Information Systems in Accounting Test Bank
Course Introduction
This course explores the integration of information systems within the accounting profession, emphasizing how technology supports business processes, financial data management, and decision-making. Students will learn about various accounting information systems (AIS), their design and implementation, internal controls, and the role of these systems in managing auditing processes and ensuring regulatory compliance. The course also covers topics such as database management, enterprise resource planning (ERP), cybersecurity risks in accounting, and the impact of emerging technologies like artificial intelligence and blockchain on accounting practices. Through case studies and practical applications, students gain hands-on experience in leveraging information systems to enhance accuracy, efficiency, and reliability in financial reporting.
Recommended Textbook
Accounting Information Systems 12th Edition by Marshall B. Romney
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Page 2
Chapter 1: Accounting Information Systems: an Overview
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Sample Questions
Q1) The process of creating value for customers is the result of nine activities that form a A) value chain.
B) profitable operation.
C) successful business.
D) support system.
Answer: A
Q2) Which of the following is a primary activity in the value chain?
A) infrastructure
B) technology
C) purchasing
D) marketing and sales
Answer: D
Q3) 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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Page 3
Chapter 2: Overview of Transaction Processing and Erp Systems
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Sample Questions
Q1) The general ledger account that corresponds to a subsidiary ledger account is known as a
A) dependent account.
B) attribute account.
C) entity account.
D) control account.
Answer: D
Q2) When the sum of all entries in the subsidiary ledger equals the balance in the corresponding general ledger account,it is assumed that
A) the recording processes were accurate.
B) all source documents were recorded.
C) adjusting entries are not required.
D) no errors exist in the subsidiary ledger.
Answer: A
Q3) Product items are often coded with (select all that apply)
A) sequence codes.
B) block codes.
C) group codes.
D) mnemonic codes.
Answer: C,D
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Chapter 3: Systems Documentation Techniques
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Sample Questions
Q1) Which symbol would be used in a flowchart to represent a general ledger?
A) #2
B) #1
C) #3
D) #5
Answer: A
Q2) More than one arrow is needed between symbols on a DFD if
A) data elements always flow together.
B) data elements flow at different times.
C) data elements flow to different locations.
D) there is no guideline on use of single or multiple arrows.
Answer: B
Q3) Most processes on a DFD can be identified by
A) data in-flows only.
B) data out-flows only.
C) data flows both into or out of a process.
D) always being followed by a data store.
Answer: C
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5
Chapter 4: Relational Databases
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Sample Questions
Q1) Reports produced using the data dictionary could include all of the following except a list of
A) programs where a data item is used.
B) synonyms for the data items in a particular file.
C) outputs where a data element is used.
D) the schemas included in a database.
Q2) Shandra Bundawi is a new graduate who has been hired by an old-line,family-owned furniture manufacturing company in the northeast.She has been asked to analyze the company's accounting information system and to recommend cost-effective improvements.After noting that the production and sales departments use database systems that are entirely separated,she recommends that they be combined.Implementation of her recommendation would benefit the company by contributing to data A) independence.
B) integration.
C) redundancy.
D) qualifications.
Q3) Explain the types of attributes that tables possess in a relational database.
Q4) Describe a data dictionary.
Q5) Describe the information that is contained in the data dictionary.
Page 6
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Chapter 5: Computer Fraud
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Sample Questions
Q1) 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.
Q2) Which characteristic of the fraud triangle relates to excuses that perpetrators use to justify their illegal behavior?
A) pressure
B) opportunity
C) rationalization
D) concealment
Q3) Which of the following is not an example of the fraud triangle characteristic concerned with easing a fraudster's conscience?
A) Revenge against the company
B) Sense of entitlement as compensation for receiving a lower than average raise
C) Intent to repay "borrowed" funds in the future
D) Belief that the company won't suffer because an insurance company will reimburse losses
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Page 7
Chapter 6: Computer Fraud and Abuse Techniques
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Sample Questions
Q1) The unauthorized use of special system programs to bypass regular system controls and perform illegal act is called
A) a Trojan horse.
B) a trap door.
C) the salami technique.
D) superzapping.
Q2) Spyware is
A) software that tells the user if anyone is spying on his computer.
B) software that monitors whether spies are looking at the computer.
C) software that monitors computing habits and sends the data it gathers to someone else.
D) none of the above
Q3) When a computer criminal gains access to a system by searching records or the trash of the target company,this is referred to as
A) data diddling.
B) dumpster diving.
C) eavesdropping.
D) piggybacking.
Q4) How can a system be protected from viruses?
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Chapter 7: Control and Accounting Information Systems
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Sample Questions
Q1) One of the objectives of the segregation of duties is to
A) make sure that different people handle different parts of the same transaction.
B) ensure that no collusion will occur.
C) make sure that different people handle different transactions.
D) achieve an optimal division of labor for efficient operations.
Q2) At a movie theater box office,all tickets are sequentially prenumbered.At the end of each day,the beginning ticket number is subtracted from the ending number to calculate the number of tickets sold.Cash is counted and compared with the number of tickets sold.Which of the following situations does this control detect?
A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the theater entrance (so the tickets didn't get torn.)
B) A group of kids snuck into the theater through a back door when customers left after a show.
C) The box office cashier accidentally gives too much change to a customer.
D) The ticket taker admits his friends without tickets.
Q3) Explain why the Foreign Corrupt Practices Act was important to accountants.
Q4) Describe the differences between general and specific authorization.
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9
Chapter 8: Information Systems Controls for System
Reliability Part 1: Information Security
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Sample Questions
Q1) The most common input-related vulnerability is
A) buffer overflow attack.
B) hardening.
C) war dialing.
D) encryption.
Q2) The security technology that evaluates IP packet traffic patterns in order to identify attacks against a system is known as
A) an intrusion prevention system.
B) stateful packet filtering.
C) static packet filtering.
D) deep packet inspection.
Q3) The ________ disseminates information about fraud,errors,breaches and other improper system uses and their consequences.
A) chief information officer
B) chief operations officer
C) chief security officer
D) computer emergency response team
Q4) Identify six physical access controls.
Q5) Explain social engineering.
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Chapter 9: Information Systems Controls for Systems
Reliability Part 2: Confidentiality and Privacy
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Q1) Which of the following is not one of the 10 internationally recognized best practices for protecting the privacy of customers' personal information?
A) Providing free credit report monitoring for customers
B) Inform customers of the option to opt-out of data collection and use of their personal information
C) Allow customers' browsers to decline to accept cookies
D) Utilize controls to prevent unauthorized access to, and disclosure of, customers' information
Q2) Information encrypted with the creator's private key that is used to authenticate the sender is
A) asymmetric encryption.
B) digital certificate.
C) digital signature.
D) public key.
Q3) Which of the following describes one weakness of encryption?
A) Encrypted packets cannot be examined by a firewall.
B) Encryption protects the confidentiality of information while in storage.
C) Encryption protects the privacy of information during transmission.
D) Encryption provides for both authentication and non-repudiation.
Page 11
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Chapter 10: Information Systems Controls for Systems
Reliability Part 3: Processing Integrity and Availability
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Sample Questions
Q1) A computer operator accidentally used the wrong master file when updating a transaction file.As a result,the master file data is now unreadable.Which control could best have prevented this from happening?
A) Internal header label
B) Validity check
C) Check digit
D) Parity check
Q2) File labels are an example of
A) data entry controls.
B) output controls.
C) processing controls.
D) source data controls.
Q3) Check digit verification is an example of a(n)
A) data transmission control.
B) output control.
C) processing control.
D) input control.
Q4) Discuss how cloud computing could both positively and negatively affect system availability.
Q5) 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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Sample Questions
Q1) Organizing the audit team and the physical examination of assets are components of which two separate audit stages?
A) planning; evaluating audit evidence
B) planning; collecting audit evidence
C) collecting audit evidence; communicating audit results
D) communicating audit results; evaluating audit evidence
Q2) What is not a typical responsibility of an internal auditor?
A) helping management to improve organizational effectiveness
B) assisting in the design and implementation of an AIS
C) preparation of the company's financial statements
D) implementing and monitoring of internal controls
Q3) An increase in the effectiveness of auditing software will have the effect of
A) increasing detection risk.
B) reducing detection risk.
C) increasing control risk.
D) reducing control risk.
Q4) Name and describe the different types of audits.
Q5) Briefly describe tests that can be used to detect unauthorized program modifications.
Q6) Describe how audit evidence can be collected.
Page 13
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Sample Questions
Q1) You have been hired by a catalog company to computerize its sales order entry process.Approximately 70% of all orders are received over the telephone by a sales person.The other 30% of orders are received by a sales person through mail or fax.The catalog company wants the phone orders processed real-time.The mail and fax orders will be processed in batches of 50 orders.The following attributes are collected for every sales order:
Customer number (if the order is from a new customer,a new number needs to be assigned)
Customer name
Address
Payment method (credit card for phone and fax orders and check for mailed orders)
Credit card number and expiration date
Items ordered and quantity of each
Unit price of each item ordered
Identify and describe at least ten specific control policies and procedures you will implement for the sales order process.Be very specific describing the controls and number each new control you suggest.
Q2) Discuss the revenue cycle threat of stockouts,carrying costs,and markdowns.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash Disbursements
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Q1) In the expenditure cycle,Financial Electronic Data Interchange (FEDI)increases efficiency by
A) eliminating the need for receiving reports.
B) eliminating the need for vendor invoices.
C) eliminating the need for purchase orders.
D) eliminating the need to prepare and mail checks.
Q2) To accomplish the objectives set forth in the expenditure cycle,a number of key management decisions must be addressed.Which of the decisions below is not ordinarily found as part of the expenditure cycle?
A) How can cash payments to vendors be managed to maximize cash flow?
B) What is the optimal level of inventory and supplies to carry on hand?
C) Where should inventories and supplies be held?
D) What are the optimal prices for each product or service?
Q3) One of the basic activities in the expenditure cycle is the receiving and storage of goods,supplies,and services.What is the counterpart of this activity in the revenue cycle?
A) sales order entry process
B) shipping function
C) cash collection activity
D) cash payments activity
Page 15
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Chapter 14: The Production Cycle
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Sample Questions
Q1) The expenses associated with a product recall are ________ costs.
A) prevention
B) inspection
C) internal failure
D) external failure
Q2) What types of data are accumulated by cost accounting? What is the accountant's role in cost accounting?
Q3) ________ 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
Q4) What are the two major types of cost accounting systems and what are the differences between the two?
Q5) The threat of loss of data exposes the company to
A) the loss of assets.
B) ineffective decision making.
C) inefficient manufacturing.
D) All of the above are correct.
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Chapter 15: The Human Resources Management and Payroll Cycle
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Sample Questions
Q1) In the payroll system,checks are issued to
A) employees and to banks participating in direct deposit.
B) a company payroll bank account.
C) government agencies.
D) All of the above are correct.
Q2) Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs.Which statement regarding direct deposit is false?
A) The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account.
B) The cashier does not have to sign employee paychecks.
C) Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited.
D) Employees who are part of a direct deposit program receive an earnings statement on payday rather than a paper check.
Q3) Explain the functions of the payroll register,deduction register,and earnings statement.
Q4) Why are accurate cumulative earnings records important?
Q5) Discuss the various types and sources of input into the HRM/payroll cycle.
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Chapter 16: General Ledger and Reporting System
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Q1) Recording interest earned on an investment is an example of which type of adjusting journal entry?
A) accrual entry
B) deferral entry
C) revaluation entry
D) correcting entry
Q2) If you believe a general ledger account was not adjusted properly or at all,you should prepare a general ledger control report listing journal vouchers in
A) numerical sequence.
B) chronological order.
C) general ledger account number order.
D) any order, since you have to review them all anyway.
Q3) When updating the general ledger,sales,purchases,and production are examples of ________ entries,and issuance or retirement of debt and the purchase or sale of investment securities are examples of ________ entries.
A) adjusting; controller originated
B) accounting subsystem; treasurer originated
C) adjusting; special journal
D) controller generated; special journal
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Page 18
Chapter 17: The Rea Data Model
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Q1) Which is a true statement about the REA data model?
A) The REA data model classifies entities into three distinct categories.
B) The term REA is an acronym that stands for resources, entities, and agents.
C) Using an REA data model is not helpful when creating an R-E diagram.
D) The "E" in the REA data model stands for things that have an economic value to the organization.
Q2) Data modeling is an element of
A) systems analysis.
B) conceptual design.
C) both A and B
D) none of the above
Q3) Describe an REA data model.
Q4) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
Q5) Define cardinality.
Q6) Explain how an AIS system can be viewed as a set of "give-to-get" exchanges.
Q7) Describe data modeling.
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) A query that extracts,for a given time period,all purchases for which there is no corresponding disburse cash event will yield
A) a cash account ledger.
B) a credit sales journal.
C) an accounts receivable ledger.
D) an accounts payable journal.
Q2) When integrating separate REA diagrams,
A) common resources are placed between the events that affect them.
B) each resource is connected to two agents.
C) resources are duplicated to show the give and get of economic duality relationships.
D) resources are merged if both events in the stockflow relationship are modeled.
Q3) In a relational database,which of the following attributes would typically be represented by a foreign key in the table that stores data about a Disburse Cash entity?
A) Amount
B) Date
C) Vendor number
D) Product number
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Page 20
Chapter 19: Special Topics in Rea Modeling
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Q1) In an REA diagram for the HR/Payroll cycle,the relationship between Employees and Training is typicallty M:N for all except which of the following reasons?
A) One employee may attend the same training event more than once.
B) Each employee may attend more than one training event.
C) Each training event may have more than one employee attend.
D) One training event may be offered more than once.
Q2) There are four main events of interest included in a typical production cycle REA diagram.Which of the following is not one of them?
A) Issuance of raw materials
B) Order raw materials
C) Use of labor in production
D) Use of machinery and equipment in production
Q3) Describe the relationships between Recruiting event and Skills,and between Recruiting event and Job Applicants.
Q4) Supplier number is least likely to be a foreign key in:
A) Order Inventory
B) Disburse Cash
C) Receive Inventory
D) Warehouse
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Chapter 20: Introduction to Systems Development Systems Analysis
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Q1) A network of arrows and nodes representing project activities that require an expenditure of time and resources and the completion of initiation of activities,respectively,is called
A) a Gantt chart.
B) a PERT diagram.
C) a SDLC cycle.
D) CASE.
Q2) Describe economic feasibility analysis.What techniques are used in economic feasibility analysis?
Q3) Which of the following aspect of a feasibility study is concerned with meeting external reporting requirements?
A) Technical feasibility
B) Legal feasibility
C) Scheduling feasibility
D) Operational feasibility
Q4) Describe the five phases of systems analysis.
Q5) Describe the four primary objectives of a systems survey conducted during systems analysis.
Q6) Identify the main reasons why companies change existing systems?
Q7) Describe the physical design stage of the systems development life cycle. Page 22
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Page 23
Chapter 21: Ais Development Strategies
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Q1) The risk of outsourcing concerned with unauthorized disclosure of sensitive information is the risk of
A) a locked-in system.
B) a loss of control.
C) a reduced competitive advantage.
D) inflexibility.
Q2) Which of the following is not appropriate for end user development?
A) performing statistical analyses
B) preparing schedules and lists
C) retrieving information from databases
D) updating database records
Q3) What term is used to refer to users becoming involved in the hands-on development,control,and employment of information systems?
A) amateur user computing (AUC)
B) competitive intra-organization systems development approach (CIOSDA)
C) end-user computing (EUC)
D) novice information systems development (NISD)
Q4) Identify the ways an organization can gain full advantage of using a Request For Proposal (RFP).
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Chapter 22: Systems Design, implementation, and Operation
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Q1) Describe the different types of documentation that should be prepared for a new system.
Q2) 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
Q3) Which of the following is the final activity in the systems development life cycle?
A) monitoring of the system
B) ongoing maintenance activities
C) preparation of the post-implementation review report
D) user acceptance of the post-implementation review report
Q4) Describe at least four considerations during controls design.
Q5) Describe the post-implementation review activity.
Q6) What factors does a steering committee consider when evaluating different system designs?
Page 25
Q7) Describe the approaches to system conversion.
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