Information Systems for Accountants
Exam Bank
Course Introduction
This course introduces the fundamental concepts of information systems as they apply to the accounting profession. Students explore how accounting information systems (AIS) support decision-making, internal controls, and business processes within organizations. The curriculum covers topics such as system design and documentation, transaction cycles, risk management, data security, and regulatory compliance. Emphasis is placed on the evaluation and use of accounting software, enterprise resource planning (ERP) systems, and emerging technologies such as blockchain and cloud computing. Through practical examples and case studies, students develop the skills needed to analyze, design, and manage information systems that meet the needs of accountants and organizations.
Recommended Textbook
Accounting Information Systems 12th Edition by Marshall B. Romney
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Chapter 1: Accounting Information Systems: an Overview
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Q1) Many modern accounting software packages offer separate transaction cycle modules.What is the reason for this?
A) Every organization does not need to implement all of the available transaction cycle modules.
B) Most businesses do not need the revenue cycle module as part of their AIS.
C) The nature of a given transaction cycle is the same irrespective of the type of organization.
D) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.
Answer: A
Q2) An accounting information system (AIS)processes ________ to provide users with ________.
A) data; information
B) data; transactions
C) information; data
D) data; benefits
Answer: A
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Chapter 2: Overview of Transaction Processing and Erp Systems
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Q1) The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky.Since 1996,the owner,Glamdring Elfthrall,has leveraged computer technology to provide a superior level of customer service.In particular,the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible.Price information and condition are also provided for each inventory item.In this database,the data about an individual figure is a(an)
A) entity.
B) attribute.
C) field.
D) record.
Answer: D
Q2) The general ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
Answer: D
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Chapter 3: Systems Documentation Techniques
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Q1) Explain two reasons why it is important to have a working knowledge of DFDs and flowcharting.
Answer: First,SOX requires auditors to evaluate internal control systems.Data flow diagrams and flowcharts are the two most frequently used development and documentation tools used in practice.Second,since systems development is extremely complex,DFDs and flowcharts are tools that are used to create order from chaos and complexity.Third,documentation tools and concepts are covered on the CPA exam.
Q2) All of the following are guidelines for preparing data flow diagrams except
A) show the most detail in the highest-level DFD.
B) include all storage files, even if they are only temporary.
C) uniquely name all data flows.
D) sequentially number process bubbles.
Answer: A
Q3) In general,a data destination will be shown by
A) an arrow pointing away.
B) an arrow pointing in.
C) arrows pointing both ways.
D) no arrows, only two horizontal lines.
Answer: B
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Chapter 4: Relational Databases
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Q1) Which of the following would not be found in a data dictionary entry for a data item?
A) records containing a specific data item
B) physical location of the data
C) source of the data item
D) field type
Q2) Discuss redundancy as it applies to database design.
Q3) What is the difference in logical view and physical view?
Q4) In a well-structured database,the constraint that ensures the consistency of the data is known as the
A) entity integrity rule.
B) referential integrity rule.
C) logical view.
D) consistency integrity rule.
Q5) The logical structure of a database is described by the
A) data dictionary.
B) schema.
C) database management system.
D) internal level.
Q6) List the four DBMS "languages" and describe who uses each and for what purpose.
Page 6
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Chapter 5: Computer Fraud
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Q1) The most efficient way to conceal asset misappropriation is to
A) write-off a customer receivable as bad debt.
B) alter monthly bank statements before reconciliation.
C) alter monthly physical inventory counts to reconcile to perpetual inventory records.
D) record phony payments to vendors.
Q2) Opportunity to commit fraud is comprised of three stages.The stage that often takes most time and effort would include
A) stealing inventory from the warehouse.
B) selling stolen inventory to get cash.
C) lapping accounts receivable.
D) creating false journal entries to overstate revenue.
Q3) Which of the following is the best way to hide theft of assets?
A) Creating "cash" through the transfer of money between banks
B) Conversion of stolen assets into cash
C) Stealing cash from customer A and then using customer B's balance to pay customer
A's accounts receivable
D) Charging the stolen asset to an expense account
Q4) Explain the impact of SAS No.99 on auditors' responsibilities.
Q5) Describe four ways companies can reduce losses from fraud.
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Chapter 6: Computer Fraud and Abuse Techniques
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Q1) In the 1960s,techniques were developed that allowed individuals to fool the phone system into providing free access to long distance phone calls.The people who use these methods are referred to as A) phreakers.
B) hackers.
C) hijackers.
D) superzappers.
Q2) Gaining control of someone else's computer to carry out illicit activities without the owner's knowledge is known as A) hacking.
B) hijacking.
C) phreaking.
D) sniffings.
Q3) How can a system be protected from viruses?
Q4) Which of the following would be least effective to reduce exposure to a computer virus?
A) Only transfer files between employees with USB flash drives.
B) Install and frequently update antivirus software.
C) Install all new software on a stand-alone computer for until it is tested.
D) Do not open email attachments from unknown senders.
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Chapter 7: Control and Accounting Information Systems
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Q1) Ferdinand Waldo Demara was known as the great imposter.He had an astounding ability to convince people that he was who he truly was not.He worked as a naval officer,physician,college teacher,prison warden,and other jobs without any of the prerequisite qualifications.By not diligently checking references,the organizations fooled by Demara (including the Canadian Navy)apparently chose to ________ the risk of fraud.
A) reduce
B) share
C) avoid
D) accept
Q2) According to the ERM,these deal with the effectiveness and efficiency of company operations,such as performance and profitability goals.
A) Compliance objectives
B) Operations objectives
C) Reporting objectives
D) Strategic objectives
Q3) Describe the differences between general and specific authorization.
Q4) 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: Information Systems Controls for System
Reliability Part 1: Information Security
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Q1) Compatibility tests utilize a(n)________,which is a list of authorized users,programs,and data files the users are authorized to access or manipulate.
A) validity test
B) biometric matrix
C) logical control matrix
D) access control matrix
Q2) Verifying the identity of the person or device attempting to access the system is
A) authentication.
B) authorization.
C) identification.
D) threat monitoring.
Q3) Which of the following is the most effective method of protecting against social engineering attacks on a computer system?
A) stateful packet filtering
B) employee awareness training
C) a firewall
D) a demilitarized zone
Q4) Identify six physical access controls.
10
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Chapter 9: Information Systems Controls for Systems
Reliability Part 2: Confidentiality and Privacy
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Q1) One way to circumvent the counterfeiting of public keys is by using
A) a digital certificate.
B) digital authority.
C) encryption.
D) cryptography.
Q2) Jeff Davis took a call from a client."Jeff,I need to interact online and real time with our affiliate in India,and I want to make sure that our communications aren't intercepted.What do you suggest?" Jeff responded "The best solution will be to implement
A) a virtual private network."
B) a private cloud environment."
C) an asymmetric encryption system with digital signatures."
D) multifactor authentication."
Q3) The system and processes used to issue and manage asymmetric keys and digital certificates are known as
A) asymmetric encryption.
B) certificate authority.
C) digital signature.
D) public key infrastructure.
Q4) Describe some steps you can take to minimize your risk of identify theft.
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Chapter 10: Information Systems Controls for Systems
Reliability Part 3: Processing Integrity and Availability
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Q1) This tests a numerical amount to ensure that it does not exceed a predetermined value nor fall below another predetermined value.
A) Completeness check
B) Field check
C) Limit check
D) Range check
Q2) ________ enables a system to continue functioning in the event that a particular component fails.
A) An incremental backup procedure
B) Fault tolerance
C) Preventive maintenance
D) A concurrent update control
Q3) A facility that contains all the computing equipment the organization needs to perform its essential business activities is known as a
A) cold site.
B) hot site.
C) remote site.
D) subsidiary location.
Q4) Define and contrast a recovery point objective and a recovery time objective.
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Chapter 11: Auditing Computer-Based Information Systems
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Q1) The scope of a(n)________ audit encompasses all aspects of systems management.
A) operational
B) information systems
C) financial
D) internal control
Q2) One tool used to document the review of source data controls is
A) a flowchart generator program.
B) a mapping program.
C) an input control matrix.
D) a program algorithm matrix.
Q3) Auditors have several techniques available to them to test computer-processing controls.An audit technique that immediately alerts auditors of suspicious transactions is known as
A) a SCARF.
B) an audit hook.
C) an audit sinker.
D) the snapshot technique.
Q4) Describe how audit evidence can be collected.
Q5) Explain why the auditor's role in program development and acquisition should be limited.
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas.He entered all the items and quantities,completed the checkout and payment process,but the following error message popped up when he tried to exit the site: "Please enter your email address." This message is likely the result of a A) customer relationship management software application.
B) validity check.
C) completeness test.
D) closed-loop verification.
Q2) A monthly statement sent to customers serves a control purpose by
A) providing an opportunity for customers to verify the balance owed and activity on the account.
B) triggering the process to record a customer payment.
C) summarizing invoices and amounts due for customers.
D) reminding customers of the balance due and due date.
Q3) What is the basic document created in the billing process?
A) bill of lading
B) sales order
C) packing list
D) sales invoice
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Chapter 13: The Expenditure Cycle: Purchasing to Cash Disbursements
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Q1) Identify ten threats and applicable control procedures in the expenditure cycle.
Q2) What is a key feature of materials requirements planning (MRP)?
A) minimize or entirely eliminate carrying and stockout costs
B) reduce required inventory levels by scheduling production rather than estimating needs
C) determine the optimal reorder point
D) determine the optimal order size
Q3) The management at Sad Clown Pajamas,an Internet-based wholesaler,is considering a new inventory control system.The current system is inadequate because it results in stockouts that interrupt production and excess stocks of some materials that result in markdowns and high carrying costs.The new system,which will focus on ensuring that orders are placed with sufficient lead time to prevent stockouts,will employ A) a just-in-time inventory system.
B) the economic order quantity.
C) a reorder point.
D) materials requirements planning.
Q4) Discuss the differences between EOQ,MRP,and JIT.
Q5) How can information technology be used to improve the vendor invoice approval process?
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Chapter 14: The Production Cycle
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Q1) What information is necessary to create the master production schedule?
A) engineering department specifications and inventory levels
B) engineering department specifications and sales forecasts
C) special orders information and engineering department specifications
D) sales forecasts, special orders information, and inventory levels
Q2) What are the two major types of cost accounting systems and what are the differences between the two?
Q3) Which of the following is not a product design objective?
A) Design a product that meets customer requirements.
B) Design a quality product.
C) Minimize production costs.
D) Make the design easy to track for cost accounting purposes.
Q4) Identify and discuss the two documents that are the result of product design activities.
Q5) Pull manufacturing is officially known as
A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).
Q6) Discuss the role the accountant can play in the production cycle.
Page 16
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Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) Which of the following will limit a firm's potential loss exposure from paycheck forgery?
A) Segregation of check distribution from payroll duties
B) Prompt redeposit of unclaimed paychecks
C) A separate payroll bank account
D) Direct deposit of checks
Q2) What factors should be considered in outsourcing payroll to a payroll service bureau? Discuss the advantages and disadvantages of using a payroll service bureau to process a payroll.
Q3) Which of the following is not one of the major sources of input to the payroll system?
A) payroll rate changes
B) time and attendance data
C) checks to insurance and benefits providers
D) withholdings and deduction requests from employees
Q4) Explain the functions of the payroll register,deduction register,and earnings statement.
Q5) Discuss the various types and sources of input into the HRM/payroll cycle.
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Q6) What is the difference between a payroll service bureau and a professional employer organization?
Chapter 16: General Ledger and Reporting System
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Q1) As responsibility reports are rolled up into reports for higher level executives,they
A) become less detailed.
B) become more detailed.
C) become narrower in scope.
D) look about the same.
Q2) Entries to update the general ledger are often documented by which of the following?
A) general journal
B) subsidiary journal
C) subsidiary ledgers
D) journal vouchers
Q3) Financial statements are prepared in a certain sequence.Which statement is prepared last in the sequence?
A) the adjusted trial balance
B) the income statement
C) the balance sheet
D) the statement of cash flows
Q4) Explain the benefits of XBRL.
Q5) Discuss the value and role of budgets as managerial reports.
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Chapter 17: 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 maximum cardinality of a relationship in an REA diagram can be either
A) zero or one.
B) one or many.
C) zero or many.
D) none of the above
Q3) In which stage(s)of the database design process does data modeling occur?
A) only in the systems analysis stage
B) only in the design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
Q4) Developing an REA diagram for a specific transaction cycle begins by identifying A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
Page 19
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) Which of the following is a redundant entity that would be merged when two cycles are combined?
A) Customer
B) Employee
C) Vendor
D) Inventory
Q2) The type of relationship between two entities is determined by
A) maximum cardinalities only.
B) minimum cardinalities only.
C) minimum and maximum cardinalities.
D) median cardinalities.
Q3) Attributes other than the primary key are
A) included to satisfy transaction processing requirements.
B) included to meet management's information needs.
C) both A and B
D) none of the above
Q4) What are the advantages of the REA data model over the traditional AIS model?
Q5) Explain where in the REA model you can find the information normally found in a ledger.
Page 20
Q6) Explain a completeness check.
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Chapter 19: Special Topics in Rea Modeling
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Q1) One of the benefits of an integrated enterprise-wide data model is that
A) auditors can use it to guide the development of queries to validate the completeness and accuracy of transaction processing.
B) journals and ledgers will be more accurate than in a traditional AIS data model.
C) workers can understand information flows better.
D) all of the above are benefits of an integrated enterprise-wide data model.
Q2) Since the same inventory items may be stored in several different warehouses,the maximum cardinality from Inventory to Warehouse is most likely ________.
A) 0
B) N
C) 1
D) determined by the number of warehouses compared to the number of inventory items
Q3) Which is the most likely primary key for the Pay for Goods table?
A) Cash transaction number
B) Check number
C) Invoice number
D) Receiving report number, check number
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Chapter 20: Introduction to Systems Development Systems Analysis
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Q1) A project development team at Midwest Construction was assigned the task of improving the efficiency of the firm's accounting information system.As part of the ________ step in the systems development life cycle,the team defined the procedures to back up and secure system data.
A) operations and maintenance
B) implementation and conversion
C) physical design
D) conceptual design
Q2) In which phase of the systems development life cycle are the broad needs of the users converted into detailed specifics that are coded and tested?
A) conceptual design
B) implementation and conversion
C) physical design
D) systems analysis
Q3) Identify and describe the five types of feasibility that must be considered throughout the system development life cycle.
Q4) Describe economic feasibility analysis.What techniques are used in economic feasibility analysis?
Page 23
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Chapter 21: Ais Development Strategies
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Q1) The development of which type of system listed below would not benefit from the creation of a prototype?
A) decision support systems
B) executive information systems
C) expert systems
D) systems that cross a number of organizational boundaries
Q2) Total costs are usually lower,and less time is required for vendor preparation and company evaluation,when requests for proposal are solicited based on
A) exact equipment needs.
B) generalized software needs.
C) specific hardware and software specifications.
D) None of the above are correct.
Q3) What is the basic function of a help desk?
A) control access to corporate data
B) provide technical maintenance and support
C) train end users and assist with application development
D) All of the above are basic functions of a help desk.
Q4) Describe outsourcing and identify the two types of outsourcing agreements.
Q5) Explain the concept of an application service provider.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) One of the purposes of the ________ is to guide physical systems design activities.
A) conceptual systems design report
B) physical systems design report
C) program design
D) systems analysis report
Q2) Step-by-step reviews of procedures or program logic early in the system design that focus on inputs,files,outputs,and data flows are called
A) acceptance tests.
B) operating tests.
C) processing of test transactions.
D) walk-throughs.
Q3) What is used as the basis for management to make a "go/no go" decision regarding whether to proceed from the physical design phase to the implementation and conversion phase of the systems development life cycle?
A) conceptual system design report
B) physical systems design report
C) systems design report
D) implementation planning design report
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