Accounting Information Systems: The Processes and Controls 2nd Edition Test Bank

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1-1ACCOUNTING INFORMATION SYSTEMS/2eTURNER / WEICKGENANNTTest Bank:CHAPTER 1: Introduction to AISNOTE: All new or adjusted questions are inred.New questions are identified by the letter A as part of the questionnumber; adjusted questions are identified by the letter X as part of the question number.End of Chapter Questions:1.When a company receives returned goods from a customer, the business process to accept the return would mostlikely be a(n):A.Administrative processB.Conversion processC.Expenditure processD.Revenue process2.Which of the following is least likely to be an output of the accounting information system?A.A checkB.A reportC.An invoiceD.A bar code3.Which of the following is not true of the supply chain?A.The supply chain includes vendors.B.The supply chain excludes customers.C.The supply chain includesinformation flows.D.The supply chain include secondary suppliers.4.Which of the following is not an objective of IT enablement?A.Increased accuracy of dataB.Reduced costC.Reduced security problemsD.Increased efficiency5.The correct order of the computer data hierarchy is:A.Byte, bit, record, field, file, databaseB.Bit, byte, record, field, file, databaseC.Bit, byte, field, record, file, databaseD.Bit, byte, field, record, database, file6.The process of searching for identifiable patterns in data is called:A.Sequential processingB.Data warehousingC.Data miningD.Real-time processing7.An IT enabled system for purchasing that is an “invoice-less” system is called a(n):A.Automated matching systemB.Evaluated receipt settlement

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1-2C.E-payablesD.Point of sale system8.The COSO report written for the purpose of assisting managers in the challenge of managing risk in theirorganization is entitled:A.Internal Control–Integrated FrameworkB.Enterprise Risk Management–Integrated FrameworkC.Corporate Governance GuidanceD.IT Governance Guidance9.Accountants have some form of use of the AIS in all but which role?A.UserB.ProgrammerC.AuditorD.Designer10.Which of the following is not true of unethical behavior?A.The only category of unethical behavior for accountants is inflating revenue.B.Accountants are often pressured to help commit or coverup unethical behavior.C.Hacking is an unethical behavior that accountants should be concerned about.D.An accounting information system can be used to cover upunethical behavior.ANSWERS TO QUESTIONS 1-10 (FROM THE TEXTBOOK)1.D6.C2.D7.B3.B8.A4.C9.B5.C10.ATEST BANK–CHAPTER 1–MULTIPLE CHOICE11.A prescribed sequence of work steps preformed in order to produce a desired result for the organization is calleda(n):A.Accounting Information SystemB.Business ProcessC.Financial TransactionD.Capital Transaction Process12.The process that must identify the transactions to be recorded, capture all theimportant details of thetransactions, properly process the transaction details, and provide reports is termed the:A.Revenue ProcessB.Expenditure ProcessC.Accounting Information SystemD.Business Process13.An accounting information system serves many functions-which of the following is NOT one of those functions?A.Capture the details of a transactionB.Implement the start of a transactionC.Provide reports of transactionsD.Process the transactions details into appropriate accounts

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1-314.The proper order of activity in an accounting information system would be as follows:A.Capture, Record, Process, ReportB.Process, Record, Capture, ReportC.Capture, Process, Report, RecordD.Record, Capture, Process, Report15.Which of the following is not one of the general types of business processes identified by the textbook?A.Revenue ProcessesB.Expenditure ProcessesC.Conversion ProcessesD.Human Resource Processes16.Which of thefollowing statements, related to business processes, is false?A.Each business process has a direct effect on the financial status of the organization.B.A business process is initiated by a particular kind of event.C.A business process has a well-defined beginning and end.D.Each business process is usually completed in a relatively short period.17.Which of the following is least likely to be part of an accounting information system function?A.Record the accounting data in the appropriate recordsB.Generation of data to be part of the information system.C.Process the detailed accounting data.D.Report the summarized accounting data.18.Work steps that are internal controls within the business process would include:A.Using an electronic register to record all sales transactions.B.Combining both manual and computer based records.C.Reconciling a cash register at the end of each day.D.Preparation of internal reports to monitor the performance of a specific department.19.Five different components of the accounting information system were presented in the textbook. Which of thefollowing is not one of those components?A.Work steps within a business process intended to capture accounting data as the business process occurs.B.Work steps that are internal controls within the business process to safeguard assets and to ensure theaccuracy and completeness of the data.C.Work steps that generate both internal and external reports.D.Work steps to assure that all business processes are recorded using computer-based procedures.20.Output from an accounting information system would include:A.Checks to vendorsB.Invoices from vendorsC.Customer statementsD.Purchase orders21.The entities, processes, and information flows that involve the movement of materials, funds, and relatedinformation through the full logistics process, from the acquisition of raw materials to the delivery of the finishedproduces to the end use is a set of linked activities referred to as:A.Management Information SystemB.Supply ChainC.Accounting Information System

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1-4D.Logistics Management22.The organization and control of all materials, funds, and related information in the logistics process, from theacquisition of raw materials to the delivery of finished products to the end user is referred to as:A.Supply Chain ManagementB.Management Information SystemC.Logistics ManagementD.IT Enablement23.When discussing the supply chain:A.Any concern about vendors would relate only to those vendors with which a company has direct contact.B.Service providers would not be part of the supply chain.C.Concern would not extend beyond the pointwhere the product is shipped to a customer.D.An entity may not be able to directly control all of the interrelated activities within the supply chain.24.Using IT systems to enhance efficiency and effectiveness of internal or supply chain processes is called:A.Information Technology EnablementB.Information Systems ControlC.Information Technology Process EngineeringD.Information Technology Business Processes25.The purposeful and organized changing of business processes to make them more efficient is referred to as:A.Information Technology EngineeringB.Information Systems ManagementC.Business Process ReengineeringD.Business Process Supply Chain26.The use of BPR (Business Process Reengineerin) is a two-fold: (1) Aligns business processes with the IT systemsused to recorded processes and, (2):A.Improves the efficiency and effectiveness of these processes.B.Reduces the cost of these processes.C.Enhances the usefulness of these processes.D.Increases the accuracy of the process.27.The smallest unit of information in a computer system can have only one of two values, zero or one, and isreferred to as a(n):A.FieldB.RecordC.ByteD.Bit28.A unit of storage thatrepresents one character is referred to as a:A.ByteB.BitC.BatD.Field29.A set of related fields is referred to as a:A.FileB.RecordC.ByteD.Binary Digit

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1-530.Each record is made up of related:A.FilesB.BytesC.NameD.Fields31.A collection of data stored on a computer in a form that allows the data to be easily accessed, retrieved,manipulated, and stored is referred to as a(n):A.Accounting Information SystemB.Information TechnologyC.DatabaseD.Master File32.A collection of data stored in several small two-dimensional tables that can be joined together in many varyingways to represent many different kinds of relationships among the data is referred to as a(n):A.DatabaseB.Master FileC.Relational DatabaseD.Relation Based Accounting Software33.Accounting software traditionally uses two different types of files. The file type that is relatively permanent andused to maintain the detailed data for each major process is a(n):A.General LedgerB.Master FileC.Transaction FileD.Subsidiary File34.Accounting software traditionally uses two different types of files. The file type that is the set of relativelytemporary records that will be process to update the permanent file is referred to as a(n):A.Master FileB.General FileC.Transaction FileD.Subsidiary File35.The chart of accounts would be a good example of a:A.Transaction FileB.Master FileC.FieldD.Record36.The organization of files in a computer system normally uses one of two different access methods. The accessmethod where the files store records in sequence, with one record stored immediately after another, is referredto as:A.Chronological AccessB.Sequential AccessC.Random AccessD.Numerical Access37.The organization of files in a computer system normally uses one of two different access methods. The accessmethod where the files are not stored in sequence, one record not stored immediately after another, is referred

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1-6to as:A.Indexed AccessB.Batch AccessC.Sequential AccessD.Random Access38.There are two modes of processing transactions in accounting systems. The mode that requires all similartransactions be grouped together and be processed at the same time, is referred to as:A.Batch ProcessingB.Online ProcessingC.Real-time ProcessingD.Sequential Processing39.There are two modes of processing transactions in accountingsystems. The mode that will record transactions,one at a time, is referred to as:A.Batch ProcessingB.Online ProcessingC.Real-Time ProcessingD.Sequential Processing40.A type of online processing where a transaction is processed immediately so that the output is availableimmediately is termed:A.Virtual ProcessingB.Sequential ProcessingC.Real-Time ProcessingD.Batch Processing41.An integrated collection of enterprise-wide data that includes five to ten fiscal years of non-volatile data, used tosupport management in decision making and planning is referred to as:A.Operational DatabaseB.Relational DatabaseC.Data StorageD.Data Warehouse42.This type of database contains the data that are continually updated as transactions are processed and includesdata for the current fiscal year and supports day-to-day operations is referred to as a(n):A.Data WarehouseB.Data StorageC.Relational DatabaseD.Operational Database43.Thedata in the data warehouse are said to be enterprise-wide because:A.The data relate to all areas of the business.B.The data are pulled from each of the operational databases and maintained in the data warehouse for manyfiscal periods.C.All areas of the business are able to access the data warehouse.D.All transactions across the all areas of the business are recorded in the data warehouse.44.The process of searching data within the data warehouse for identifiable patterns that can be used to predictfuture behavior is referred to as:A.Data miningB.Data digging

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1-7C.Data housingD.Data querying45.Two or more computers linked together to share information and / or resources is referred to as a(n):A.Computer IntranetB.Computer InternetC.Computer SystemD.Computer Network46.This type of computer network is one that spans a relatively small area-often confined to a single building orgroup of buildings, and are intended to connect computers within an organization.A.Local Area NetworkB.Land Arena NetworkC.ExtranetD.Internet47.The global computer network, or “information super highway”, is the:A.WANB.IntranetC.InternetD.LAN48.A company’s privatenetwork, accessible only to the employees of that company is the:A.WANB.IntranetC.InternetD.LAN49.This computer network is similar to a company’s intranet except that it does allow access to selected outsiders,such as buyers, suppliers, distributors, and wholesalers.A.UltranetB.InternetC.ExtranetD.LAN49A.A contemporary type of computer infrastructure that is used by an increasing number of companies involves theuse of shared services, software, and / or data stored on servers at a remote location, which are accessible over anetwork, is referred to as:A.DatabaseB.Cloud ComputingC.InternetD.Relational Internet50.The use of electronic means to enhance business processes is termed:A.E-businessB.Electronic data interchangeC.Point of sale systemD.E-commerce51.The intercompany, computer-to-computer transfer of business documents in a standard business format is called:A.E-businessB.E-commerce

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1-8C.Local area networkD.Electronic data interchange52.Which of the following is NOT one of the three components of electronic data interchange?A.Commerce-encompasses all forms of electronic trading.B.Intercompany-two or more companies conducting business electronically.C.Standard business format-necessary so that the various companies can interact and trade electronically.D.Computer to computer-indicates that each company’s computers are connected via a network.53.This term refers to a system of hardware and software that captures retail sales transactions by standard barcoding.A.E-businessB.Electronic data interchangeC.Point of sale systemD.E-commerce54.When a point of sale system is used and a customer checks out through a cash register, which of the followingprocesses occur?A.Net income is computedB.Inventory values are updatedC.Accounts payable balances are updatedD.Replacement inventory is purchased55.A system of computer hardware and software in which the software matches an invoice to its related purchaseorder and receiving report is called:A.Point of sale systemB.Electronic data interchangeC.Automated matchingD.Evaluated receipt settlement56.An invoice-less system in which computer hardware and software complete an invoice-less match that is acomparison of the purchase order with the goods received is termed:A.Evaluated receipt settlementB.Automated matchingC.Electronic invoice presentation and paymentD.Enterprise resource planning57.This system enables a vendor to present an invoice to its trading partner via the internet, eliminating the paper,printing, and postage costs of traditional paper invoicing.A.Evaluated receipt settlementB.Electronic invoice presentation and paymentC.Automated matchingD.Electronic data interchange58.A multi-module software system designed to manage all aspects of an enterprise usually broken down intomodules such as financials, sales, human resources, and manufacturing, is referred to as a(n):A.Electronic data systemB.Electronic data interchangeC.Enterprise resource planningD.Electronic resource program

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1-959X.Management has the responsibility, and the ability, to take action to reduce risks or to lessen the impact al nearlyall risks an organization faces. The steps taken by management to lessen the risk or reduce the impact of the risk,are referred to as:A.ProgramsB.Risk assessmentC.Information evaluationD.Controls60.Which of the following groups of professionals within an organization have a history of designing andimplementing the controls to lessen risks?A.ManagementB.AccountantsC.Human ResourcesD.Lawyers61.Which of the following is not one of broad categories of controls?A.The risk that assets will be stolen ormisused.B.The risk of errors in accounting data or information.C.The risk of loss due to a natural disaster.D.The risk of fraudulent activity by employees.62.Which of the following is not a risk inherent in an IT system?A.Computer security breaches.B.Computers being stolen.C.Erroneous input of data.D.Hardware or software failure.63X.A comprehensive report on enterprise risk management was issued by this organization.A.American Accounting AssociationB.New York Stock ExchangeC.Institute of Internal AuditorsD.Committee on Sponsoring Organizations64.A process, effected by an entity’s board of directors, management and other personnel, applied in strategy settingand across the enterprise, designed to identify potential events that may effect the entity, and manage risk to bewithing its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives isreferred to as:A.Enterprise resource planningB.Enterprise risk managementC.IT system control structureD.Corporate governance structure65.In order to achieve the objective of managing risk, management should establish control structures that include,at a minimum:A.Accounting internalcontrols.B.Accounting internal controls, IT controls, corporate governance, enterprise risk management, and ITgovernance.C.IT controls, IT governance, corporate governance, and accounting internal controls.D.IT controls and accounting internal controls.

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1-1066.The company’s development and adherence to this should reduce the opportunities for managements oremployees to conduct fraud.A.Code of ethicsB.Internal control structureC.Application controlsD.Corporate governance67X.The COSO report, Internal Controls–Integrated Framework, identified interrelated components of internalcontrol. Which of the following isnotone of those components?A.MonitoringB.Risk assessmentC.Control activitiesD.Enterprise risk management68.IT controls can be divided into two categories. Which of the following is a correct statement of one of thosecategories?A.Application controls apply overall to the IT accounting system.B.Application controls apply to the prevention of erroneous or incomplete input or processing of data.C.Application controls are used specifically in accounting applications to control inputs, processing, andoutput.D.Application controls are used to prohibit fraudulentfinancial reporting.69.An elaborate system of checks and balances, whereby a company’s leadership is held accountable for buildingshareholder value and creating confidence in the financial reporting processes, is referred to as:A.Enterprise risk managementB.Corporate governanceC.Application controlsD.Internal control structure70.The purpose of this 2002 act was to improve financial reporting and reinforce the importance of corporate ethics.A.Foreign Corrupt Practices ActB.Sarbanes-Oxley ActC.Securities and Exchange ActD.Treadway Act71.Which of the following is not one of the corporate functions interrelated within the corporate governance system?A.Management OversightB.Ethical ConductC.Risk AssessmentD.Financial Stewardship72.The proper management, control, and use of IT systems are known as:A.IT GovernanceB.IT ControlsC.IT Risk ManagementD.IT Code of Ethics73.Accountants have several possible rolesrelated to accounting information systems. Which of the following is notnormally one of those roles?A.Auditor of an AISB.User of the AIS

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1-11C.Programmer of the AISD.Design of the AIS74.There are many reasons for accountants to become aware of potential unethical behaviors. Which of thefollowing is not one of the reasons identified by the authors?A.Accountants are responsible for identifying unethical and illegal activities.B.Accounts assist in developing and implementing internal control structures that should decrease the chanceof unethical actions.C.Accountants are often pressured to assist in, or cover up, unethical actions.D.Accountants deal with assets or records that could easily tempt accountants to engage in unethicalbehavior.ANSWERS TO TEST BANK–CHAPTER 1–MULTIPLE CHOICE:11.B24.A37.D50.A63X.D12.C25.C38.A51.D64.B13.B26.A39.B52.A65.C14.A27.D40.C53.C66.A15.D28.A41.D54.B67X.D16.A29.B42.D55.C68.C17.B30.D43.B56.A69.B18.C31.C44.A57.B70.B19.D32.C45.D58.C71.C20.B33.B46.A59X.D72.A21.B34.C47.C60.B73.C22.A35.B48.B61.C74.A23.D36.B49.C62.B49A.BTEST BANK–CHAPTER 1–TRUE/FALSE:75.A business process has a well-defined beginning and end.TRUE76.Each business process has a direct effect on the financial status of an organization.FALSE: The process could have an indirect effect.77.Fewaccounting information systems rely on computer hardware and software to track business processes.FALSE: Most accounting information systems rely on computer hardware and software.78.The rethinking and redesigning that occur during business process reengineering are aided by the use ofinformation technology.TRUE79.There are very few business processes that have the potential to be improved by IT enablement.FALSE80.Business process reengineering should leverage the capabilities of information technology to improve theefficiency of business processes.TRUE81.It is important for accountants to have some understanding of basic computer terminology.

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1-12TRUE82.When files are organized as sequential access, and the user needs to access record number 250, the previous 249records will be read by the computer before reading record number 250.TRUE83.When files are organized as sequential access, the sequence is normally based on one key record in each file.FALSE: the key is a field–not a record84.Batch processing is best suited to applications that have large volumes of similar transactions that can beprocessed as regular intervals.TRUE85.Online processing is the opposite of real-time processing.FALSE: Online processing is the opposite of batch processing.86.Batch processing is best suited to sequential access files.TRUE87.Online processing is best suited to sequential access files.FALSE: random access files, not sequential access files.88.Online processing is best suited to situations were there is a large volume of records but only a few records areneeded to process any individual transaction.TRUE89.Each time a new transaction is completed, parts of the data warehouse must be updated.FALSE:parts of the operational database must be updated.90.Data in the data warehouse are called nonvolatile because they do not change rapidly in the same way thatoperational data change.TRUE91.A system of local area networks connected over any distance via other net work connections is called a WAN, orwide area network.TRUE92.E-business is a type of e-commerce.FALSE: e-commerce is a type of e-business93.The “intercompany” component of electronic data interchange means that two or more companies are conductingbusiness electronically.TRUE94.In order to have an automated matching system it is necessary to have access to paper copies of purchase ordersand invoices.FALSE: All of therelated files need to be online.95.When automated matching is used, the system will not approve an invoice for payment unless the items andquantities match with the packing slip and the prices match the purchase order prices.TRUE

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1-1396.The evaluated receipt settlement system is an IT enabled system that reduces the time and cost of processingcustomer payments.FALSE: processing vendor payments.97.ERP systems are based on a relational database system.TRUE98.Traditional accounting software is much more comprehensive and encompassing that ERP software.FALSE99.Before ERP software systems, modules such as human resources were in separate software but well integratedwith the accounting software.FALSE:were NOT wellintegrated.100.Although accountants are heavily involved in the creation, implementation, and monitoring of the controlstructure, management has the ultimate responsibility to establish a control environment.TRUE101.Once a company has decided on the control processes needed, it is not necessary to have an ongoing assessmentof risks.FALSE:it is necessary to have an ongoing assessment of risks.102.A code of ethics should reduce opportunities for employees to conduct fraud if management emphasizes the costand disciplines or discharges those who violate it.TRUE103.IT systems are to be chosen and implemented to support the attainment of strategies and objectives.TRUE104.It is likely that an accountant will select acareer path, within accounting, that will not in some way, involve the useof an accounting information system.FALSE105.An auditor cannot make informed decisions necessary to complete the audit without an understanding of theaccounting information system.TRUE106.The accounting information system is often the tool used to commit or cover up unethical behavior.TRUEANSWERS TO TEST BANK–CHAPTER 1–TRUE/FALSE:75.True82.True89.False96.False103.True76.False83.False90.True97.True104.False77.False84.True91.True98.False105.True78.True85.False92.False99.False106.True79.False86.True93.True100.True80.True87.False94.False101.False81.True88.True95.True102.True

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ACCOUNTING INFORMATION SYSTEMS/2eTURNER / WEICKGENANNTTest Bank: CHAPTER 3:Fraud, Ethics, and Internal ControlNOTE: All new or adjusted questions are inred.New questions are identified by the letter A as part ofthe question number; adjusted questions are identified by the letter X as part of the question number.End of Chapter Questions:1.The careful and responsible oversight and use of the assets entrusted to management iscalled:A.Control environmentB.StewardshipC.Preventive controlD.Security2.Which of the following is not a condition in the fraud triangle?A.RationalizationB.IncentiveC.ConversionD.Opportunity3.There are many possible indirect benefits to management when management fraudoccurs. Which of the following innotan indirect benefit of management fraud?A.Delayed exercise of stock options.B.Delayed cash flow problems.C.Enhanced promotion opportunities.D.Increased incentive-based compensation.4.Which of the following isnotan example of employee fraud?A.SkimmingB.LarcenyC.KickbacksD.Earnings management5.Which of the following isnota common form of employee fraud?A.Inventory theftB.Expense account fraudC.Payroll fraudD.Refund fraud6.Segregation of duties is a fundamental concept in an effective system of internalcontrols. Nevertheless, the effectiveness of this control can be compromised throughwhich situation?A.A lack of employee trainingB.Collusion among employeesC.Irregular employee reviewsD.The absence of an internal audit function

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7.The most difficult type of misstatement to discover is fraud that is concealed by:A.Over-recording the transactionsB.Nonrecorded transactionsC.Recording the transactions in subsidiary recordsD.Related parties8.The review of amounts charged to the company from a seller that itpurchased from iscalled a:A.Vendor auditB.Seller reviewC.CollusionD.Customer review9.Which of the following is generally an external computer fraud, rather than an internalcomputer fraud?A.SpoofingB.Input manipulationC.Program manipulationD.Output manipulation10.Which control activity is intended to serve as a method to confirm the accuracy orcompleteness of data in the accounting system?A.AuthorizationB.Segregation of dutiesC.Security of assetsD.Independent checks and reconciliations11.COSO describes five components of internal control. Which of the following terms isbest described as “policies and procedures that help ensure management directives arecarried out and management objectives are achieved”?A.Risk assessmentB.Information and communicationC.Control activitiesD.Control environment12.Proper segregation of functional responsibilities calls for separation of the functions of:A.Authorization, execution, and paymentB.Authorization, recording, and custodyC.Custody, execution, and reportingD.Authorization, payment, and recording13.AICPA Trust Principles identify five categories of risks and controls. Which category isbestdescribed by the statement, “Information process could be inaccurate, incomplete,or not properly authorized”?A.SecurityB.AvailabilityC.Processing integrityD.Confidentiality

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