Introduction to Accounting Information Systems
Exam Questions
Course Introduction
Introduction to Accounting Information Systems provides students with a foundational understanding of how information systems facilitate and enhance accounting processes in modern organizations. The course covers key concepts such as the design, implementation, and management of accounting information systems (AIS), as well as their role in supporting financial reporting, internal controls, and decision-making. Students will explore topics including database management, system documentation, internal control frameworks, and the impact of emerging technologies such as cloud computing and data analytics on the accounting profession. Practical exercises and case studies are incorporated to develop analytical and problem-solving skills relevant to AIS in real-world business settings.
Recommended Textbook
Accounting Information Systems 13th Edition by Marshall B. Romney
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Page 2
Chapter 1: Accounting Information Systems: an Overview
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Q1) Identify how firms use predictive analysis.
A) to provide an educated guess regarding what is expected to occur in the near future
B) to engage in data warehousing
C) to engage in a low-cost strategy
D) to design the most effective accounting information system
Answer: A
Q2) It is important that a firm's AIS collect and integrate financial and non-financial information about the organization's activities if the firm seeks use its AIS to gain a competitive advantage.
A)True
B)False
Answer: True
Q3) Identify the party below that is not external to the firm.
A) customer
B) vendor
C) government agencies
D) CEO
Answer: D
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Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Q1) Which of the following information would most likely be reviewed by management on an exception report?
A) monthly cash budget
B) quality control system failures
C) unit sales by territory and salesperson
D) income statement
Answer: B
Q2) To be effective,the chart of accounts must
A) not use alpha-numeric characters.
B) contain sufficient detail.
C) utilize only one coding technique.
D) begin with account 001.
Answer: B
Q3) A specialized journal would be most likely to be used to enter
A) sales transactions.
B) monthly depreciation adjustments.
C) annual closing entries.
D) stock issuance transactions.
Answer: A
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Chapter 3: Systems Documentation Techniques
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Q1) In a data flow diagram,an inverted triangle represents
A) an internal control.
B) document filing.
C) on page connection.
D) document processing.
Answer: A
Q2) Which of the following is not a true statement?
A) Documentation tools save an organization both time and money.
B) Documentation tools are used extensively in the systems development process.
C) Data flow diagrams and flowcharts are the two most frequently used systems development documentation tools.
D) Data flow diagrams and flowcharts are difficult to prepare and revise using software packages.
Answer: D
Q3) Which symbol would be used in a flowchart to represent the symbol for a file?
A) #9
B) #5
C) #6
D) #11
Answer: A
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Chapter 4: Relational Databases
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Q1) The ________ occurs when more than one occurrence of a specific data item in a database exists.
A) inconsistency anomaly
B) insert anomaly
C) delete anomaly
D) update anomaly
Q2) The update anomaly in non-normalized database tables
A) occurs because of data redundancy.
B) restricts addition of new fields or attributes.
C) results in records that cannot be updated.
D) is usually easily detected by users.
Q3) In a well-designed and normalized database,which of the following attributes would be a foreign key in a cash receipts table?
A) customer number
B) cash receipt date
C) remittance advice number
D) customer check number
Q4) Explain the difference between file-oriented transaction processing systems and relational database systems.Discuss the advantages and disadvantages of each system.
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Chapter 5: Computer Fraud
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Q1) Why is computer fraud often much more difficult to detect than other types of fraud?
A) because massive fraud can be committed in only seconds, leaving little-to-no evidence
B) because most perpetrators invest their illegal income rather than spend it, concealing key evidence
C) because most computer criminals are older and more cunning than perpetrators of other types of fraud
D) because perpetrators usually only steal very small amounts of money at a time, requiring a long period of time to pass before discovery
Q2) Lapping is best described as the process of
A) applying cash receipts to a different customer's account in an attempt to conceal previous thefts of cash receipts.
B) inflating bank balances by transferring money among different bank accounts.
C) stealing small amounts of cash, many times over a period of time.
D) increasing expenses to conceal that an asset was stolen.
Q3) Describe two kinds of fraud.
Q4) Why do fraudulent acts often go unreported and are therefore not prosecuted?
Q5) What are some of the distinguishing characteristics of fraud perpetrators?
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Chapter 6: Computer Fraud and Abuse Techniques
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Q1) Which of the following is not an example of social engineering?
A) obtaining and using another person's Social Security number, credit card, or other confidential information
B) creating phony websites with names and URL addresses very similar to legitimate websites in order to obtain confidential information or to distribute malware or viruses
C) using e-mail to lure victims into revealing passwords or user IDs
D) setting up a computer in a way that allows the user to use a neighbors unsecured wireless network
Q2) Gaining control of somebody's computer without their knowledge and using it to carry out illicit activities is known as
A) hacking.
B) sniffing.
C) phreaking.
D) hijacking.
Q3) How can a system be protected from viruses?
Q4) What is social engineering?
Q5) Describe at least six computer attacks and abuse techniques.
Q6) Describe at least four social engineering techniques.
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Chapter 7: Control and Accounting Information Systems
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Q1) Which type of audits can detect fraud and errors?
A) external audits
B) internal audits
C) network security audits
D) all of the above
Q2) According to the COSO Enterprise Risk Management Framework,the risk assessment process incorporates all of the following components except
A) reporting potential risks to auditors.
B) identifying events that could impact the enterprise.
C) evaluating the impact of potential events on achievement of objectives.
D) establishing objectives for the enterprise.
Q3) How is expected loss calculated when performing risk assessment?
A) impact times expected loss
B) impact times likelihood
C) inherent risk times likelihood
D) residual risk times likelihood
Q4) Using the COSO definition of an event,an event represents uncertainty.
A)True
B)False
Q5) Explain why the Foreign Corrupt Practices Act was important to accountants.
Page 9
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Chapter 8: Controls for Information Security
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Q1) Describe what a man-trap is and how it contributes to information security.
Q2) Which of the following is not a requirement of effective passwords?
A) Passwords should be changed at regular intervals.
B) Passwords should be no more than 8 characters in length.
C) Passwords should contain a mixture of upper and lowercase letters, numbers and characters.
D) Passwords should not be words found in dictionaries.
Q3) A border router
A) routes electronic communications within an organization.
B) connects an organization's information system to the Internet.
C) permits controlled access from the Internet to selected resources.
D) serves as the main firewall.
Q4) Which of the following is commonly true of the default settings for most commercially available wireless access points?
A) The security level is set at the factory and cannot be changed.
B) Wireless access points present little danger of vulnerability so security is not a concern.
C) Security is set to the lowest level that the device is capable of.
D) Security is set to the highest level that the device is capable of.
Q5) Describe four requirements of effective passwords .
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Chapter 9: Confidentiality and Privacy Controls
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Q1) If an organization asks you to disclose your date of birth and your address,but fails to establish any procedures for responding to customer complaints,the organization has likely violated which of the Generally Accepted Privacy Principles?
A) Collection
B) Access
C) Security
D) Monitoring and enforcement
Q2) 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.
Q3) Encryption is one of the many ways to protect information in transit over the internet.
A)True
B)False
Q4) Describe symmetric encryption and identify three limitations.
Q5) Describe some steps you can take to minimize your risk of identity theft.
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Chapter 10: Processing Integrity and Availability Controls
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Q1) Which of the following is not an objective of a disaster recovery plan?
A) Minimize the extent of the disruption, damage or loss.
B) Permanently establish an alternative means of processing information.
C) Resume normal operations as soon as possible.
D) Train employees for emergency operations.
Q2) Modest Expectations Investment Services (MEIS)allows customers to manage their investments over the Internet.If customers attempt to sell more shares of a stock than they have in their account,an error message is displayed.This is an example of a
A) reasonableness test.
B) field check.
C) validity check.
D) limit check.
Q3) Form design is one example of a(n)
A) output control.
B) processing control.
C) input control.
D) data entry control.
Q4) Discuss how cloud computing could both positively and negatively affect system availability.
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Chapter 11: Auditing Computer-Based Information Systems
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Q1) When programmers are working with program code,they often employ utilities that are also used in auditing.For example,as program code evolves,it is often the case that blocks of code are superseded by other blocks of code.Blocks of code that are not executed by the program can be identified by
A) embedded audit modules.
B) scanning routines.
C) mapping programs.
D) automated flow charting programs.
Q2) Which of the following is not one of the types of internal audits?
A) reviewing corporate organizational structure and reporting hierarchies
B) examining procedures for reporting and disposing of hazardous waste
C) reviewing source documents and general ledger accounts to determine integrity of recorded transactions
D) comparing estimates and analysis made before purchase of a major capital asset to actual numbers and results achieved
Q3) Explain the differences between each type of audit risk.
Q4) How and to whom does an auditor communicate the audit results?
Q5) Briefly describe tests that can be used to detect unauthorized program modifications.
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) The accounts receivable management method typically used by credit card companies is
A) balance forward.
B) postbilling.
C) monthly statement.
D) open-invoice.
Q2) The best solution for maintaining accurate automated perpetual inventory system is to use
A) closed-loop verification when inventory is received from vendors and recorded.
B) point of sale devices integrated with inventory records.
C) periodic physical counts to reconcile with perpetual inventory records.
D) RFID tags.
Q3) Basic segregation of duties requires the credit manager reports to the ________ and the treasurer report to the ________.
A) treasurer; controller
B) treasurer; vice president of finance
C) controller; vice president of finance
D) marketing manager; vice president of finance
Q4) Describe the basic revenue cycle activities.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash
Disbursements
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Q1) A disbursement voucher contains
A) a list of outstanding invoices.
B) the net payment amount after deducting applicable discounts and allowances.
C) the general ledger accounts to be debited.
D) All of the above are correct.
Q2) What is the main reason a list of potential alternative suppliers be maintained?
A) in case the primary supplier is out of stock
B) so the firm can sample different suppliers
C) in case the primary supplier is more expensive
D) to segregate purchasing suppliers
Q3) Which electronic files are either read or updated when goods are ordered from a vendor?
A) inventory, vendors, and accounts payable
B) vendors and accounts payable
C) inventory, vendors, and open purchase orders
D) open purchase orders and accounts payable
Q4) Identify ten threats and applicable control procedures in the expenditure cycle.
Q5) Discuss the differences between EOQ,MRP,and JIT.
Q7) Define and describe the EOQ approach to inventory management. Page 15
Q6) Under what conditions is MRP more suitable than JIT and vice versa?
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Chapter 14: The Production Cycle
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Q1) What types of data are accumulated by cost accounting? What is the accountant's role in cost accounting?
Q2) Discuss the role the accountant can play in the production cycle.
Q3) The use of various forms of information technology in the production process is referred to as
A) computerized investments and machines.
B) computerized integration of machines.
C) computer-integrated manufacturing.
D) computer intense manufacturing.
Q4) The production cycle differs from the revenue and expenditure cycles for all the following reasons except
A) cost accounting is involved in all activities.
B) not all organizations have a production cycle.
C) there are no direct external data sources or destinations.
D) very little technology exists to make activities more efficient.
Q5) The cost of a product liability claim can be classified as a(n)
A) prevention cost.
B) inspection cost.
C) internal failure cost.
D) external failure cost.
17
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Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) Using financial incentives requires organizations to A) pay employees less than they would have to if pay was a fixed salary.
B) better monitor employee attendance.
C) link the payroll system to other cycles to calculate incentive payments.
D) better monitor employee effort.
Q2) Falk Noam is the internal auditor for Matan Incorporated.Before investigating the HRM / payroll cycle at Matan,Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes.For strongest segregation of duties,the ________ should distribute paychecks.
A) accounts payable department
B) cashier
C) internal audit department
D) external auditor
Q3) Professional employer organizations (PEOs)are especially attractive to small and mid-sized businesses for all of the following reasons except A) reduced costs.
B) wider range of benefits.
C) freeing up computer resources.
D) improved service quality.
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Chapter 16: General Ledger and Reporting System
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Q1) Which of the following is not one of the principles of proper graph design for bar charts?
A) Include data values with each element.
B) Use 3-D rather than 2-D bars to make reading easier.
C) Use colors or shades instead of patterns to represent different variables.
D) Use titles that summarize the basic message.
Q2) Performance reports for sales departments should compare actual revenue versus budgeted
A) revenue.
B) cost.
C) return on investment.
D) profit.
Q3) 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.
Q4) Explain the benefits of XBRL.
Q5) Explain the purpose of a journal voucher file.
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Chapter 17: Database Design Using the Rea Data Model
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Q1) An entity-relationship diagram represents entities as ________ and the relationships between them as lines and ________.
A) circles; squares
B) squares; diamonds
C) rectangles; diamonds
D) rectangles; circles
Q2) An entity-relationship diagram
A) can represent the contents of any database.
B) is only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) is used only to design new databases.
Q3) With regards to the database design process,accountants may provide the greatest value to their organization by participating in
A) implementation and conversion.
B) data modeling.
C) database operation and maintenance.
D) system auditing.
Q4) Define minimum and maximum cardinalities.
Q5) Explain how an AIS system can be viewed as a set of "give-to-get" exchanges.
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) Which table is most likely to have a concatenated key?
A) customer
B) sales
C) customer-sales
D) accounts receivable
Q2) Because information about temporal imbalances between two ________,such as accounts receivable and accounts payable,is needed so frequently,such calculated values are sometimes stored as ________ in the appropriate tables.
A) events; agents
B) events; attributes
C) resources; agents
D) resources; attributes
Q3) The primary key for M:N relationship tables
A) is a single attribute.
B) always consists of two attributes.
C) is the primary key of the most important entity linked to that relationship.
D) does not exist. Many-to-many relationship tables only use foreign keys.
Q4) Explain where in the REA model you can find the information normally found in a journal.
Page 21
Q5) Explain a completeness check.
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Chapter 19: Special Topics in Rea Modeling
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Q1) Many companies sell software,music,or digital photographs over the Internet.They provide each customer with a digital copy of those resources,but not the actual resource itself.How will this company's REA model differ from those selling tangible inventory?
A) These companies do not need an Inventory table.
B) The structure of Inventory table is completely different from that of mass-produced merchandise.
C) The Inventory table is only different in that it doesn't need attributes such as quantity-on-hand, quantity-available, reorder point, and standard reorder quantity.
D) The Inventory table need not include information about the standard list price of each item and its description.
Q2) In which entity would information about depreciation formula(s)and assumption(s)be stored in an REA model?
A) Resource
B) Event
C) Agent
D) Both A and B
Q3) What are the benefits of an integrated enterprise-wide data model?
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Chapter 20: Introduction to Systems Development and Systems Analysis
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Q1) Identify the statement below that is not a major reason companies change their information systems.
A) in response to changes in user needs
B) in response to technological changes
C) to gain a competitive advantage
D) to take advantage of tax benefits
Q2) Who is responsible for ensuring that the new system will meet the needs of users?
A) accountants
B) system programmers
C) the project development team
D) system analysts
Q3) Which planning technique does not show the relationships among various activities?
A) Gantt chart
B) PERT
C) the critical path method
D) VAN
Q4) What are some of the reasons why behavioral problems occur when a new AIS is introduced?
Page 23
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Chapter 21: Ais Development Strategies
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Q1) Which approach systems acquisition is generally costly and labor-intensive?
A) canned software
B) custom software
C) modified software
D) turnkey software
Q2) Information provided to potential vendors on a Request For Proposal should include
A) a budget for software and hardware.
B) detailed specifications for the AIS.
C) a timeframe required for completion of the project.
D) All of the above are correct.
Q3) ________ is a performance evaluation approach that evaluates systems based on the weighted score of criteria and points.
A) Benchmarking
B) Point scoring
C) Prototyping
D) Requirements drafting
Q4) Describe each of the four important principles underlying Business Process Management (BPM).
Q5) Describe the difficulties that could be encountered when developing an AIS.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) Identify a control commonly used by organizations during the output design phase of the physical systems design stage of developing a new system to avoid expensive time delays later in the SDLC process.
A) requiring management to test the system before proceeding
B) requiring programmers to alert the project team when they are exceeding their allocated time budgets
C) requiring the development team to take time-off so that they do not become fatigued
D) requiring users to sign a document stating the output form and content are acceptable
Q2) What type of conversion terminates the old system as soon as the new system is ready?
A) direct conversion
B) parallel conversion
C) phase-in conversion
D) pilot conversion
Q3) Describe the eight basic steps in program design.
Q4) What are the purposes of a conceptual systems design report?
Q5) Describe the post-implementation review activity.
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