Deck 1: Accounting Information Systems and the Accountant

Question 1

One of the motivations for SAR is to identify money laundering activities.

Answer 1

True

Question 2

The authors consider accountants to be "knowledge workers."

Answer 2

True

Question 3

The acronym ERP stands for "electronic reporting plan."

Answer 3

False

Question 4

The acronym AIS stands for "Accounting Information Standards."

Question 5

As used in this chapter, the acronym SAR stands for "suspicious accounting reporting."

Question 6

Accounting information systems must be computerized to be effective.

Question 7

The term information overload refers to providing too much data to management, often resulting in managers ignoring it.

Question 8

The path that data follow in an AIS, for example from manual source document to completed output report, is called an audit trail.

Question 9

Predictive analytics use large data warehouses to help organizations improve performance by predicting future outcomes.

Question 10

The term "Patriot" in the "Patriot Act of 2001 is an acronym for "providing appropriate tools required to intercept and obstruct terrorism."

Question 11

The starting point for an audit trail of a weekly payroll system might be an employee time card.

Question 12

In order to be useful, raw accounting data must be processed by a computer.

Question 13

A company's audit trail is normally easier to follow under a manual data processing system compared to a computerized information processing system.

Question 14

Sections of the Patriot Act mandate suspicious activity reporting.

Question 15

The starting point for an audit trail of a production department might be the purchase order for raw materials.

Question 16

It is best to view an AIS as an accounting system that must be computerized.

Question 17

An advantage of computerized AISs is that they do not need to be programmed to catch simple input errors such as entering "4.0" instead of "40.0" for hours worked in a payroll application.

Question 18

The acronym ERP stands for "enterprise reporting system."

Question 19

Computers tend to make audit trails easier to follow because everything is computerized.

Question 20

AISs often create information that is useful to non-accountants.

Question 21

Accounting systems are useful for performing accounting tasks, but cannot be used for such security purposes as countering terrorism.

Question 22

Accounting rules do not allow for any flexibility in financial reporting by management.

Question 23

As used in chapter 1, the term "dashboard" refers to a quick and easy plan to install a computerized accounting system in an organization.

Question 24

One major difference between financial accounting and managerial accounting is that financial accountants use dashboards while managerial accountants do not.

Question 25

"Cost accounting" is a subset of managerial accounting.

Question 26

The Sarbanes-Oxley Act prohibits companies from using the same auditing firms for performing both auditing and management consulting services.

Question 27

In a responsibility accounting system, managers trace unfavorable performance to the department or persons causing the inefficiencies.

Question 28

A major output of financial accounting is the preparation of financial statements such as an income statement.

Question 29

An example of a financial report that would be prepared by a managerial accountant (instead of a financial accountant)is a budget report.

Question 30

The Sarbanes-Oxley Act allows CPA firms to help clients acquire, install and use information systems and to also act as those clients' external auditor.

Question 31

The purpose of the assurance services of an accounting firm is to give a company's managers moral support when they are audited by the federal or state government.

Question 32

Cloud computing is a way of using business applications over the Internet.

Question 33

A consulting service provided by CPA firms is risk assessment.

Question 34

XBRL is a business reporting language that is used to define interactive financial data.

Question 35

The series of steps leading from data recorded in transaction records to the information reported on financial statements is called the accounting cycle.

Question 36

An ABC inventory system refers to an "activity-based costing" system.

Question 37

As used in Chapter 1, a dashboard is an up-to-the-minute graphic depiction of key performance measures.

Question 38

An example of a corporate scandal that was mentioned in this chapter is the Enron case.

Question 39

One major difference between financial accounting and managerial accounting is that financial accountants prepare financial statements for external investors while managerial accountants prepare financial statements for internal managers.

Question 40

AISs are only concerned with financial information.

Question 41

Which of the following best describes a data warehouse?

A)A repository of historical information from one accounting application
B)A repository of historical information from a set of accounting applications
C)A repository of information from a wide range of services-some not accounting-stored within a company
D)A repository of information from many businesses in the same industry

Question 42

Students majoring in AIS are unlikely to assume jobs in traditional accounting positions because they know too much.

Question 43

Because accountants are not normally computer programmers working within the information processing subsystem, it is unnecessary for them to understand the capabilities and limitations of computers.

Question 44

Today's AIS is an enterprise-wide information system that focuses on interdepartmental business processes.

Question 45

Activity-based costing systems focus on allocating overhead on the basis of direct labor hours used.

Question 46

The letter "P" in the acronym "ERP" stands for:

A)Production
B)Planning
C)Project
D)none of these

Question 47

As a result of computerized information processing systems in many organizations today, the need for accountants in these organizations has significantly declined.

Question 48

Managerial accounting principally provides decision?making information to a company's internal managers.

Question 49

The "S" in the acronym "AIS" stands for:

A)Standard
B)System
C)Symbol
D)none of these

Question 50

Which of the following captures the same idea as the term "Garbage In Garbage Out?"

A)Too much information is the same as garbage
B)The quality of computer output is determined by the quality of the input
C)Great investments lead to great returns
D)Too many cooks spoil the broth

Question 51

An example of a value-added reseller (VAR)is a dealer who sells software but does not help with the installation, training and customization of that software for the customer.

Question 52

Which of the following is true about the terms "data" and "information" within the context of Chapter 1?

A)These terms are exactly the same
B)These terms are exact opposites
C)Processed "data" becomes "information"
D)none of these

Question 53

The CISA is an acronym for a professional accounting certification.

Question 54

One possible career for AIS majors is in the traditional area of financial or managerial accounting.

Question 55

Some possible career opportunities for AIS majors or minors include consulting positions, computerized auditing, or computer security positions.

Question 56

Within the traditional AIS, a sales order would not be considered an accounting transaction.

Question 57

A good audit trail within the financial accounting system should allow a manager or auditor to trace any source document back from a report to the original data entry.

Question 58

There are limited career opportunities available for students who study both accounting and information systems.

Question 59

"CPA Trust Services" performed by a CPA provides assurance that a company engaged in electronic commerce has an information system that is secure.

Question 60

Accountants are usually classified as "line workers" within business organizations.

Question 61

Which of these would be considered suspicious activities under current SAR rules?

A)Money laundering
B)Bribing officials
C)Transferring money to suspected terrorists
D)all of these

Question 62

The P in the acronym KPI stands for:

A)Processing
B)Performance
C)Planning
D)Personnel
E)none of these

Question 63

Which of these businesses is not required to report suspicious activities under current federal laws?

A)Banks
B)Money service organizations
C)Commodity Traders
D)Mutual fund dealers
E)All of these businesses must engage in SAR

Question 64

Most AISs perform all of these functions except:

A)Collect raw accounting data
B)Store accounting data for future uses
C)Process data into useful information
D)AISs perform all of these functions

Question 65

What is the first step to be performed by most organizations in their accounting cycles?

A)Recording business transactions in a journal
B)Preparing a trial balance
C)Recording closing entries in a journal
D)Preparing transaction source documents
E)none of the above

Question 66

What has been the effect on accountants in those organizations which have computerized their data processing functions?

A)The need for accountants has disappeared
B)The accountants have become "pure" bookkeepers
C)The accountants have become involved in more decision?making activities
D)The accountants' decision?making activities have drastically declined

Question 67

Bernard Madoff is most closely associated with which of the following terms?

A)The father of activity-based costing systems
B)SAR
C)Ponzi scheme
D)Sarbanes-Oxley Act of 2002
E)Key sponsor of the Patriot Act

Question 68

An example of an assurance service for a company engaged in electronic commerce is:

A)XBRL
B)Trust US
C)CITP
D)CPA Trust Services

Question 69

The process by which a financial transaction is recorded so that its flow through the system can be followed is called:

A)Financial shadowing
B)Managerial trace technique
C)Concatenation
D)An audit trail

Question 70

Which of these is a business reporting language often used in recording or transmitting accounting data?

A)XBRL
B)XFile
C)ABC
D)Accounting Live

Question 71

Managerial accounting principally provides information to:

A)Stockholders
B)Government regulators (e.g., SEC, Federal bank examiners)
C)Internal company management
D)Potential creditors

Question 72

Many accountants feel that the most important part of the Sarbanes-Oxley Act is:

A)Its anti-terrorist provisions
B)Its provisions requiring the reporting of suspicious activities
C)Section 404 on internal controls
D)Section 505 on money laundering

Question 73

All of the following are possible uses of AIS or accounting personnel that were discussed in the chapter except:

A)Countering terrorism
B)Foiling future accounting scandals
C)Providing assurance services
D)Performing monetary exchanges

Question 74

For performance reports to achieve their control objectives, they must:

A)Include relevant information so that necessary action may be taken to accomplish organizational goals
B)Be timely so that minimal time elapses between an activity's occurrence and the feedback reflecting the activity's efficient or inefficient performance
C)Provide subsystem managers with suggestions as to how they can operate their subsystems more efficiently
D)all of the above
E)a and b only

Question 75

Historically, financial data used in one application was not easily transferable to other applications.However, the problem was fixed with which one of the following?

A)XMP
B)ERP
C)XBRL
D)XMLP

Question 76

Which of the following accounting functions has been automated by most companies' information processing subsystems?

A)Posting to ledgers
B)Recording journal entries
C)Preparing trial balances
D)all of the above

Question 77

Which of the following is not a component of the balanced scorecard?

A)Customer knowledge
B)Internal business processes
C)Transaction processing
D)Financial performance

Question 78

Suspicious activity reporting:

A)Only applies to banking transactions
B)Is mandated by state, but not federal, regulations
C)Is mostly concerned with embezzlement issues
D)Requires CPAs to report questionable financial transactions to the U.S.Treasury Department.

Question 79

Which of these statements best describes the relationship between "AISs" and "countering terrorism?"

A)These are completely independent items; there is no relationship
B)AISs can help counter terrorism by providing SAR evidence
C)AISs can help by denying financial aid to terrorist groups
D)AISs can help by identifying international embezzlers

Question 80

As used in the chapter, the term "knowledge workers":

A)Are blue collar workers in non-managerial positions
B)Are the same as delivery clerks
C)Include most accountants
D)Does not include most accountants