Accounting Information Systems
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Course Introduction
Accounting Information Systems explores the integration of information technology and accounting principles to support decision-making and enhance business operations. The course covers the design, implementation, and management of computerized accounting systems, emphasizing internal controls, data security, and ethical considerations. Students learn about transaction cycles, database management, system documentation, and emerging technologies such as cloud computing and blockchain in accounting. Through case studies and hands-on projects, the course prepares students to analyze, evaluate, and optimize information systems to meet organizational needs.
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Accounting Information Systems 14th Edition by Marshall B. Romney
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Page 2
Chapter 1: Conceptual Foundations of Accounting Information Systems
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Q1) ________ information reduces uncertainty,improves decision makers' ability to make predictions,or confirms expectations.
A)Timely
B)Reliable
C)Relevant
D)Complete
Answer: C
Q2) In which transaction cycle would information for initiating back orders for out of stock goods be most likely to pass between internal and external accounting information systems?
A)the revenue cycle
B)the expenditure cycle
C)the human resources / payroll cycle
D)the financing cycle
Answer: A
Q3) Define the concept of a system.
Answer: A system is a set of two or more components that are somehow interrelated and interact together to achieve a specific goal.
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Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Sample Questions
Q1) Build Smarts is a supplier of building materials to more than 150 builders in the state of Illinois.What is the best way for Build Smarts to ensure that all sales are recorded?
A)well-designed paper forms
B)source data automation
C)turnaround documents
D)sequentially numbered sales invoices
Answer: D
Q2) John Pablo works in the accounting department of a multinational manufacturing company.His job includes updating accounts payable based on purchase orders and checks.His responsibilities are part of the company's
A)revenue cycle.
B)expenditure cycle.
C)financing cycle.
D)production cycle.
Answer: B
Q3) The existence of relevant data guarantees the data are useful.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Systems Documentation Techniques
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Sample Questions
Q1) Discuss the ways in which information professionals interact with documentation tools and the various levels of understanding necessary.
Answer: At a minimum,a professional should be able to read documentation.A professional may also be called upon to evaluate internal control system documentation in order to identify control strengths and weaknesses or recommend improvements.A professional may be engaged to prepare documentation,which requires the greatest amount of skill and understanding of a particular system.
Q2) To create a good business process flowchart,one should emphasize ________ and put less emphasis on ________.
A)meeting with top management;meeting with staff employees
B)following rigid rules on how to prepare a business process flowchart;clearly communicating the activities involved in the process
C)clearly communicating the activities involved in the process;following rigid rules on how to prepare a business process flowchart
D)meeting with staff employees;meeting with top management
Answer: C
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Chapter 4: Relational Databases
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Sample Questions
Q1) Mara Kay is a system analyst for a national department store.She was tasked to identify previously unknown relationships in the company's sales data that can be used in future promotions.What technique would Mara most likely use?
A)Customer auditing
B)Customer resource management
C)Data exploring
D)Data mining
Q2) What acts as an interface between the database and the various application programs?
A)data warehouse
B)database administrator
C)database system
D)database management system
Q3) Explain the relational database data model.
Q4) Describe the differences between the data definition language (DDL),data manipulation language (DML),and the data query language (DQL).
Q5) Explain the two advantages semantic data modeling has over normalization when designing a relational database.
Q6) Discuss redundancy as it applies to database design.
Page 6
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Chapter 5: Computer Fraud
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Q1) Excessive heat is an example of a(n)________ threat.
A)natural and political disasters
B)software errors and equipment malfunctions
C)unintentional acts
D)intentional acts (computer crimes)
Q2) Undetected data transmission errors are an example of a(n)________ threat.
A)natural and political disasters
B)software errors and equipment malfunctions
C)unintentional acts
D)intentional acts (computer crimes)
Q3) Why is computer fraud often more difficult to detect than other types of fraud?
A)Rarely is cash stolen in computer fraud.
B)The fraud may leave little or no evidence it ever happened.
C)Computers provide more opportunities for fraud.
D)Computer fraud perpetrators are just more clever than other types of criminals.
Q4) Describe two kinds of fraud.
Q5) Explain the impact of SAS No.99 on auditors' responsibilities.
Q6) Describe some of the most frequent fraudulent financial reporting schemes.
Q7) Describe at least four ways a company can make fraud less likely to occur.
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Chapter 6: Computer Fraud and Abuse Techniques
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Q1) Developers of computer systems often include a user name and password that is hidden in the system,just in case they need to get into the system and correct problems in the future.This is referred to as a A)Trojan horse.
B)key logger.
C)spoof.
D)back door.
Q2) Using special software to bypass system controls and perform illegal acts is called A)superzapping.
B)tabnapping.
C)pretexting.
D)piggybacking.
Q3) A hacker who changed the voice mail greeting of a company to say that it is offering free products by asking customers to dial a different phone number to claim their gifts is engaging in A)diddling.
B)phreaking
C)phishing.
D)hacking.
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Page 8
Chapter 7: Control and Accounting Information Systems
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Sample Questions
Q1) Best Friends,Incorporated is a publicly traded company where three BFF's (best friends forever)serve as its key officers.This situation
A)violates the Sarbanes-Oxley Act.
B)violates the Securities and Exchange Act.
C)increases the risk associated with an audit.
D)All of the above.
Q2) Which type of control prevents,detects,and corrects transaction errors and fraud?
A)general
B)application
C)detective
D)preventive
Q3) In a system with effective separation of duties,it is difficult for any single employee to embezzle successfully.
A)True
B)False
Q4) Explain how a company could safeguard its assets,records,and data.
Q5) Explain why management's philosophy and operating style are considered to be the most important element of the internal environment.
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Chapter 8: Controls for Information Security
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Sample Questions
Q1) ________ is an authorized attempt by an internal audit team or an external security consultant to attempt to break into the organization's information system.
A)Log analysis test
B)Intrusion test
C)Penetration test
D)Vulnerability test
Q2) The most effective way to protect network resources that are exposed to the internet,yet reside outside of a network is
A)a firewall.
B)employee training.
C)a demilitarized zone.
D)stateful packet filtering.
Q3) Describe the five principles of the Trust Services Framework.Select one of the principles and discuss the why it is important to an organization.
Q4) Cloud computing is generally more secure than traditional computing.
A)True
B)False
Q5) Describe the security risks associated with virtualization and cloud computing.
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Chapter 9: Confidentiality and Privacy Controls
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Sample Questions
Q1) CAN-SPAM provides both criminal and civil penalties for violations of the law.
A)True
B)False
Q2) Which of the following is not true regarding virtual private networks (VPN)?
A)VPNs provide the functionality of a privately owned network using the Internet.
B)Using VPN software to encrypt information while it is in transit over the Internet in effect creates private communication channels,often referred to as tunnels,which are accessible only to those parties possessing the appropriate encryption and decryption keys.
C)It is more expensive to reconfigure VPNs to include new sites than it is to add or remove the corresponding physical connections in a privately owned network.
D)The cost of the VPN software is much less than the cost of leasing or buying the infrastructure (telephone lines,satellite links,communications equipment,etc. )needed to create a privately owned secure communications network.
Q3) Describe some steps you can take to minimize your risk of identity theft.
Q4) Compare the advantages and disadvantage of symmetric and asymmetric encryption.
Q5) Discuss the most important control for protecting confidentiality.
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Chapter 10: Processing Integrity and Availability Controls
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Sample Questions
Q1) Reconciliation procedures is an example of
A)a data entry control.
B)a data transmission control.
C)an output control.
D)a processing control.
Q2) ________ involves copying only the data items that have changed since the last partial backup.
A)Archive
B)Cloud computing
C)Differential backup
D)Incremental backup
Q3) A customer forget to include her account number on her check,and the accounts receivable clerk credited her payment to a different customer with the same last name.Which control could have been used to most effectively to prevent this error?
A)Closed-loop verification.
B)Duplicate values check.
C)Reasonableness test.
D)Reconciliation of a batch control total.
Q4) Discuss ways that can help ensure the processing integrity of electronic voting.
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Chapter 11: Auditing Computer-Based Information Systems
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Sample Questions
Q1) The scope of a(n)________ audit encompasses all aspects of systems management.
A)operational
B)information systems
C)financial
D)internal control
Q2) What is a test data generator?
A)It is an application that records how well systems personnel have performed on company competency examinations.
B)It is an application that prepares data that can be used for auditing the effectiveness of computer processing.
C)It is an application that records which professional examinations systems personnel have obtained.
D)It is a backup generator application that can be used to generate data if the original storage device fails.
Q3) ________ is one tool used to document source data controls.
A)An input control matrix
B)A flowchart generator program
C)A program algorithm matrix
D)A mapping program
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) For strongest segregation of duties,a sales representative should never be allowed to
A)discuss the company's products.
B)negotiate the sales price.
C)approve a sale on credit.
D)send a customer a gift.
Q2) The ________ is a legal contract that defines responsibility for goods that are in transit.
A)bill of lading
B)packing slip
C)back order
D)picking list
Q3) Special software packages called ________ can help an organization manage customer service.
A)EDI systems
B)CRM systems
C)POS systems
D)VMI systems
Q4) Explain how validity checks,completeness tests and reasonableness tests can be implemented to ensure accuracy of customer orders.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash Disbursements
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Q1) Vendor invoices are approved by the ________,which reports to the ________.
A)purchasing department;controller
B)accounts payable department;treasurer
C)purchasing department;treasurer
D)accounts payable department;controller
Q2) Identify in which of the following scenarios a company could adjust the balance due the vendor by issuing a debit memo.
A)quantity different from that ordered
B)damage to the goods
C)goods that fail inspection for quality
D)All of the above are possible scenarios.
Q3) Economic Order Quantity (EOQ)includes several variables that must be taken into consideration when calculating the optimal order size.One variable,the costs associated with holding inventory,is referred to as
A)ordering costs.
B)carrying costs.
C)the reorder point.
D)stockout costs.
Q4) Describe the function of an imprest fund.
Page 15
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Chapter 14: The Production Cycle
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Q1) What role does the AIS play in the production cycle?
Q2) ________ are incurred to ensure that products are created without defects the first time.
A)External failure costs
B)Inspection costs
C)Internal failure costs
D)Prevention costs
Q3) Yasamin Roshni owns and operates a small deli in Miami,Florida.Each afternoon,she prepares a shopping list that describes the quantity and variety of ingredients that she will purchase in the evening from her wholesaler.The shopping list is an example of a(n)
A)bill of materials.
B)materials requisition.
C)operations list.
D)production order.
Q4) Which of the following is not a benefit of activity-based costing?
A)Lower cost.
B)Better decisions.
C)Improved cost management.
D)Identification of cost drivers.
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Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) The HRM department should immediately delete records of employees who quit to prevent other employees from assuming their identities.
A)True
B)False
Q2) What is a potential threat to the specific activity of payroll processing?
A)Hiring unqualified employees.
B)Poor system performance.
C)Violations of employment laws.
D)Unauthorized changes to the payroll master file.
Q3) The average annual management salary at Iyov Management is $100,000.If the average turnover rate for employees is six per year,what is the approximate average annual cost of turnover?
A)$100,000.
B)$400,000
C)$600,000.
D)$900,000.
Q4) Batch processing continues to be widely used to process payroll transactions.
A)True
B)False
Q5) Describe the basic activities in an HRM/payroll cycle.
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Chapter 16: General Ledger and Reporting System
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Q1) The balanced scorecard attempts to solve what major issue associated with traditional accounting reports?
A)Traditional accounting reports focus too narrowly on financial performance.
B)Traditional accounting reports are not easily understood by non-accountants.
C)Traditional accounting reports are expensive to produce.
D)Traditional accounting reports are produced too slowly to provide value.
Q2) The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports.
A)business transactions;updating;processing
B)data processing;business transactions for;printing
C)information processing;updating;creating
D)business transactions;data processing;preparing
Q3) Which of the following balanced scorecard dimensions provides measures on how well the organization is working to improve customer satisfaction and become the preferred supplier for key customers?
A)Financial.
B)Internal operations.
C)Innovation and learning.
D)Customer.
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Chapter 17: Database Design Using the Rea Data Model
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Q1) Which of the following statements is true about the development of an REA model?
A)Events that pertain to the entry of data are included in the REA model.
B)The objective is to model basic value-chain activities.
C)REA diagrams model individual transactions and data collections.
D)Information retrieval events are modeled as events in the REA model.
Q2) 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.
Q3) Every citizen in the United States has one social security number,but no two citizens have the same social security number.Thus,the cardinality that exists between social security numbers and citizens is
A)one-to-one.
B)one-to-many.
C)many-to-many.
D)many-to-none.
Q4) Describe what is a E-R diagram and provide an example.
Q5) Define cardinality.
Q6) What is Cardinalities?
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) In a relational database designed according to the REA model,where is information about accounts receivable stored?
A)Event entities.
B)Agent entities.
C)Both A and B.
D)None of the above.
Q2) Explain a completeness check.
Q3) In a relational database designed according to the REA model,where is information about transactions stored?
A)Resource entities.
B)Agent entities.
C)Event entities.
D)All of the above.
Q4) Explain where in the REA model you can find the information normally found in a ledger.
Q5) In an integrated REA diagram,every resource must be linked to
A)at least two events.
B)at least two agents.
C)at least one other resource.
D)at least two other resources.
20
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Chapter 19: Special Topics in Rea Modeling
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Q1) A dental office would likely model the relationships between the Sales event and both the Services and Supplies Resource entities as
A)M:N.
B)1:1.
C)1:N.
D)1:M.
Q2) Many companies sell software,music,or digital photographs over the Internet.They provide each customer with a digital copy of those resources,but not the actual resource itself.How will this company's REA model differ from those selling tangible inventory?
A)These companies do not need an Inventory table.
B)The structure of Inventory table is completely different from that of mass-produced merchandise.
C)The Inventory table is only different in that it doesn't need attributes such as quantity-on-hand,quantity-available,reorder point,and standard reorder quantity.
D)The Inventory table need not include information about the standard list price of each item and its description.
Q3) Why is cost information stored in several relational tables?
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Chapter 20: Introduction to Systems Development and Systems Analysis
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Q1) A planning horizon of at least ________ years is common for any master plan;however,the plan should be updated at least ________ each year.
A)3;four times
B)5;four times
C)3;two times
D)5;two times
Q2) It is most difficult to quantify ________ when assessing economic feasibility.
A)benefits
B)costs
C)the payback period
D)break even
Q3) What report serves as a repository of data from which systems designers can draw information?
A)The executive steering committee report.
B)The initial investigation report.
C)The systems analysis report.
D)The systems survey report.
Q4) Discuss the relative advantages and disadvantages of the four different methods for gathering data during a systems survey.
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Chapter 21: Ais Development Strategies
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Q1) Benathir Donathat,director of the project committee,has received approval from management for implementation of a new accounting information system.After putting out an RFP,the committee settled on a Web-based application service provider that will manage all hardware and software required by the system,with fees based on usage.The committee decided to go with
A)canned software.
B)a turnkey system.
C)an outsourced system.
D)an end-user developed system.
Q2) Identify one major drawback that is frequently associated with canned software.
A)A commercial software development company develops it.
B)Canned software is sold on the open market to a broad range of users with similar requirements.
C)Canned software may not meet all of a company's information or data processing needs.
D)Canned software may offer easy availability and lower costs.
Q3) What guidelines should be followed when contracting with an outside developer to create custom software?
Q4) Describe outsourcing and identify the two types of outsourcing agreements.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) In a ________,the old and the new systems are operated simultaneously for a period of time.
A)direct conversion
B)parallel conversion
C)phase-in conversion
D)pilot conversion
Q2) Since most systems are moving away from using paper documents,form design is not as an important consideration in system development.
A)True
B)False
Q3) Which of the following is not generally changed when a company's accounting information system is changed?
A)Employee compensation.
B)The organization's structure.
C)Employee headcount.
D)All of the above are generally changed.
Q4) Describe the approaches to system conversion.
Q5) Describe the eight basic steps in program design.
Q6) Describe structured programming.
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