Deck 1: Accounting Information Systems and Firm Value

Question 1

Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is an example of discretionary information.

Answer 1

False

Question 2

An accounting information system (AIS)is defined as being an information system that records,processes and reports on transactions to provide financial and nonfinancial information for decision making and control.

Answer 2

True

Question 3

A well-designed and well-functioning AIS can be expected to create value by providing relevant information helpful to management to increase revenues and reduce expenses.

Answer 3

True

Question 4

Information is defined as being data organized in a meaningful way that is useful to the user.

Question 5

The Certified Information Systems Auditor (CISA)is a professional designation generally sought by those performing IT audits.

Question 6

Relevant information's most defining characteristic is that it is free from bias and error.

Question 7

An enterprise system is a centralized database that collects data from throughout the firm.This includes data from orders,customers,sales,inventory and employees.

Question 8

Outbound logistics are the activities associated with receiving and storing raw materials as well as activities that transform these inputs into finished goods.

Question 9

The Certified Information Technology Professional (CITP)is a professional designation for those with a broad range of technology knowledge and does not require a CPA.

Question 10

A faithful representation of the underlying event should reflect the bias of the system analyst.

Question 11

As of today,Accounting Information Systems are all computerized.

Question 12

The main financial benefit of Customer Relationship Management practices reduces the cost of goods sold.

Question 13

Information overload is defined as the difficulty a person faces in understanding a problem and making a decision as a consequence of too much information.

Question 14

Data is defined as being information organized in a meaningful way that is useful to the user.

Question 15

Business value includes all those items,events and interactions that determine the financial health and well-being of the firm.

Question 16

The characteristics of relevant information include predictive value,feedback value and timeliness.

Question 17

A systems analyst analyzes a business problem that might be addressed by an information system and recommends software or systems to address that problem.

Question 18

A value chain is defined as the cost of performing various activities inside a firm.

Question 19

Service Activities as defined in the value chain are those activities that provide the support of customers after the products and services are sold to them (e.g.warranty repairs,parts,instruction manuals,etc. ).

Question 20

An efficient Enterprise System can significantly lower the cost of support processes included in sales,general,and administrative expenses.

Question 21

When Uber (a ride sharing application)developed their unique platform to match drivers with riders,this was an example of _____ with IT Investments which fundamentally changed how people use car services.

A)Automating
B)Informating - up
C)Transforming
D)Informating - down

Question 22

Which of the following is not an attribute of useful information?

A)Bias.
B)Feedback value.
C)Predictive value.
D)Verifiability.

Question 23

The income statement line item most likely affected by an AIS investment in enterprise systems would be:

A)Revenues.
B)Cost of Goods Sold.
C)Selling,General and Administrative Expenses.
D)Unearned Revenue.

Question 24

Enterprise Systems do not exist to facilitate decision making.

Question 25

The income statement line item most likely affected by an AIS investment in supply chain that would interface with suppliers would be:

A)Revenues.
B)Cost of Goods Sold.
C)Selling,General and Administrative Expenses.
D)Research and Development Expenses.

Question 26

The income statement account most likely affected by an AIS investment in customer relationship management (CRM)would be:

A)Revenues.
B)Cost of Goods Sold.
C)Selling,General and Administrative Expenses.
D)Unearned Revenue.

Question 27

According to a recent study,the transform IT strategic role is defined as systems that:

A)Replace human labor in automating business processes.
B)Provide information about business activities to all employees.
C)Provide information about business activities to senior management.
D)Fundamentally redefine business processes and relationships.

Question 28

The Certified Information Technology Professional is the position created by the AICPA to recognize CPAs who have the ability to provide skilled professional services on Information Technology.

Question 29

Which of the following are considered to be mandatory information required by a regulatory body?

A)Financial reports for the Securities and Exchange Commission.
B)The amount of taxes saved by a merger.
C)The total dollar value of fireworks that are sold on July 4.
D)The cost to build an all-new Starbucks restaurant in Abu Dhabi.

Question 30

The correct order of effects in the value chain are:

A)Inbound Logistics → Operations → Service.
B)Inbound Logistics → Outbound Logistics → Marketing & Sales.
C)Inbound Logistics → Operations → Outbound Logistics.
D)Inbound Logistics → Operations → Shipping.

Question 31

A supply chain system does not include information about:

A)Current customers.
B)Prospective customers.
C)Availability of inventory.
D)Current suppliers.

Question 32

Which designation would be most appropriate for those professionals possessing IT audit,control and security skills?

A)Certified Internal Auditor (CIA).
B)Certified Public Accountant (CPA).
C)Certified Information Technology Professional (CITP).
D)Certified Information Systems Auditors (CISA).

Question 33

According to a recent study,the informate-up IT strategic role is defined as systems that:

A)Replace human labor in automating business processes.
B)Provide information about business activities to all employees.
C)Provide information about business activities to senior management.
D)Fundamentally redefine business processes and relationships.

Question 34

Accounting information systems:

A)Are always computerized.
B)Report only accounting information.
C)Include records,processes and reports.
D)Are for computer games.

Question 35

The IT strategic roles of AIS investments are classified as:

A)Automate,Informate,Transform.
B)Value creation,Value Destruction,Value Neutral.
C)Digitize,Report,Transform.
D)Automate,Digitize,Transport.

Question 36

Many fast food restaurants now have kiosks where customers can order without speaking to an employee.This is an example of the _____ strategic role.

A)Automate
B)Informate- up
C)Transform
D)Informate- down

Question 37

Which designation is for CPAs with a broad range of technology knowledge and experience?

A)Certified Internal Auditor (CIA).
B)Certified Public Accountant (CPA).
C)Certified Information Technology Professional (CITP).
D)Certified Information Systems Auditors (CISA).

Question 38

A supply chain:

A)Refers to the supplies needed to build products.
B)Refers to the flow of materials,information,payments and services.
C)Refers to how costs are tracking in an AIS.
D)Does not apply to a service firm like an accounting firm.

Question 39

The Sarbanes-Oxley Act of 2002 is a federal law in the United States that set new and enhanced standards for all U.S.public companies,their management and public accounting firms.

Question 40

CRM software often includes the use of database marketing tools to learn more about the customers and to develop strong firm-to-customer relationships.

Question 41

Which of the following is usually the primary objective for companies when creating mandatory information?

A)Increase stock price.
B)Minimize cost.
C)Improve business decisions.
D)Ensure proper controls over business processes.

Question 42

The primary transformation of data into information takes place in which of the following activities?

A)Input.
B)Storage.
C)Processing.
D)Output.

Question 43

A dental practice implemented an upgrade to its AIS that provides the dentists with daily and weekly patient and financial summaries.The practice's upgrade is an example of which IT strategic role?

A)Automate.
B)Informate - up.
C)Transform.
D)Informate - down.

Question 44

Which of the following is not a primary activity in the Value Chain?

A)Outbound Logistics.
B)Marketing.
C)Inbound Logistics.
D)Information Technology.

Question 45

Investors reward companies most that announce IT initiatives with which type of strategic role?

A)Automate.
B)Informate - up.
C)Transform.
D)Informate - down.

Question 46

The role of accountants in accounting information systems include all except:

A)User.
B)Manager.
C)Coder.
D)Evaluator.

Question 47

The Information Value Chain is defined as:

A)The flow of materials,information,payments,and services.
B)The use of computer technology to provide information about business activities to employees across the firm.
C)The overall transformation of data from a business need to the ultimate decision.
D)A centralized database that collects data from throughout the firm.

Question 48

One of the most important ways that ERPs benefit organizations and their business processes is:

A)Current information is made available to all users involved in the activities and decisions associated with a company's business processes.
B)Information is stored in many specialized,distributed databases that each serve separate business processes.
C)Reducing the amount of time to complete business processes by eliminating all controls associated with the processes.
D)Preventing external business partners from accessing the organization's data.

Question 49

Which of the following diagrams most accurately illustrates an information system?

A)
B)
C)
D)

Question 50

Effective use of Supply Chain Management software is generally expected to provide all of the following benefits except:

A)Reduced inventory carrying costs.
B)Lower production costs.
C)Lower payroll costs.
D)Better communications with suppliers.

Question 51

Which of the following systems would a company be most likely to employ for the primary purpose of generating additional sales revenue?

A)MDBMS.
B)CRM.
C)SCM.
D)OCR.

Question 52

The Sarbanes-Oxley Act of 2002 requires that a company's attest auditors be able to perform which of the following activities?

A)Evaluate the internal controls in an AIS.
B)Assess the value of a company's IT assets.
C)Take over the company's AIS if necessary.
D)Design and implement the controls used in the AIS.

Question 53

Consider the non-profit organization Doctors without Borders (Médecins Sans Frontières),a Nobel Peace Prize winning organization that provides medical services in war zones and developing countries.For this type of organization,which of the following would likely be the best measure of business value?

A)Fund balance (i.e. ,the net of revenues less expenditures).
B)Lives saved.
C)Donations raised.
D)Volunteers deployed.

Question 54

A simple information system includes all but the following elements except:

A)Processing.
B)Storage.
C)Input.
D)Reporting.

Question 55

Which of the following statements is most true:

A)Relevant information does not help predict the future.
B)There are sometimes tradeoffs between information that is relevant and a faithful representation.
C)Information must always be audited to be insightful an organization.
D)Information does not need to be neutral or free from bias.

Question 56

Customer Relationship Management is best defined as:

A)A system used to manage and nurture a firm's interactions with its current and potential customers.
B)A system used to track a customer's past purchases.
C)A system used to connect a firm's suppliers with a firm's customers.
D)A system used to advertise current items on sale to customers.

Question 57

Which of the following is an example of information as opposed to just data:

A)Number of dresses sold.
B)Color of dresses sold.
C)Dress sales in Michigan at Walmart Store #3458.
D)Types of dresses sold per region and season.

Question 58

Discretionary information is most likely to be used in which of the following activities?

A)Preparing required Environmental Protection Agency emissions reports.
B)Filing a 10-K with the SEC.
C)Management decision-making.
D)Payroll tax reporting.

Question 59

Branch profitability is an example of:

A)Information overload.
B)Mandatory information.
C)Discretionary information.
D)Enterprise System.

Question 60

Bob's manager complains that Bob suffers from "Analysis Paralysis;" that is,he spends too much time reviewing endless reports and is reluctant to make decisions.Bob most likely suffers from _____.

A)Data gridlock.
B)Discretionary information.
C)Information overload.
D)Data redundancy.