Deck 1: Introduction to Accounting Information Systems

Question 1

The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of financial accountants and auditors.

Answer 1

True

Question 2

According to the Sarbanes-Oxley Act's Section 409, material changes in the organization's financial condition must be disclosed to the public on a rapid and current basis.

Answer 2

True

Question 3

Internal control is a process that provides complete assurance that the organization is meeting its objectives, such as efficiency and effectiveness of operations and reliable reporting.

Answer 3

False

Question 4

Billing/accounts receivable is traditionally part of the AIS.

Question 5

According to the Sarbanes-Oxley Act of 2002 and PCAOB Auditing Standard No. 5, management must audit and report on auditors' assertions about the organizations' systems of internal controls.

Question 6

Enterprise systems integrate an organization's business processes and information from all of an organization's functional areas.

Question 7

The three themes of the text are operating systems, e-business, and internal control.

Question 8

The role of the accountant has evolved to include non-financial information and information technology.

Question 9

The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not-for-profit entities.

Question 10

The MIS is a subsystem of the AIS.

Question 11

Sarbanes-Oxley Section 404 compliance is a major line of business for the biggest accounting firms.

Question 12

An information system consists of an integrated set of computer-based and manual components established to provide information to users.

Question 13

The Sarbanes-Oxley Act's Section 404 creates changes in both how companies document and evaluate internal control and how auditors audit and report on internal control.

Question 14

Historically the purpose of an accounting information system is to collect, process, and report financial aspects of business events.

Question 15

E-business is the application of electronic networks to undertake business processes among the functional areas in an organization.

Question 16

Production and personnel are part of the operations process.

Question 17

Information systems reliability and electronic commerce have been identified by the AICPA as potential assurance services.

Question 18

Sales/marketing information system is traditionally part of the AIS.

Question 19

It is critical for accountants to understand enterprise resource planning (ERP) systems.

Question 20

According to the Sarbanes-Oxley Act of 2002, management must identify, document, and evaluate significant internal controls.

Question 21

Information that is capable of making a difference in a decision-making situation, by reducing uncertainty or increasing knowledge for that particular decision, has the quality of relevance.

Question 22

Information has understandability when it is capable of making a difference in a decision-making situation..

Question 23

Information about a customer's credit history that is received after the decision to grant additional credit lacks completeness.

Question 24

A system that consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users is a(n)

A) output
B) ERP
C) database
D) information system

Question 25

A system can be further divided into

A) input data
B) subsystems
C) databases
D) enterprise systems

Question 26

A set of interdependent elements that together accomplish specific objectives is a

A) system
B) subsystem
C) database
D) accounting information system

Question 27

Deciding how much credit to grant to a customer is a structured decision.

Question 28

The management process includes marketing and sales.

Question 29

Operations management requires information that is more accurate and timely than strategic management.

Question 30

Strategic managers use more information from outside the organization than do operations managers.

Question 31

The three themes of the text book include all of the following except:

A) enterprise systems
B) risk assessment
C) e-business
D) internal control

Question 32

As a designer of an AIS the accountant will test a new system's controls.

Question 33

The most important information for tactical management involves information about the organization's environment.

Question 34

The consistency principle is violated when a firm uses straight-line depreciation one year and changes to declining balance depreciation the next year.

Question 35

Accuracy is the correspondence or agreement between the information and the actual events or objects that the information represents.

Question 36

Strategic management requires more detailed information than operations management.

Question 37

Efficiency and effectiveness of operations are goals of:

A) enterprise systems
B) risk assessment
C) e-business
D) internal control

Question 38

The three steps in decision making take place in the sequence of (1) intelligence (2) design (3) choice.

Question 39

What controls will be necessary is a question that an accountant answers in the design of the AIS.

Question 40

As a user of an AIS an accountant may be called upon to participate in the AIS design process.

Question 41

All of the following are components of reliability except:

A) validity
B) accuracy
C) verifiability
D) feedback value

Question 42

____ is (are) data presented in a form that is useful to decision makers.

A) Activities
B) Information
C) Objectives
D) Goals

Question 43

Which of the following is NOT a business processes element?

A) Business operations
B) Events processing
C) Management decision making
D) Technology

Question 44

All of the following are components of relevance except:

A) feedback value
B) predictive value
C) verifiability
D) timeliness

Question 45

A man-made system consisting of people, authority, organization, policies and procedures whose objective is to accomplish the work of planning and controlling the operations of the organization.

A) operations process
B) management process
C) information process
D) planning process

Question 46

An information system:

A) is composed of only the computer-based information resources of an organization
B) may consist of both computer-based and manual components
C) is different from a data processing system because it uses computers
D) is not generally used for transaction processing

Question 47

A man-made system consisting of people, equipment, organization, policies and procedures with the objective of accomplishing the work of the organization.

A) operations process
B) management process
C) information process
D) planning process

Question 48

The AICPA has identified all but which of the following as assurance services?

A) consulting
B) information systems reliability
C) electronic commerce
D) All of these are assurance services identified by the AICPA.

Question 49

Which of the following statements is false?

A) Management designs the operations and information processes and establishes these processes with people, equipment, and policies.
B) Information process users include operations personnel, management, and people outside the organization.
C) Operations related and accounting related processes are designed by those external to the organization.
D) None of the statements are false.

Question 50

The sequence of components in the functional model of an information system is

A) Output, Input, Processing, Users
B) Input, Processing, Output, Users
C) Processing, Input, Users, Output
D) Users, Processing, Input, Output

Question 51

According to the ____, one of the responsibilities of accountants is to assess financial operations and make best-practices recommendations to management.

A) AICPA
B) Sarbanes-Oxley Act of 2002
C) Occupational Outlook Handbook
D) Accounting Information System

Question 52

The three logical components of a business process include all of the following except:

A) management process
B) operations process
C) information process
D) organization process

Question 53

____ improves the decision maker's capacity to predict, confirm, or correct earlier expectations

A) Understandability
B) Feedback value
C) Neutrality
D) Comparability

Question 54

Historically, the relationship between an information system and an accounting information system has been:

A) the AIS is a part of the IS
B) the IS is a part of the AIS
C) the IS and the AIS are one in the same
D) the IS and AIS are unrelated

Question 55

Which of the following statements is true?

A) The information process facilitates operations by maintaining data such as inventory and customer data.
B) The information process provides the means by which management monitors the operations process.
C) Management designs the operations and information processes.
D) All of the statements are true.

Question 56

Internal control is a process designed to provide absolute assurance regarding achieving objectives in which of the following?

A) efficiency and effectiveness of operations
B) reliability of reporting
C) compliance with applicable laws and regulations
D) none of the above

Question 57

The Sarbanes-Oxley Act of 2002 dramatically changed the daily work of financial accountants and auditors because it

A) expanded the scope of the audit beyond financial information
B) required that organizations work with their auditors to design systems of internal control
C) required that external auditors report on the effectiveness of an organizations system of internal control
D) expanded the opportunities for auditors to engage in consulting activities with their audit clients

Question 58

The text takes the following view of the relationship between an IS and an AIS:

A) the AIS is part of the IS
B) the IS is part of the AIS
C) the IS and the AIS are one in the same
D) the AIS is the primary system and the IS the subsystem

Question 59

____ are facts and figures in raw form.

A) Data
B) Information
C) Objectives
D) Goals

Question 60

A man-made system that generally consists of an integrated set of computer-based components and manual components established to collect, store, and manage data and to provide output information to users.

A) information system
B) output system
C) business event system
D) database system

Question 61

The correspondence or agreement between the information and the actual events or objects that the information represents is known as

A) accuracy
B) completeness
C) neutrality
D) comparability

Question 62

Which of the following statements is false?

A) Strategic planning is relatively unstructured.
B) Strategic planning uses much information from outside the firm.
C) Tactical management focuses on relevant operations units and uses some external information.
D) Tactical management uses the most detailed and accurate information.

Question 63

Which of the following is an unstructured decision?

A) how much inventory to reorder
B) how fast an assembly line should operate
C) when scheduled maintenance should be performed
D) which research and development projects should be undertaken

Question 64

The ability of more than one individual to come to the same measurement is known as

A) accuracy
B) completeness
C) verifiability
D) comparability

Question 65

Generally, which of the following is NOT one of the three roles an accountant typically fills in relation to the AIS?

A) designer
B) programmer
C) user
D) auditor

Question 66

Which of the following is an element of the operations process?

A) production
B) planning
C) controlling
D) decision making

Question 67

At which level of the organization are decisions most unstructured?

A) operations and business event processing level
B) strategic management level
C) operations management level
D) tactical management level

Question 68

The information quality that enables users to identify similarities and differences in two pieces of information is

A) Understandability
B) Predictive value
C) Neutrality
D) Comparability

Question 69

____ requires information to assess the environment and to project future events and conditions.

A) Strategic management
B) Tactical management
C) Operations management
D) Operations and business event processing

Question 70

E-business does not include

A) business processes between individuals and organizations
B) electronic networks
C) ERP systems
D) interaction between back-office and front-office processes

Question 71

Which of the following is NOT one of the three steps in decision making as described in the text

A) action
B) intelligence
C) design
D) choice

Question 72

Structured decision

A) are usually tactical management decisions
B) require the use of an organization's AIS system.
C) are relatively routine and repetitive
D) All of the above

Question 73

Which of the following is one of the three most prominent management activities?

A) production
B) finance
C) marketing
D) planning

Question 74

Regarding management problem structure and information requirements, which of the following represents the vertical information flows from lowest to highest?

A) strategic management, tactical management, operations management, operations and business event processing
B) operations and business event processing, strategic management, tactical management, operations management
C) tactical management, operations management, strategic management, operations and business event processing
D) operations and business event processing, operations management, tactical management, strategic management

Question 75

Enterprise systems

A) integrate back-office and front-office processes
B) can include ERP systems
C) have become fairly easy to implement
D) facilitate business processes between organizations

Question 76

The central repository for all the data related to the enterprise's business activities and resources.

A) information system
B) management information system
C) enterprise database
D) strategic planning

Question 77

The degree to which information includes data about every relevant object or event necessary to make a decision is

A) accuracy
B) completeness
C) neutrality
D) comparability

Question 78

If information arrives too late to impact a decision then there is a problem with

A) timeliness
B) relevance
C) completeness
D) neutrality

Question 79

Which of the following questions might the accountant answer in the design of the AIS?

A) what will be recorded
B) what controls are necessary
C) what reports will be produced
D) all of the above

Question 80

The ____ manager may be more concerned with accuracy than with timeliness.

A) strategic
B) tactical
C) operations
D) All of the above.