Accounting Information Systems
Mock Exam
Course Introduction
Accounting Information Systems explores the integration of accounting principles with information technology to support financial reporting, decision-making, and internal controls within organizations. The course covers the design, implementation, and management of accounting systems, emphasizing topics such as database management, system documentation, internal controls, fraud prevention, and the use of accounting software. Students gain practical skills in analyzing and evaluating information systems, understanding how technology impacts accounting processes, and ensuring data accuracy and security in a digital environment.
Recommended Textbook
Auditing and Assurance Services 17th edition by Alvin A. Arens
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26 Chapters
3526 Verified Questions
3526 Flashcards
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Page 2
Chapter 16: Completing the Tests in the Sales and Collection
Cycle: Accounts Receivable
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) The most reliable evidence from confirmations is obtained when they are sent A) as close to the balance sheet date as possible.
B) at various times throughout the year to different segments of the sample, so that the entire sample is representative of account balances scattered throughout the year.
C) several months before the year-end, so the auditor will have adequate time to perform alternate procedures if they are required.
D) at various times throughout the year to the same group in the sample, so that the sample will not have a time bias.
Q2) For cash receipts, the occurrence transaction-related audit objective affects which of the following balance-related audit objectives?
A) existence
B) completeness
C) rights
D) detail tie-in
Q3) Describe how the auditor tests the accuracy objective for accounts receivable.
Q4) Stratification of accounts receivable is desirable when using confirmations.
A)True
B)False
Page 18
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Chapter 18: Audit of the Acquisition and Payment Cycle:
Tests of Controls, Substantive Tests of Transactions, and Accounts Payable
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Discuss the key internal controls that should be present in the processing purchase orders function in the acquisitions and payment cycle.
Q2) Matching the supplier's invoice, the purchase order, and the receiving report prior to preparing the voucher would normally be the responsibility of the
A) warehouse receiving function.
B) purchasing function.
C) general accounting function.
D) treasury function.
Q3) Purchase returns and allowances and purchase discounts business functions are generally not significant in amount for most companies.
A)True
B)False
Q4) Cutoff information for inventory acquisitions should be obtained during A) the interim period prior to year-end.
B) the interim period immediately following year-end.
C) the physical observation of inventory.
D) either the interim period prior to or immediately following year-end.
Page 20
Q5) List the four business functions in the acquisition and payment cycle.
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Chapter 19: Completing the Tests in the Acquisition and Payment
Cycle: Verification of Selected Accounts
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Describe the audit procedures used to verify the accuracy and detail tie-in objectives for prepaid insurance.
Q2) In determining whether goodwill should be tested for impairment, companies and their management consider qualitative factors second, after performing a quantitative test for impairment.
A)True
B)False
Q3) The auditor receives the client's schedule of recorded disposals and then performs detail tie-in tests of the recorded disposals schedule. What procedures does the auditor perform on the client's schedule of recorded disposals?
Q4) The most important audit objective for depreciation expense is detail tie-in. A)True
B)False
Q5) The starting point for the verification of current-year acquisitions of property, plant, and equipment is normally a client-prepared schedule of all acquisitions recorded in the general ledger during the year.
A)True
B)False
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Chapter 21: Audit of the Inventory and Warehousing Cycle
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146 Verified Questions
146 Flashcards
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Sample Questions
Q1) Boxes or other containers holding inventory should also be opened during test counts to determine the ________ of the inventory.
A) classification
B) detail tie-in
C) existence
D) realizable value
Q2) To best ascertain that a company has properly included merchandise that it owns in its ending inventory, the auditor should review and test the
A) terms of the open purchase orders.
B) purchase cutoff procedures.
C) contractual commitments made by the purchasing department.
D) purchase invoices received on or around year-end.
Q3) Cost of goods sold is generally one of the largest accounts on the income statement.
A)True
B)False
Q4) The audit of the inventory and warehousing cycle consists of five parts. State the five parts and, for each part, identify the cycle in which that part is tested by the auditor.
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Chapter 22: Audit of the Capital Acquisition and Repayment Cycle
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) All of the following are owners' equity accounts except for A) common stock.
B) paid-in-capital in excess of par.
C) sales.
D) retained earnings.
Q2) The board of directors must authorize the amount of the dividend per share and the dates of record and payment of the dividend.
A)True
B)False
Q3) When a company maintains its own records of stock transactions and outstanding stock, internal controls must be adequate to ensure that
A) actual owners are recorded in the bylaws.
B) the correct amount of dividends is paid to stockholders owning the stock on the dividend record date.
C) the correct amount of dividends is paid to stockholders owning the stock on the declaration date.
D) actual owners are recorded in the minutes.
Q4) Identify three substantive analytical procedures commonly performed for notes payable.
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Chapter 23: Audit of Cash and Financial Instruments
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145 Verified Questions
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Sample Questions
Q1) When auditing financial instruments, interest income and dividends can be recomputed and compared to a public source.
A)True
B)False
Q2) The process of transferring money from one bank account to another and improperly recording the transaction is referred to as
A) kiting.
B) lapping.
C) scamming.
D) embezzling.
Q3) An auditor is reviewing the minutes of board meetings to determine whether any securities are pledged as collateral. This test of the detail of balances relates to the audit objective of A) rights.
B) cutoff.
C) realizable value.
D) classification.
Q4) Explain kiting, and discuss how it is performed.
Q5) What should be audited on an interbank transfer schedule?
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Chapter 24: Completing the Audit
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) The letter of representation obtained from an audit client should be
A) dated as of the end of the period under audit.
B) dated as of the audit report date.
C) dated as of any date decided upon by the client and auditor.
D) dated as of the issuance of the financial statement.
Q2) Which of the following subsequent events is most likely to result in an adjustment to a company's financial statements?
A) merger or acquisition activities
B) bankruptcy (due to deteriorating financial condition) of a customer with an outstanding accounts receivable balance
C) issuance of common stock
D) an uninsured loss of inventories due to a fire
Q3) An auditor is reconciling the amounts included in the long-term debt footnotes to the information examined and supported in the audit files for long-term debt. Which audit objective is being satisfied?
A) accuracy and valuation
B) occurrence and rights and obligations
C) completeness
D) classification and understandability
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Page 26
Chapter 25: Other Assurance Services
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123 Verified Questions
123 Flashcards
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Sample Questions
Q1) If a client has failed to follow applicable accounting standards in a review engagement, the report must be modified. Prepare an example of the suggested wording in a separate paragraph covering known departures from accounting principles generally accepted in the United States of America.
Q2) When the accountant has performed a review and has determined that no material changes to the financial statements are needed, the first paragraph of the review report
A) expresses positive assurance about the financial statements.
B) notes the accountant's responsibility to conduct the review.
C) identifies the entity and the period of financial statements subject to the review.
D) specifies that management is responsible for the financial statements.
Q3) A primary concern in reporting on a comprehensive basis is to make sure that the statements clearly indicate that they are prepared on a basis other than GAAP.
A)True B)False
Q4) Who developed the WebTrust service?
Briefly explain this service.
Q5) Define forecast and projection.
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Chapter 26: Internal and Governmental Financial Auditing and Operational Auditing
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Because they spend all their time within one company, internal auditors have much greater knowledge about the company's operations and internal controls then external auditors.
A)True
B)False
Q2) What distinguishes internal control evaluation and testing for financial and operational auditing?
A) purpose of the work
B) scope of the work
C) both A and B
D) neither A nor B
Q3) The professional organization which is responsible for providing guidance for internal auditors is the
A) Association of Private Auditors.
B) Institute of Internal Auditors.
C) American Bar Association.
D) Association of Internal Auditors.
Q4) The formal name of the Yellow Book is Government Auditing Standards.
A)True B)False
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