Accounting Information Systems
Test Bank
Course
Introduction
Accounting Information Systems explores the design, implementation, and management of information systems that support accounting processes and decision-making within organizations. The course covers topics such as internal controls, data security, auditing with information systems, transaction processing cycles, and the integration of accounting systems with broader enterprise systems. Students will analyze real-world cases to understand how information technologies enhance the accuracy, efficiency, and reliability of financial information, while also addressing the risks and ethical considerations associated with digital accounting environments.
Recommended Textbook
Ethical Obligations and Decision Making in Accounting Text and Cases 2nd Edition by Mintz
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8 Chapters
609 Verified Questions
609 Flashcards
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Page 2
Chapter 1: Ethical Reasoning Implications for Accounting
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Your manager asks you to "cook the books" to make the company look better for a bank that your company is trying to get a loan through.The manager stresses that nothing and no one will be harmed because the company will come out on top, the shareholders will be happy, and the bank will get their money back with interest.Which theory is the manager employing?
A)Egoism
B)Utilitarianism
C)Fairness
D)Virtue
Answer: B
Q2) The biggest problem in implementing a rights approach to decision making is:
A)The interests of others may be subservient to self-interests
B)It is difficult to weigh harms and benefits
C)It relies on moral absolutes
D)It can be difficult to determine criteria to distinguish equals from unequal claims
Answer: C
Q3) What is the role of a code of professional conduct and standards of ethical behavior for accountants and auditors?
Answer: Answer will vary
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Page 3
Chapter 2: Accountants Ethical Decision Process and Professional Judgment
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) The case titled "Expectations for Professional Judgment by Auditors to Detect Fraud" suggests that:
A)Fraud is a common element of audits.
B)Auditors always detect fraud if they follow professional standards.
C)Even an audit in accordance with professional standards can fail to detect a material fraud in the financial statements, particularly where management has gone to great lengths to cover up the fraud.
D)Auditors should not be expected to uncover fraud since management always has the upper hand with respect to financial statement matters.
Answer: C
Q2) In stage 5 of Kohlberg's model, ethical reasoning is motivated by:
A)Acting in the best interests of others
B)Following the law
C)Upholding the rights, values, and legal contracts of society
D)Acting based on universal principles
Answer: C
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4
Chapter 3: Corporate Governance and Ethical Management
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) In an ethical decision making model, the final step is
A)Know how to protect yourself
B)Reflect on the decision
C)Frame the ethical issue
D)Determine all alternative actions
Answer: B
Q2) In the survey of corporate values discussed in the chapter, which of the following was the most frequent value included in corporate values statements:
A)Ethical behavior/integrity
B)Commitment to customers
C)Honesty/openness
D)Accountability
Answer: A
Q3) Which of the following is not an ethical issue in business?
A)Conflicts of interest
B)Maximization of profits
C)Discrimination
D)Information technology
Answer: B
Page 5
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Chapter 4: Aicpa Code of Professional Conduct
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Sample Questions
Q1) In the Fund of Funds case discussed in this chapter, the external auditors violated which rule of conduct?
A)Due care
B)The financial statements were certified as being in conformity with GAAP when that was not the case
C)The financial statements were certified as being in conformity with generally accepted auditing standards when that was not the case
D)Confidentiality
Q2) Assume the external auditor of a client entity also served on the client's board of directors.What aspect of independence would be violated?
A)The auditor may be exposed to an intimidation threat by the client
B)The auditor is involved in a business relationship with the client
C)The auditor serves in a management decision making position with the client
D)All of the above
Q3) What are the similarities and differences in the application of the rules of professional conduct in the AICPA with respect to internal accountants who are CPAs and CPA-external auditors?
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Chapter 5: Audit Responsibilities and Accounting Fraud
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Sample Questions
Q1) Mr.Arty works for Smile Accounting Firm as a senior accountant.Currently he is doing review of rental property compliance testing completed by the staff accountants.He realizes that the staff accountants only tested two tenants per property instead of the required three by the audit program.To request more information from the client would cause massive delays and the manager is pressing hard for the information before the Christmas vacation.What should Mr.Arty do and why? Use the ethical theory and ethical decision making model to discuss the situation.
Q2) Typically, when a going concern issue exists the auditor should:
A)Issue an unqualified opinion with an explanatory paragraph
B)Explain the reasons for the going concern issue
C)Indicate where management's plans to deal with the going concern are addressed
D)All of the above
Q3) In which of the following circumstances would an adverse opinion be appropriate?
A)An uncertainty prevents the issuance of a standard unqualified opinion.
B)The statements are not in conformity with generally accepted accounting principles regarding stock options plans.
C)The auditor has been unable to obtain sufficient competent evidential matter.
D)The principal auditors decide to make reference to the report of another auditor who audited a subsidiary.
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Page 7
Chapter 6: Legal and Regulatory Obligations in an Ethical Framework
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Sample Questions
Q1) In the case of Equity Funding, the audit client
A)Fraudulently recorded inventories that did not in fact exist
B)Inflated its earnings by recording fictitious sales of insurance policies
C)Moved liabilities off the balance sheet by using thousands of subsidiaries
D)Recorded inventory below cost, therefore understating costs of goods sold and overstating net income
Q2) Michael Trent Reznor, the lead singer in the band Nine Inch Nails, filed a lawsuit against Richard Szekelyi and the Navigent Group in the Reznor v JAM, Inc case alleging:
A)Negligence
B)Breach of fiduciary duty
C)Aiding and abetting fraud
D)All of the above
Q3) What are the best defenses that an auditor can use to defend oneself against charges of fraud? How does ethical behavior relate to these defenses?
Q4) Is insider trading always unethical? If you answer that it is explain why such an action violates ethical standards.If you say that it is not, explain why such an action does not violate ethical actions.
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Chapter 7: Earnings Management and the Quality of Financial Reporting
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66 Verified Questions
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Sample Questions
Q1) In the Sweat Hog Construction case, the company tried to manipulate earnings through the use of which accounting technique?
A)Cookie jar reserves
B)Lease capitalization
C)Percentage of completion method
D)The Big Bath Theory
Q2) If a company is managing its earnings, which of the ethical theories are they most likely following?
A)Rights
B)Fairness
C)Egoism
D)Virtue
Q3) Which of the following is NOT a technique used by Enron to manage earnings?
A)Used reserves to increase earnings when reported amounts were too low.
B)Deliberately over stated the allowance for uncollectible and adjusted it downward in future years.
C)Used mark-to-market estimates to inflate earnings in violation of GAAP.
D)Selected which operating assets to "sell" to the SPEs, affecting the gain on transfer and earnings effect.
Page 9
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Chapter 8: International Financial Reporting: Ethics and Corporate Governance Considerations
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Sample Questions
Q1) The primary role of the Supervisory Board is to:
A)Manage the enterprise for the benefit of various stakeholder groups
B)Work with the auditors in their review of financial statements
C)Work with the managing board in running day-to-day operations
D)Oversee and advise the Managing Board on policy matters
Q2) The IASB Framework for the Preparation and Presentation of Financial Statements:
A)Dictates the standards to be followed in preparing financial statements under IFRS
B)Requires an entity to use its judgment in developing and applying and accounting policy that results in information that is relevant and reliable
C)Serves as a guide to resolving accounting issues that are not addressed directly in a standard
D)All of the above
Q3) One way to characterize the term "true and fair view" is that:
A)It is used to determine which international auditing standards should be used.
B)It is used to assess whether the entity has met the comply or explain provisions in corporate governance codes.
C)It is a governing criterion by which financial statements are to be judged.
D)All of the above.
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