Accounting Systems and Controls Exam Review
Course Introduction
This course explores the design, implementation, and evaluation of accounting information systems (AIS) and the internal controls necessary for safeguarding assets, enhancing data integrity, and supporting reliable financial reporting. Students examine the components of AIS, including documentation techniques, flowcharting, database management, and computerized accounting systems. Emphasis is placed on understanding internal control frameworks, risk assessment, compliance requirements, and the application of technology to mitigate fraud and errors within both manual and computerized environments. By the end of the course, students will be equipped to critically assess and strengthen accounting systems to support organizational objectives and regulatory standards.
Recommended Textbook
Accounting Information Systems 1st Edition by Vernon J. Richardson
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Page 2
Chapter 1: Accounting Information Systems and Firm Value
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Sample Questions
Q1) The income statement line item most likely affected by an AIS investment in supply chain that would interface with suppliers would be:
A) Revenues
B) Cost of Goods Sold
C) Selling, General and Administrative Expenses
D) Research and Development Expenses
Answer: B
Q2) An enterprise system is primarily used to manage and nurture a firm's interactions with its current and potential clients.
A)True
B)False
Answer: False
Q3) Accounting and Finance is a primary activity in the value chain.
A)True
B)False
Answer: False
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Chapter 2: Accountants As Business Analysts
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Q1) Business Process Modeling Notation (BPMN)activity diagrams depict activities as circles.
A)True
B)False
Answer: False
Q2) Which of the following is not part of the business analysis process?
A) Ascertaining information about current and future business processes.
B) Using business process modeling tools.
C) Using IT to make finance and accounting processes more efficient and effective.
D) Documenting current and future business processes.
Answer: C
Q3) Business Process Modeling Notation (BPMN)activity models show the sequence of flow from right to left and top to bottom.
A)True
B)False
Answer: False
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Chapter 3: Data Modeling
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Q1) Consider an association indicating professional licensing status between an Accountant class and a States class in a Unified Modeling Language (UML)Class diagram.The multiplicities next to the Accountants class are 0..* and the multiplicities next to the States class are 0..*.Which of the following is the best way to implement that association in your database?
A) Post the primary key of Accountants as a foreign key in States.
B) Post the primary key of States as a foreign key in Accountants.
C) Create a linking table.
D) None of the above.
Answer: C
Q2) Consider an association between a Customers class and a Sale class in a Unified Modeling Language (UML)Class diagram.The multiplicities next to the Customers class are 1..1 and the multiplicities next to the Sale class are 0..*.Which of the following is the best way to implement that association in your database?
A) Post the primary key of Customers as a foreign key in Sales.
B) Post the primary key of Sales as a foreign key in Customers.
C) Create a linking table.
D) None of the above.
Answer: A
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Page 5
Chapter 4: Relational Databases and Enterprise Systems
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Q1) In Access,users can edit database information in reports.
A)True
B)False
Q2) What kind data model is most commonly used as a basis for today's enterprise systems?
A) The hierarchical mode
B) The network model
C) The relational model
D) None of the above
Q3) While hierarchical and network data models require relationships to be formed at the database creation,relational data models can be made up as needed.
A)True
B)False
Q4) What is the main purpose of using foreign keys in a relational database design?
A) It provides useful financial data value in the table.
B) It is required in all tables.
C) It is used to link tables.
D) None of the above is correct.
Q5) Explain the three main types of classes in data modeling.
Q6) Discuss the challenges of enterprise system implementation?
Page 6
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Chapter 5: Sales and Collections Business Process
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Q1) An intermediate error event can be used to model process exceptions.
A)True
B)False
Q2) One-to-one relationships are implemented by creating a linking table.
A)True
B)False
Q3) Which of the following best describes the difference between access controls and application controls?
A) Access controls limit who can change records and application controls provide an audit trail of any changes.
B) Access controls implement business rules and application controls do not.
C) Access controls are "prohibited" business rules and application controls are "allowed" business rules.
D) There is no difference between access and application controls.
Q4) A pool in a BPMN model does not actually have to display any activities.
A)True
B)False
Q5) One-to-many relationships are implemented by posting a foreign key.
A)True
B)False
7
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Chapter 6: Purchases and Payments Business Process
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Q1) In a BPMN collaboration model of the purchase process,which of the following is the appropriate term for the message flows between pools?
A) Orchestration
B) Choreography
C) Collaboration
D) Intermediate events
Q2) In a BPMN collaboration model of the purchase process,one pool describes the focal organization's activities and the other pool describes what?
A) The supplier's activities
B) The customer's activities
C) The sequence of steps in the process
D) The message flows between the pools
Q3) In a BPMN collaboration model of the purchase process,which of the following best describes the purpose of swimlanes is which of the following?
A) Capturing the process complexity
B) Clarifying the interaction between pools
C) Showing the sequence of activities in a pool
D) Showing different jobs in the purchase process
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Chapter 7: Conversion Business Process
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Sample Questions
Q1) Application controls limit access to viewing and changing records in a system.
A)True
B)False
Q2) Review the following diagram.Which answer provides the best interpretation of the multiplicities for the association between the Products and Production Authorization classes?
A) The employee records the completion of a job and updates finished goods.
B) Each production authorization is related to one product.
C) Each product is related to one production authorization.
D) One employee can authorize production multiple times.
Q3) Consider the following BPMN diagram of a subprocess.Which of the following is required to correct an error in the diagram?
A) Change the intermediate event to a start event.
B) Change the intermediate error event to an exclusive gateway
C) Add a sequence flow to an end event after the discard errors activity.
D) Drop the activity named Discard Errors.
Q4) A labor plan class would establish standard overhead allocation rates.
A)True
B)False
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Chapter 9: Reporting Processes and Extensible Business
Reporting Language XBRL
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Sample Questions
Q1) How would Apple Computer use a data mart in its marketing area? How does that help designers of the data warehouse know what to include?
Q2) The tool that defines and describes each key data element (e.g.,total assets,accounts,payable,net income,etc.)in XBRL is called _________
A) XBRL specification.
B) XBRL taxonomy.
C) XBRL style sheet.
D) XBRL instance document.
Q3) XBRL style sheets take the instance documents and add presentation elements to make XBRL filings readable by humans.
A)True
B)False
Q4) Name five items that you think would be included in a digital dashboard for an organization that you are familiar with (church,sorority,local not-for-profit,etc.)Why are these critical business processes for them?
Q5) Why would the company want XBRL assurance if the IRS or SEC were going to be using its data?
Page 10
Q6) How would XBRL GL be used for internal uses such as management accounting?
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Chapter 10: Accounting Information Systems and Internal Controls
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Q1) Segregation of duties reduces the risk of errors and irregularities in accounting records.
A)True
B)False
Q2) The framework could be used by management in its internal control assessment under requirements of SOX is the:
A) COSO internal framework.
B) COSO enterprise risk management framework.
C) COBIT framework.
D) All of the above are correct.
Q3) Given the requirement of the Sarbanes-Oxley Act of 2002 (SOX),the Public Company Accounting Oversight Board (PCAOB)established the Securities and Exchange Commission (SEC)to provide independent oversight of public accounting firms.
A)True
B)False
Q4) What are the three main functions of COSO ERM?
Q5) What is the impact of the Sarbanes-Oxley Act of 2002 (SOX)on public companies and public accounting firms?
11
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Chapter 11: Information Security and Computer Fraud
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Sample Questions
Q1) Describe the framework for vulnerability assessment and vulnerability management.
Q2) When client's accounts payable computer system was relocated,the administrator provided support through a dial-up connection to server.Subsequently,the administrator left the company.No changes were made to the accounts payable system at that time.Which of the following situations represents the greatest security risk?
A) User passwords are not required to the in alpha-numeric format.
B) Management procedures for user accounts are not documented.
C) User accounts are not removed upon termination of employees.
D) Security logs are not periodically reviewed for violations.
Q3) To prevent invalid data input,a bank added an extra number at the end of each account number and subjected the new number to an algorithm.This technique is known as:
A) A validation check.
B) check digit verification.
C) A dependency check.
D) A format check.
Q4) Describe the process of using asymmetric-key encryption to authenticate the trading partner involved in e-business.
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Page 12
Chapter 12: Monitoring and Auditing AIS
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Q1) What are the two approaches of CAATs in auditing systems? What are the differences between them?
Q2) Computer-assisted audit techniques (CAAT)are often used when auditing a company's IT infrastructure.
A)True
B)False
Q3) Masquerading threat for wireless LANs is:
A) The attacker actively intercepts communications between wireless clients and access points to obtain authentication credentials and data
B) The attacker alters a legitimate message sent via wireless networks by deleting, adding to, changing, or reordering it
C) The attacker passively monitors wireless networks for data, including authentication credentials
D) The attacker impersonates an authorized user and gains certain unauthorized privileges to the wireless network
Q4) Discuss five significant barriers that are often encountered in implementing continuous auditing?
Q5) What are the general security objectives for both wired LANs and wireless LANs?
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Chapter 13: The Balanced Scorecard and Business Value of Information Technology
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Q1) Network IT changes the way that work if performed and decisions are made.
A)True
B)False
Q2) Which of the following is not an example of Enterprise IT?
A) Spreadsheet financial applications
B) Business intelligence systems
C) CRM systems
D) ERP systems
Q3) Which of the following is not a general type of business process found on generic strategy maps?
A) Innovation processes
B) Administrative processes
C) Operations management processes
D) Customer management processes
Q4) Which of the following is not an organizational capability directly supported by Enterprise IT?
A) Process definition
B) Process integration
C) Customer service
D) Transaction automation
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Chapter 14: Evaluating AIS Investments
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Q1) The benefits of an IT project are not necessarily measurable in financial terms.
A)True
B)False
Q2) Capital budgeting techniques provide precise estimates on an IT projects costs and benefits.
A)True
B)False
Q3) Which of the following is not a direct operating cost of an IT initiative?
A) End-user data management
B) Ongoing hardware replacement
C) Software upgrades
D) Hardware disposal
Q4) Net present value techniques compute the unique rate of return for a particular IT project.
A)True
B)False
Q5) In making the business case for an IT investment,companies should assess the sensitivity of results to the assumptions.
A)True
B)False
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Chapter 15: The Systems Development Life Cycle and Project Management: Addressing the Challenges of Building Ais Systems
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Q1) Segregation of duties can be the source of IT material weaknesses when assessing the effectiveness of internal controls over the company's accounting information system.
A)True
B)False
Q2) Explain how the Technology Acceptance Model can be used as a useful tool in modifying an IT project.
Q3) Brainstorm a list of reasons why 68% (including 44% challenged + 24% failed)of the information technology projects either failed or were challenged in 2009.Consider specifics of each of the elements of the triple constraints model and any other common delays including the challenges of working with programmers,software and hardware suppliers and vendors,etc.What is the best way to overcome these issues and decrease the number of projects failed or challenged?
Q4) The triple constraints of project management are also referred to as Dempster's triangle.
A)True
B)False
Q5) What can be done to combat scope creep?
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