Information Technology in Accounting Question Bank
Course Introduction
Information Technology in Accounting explores the integration of modern technology within the field of accounting, focusing on how digital tools and systems enhance financial data management, analysis, and reporting processes. This course covers topics such as computerized accounting systems, enterprise resource planning (ERP), data analytics, cloud-based solutions, cybersecurity considerations, and regulatory compliance in digital environments. Students will gain practical experience with accounting software, understand the impact of technological advancements on internal controls and audits, and examine trends shaping the future of the accounting profession.
Recommended Textbook
Accounting Information Systems 7th Edition by James Hall
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17 Chapters
1713 Verified Questions
1713 Flashcards
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Page 2
Chapter 1: The Information System: An Accountants Perspective
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96 Verified Questions
96 Flashcards
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Sample Questions
Q1) Disadvantages of distributed data processing include all of the following except A) mismanagement of organization-wide resources
B) hardware and software incompatibility
C) cost reductions
D) difficulty in hiring qualified IT professionals
Answer: C
Q2) Disadvantages of the distributed data processing approach include all of the following except
A) possible mismanagement of organization resources
B) redundancy of tasks
C) software incompatibility
D) system is not responsive to the user's situation
Answer: D
Q3) Which level of management is responsible for controlling day-to-day operations?
A) top management
B) middle management
C) operations management
D) executive management
Answer: C
Page 3
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Chapter 2: Introduction to Transaction Processing
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Operational efficiencies can be improved by
A) updating accounts both common and unique to many concurrent transactions in real time.
B) updating accounts both common and unique to many concurrent transactions in batch mode.
C) updating accounts unique to many concurrent transactions in real time and updating common accounts in batch mode.
D) None of the above are true statements
Answer: C
Q2) Data flow diagrams represent the physical system.
A)True
B)False
Answer: False
Q3) What are the subsystems of the revenue cycle?
Answer: sales order processing,cash receipts
Q4) Is a flowchart an effective documentation technique for identifying who or what performs a particular task? Explain.
Answer: Yes.A flowchart depicts the physical system and illustrates who,what,and where a task is performed.
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Chapter 3: Ethics, Fraud, and Internal Control
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Explain the pass through fraud.
Answer: A pay-and-return scheme involves a clerk with check-writing authority who pays a vendor twice for the same products (inventory or supplies)received.The vendor,recognizing that its customer made a double payment,issues a reimbursement to the victim company.The clerk intercepts and cashes the reimbursement check.
Q2) The external auditor is responsible for establishing and maintaining the internal control system.
A)True
B)False
Answer: False
Q3) Which ethical principle states that the benefit from a decision must outweigh the risks,and that there is no alternative decision that provides the same or greater benefit with less risk?
A) minimize risk
B) justice
C) informed consent
D) proportionality
Answer: D
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Chapter 4: The Revenue Cycle
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105 Verified Questions
105 Flashcards
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Sample
Questions
Q1) What are the three rules that ensure that no single employee or department processes a transaction in its entirety.
Q2) State two specific functions or jobs that should be segregated in the sales processing system.
Q3) The most effective internal control procedure to prevent or detect the creation of fictitious credit memoranda for sales returns is to
A) supervise the accounts receivable department
B) limit access to credit memoranda
C) prenumber and sequence check all credit memoranda
D) require management approval for all credit memoranda
Q4) In the revenue cycle,the internal control "limit access" applies to physical assets only.
A)True
B)False
Q5) A remittance advice is
A) used to increase (debit) an account receivable by the cash received
B) is a turn-around document
C) is retained by the customer to show proof of payment
D) none of the above
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Chapter 5: The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) The inventory procurement process begins with the purchasing clerk preparing a purchase order.
A)True
B)False
Q2) Describe an internal control procedure that would detect that a vendor overcharged for goods delivered.
Q3) Describe an internal control procedure that would prevent issuing two checks in payment of the same invoice.
Q4) Explain why supervision is so important in the receiving department.
Q5) The open purchase order file in the purchasing department is used to determine A) the quality of items a vendor ships
B) the best vendor for a specific item
C) the orders that have not been received
D) the quantity of items received
Q6) Where is access control exercised in the purchasing/cash disbursement functions?
Q7) What internal accounting control(s)would be the most effective in preventing a storekeeper from taking inventory home at night? When shortages become apparent,he claims the goods were never received.
Q8) What are the steps taken in the cash disbursement system? Page 7
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Page 8
Chapter 6: The Expenditure Cycle Part II: Payroll Processing and
Fixed Asset Procedures
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87 Flashcards
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Sample Questions
Q1) Which of the following is not a characteristic of the Fixed Asset System?
A) Acquisitions are routine transactions requiring general authorization.
B) Retirements are reported on an authorized disposal report form.
C) Acquisition cost is allocated over the expected life of the asset.
D) Transfer of fixed assets among departments is recorded in the fixed asset subsidiary ledger.
Q2) Personnel action forms are used to do all of the following except
A) activate new employees
B) terminate employees
C) record hours worked
D) change pay rates
Q3) Time cards capture the total time an individual worker spends on each production job.
A)True
B)False
Q4) What negative consequences result when fixed asset records include assets that are no longer owned by the firm?
Q5) Employee paychecks should be drawn against a special checking account. A)True B)False
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Chapter 7: The Conversion Cycle
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Sample Questions
Q1) What is meant by the term "islands of technology"?
Q2) Which situation violates the segregation of functions control procedure?
A) production planning and control is located apart from the work centers
B) inventory control maintains custody of inventory items
C) cost accounting has custody of and makes entries on cost records
D) work centers record direct labor on job tickets
Q3) Traditional accounting assumes that products cause costs.ABC assumes that _________________ cause costs.
Q4) 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
Q5) Discuss the importance to the cost-accounting department of the move ticket.
Q6) A company's value stream map depicts only the value added activities needed to complete a process or product.
A)True
B)False
Q7) Discuss three common problems associated with inventories.
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Chapter 8: General Ledger, Financial Reporting, and Management Reporting Systems
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Sample Questions
Q1) 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
Q2) One benefit of the Management Reporting System is that it can alert management to delays in project implementation.
A)True
B)False
Q3) Which of the following statements is NOT true?
A) XML stands for eXperimental Markup Language.
B) XML is a is a meta-language for describing markup languages.
C) Unlike HTML, XML is capable of storing data in relational form.
D) Any markup language can be created using XML
Q4) The difference between the actual performance and the standard is called the
Q5) Primary recipients of financial statement information are internal management.
A)True
B)False
Page 11
Q6) What three elements must be present for a problem to be "structured?"
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Chapter 9: Database Management Systems
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106 Flashcards
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Sample Questions
Q1) Which characteristic is associated with the database approach to data management?
A) data sharing
B) multiple storage procedures
C) data redundancy
D) excessive storage costs
Q2) Which of the following is a relational algebra function?
A) restrict
B) project
C) join
D) all are relational algebra functions
Q3) All of the following are advantages of a partitioned database except A) increased user control by having the data stored locally B) deadlocks are eliminated
C) transaction processing response time is improved
D) partitioning can reduce losses in case of disaster
Q4) Distinguish between a database lockout and a deadlock.
Q5) Discuss the key factors to consider in determining how to partition a corporate database.
Q6) What is a partial dependency?
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Chapter 10: The REA Approach to Business Process
Modeling
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Sample Questions
Q1) What is the REA model? What does it mean for accountants?
Q2) The REA approach generates an information system based on a single holistic user view.
A)True
B)False
Q3) When assigning foreign keys in a 1:1 association:
A) The primary key of each table should be embedded as a foreign key in the related table
B) The primary key on the (0,1) side of the relation should be embedded as the foreign key on the (1,1) side.
C) The primary key on the (1,1) side of the relation should be embedded as the foreign key on the (0,1) side.
D) None of the above is true
Q4) When modeling M:M associations,it is conventional to include link tables in the REA diagram so that the model reflects closely the actual database.
A)True
B)False
Q5) Define resources,economic events,and agents.
Q6) What is a user view?
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Chapter 11: Enterprise Resource Planning Systems
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Define the term "core applications" and give some examples.
Q2) What is meant by the OLAP term: consolidation?
Q3) What is the fundamental concept behind the rule of least access? Explain why this is a potential problem in an ERP environment.
Q4) Data entered into the data warehouse must be normalized.
A)True
B)False
Q5) The client/server model is a form of network technology in which user computers,called clients,access ERP programs and data via a host computer called a server.
A)True
B)False
Q6) Briefly explain the two general approaches to contingency planning for ERPs.
Q7) Data warehousing processes do not include
A) modeling data
B) condensing data
C) extracting data
D) transforming data
Q8) Define ERP.
Page 15
Q9) Why does data need to be cleansed?
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Chapter 12: Electronic Commerce Systems
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102 Flashcards
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Sample Questions
Q1) All of the following are true about the Open System Interface (OSI)protocol except
A) within one node different layers communicate with other layers at that node
B) one protocol is developed and applied to all the OSI layers
C) specific layers are dedicated to hardware tasks and other layers are dedicated to software tasks
D) layers at each node communicate logically with their counterpart layers across nodes
Q2) A ping signal is used to initiate
A) URL masquerading
B) digital signature forging
C) Internet protocol spoofing
D) a smurf attack
E) none of the above is true
Q3) What is a seal of assurance?
Q4) List at least five top-level domain names used in the United States.
Q5) What is an extranet?
Q6) Polling is one technique used to control data collisions.
A)True
B)False
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Chapter 13: Managing the Systems Development Life Cycle
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93 Flashcards
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Sample Questions
Q1) Explain the role of accountants in the conceptual design stage.
Q2) List four types of facts that should be gathered during an analysis of a system.
Q3) An example of a tangible benefit is
A) increased customer satisfaction
B) more current information
C) reduced inventories
D) faster response to competitor actions
Q4) The objective of systems planning is to link systems projects to the strategic objectives of the firm.
A)True
B)False
Q5) System maintenance is often viewed as the first phase of a new development cycle.
A)True
B)False
Q6) Examples of recurring costs include
A) software acquisition
B) data conversion
C) personnel costs
D) systems design
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Chapter 14: Construct, Deliver, and Maintain Systems Projects
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Sample Questions
Q1) An advantage of the Computer Aided Software Engineering (CASE)model tool,which transforms the structure diagram into machine language,is
A) it facilitates the auditors review of the system
B) it ensures that firm will use a specific CASE tool and vendor
C) it forces all system changes to be made through the data flow diagrams
D) it reduces the analysis required in designing the system
Q2) In the object-oriented approach to systems design,when an operation is performed on an object,an attribute will always be changed.
A)True
B)False
Q3) Which statement is not correct? The structured design approach
A) is a top-down approach
B) is documented by data flow diagrams and structure diagrams
C) assembles reusable modules rather than creating systems from scratch
D) starts with an abstract description of the system and redefines it to produce a more detailed description of the system
Q4) List two techniques of forms design that encourage efficient and effective data collection.
Q5) What are embedded instructions? Why do they matter?
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Chapter 15: IT Controls : Sarbanes-Oxley and IT Governance
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Sample Questions
Q1) Compare and contrast the following disaster recovery options: empty shell,recovery operations center,and internally provided backup.Rank them from most risky to least risky,as well as most costly to least costly.
Q2) The following are examples of commodity assets except A) network management
B) systems operations
C) systems development
D) server maintenance
Q3) Internal control in a computerized environment can be divided into two broad categories.What are they? Explain each.
Q4) Typically,internal auditors perform all of the following tasks except A) IT audits
B) evaluation of operational efficiency
C) review of compliance with legal obligations
D) internal auditors perform all of the above tasks
Q5) Explain the role of a SAS 70 report in reviewing internal controls.
Q6) Discuss the interrelationship of tests of controls,audit objectives,exposures,and existing controls.
Q7) Name three types of program fraud.
Page 20
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Chapter 16: IT Controls : Security and Access
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Sample Questions
Q1) Many techniques exist to reduce the likelihood and effects of data communication hardware failure.One of these is
A) hardware access procedures
B) antivirus software
C) parity checks
D) data encryption
Q2) All of the following techniques are used to validate electronic data interchange transactions except
A) value added networks can compare passwords to a valid customer file before message transmission
B) prior to converting the message, the translation software of the receiving company can compare the password against a validation file in the firm's database
C) the recipient's application software can validate the password prior to processing
D) the recipient's application software can validate the password after the transaction has been processed
Q3) What are biometric devices?
Q4) Explain how smurf attacks can be controlled.
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21
Chapter 17: IT Controls : Systems Development Program
Changes and Application Controls
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Sample Questions
Q1) If input and processing controls are adequate,why are output controls needed?
Q2) Which check is not an input control?
A) reasonableness check
B) validity check.
C) spooling check
D) missing data check
Q3) Outline the six controllable activities that relate to new systems development
Q4) What are program version numbers and how are the used?
Q5) In a computerized environment,all input controls are implemented after data is input.
A)True
B)False
Q6) The presence of a SPLMS effectively guarantees program integrity.
A)True
B)False
Q7) 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
Q8) Explain the three methods used to correct errors in data entry. Page 22
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