Deck 1: The Information System: An Accountant’s Perspective

Question 1

Most of the inputs to the General Ledger System come from the Financial Reporting System.

Answer 1

False

Question 2

Information lacking reliability may still have value.

Answer 2

False

Question 3

One of the greatest disadvantages of database systems is that all data is always available to all users.

Answer 3

False

Question 4

The internal auditor represents the interests of third-party outsiders.

Question 5

Increased control is one of the key advantages of distributed data processing.

Question 6

A backbone system is completely finished,tested,and ready for implementation.

Question 7

An information system is an example of a natural system.

Question 8

Information is a business resource.

Question 9

In a flat-file system,files are easily shared by users.

Question 10

Information Technology (IT)audits can be performed by both internal and external auditors.

Question 11

When preparing discretionary reports,organizations can choose what information to report and how to present it.

Question 12

The Management Reporting System provides the internal financial information needed to manage a business.

Question 13

The single largest user of computer services is the personnel function.

Question 14

Systems development represents 80 to 90 percent of the total cost of a computer system.

Question 15

Legacy systems were eliminated in the effort to make systems Y2K compliant.

Question 16

The database administrator is responsible for the security and integrity of the database.

Question 17

Retrieval is the task of permanently removing obsolete or redundant records from the database.

Question 18

Transaction processing systems convert non-financial transactions into financial transactions.

Question 19

The flat-file approach is most often associated with so-called legacy systems.

Question 20

A balance sheet prepared in conformity with GAAP is an example of discretionary reporting.

Question 21

Under SOX legislation public accounting firms are no longer allowed to provide consulting services to their clients.

Question 22

The value of information for users is determined by all of the following but

A) reliability
B) relevance
C) convenience
D) completeness

Question 23

Which of the following is not a business resource?

A) raw material
B) labor
C) information
D) all are business resources

Question 24

Under SOX legislation public accounting firms are no longer allowed to provide consulting services to audit clients.

Question 25

The Transaction Processing System includes all of the following cycles except

A) the revenue cycle
B) the administrative cycle
C) the expenditure cycle
D) the conversion cycle

Question 26

Which level of management is responsible for short-term planning and coordination of activities necessary to accomplish organizational objectives?

A) operations management
B) middle management
C) top management
D) line management

Question 27

When designing the data collection activity,which type of data should be avoided?

A) data that is relevant
B) data that is efficient
C) data that is redundant
D) data that is accurate

Question 28

Which subsystem is not part of the Accounting Information System?

A) Transaction Processing System
B) Expert System
C) General Ledger/Financial Reporting System
D) Management Reporting System

Question 29

Effective information has all of the following characteristics except

A) relevance
B) completeness
C) summarization
D) structure

Question 30

In a database,a complete set of attributes for a single occurrence of an entity class is called

A) a key
B) a file
C) a record
D) a character

Question 31

Database management tasks do not include

A) summarization
B) storage
C) retrieval
D) deletion

Question 32

The author distinguishes between the Accounting Information System and the management Information System based on

A) whether the transactions are financial or nonfinancial
B) whether discretionary or nondiscretionary reports are prepared
C) the end users of the reports
D) the organizational structure of the business

Question 33

An example of a nonfinancial transaction is

A) sale of products
B) cash disbursement
C) log of customer calls
D) purchase of inventory

Question 34

An example of a financial transaction is

A) the purchase of computer
B) a supplier's price list
C) a delivery schedule
D) an employee benefit brochure

Question 35

The major difference between the Financial Reporting System (FRS)and the Management Reporting System (MRS)is the

A) FRS provides information to internal and external users; the MRS provides information to internal users
B) FRS provides discretionary information; the MRS provides nondiscretionary information
C) FRS reports are prepared using information provided by the General Ledger System; the MRS provides information to the General Ledger System
D) FRS reports are prepared in flexible, nonstandardized formats; the MRS reports are prepared in standardized, formal formats

Question 36

The primary input to the Transaction Processing System is

A) a financial transaction
B) an accounting record
C) an accounting report
D) a nonfinancial transaction

Question 37

The ability to achieve the goals of a system depends upon the effective functioning and harmonious interaction between its subsystems.This is called

A) system decomposition
B) system redundancy
C) backup system
D) subsystem interdependency

Question 38

The purpose of the Transaction Processing System includes all of the following except

A) converting economic events into financial transactions
B) recording financial transactions in the accounting records
C) distributing essential information to operations personnel to support their daily operations
D) measuring and reporting the status of financial resources and the changes in those resources

Question 39

Which level of management is responsible for controlling day-to-day operations?

A) top management
B) middle management
C) operations management
D) executive management

Question 40

The most basic element of useful data in the database is

A) the record
B) the key
C) the file
D) the attribute

Question 41

Which of the following is not part of the accounting function?

A) managing the financial information resource of the firm
B) capturing and recording transactions in the database
C) distributing transaction information to operations personnel
D) managing the physical information system of the firm

Question 42

Attestation services are performed by

A) external auditors
B) internal accountants
C) internal auditors
D) third-party accountants

Question 43

Which activity is not part of the finance function?

A) cash receipts
B) portfolio management
C) credit
D) general ledger

Question 44

The objectives of all information systems include all of the following except

A) support for the stewardship function of management
B) evaluating transaction data
C) support for the day-to-day operations of the firm
D) support for management decision making

Question 45

Which individuals may be involved in the Systems Development Life Cycle?

A) accountants
B) systems professionals
C) end users
D) all of the above

Question 46

All of the following are external end users except

A) cost accountants
B) creditors
C) stockholders
D) tax authorities

Question 47

Market research and advertising are part of which business function?

A) materials management
B) finance
C) marketing
D) production

Question 48

The term "accounting independence" refers to

A) data integrity
B) separation of duties, such as record keeping and custody of physical resources
C) generation of accurate and timely information
D) business segmentation by function

Question 49

An appraisal function housed within the organization that performs a wide range of services for management is

A) internal auditing
B) data control group
C) external auditing
D) database administration

Question 50

Which individual is least involved in new systems development?

A) systems analyst
B) external auditor
C) end user
D) data librarian

Question 51

In the distributed data processing approach

A) computer services are consolidated and managed as a shared organization resource
B) the computer service function is a cost center
C) the end users are billed using a charge-back system
D) computer services are organized into small information processing units under the control of end users

Question 52

Which function manages the financial resources of the firm through portfolio management,banking,credit evaluation,and cash receipts and disbursements?

A) accounting
B) finance
C) materials management
D) distribution

Question 53

Advantages of a database system include all of the following except

A) elimination of data redundancy
B) open access to all data by all users
C) single update for changes in data
D) confidence that all data is current

Question 54

The data control group is responsible for

A) performing the day-to-day processing of transactions
B) security and integrity of the database
C) liaison between the end user and data processing
D) providing safe storage for off-line data files

Question 55

Disadvantages of distributed data processing include all of the following except

A) mismanagement of organization-wide resources
B) hardware and software incompatibility
C) cost reductions
D) difficulty in hiring qualified IT professionals

Question 56

Useful information must possess all of the following characteristics except

A) relevance
B) precision
C) accuracy
D) completeness

Question 57

Data processing does not involve

A) data control
B) computer operations
C) system maintenance
D) data conversion

Question 58

Advantages of distributed data processing include each of the following except

A) cost reductions
B) better management of organization resources
C) improved operational efficiency
D) increased user satisfaction

Question 59

ERP packages include all of the following modules except

A) human resources
B) general ledger
C) inventory management
D) they include all of the above

Question 60

Disadvantages of the distributed data processing approach include all of the following except

A) possible mismanagement of organization resources
B) redundancy of tasks
C) software incompatibility
D) system is not responsive to the user's situation

Question 61

What is discretionary reporting?

Question 62

The __________________________ and __________________________ standards that characterize the AIS clearly distinguish it from the MIS.

Question 63

Audits are conducted by ____________________,____________________,and ____________________ auditors.

Question 64

The transaction processing system is comprised of three cycles: __________________________,__________________________,and __________________________.

Question 65

Why is it necessary to distinguish between AIS and MIS?

Question 66

Two distinct ways to structure the Data Processing Department are ____________________ and ____________________.

Question 67

Two methods to acquire information systems are to __________________________ and to __________________________.

Question 68

The three major subsystems of the AIS are _______________________________,___________________________,and _______________________________.

Question 69

The objectives of an information system include each of the following except

A) support for the stewardship responsibilities of management
B) furthering the financial interests of shareholders
C) support for management decision making
D) support for the firm's day-to-day operations

Question 70

Accountants play many roles relating to the accounting information system,including all of the following except

A) system users
B) system designers
C) system auditors
D) system converters

Question 71

How has SOX legislation impacted the consulting practices of public accounting firms?

Question 72

The REA model identifies an organization's ____________________,____________________,and ____________________.

Question 73

The process of breaking a system into smaller subsystem parts is called ______________________________.

Question 74

Entities outside the organization with a direct or indirect interest in the firm,such as stockholders,financial institutions,and government agencies,are called ____________________.

Question 75

Three activities that are part of the finance function are __________________________,__________________________,and __________________________.

Question 76

A system is a group of two or more interrelated components that ___________________________________.

Question 77

The task of locating and transferring an existing record from the database for processing is called data ____________________.

Question 78

Sarbanes-Oxley legislation requires that management designs and implements controls over the entire financial reporting process.What systems does this include?

Question 79

Transactions with trading partners include ____________________ and ____________________.

Question 80

Sales of products to customers,purchases of inventory from vendors,and cash disbursements are all example of __________________________.