AIS and Internal Controls Practice Questions
Course Introduction
This course explores Accounting Information Systems (AIS) with a focus on the design, implementation, and evaluation of internal controls within organizations. Students will learn how AIS support business processes, facilitate decision-making, and ensure data integrity, security, and confidentiality. Topics include systems documentation and flowcharting, risk assessment, types of internal controls, fraud prevention, and the impact of information technology on accounting processes. Through case studies and practical assignments, students will develop the skills to analyze, design, and audit effective internal control systems in alignment with current professional standards and regulatory requirements.
Recommended Textbook
Accounting Information Systems 10th Edition by James A. Hall
Available Study Resources on Quizplus
16 Chapters
1672 Verified Questions
1672 Flashcards
Source URL: https://quizplus.com/study-set/3789
2
Chapter 1: The Information System: an Accountants Perspective
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/75666
Sample Questions
Q1) Which of the following is not part of the accounting function?
A)managing the financial information resource of the firm
B)capturing and recording transactions in the database
C)distributing transaction information to operations personnel
D)managing the physical information system of the firm
Answer: D
Q2) Retrieval is the task of permanently removing obsolete or redundant records from the database.
A)True
B)False
Answer: False
Q3) Useful information must possess all of the following characteristics except A)relevance
B)precision
C)accuracy
D)completeness
Answer: B
Q4) Transactions with trading partners include ____________________ and ____________________.
Answer: sales,purchases
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Introduction to Transaction Processing
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/75665
Sample Questions
Q1) The most important advantage of an alphabetic code is that
A)meaning is readily conveyed to users
B)sorting is simplified
C)the capacity to represent items is increased
D)missing documents can be identified
Answer: C
Q2) Mnemonic codes are appropriate for items in either an ascending or descending sequence,such as the numbering of checks or source documents.
A)True
B)False
Answer: False
Q3) 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.
Q4) Data flow diagrams represent the physical system.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Ethics,fraud,and Internal Control
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/75664
Sample Questions
Q1) The text describes six internal control activities.List four of them and provide a specific example of each one.
Answer: 11ea8d40_9750_0ad0_b445_d75a6de1f459_TB6581_00
Q2) The external auditor is responsible for establishing and maintaining the internal control system.
A)True
B)False Answer: False
Q3) Defalcation is another word for financial fraud.
A)True
B)False Answer: True
Q4) Of the three fraud factors (situational pressure,ethics,and opportunity),situational pressure is the factor that actually facilitates the act.
A)True
B)False Answer: False
Q5) What are the three broad categories of application controls?
Answer: input,processing,and output controls
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: The Revenue Cycle
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/75663
Sample Questions
Q1) Explain the steps needed to process a credit memo in the sales return system.
Q2) A remittance advice is a form of turnaround document. A)True
B)False
Q3) Integrated accounting systems automatically transfer data between modules. A)True B)False
Q4) A customer payment of $247 was correctly posted in the general ledger but was recorded as $274 in the customer's account receivable.Describe a specific internal control procedure that would detect this error.
Q5) What specific internal control procedure would prevent an accounts receivable clerk from issuing a fictitious credit memo to a customer (who is also a relative)for goods that were "supposedly" returned from previous sales?
Q6) How may an employee embezzle funds by issuing an unauthorized sales credit memo if the appropriate segregation of functions and authorization controls were not in place?
Q7) For the revenue cycle,state two specific independent verifications that should be performed.
Q8) What are the benefits and risks of making Internet sales?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: The Expenditure Cycle Part I: Purchases and Cash
Disbursements Procedures
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/75662
Sample Questions
Q1) Because of time delays between receiving inventory and making the journal entry
A)liabilities are usually understated
B)liabilities are usually overstated
C)liabilities are usually correctly stated
D)liabilities are not affected
Q2) Explain how a voucher payable system works.How is the balance of AP determined?
Q3) The purchase order
A)is the source document to make an entry into the accounting records
B)indicates item description, quantity, and price
C)is prepared by the inventory control department
D)is approved by the end-user department
Q4) In the expenditure cycle,general ledger does not
A)post the journal voucher from the accounts payable department
B)post the account summary from inventory control
C)post the journal voucher from the purchasing department
D)reconcile the inventory control account with the inventory subsidiary summary
Q5) What is an AP packet?
Q7) What is the objective of automated purchase approval? Page 7
Q6) Which internally generated document should be compared to the supplier's invoice to verify the quantity being billed for?
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 6: The Expenditure Cycle Part II: Payroll Processing and
Fixed Asset Procedures
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/75661
Sample Questions
Q1) When fixed assets are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.
A)True
B)False
Q2) Which transaction is not processed in the fixed asset system?
A)purchase of building
B)improvement of equipment
C)purchase of raw materials
D)sale of company van
Q3) An important reconciliation in the payroll system is
A)general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable
B)personnel compare the number of employees authorized to receive a paycheck to the number of paychecks prepared
C)production compares the number of hours reported on job tickets to the number of hours reported on time cards
D)payroll compares the labor distribution summary to the hours reported on time cards
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 7: The Conversion Cycle
Available Study Resources on Quizplus for this Chatper
102 Verified Questions
102 Flashcards
Source URL: https://quizplus.com/quiz/75660
Sample Questions
Q1) A move ticket
A)is the formal plan and authority to begin production
B)specifies the materials and production required for each batch
C)records the work done in each work center
D)authorizes the storekeeper to release materials to work centers
Q2) Deficiencies of the traditional cost accounting information system include all of the following except
A)an emphasis on financial performance
B)inaccurate cost allocations
C)an emphasis on standard costs
D)immediate feedback about deviations from the norm
Q3) What is a company's value stream?
Q4) Explain the conversion cycle.
Q5) Explain the relationship between MRP,MRP II,and ERP.
Q6) Explain how CAM can contribute to a firm's move toward world-class status.
Q7) The only objective of the just-in-time philosophy is to reduce inventory levels.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Q8) Traditional accounting assumes that _______________ cause costs.ABC assumes that _________________ cause costs.
Chapter 8: Financial Reporting,and Management Reporting Systems
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/75659
Sample Questions
Q1) All of the following are elements of operational control decisions except A)determining the scope of the activity
B)setting operating standards
C)evaluating performance
D)taking corrective action when necessary
Q2) In most cases intangible decision criteria can be quantified.
A)True
B)False
Q3) The management reporting system is a nondiscretionary system.
A)True
B)False
Q4) What is XML?
Q5) A fundamental principle of responsibility accounting is that A)managers are accountable only for items they control
B)a manager's span of control should not exceed eight people
C)structured reports should be prepared weekly
D)the information flow is in one direction, top-down
Page 11
Q6) Describe the three elements of problem structure.Contrast a structured problem to an unstructured problem.Describe which levels of management typically deal with structured problems and with unstructured problems.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 9: Database Management Systems
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/75658
Sample Questions
Q1) Data concurrency
A)is a security issue in partitioned databases
B)is implemented using timestamping
C)may result in data lockout
D)occurs when a deadlock is triggered
Q2) Task-data dependency is directly related to data redundancy.
A)True
B)False
Q3) What is the partitioned database approach and what are its advantages?
Q4) To the user,data processing procedures for routine transactions,such as entering sales orders,appear to be identical in the database environment and in the traditional environment.
A)True
B)False
Q5) The ____________________ allows users to retrieve and modify data easily.
Q6) Discuss the accountant's role in data modeling and potential problems caused by anomalies.
Q7) The physical database is an abstract representation of the database.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 10: The Rea Approach to Business Process
Modeling
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/75657
Sample Questions
Q1) In an REA model,events are described from the perspective of
A)the organization
B)the designer
C)the user
D)the customer
Q2) How does the REA approach improve efficiency?
Q3) Which of the following events would be least likely to be modeled in a REA diagram?
A)customer inquiries
B)posting accounts payable
C)receiving cash
D)sales to a customer
Q4) What are the four basic forms of cardinality?
Q5) A difference between ER and REA diagrams is that ER diagrams present a static picture of the underlying business phenomena.
A)True
B)False
Q6) What do the letters 'R,' 'E,' and 'A' stand for in the term "REA model"?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Q7) Discuss the concept of duality as it relates to modeling an economic transaction.
Chapter 11: Enterprise Resource Planning Systems
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/75656
Sample Questions
Q1) Legacy systems are
A)old manual systems that are still in place
B)flat file mainframe systems developed before client-server computing became standard
C)stable database systems after debugging
D)advanced systems without a data warehouse
Q2) Closed database architecture is
A)a control technique intended to prevent unauthorized access from trading partners
B)a limitation inherent in traditional information systems that prevents data sharing
C)a data warehouse control that prevents unclean data from entering the warehouse
D)a database structure that many of the leading ERPs use to support OLTP applications
Q3) Define OLAP and give some examples.
Q4) Briefly explain the two general approaches to contingency planning for ERPs.
Q5) Why does the data warehouse need to be separate from the operational databases?
Q6) What is the closed database architecture?
Q7) How can a firm acquire bolt-on software? What are the options?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 12: Electronic Commerce Systems
Available Study Resources on Quizplus for this Chatper
109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/75655
Sample Questions
Q1) Cloud computing is the technology that has unleashed virtualization.
A)True
B)False
Q2) An IP address
A)defines the path to a facility or file on the web
B)is the unique address that every computer node and host attached to the Internet must have
C)is represented by a 64-bit data packet
D)is the address of the protocol rules and standards that govern the design of Internet hardware and software
Q3) The client-server topology
A)increases the amount of data that is transmitted between the central file and the network node
B)eliminates the need for nodes to communicate with each other
C)reduces the number of records that must be locked by having the file server perform record searches
D)functions only with a ring and bus topology
Q4) The standard format for an e-mail address is DOMAIN NAME@USER NAME.
A)True
B)False
16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Managing the Systems Development Life Cycle
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/75654
Sample Questions
Q1) The formal product of the systems evaluation and selection phase of the systems development life cycle is
A)the report of systems analysis
B)the systems selection report
C)the detailed system design
D)the systems plan
Q2) Contrast the structured and object-oriented approaches to conceptual systems design.
Q3) A commercial software system that is completely finished,tested,and ready for implementation is called a
A)backbone system
B)vendor-supported system
C)benchmark system
D)turnkey system
Q4) A tangible benefit
A)can be measured and expressed in financial terms
B)might increase revenues
C)might decrease costs
D)all of the above
Q5) Name three topics that would not be included in the systems analysis report.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 14: Auditing It Controls Part I: Sarbanes-Oxley and It Governance
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/75653
Sample Questions
Q1) Explain how IT outsourcing can lead to loss of strategic advantage.
Q2) Operations fraud includes
A)altering program logic to cause the application to process data incorrectly
B)misusing the firm's computer resources
C)destroying or corrupting a program's logic using a computer virus
D)creating illegal programs that can access data files to alter, delete, or insert values
Q3) The financial statements of an organization reflect a set of management assertions about the financial health of the business.All of the following describe types of assertions except
A)that all of the assets and equities on the balance sheet exist
B)that all employees are properly trained to carry out their assigned duties
C)that all transactions on the income statement actually occurred
D)that all allocated amounts such as depreciation are calculated on a systematic and rational basis
Q4) Some systems professionals have unrestricted access to the organization's programs and data.
A)True
B)False
Q5) As a form of computer fraud,what is eavesdropping?
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 15: Auditing It Controls Part II: Security and Access
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/75652
Sample Questions
Q1) In a telecommunications environment,line errors can be detected by using an echo check.
A)True
B)False
Q2) The checkpoint feature
A)makes a periodic backup of the entire database
B)uses logs and backup files to restart the system after failure
C)suspends all data processing while the system reconciles the transaction log against the database
D)provides an audit trail of all processed transactions
Q3) Which is not a biometric device?
A)password
B)retina prints
C)voice prints
D)signature characteristics
Q4) A firewall is a hardware partition designed to protect networks from power surges.
A)True
B)False
Q5) Explain the concept of discretionary access privileges.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 16: Auditing It Controls Part III: Systems
Development, program Changes, and Application Auditing
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/75651
Sample Questions
Q1) Which of the following statements is not true?
A)All systems should be properly authorized to ensure their economic justification and feasibility.
B)Users need not be actively involved in the systems development process.
C)All program modules must be thoroughly tested before they are implemented.
D)The task of creating meaningful test data is time consuming.
Q2) The technical design activities translate a system's set of detailed technical specifications into user specifications.
A)True
B)False
Q3) When using the test data method,the presence of multiple error messages indicates a flaw in the preparation of test transactions.
A)True
B)False
Q4) Maintenance access to systems increases the risk that logic will be corrupted either by accident or intent to defraud.
A)True
B)False
Q5) Describe parallel simulation.
To view all questions and flashcards with answers, click on the resource link above. Page 20