing
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Sample Questions
Q1) The type of transaction most suitable for batch processing is
A)airline reservations
B)credit authorization
C)payroll processing
D)adjustments to perpetual inventory
Answer: C
Q2) Which documentation technique depicts relationship between business entities in databases?
Answer: entity relationship diagram
Q3) With regard to an entity relationship diagram,what is an entity?
Answer: Entities are physical resources (automobiles,cash,or inventory),events (ordering inventory,receiving cash,shipping goods)and agents (salesperson,customer,or vendor)about which the organization wishes to capture data.
Q4) List two of the three transaction cycles.
Answer: expenditure cycle,conversion cycle,revenue cycle
Q5) What is a ledger?
Answer: A ledger is a book of accounts that reflects the financial effects of the firm's transactions after they are posted from the journals.Ledgers show activity by account type.
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Chapter 3: Ethics,fraud,and Internal Control
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Sample Questions
Q1) In a computerized environment,all input controls are implemented after data is input.
A)True
B)False
Answer: False
Q2) Situational pressure includes personal or job-related stresses that could coerce an individual to act dishonestly.
A)True
B)False
Answer: True
Q3) An example of a hash total is
A)total payroll checks-$12,315
B)total number of employees-10
C)sum of the social security numbers-12,555,437,251
D)all of the above
Answer: C
Q4) Locking petty cash in a safe is an example of __________________________. Answer: access controls
Q5) What are the three broad categories of application controls?
Answer: input,processing,and output controls
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Chapter 4: The Revenue Cycle
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Sample Questions
Q1) The printer ran out of preprinted sales invoice forms and several sales invoices were not printed.The best internal control to detect this error is
A)a batch total of sales invoices to be prepared compared to the actual number of sales invoices prepared
B)sequentially numbered sales invoices
C)visual verification that all sales invoices were prepared
D)none of the above will detect this error
Q2) The cash receipts journal is a special journal.
A)True
B)False
Q3) The data processing method that can shorten the cash cycle is
A)batch, sequential file processing
B)batch, direct access file processing
C)real-time file processing
D)none of the above
Q4) Process controls are controls over the logic of the application.
A)True
B)False
Q5) What does EDI technology do?
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Chapter 5: The Expenditure Cycle Part I: Purchases and Cash
Disbursements Procedures
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Sample Questions
Q1) What are the six classes of physical internal controls? What is the purpose of these controls?
Q2) Explain how a voucher payable system works.How is the balance of AP determined?
Q3) What are the key authorization issues in purchasing and cash disbursements?
Q4) To provide proper authorization control for inventory,what two departments should be segregated?
Q5) In regards to the accounts payable department,which statement is not true?
A)The purchase requisition shows that the transaction was authorized.
B)The purchase order proves that the purchase was required.
C)The receiving report provides evidence of the physical receipt of the goods.
D)The supplier's invoice indicates the financial value of the transaction.
Q6) Describe an internal control procedure that would prevent payment of an invoice for goods that were never delivered.
Q7) Firms that wish to improve control over cash disbursements use a voucher system.
A)True
B)False
Q9) What is the purpose of the purchase requisition? Page 7
Q8) Discuss the steps taken in the purchasing department in a basic technology expenditure cycle.
Q10) What is the principle objective of the cash disbursement system?
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Chapter 6: The Expenditure Cycle Part II: Payroll Processing and
Fixed Asset Procedures
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Sample Questions
Q1) Describe several technologies developed for producing the time and attendance file in a modern business with telecommuting employees working from multiple locations.
Q2) Describe an internal control that would prevent the charging of depreciation expense to the maintenance department for a sweeper that is now located in and used by the engineering department.
Q3) What is a personnel action form?
Q4) Explain the purpose of each of the following documents used in the payroll system: the personnel action form,the job ticket,the time card.
Q5) List two types of authorization required in the fixed asset system.
Q6) Authorization to dispose of fixed assets should be issued by the user of the asset. A)True B)False
Q7) The fixed asset disposal report authorizes the user department to dispose of a fixed asset.
A)True B)False
Q8) Why should the employee's supervisor not distribute paychecks?
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Chapter 7: The Conversion Cycle
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Sample Questions
Q1) Firms are abandoning activity-based costing (ABC)because
A)it does not facilitate the analysis of variances
B)it is complex and time consuming
C)it does not recognize the importance of direct labor as a component of total manufacturing cost
D)the financial nature of the reports does not permit comparisons to be made among different types of products
Q2) Typically the only allocated cost in the value stream is a charge per square foot for the value stream production facility.
A)True
B)False
Q3) Inventory control performs all of the following tasks except it
A)provides production planning and control with the inventory status report of finished goods
B)updates the raw material inventory records
C)prepares a materials requisition for each production batch
D)records the completed production as an increase to finished goods inventory
Q4) Explain the conversion cycle.
Q5) How does automation assist with the lean manufacturing philosophy?
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Chapter 8: Financial Reporting,and Management Reporting Systems
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Sample Questions
Q1) Management reporting is often called discretionary reporting because,unlike financial reporting,it is not mandated.
A)True
B)False
Q2) The decision to enter a new market is an example of
A)strategic planning
B)tactical planning
C)management control
D)operational control
Q3) What are the major exposures in the general ledger/financial reporting system?
Q4) Which statement is not correct?
A)the post-closing trial balance reports the ending balance of each account in the general ledger
B)one purpose of preparing the unadjusted trial balance is to ensure that debits equal credits
C)financial statements are prepared based on the unadjusted trial balance
D)the unadjusted trial balance reports control account balances but omits subsidiary ledger detail
Q5) Discuss inappropriate performance measures and how to avoid them.
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Chapter 9: Database Management Systems
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Sample Questions
Q1) Define repeating groups,partial dependencies and transitive dependencies and discuss how they are dealt with in the process of normalizing tables.
Q2) An entity is any physical thing about which the organization wishes to capture data.
A)True
B)False
Q3) Explain the three types of anomalies associated with database tables that have not been normalized.
Q4) Which of the following is a level of the database that is defined by the data definition language?
A)user view
B)schema
C)internal view
D)all are levels or views of the database
Q5) The __________________________ authorizes access to the database.
Q6) List the steps involved in creating a relational database using a top-down approach.
Q7) Explain the three views of a database.
Q8) What is a database lockout?
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Chapter 10: The Rea Approach to Business Process
Modeling
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Q1) The REA model is an alternative accounting framework for modeling an organization's critical resources,events,and accounts.
A)True
B)False
Q2) Under the REA approach,support events may directly effect a change in resources.
A)True
B)False
Q3) ER diagrams always label entity names in the singular noun form.
A)True
B)False
Q4) Most companies implementing an REA model also maintain a traditional general ledger system for financial reporting.
A)True
B)False
Q5) An example of an economic event is checking customer credit prior to processing a sale.
A)True
B)False
Q6) Describe the rule for assigning foreign keys in a (1:1)association
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Chapter 11: Enterprise Resource Planning Systems
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Sample Questions
Q1) RBAC assigns access permissions to the role an individual plays in the organization rather than directly to the individual.
A)True
B)False
Q2) ERP systems support a smooth and seamless flow of information across organizations.
A)True
B)False
Q3) An access control list specifies the user-ID,the resources available to the user,and the level of permission granted.
A)True
B)False
Q4) What is data cleansing?
Q5) The primary goal of installing an ERP system is reducing system maintenance costs. A)True
B)False
Q6) What is the client-server model?
Q7) What is meant by the OLAP term: slicing and dicing?
Page 14
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Chapter 12: Electronic Commerce Systems
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Sample Questions
Q1) Discuss common risks to consumers from cyber criminals that impact electronic commerce.
Q2) The provision of computing power and disk space to client firms who access it from desktop PCs is known as
A)computing-as-a-service
B)infrastructure-as-a-service
C)platform-as-a-service
D)software-as-a-service
Q3) What is an IRC?
Q4) HTML controls web browsers that access the web.
A)True
B)False
Q5) Business-to-consumer is the largest segment of Internet commerce.
A)True
B)False
Q6) In a ring topology,all of the following are true except A)all nodes are of equal status
B)nodes manage private programs and databases locally
C)shared resources are managed by a file server which is a node on the ring
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D)a central computer is designated to control traffic between the peers
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Chapter 13: Managing the Systems Development Life Cycle
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Q1) List four types of facts that should be gathered during an analysis of a system.
Q2) Why is cost-benefit analysis more difficult for information systems than for many other types of investments organizations make?
Q3) An example of an intangible benefit is
A)expansion into other markets
B)reduction in supplies and overhead
C)more efficient operations
D)reduced equipment maintenance
Q4) The concept of reusability is central to the structured approach to systems design.
A)True
B)False
Q5) The systems analysis report does not
A)identify user needs
B)specify requirements for the new system
C)formally state the goals and objectives of the system
D)specify the system processing methods
Q6) Contrast the structured and object-oriented approaches to conceptual systems design.
Q7) Name three items included in the detailed design report.
Page 16
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Chapter 14: Auditing It Controls Part I: Sarbanes-Oxley and It Governance
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Sample Questions
Q1) The following are examples of commodity assets except
A)network management
B)systems operations
C)systems development
D)server maintenance
Q2) Statements on Auditing Standards recommendations must be followed by every member of the profession unless it can be shown why a standard does not apply in a given situation.
A)True
B)False
Q3) Why should the tasks of systems development and maintenance be segregated from operations?
Q4) Name three forms of computer fraud.
Q5) Which concept is not an integral part of an audit?
A)evaluating internal controls
B)preparing financial statements
C)expressing an opinion
D)analyzing financial data
Q6) What is scavenging?
Q7) What is program fraud? Page 17
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Chapter 15: Auditing It Controls Part II: Security and Access
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Sample Questions
Q1) Discuss three techniques for breaching operating system controls.
Q2) Explain the concept of discretionary access privileges.
Q3) Which of the following is true?
A)Deep packet inspection uses a variety of analytical and statistical techniques to evaluate the contents of message packets.
B)An intrusion prevention system works in parallel with a firewall at the perimeter of the network to act as a filer that removes malicious packets from the flow before they can affect servers and networks.
C)A distributed denial of service attack is so named because it is capable of attacking many victims simultaneously who are distributed across the Internet.
D)None of the above are true statements.
Q4) Which of the following is considered an unintentional threat to the integrity of the operating system?
A)a hacker gaining access to the system because of a security flaw
B)a hardware flaw that causes the system to crash
C)a virus that formats the hard drive
D)the systems programmer accessing individual user files
Q5) Describe one benefit of using a call-back device.
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Chapter 16: Auditing It Controls Part III: Systems
Development, program Changes, and Application Auditing
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Q1) The base case system evaluation is a variation of the test data method.
A)True
B)False
Q2) What is an embedded audit module?
Q3) The results of a parallel simulation are compared to the results of a production run in order to judge the quality of the application processes and controls.
A)True
B)False
Q4) Describe parallel simulation.
Q5) The technical design activities translate a system's set of detailed technical specifications into user specifications.
A)True
B)False
Q6) New system development activity controls must focus on the authorization,development,and implementation of new systems and its maintenance.List five control activities that are found in an effective system development life cycle.
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Q7) What is ITF?
Q8) What are program version numbers and how are they used?
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