Deck 5: Reporting Process, Coding Methods, and Audit Trails

Question 1

Of the following business organizations, which one requires daily financial statement preparation?

A) An oil drilling rig manufacturer
B) A bank
C) A tool manufacturing company
D) A video store

Answer 1

B

Question 2

Which of the following is an example of exception reporting?

A) Providing reports of production hours worked to personnel
B) Providing reports of dollar denominated data to sales personnel
C) Providing reports of data with significant deviance from expected results to managers
D) Providing financial reports to the chief financial officer

Answer 2

C

Question 3

Which relationship among reporting frequency, type of data reported, and functional responsibilities is a common pattern?

A) Daily reporting of monetary data for financial managers
B) Monthly reporting of physical data for production managers
C) Daily reporting of monetary data for production managers
D) Daily reporting of physical data for production managers

Answer 3

D

Question 4

Effective exception reporting depends on an accounting information system having the ability to do which of the following?

A) Sequence selected records based on the size of the differences between comparative account balances
B) Select records based on differences between current actual account balances and prior period actual account balances
C) Select records based on differences between actual account balances and the budgeted amount for those accounts
D) All of the above are important for effective exception reporting.

Question 5

Which of the following factors does not influence the frequency of reporting?

A) The type of data reported
B) The significance of the data
C) The nature of the activity
D) The conciseness of the report

Question 6

What kind of reporting calls for arranging together actual data for a current period and actual data for a prior period?

A) Function reporting
B) Financial reporting
C) Exception reporting
D) Comparative reporting

Question 7

Which of the following is not a general principle that forms a foundation for effective reporting?

A) Emphasis on monetary measures only
B) Frequency of reporting
C) Reporting by function
D) Necessity for concise reports

Question 8

Which of the following factors influences the frequency of reporting?

A) The type of data reported
B) The conciseness of the report
C) The length of the report
D) The writing ability of the accountant

Question 9

What is the arranging of records in order of severity of the problem with the most severe t the beginning of the reports known as?

A) Exception reporting
B) Function reporting
C) Record sequencing
D) Comparative reporting

Question 10

Which of the following is not a general principle that forms a foundation for effective reporting?

A) Emphasis on both physical and financial measures
B) Comparative reporting
C) Necessity for lengthy reports
D) Exception reports

Question 11

Which of the following would not be suitable as a reference identifier in an audit trail?

A) Customer invoice
B) Document number of checks issued
C) Purchase order number
D) Internally generated numbers that represent completed transaction

Question 12

Which of the following would be suitable to use as a reference identifier in an audit trail?

A) The vendor's invoice date
B) The vendor's invoice number
C) The document number of a check issued
D) The date of a check issued

Question 13

What is a solution to the problem that exception reporting may have the most severe problems appearing on the report's back pages?

A) Record sequencing
B) Comparative reporting
C) Coding methods
D) Responsibility reporting

Question 14

Which of the coding methods represents a logical association between the characters forming the code and the item being identified?

A) Block coding
B) Sequence code
C) Group code
D) Mnemonic code

Question 15

17 What is a set of processing references that enables the tracing of an event from its source to its destination or from its destination back to its sources known as?

A) Sequencing records
B) Hierarchical report
C) Audit trail
D) Coding methods

Question 16

Postal zip codes are examples of which type of coding system?

A) Sequence code
B) Mnemonic code
C) Group code
D) Block code

Question 17

Numbers that are used as unique reference identifiers should have which of the following characteristics?

A) Represent the initiation of a transaction
B) Derived from externally generated documents
C) Represent the completion of a transaction
D) Derived from internally generated documents
E) Both C and D E

Question 18

What is record sequencing?

A) Arranging together actual data for a current period or actual data for a prior period
B) Arranging records in order of severity of the problem
C) Daily reporting of monetary data for financial managers
D) Selecting records based on differences

Question 19

16 What does entity coding identify?

A) Master file records
B) Transaction event C. Receipt of sales order
D) Acceptance of sales order
C) Receipt of sales order
D) Acceptance of sales order

Question 20

In which of the following situations should the frequency of reporting be weekly or even daily?

A) The data are critical to the detection of an out-of-control situation.
B) The data are related to the processing of natural resources such as pulp timber.
C) The data are used for comparison reporting.
D) The data are used for responsibility reporting.

Question 21

Which of the following tools would allow an auditor to most easily and efficiently compare a client company's financial results with those of its competitors?

A) HTML tagging
B) XBRL tagging
C) Database management system
D) Electronic spreadsheet

Question 22

Which of the following languages is a financial reporting language developed in part by the accounting profession?

A) Extensible markup language (XML)
B) Extensible business reporting language (XBRL)
C) Structured query language (SQL)
D) Hypertext markup language (HTML)

Question 23

Which type of data is more useful in accounting reports that cover a short period of time?

A) Financial
B) Physical
C) Abstract
D) Temporal

Question 24

Which of the following is not used for event coding in accounting information systems?

A) A sale
B) Receipt of a sales order
C) A vendor
D Acceptance of a sales order

Question 25

What is the primary benefit of creating XBRL financial reports and electronically disseminating them?

A) The results of a company's operations can be graphically displayed.
B) Information can be published one time and then extracted electronically for other purposes thereby eliminating the need to identify and reenter the data.
C) Information stored in tables can be easily accessed through a query language.
D) Data can be easily shared by authorized users.

Question 26

Which of the following formats would most likely eliminate reentry of data and significantly reduce reporting costs for a business?

A) Electronic spreadsheet
B) Electronic word processor
C) HTML
D) XBRL

Question 27

What language uses a standardized tag such as to enable the retrieval of information about assets held for sale from multiple balance sheets?

A) Hypertext Markup Language (HTML)
B) Extensible Business Reporting Language (XBRL)
C) Structured Query Language (SQL)
D) Data Definition Language (DDL)

Question 28

Which of the following is a general principle of effective reporting?

A) Necessity for lengthy reports
B) Comparative reporting
C) Bidirectional reporting
D) Multidimensional reporting

Question 29

Which of the following computer languages is used specifically for Web applications?

A) Structured query language (SQL)
B) Extensible markup language (XML)
C) Web services description language (WSL)
D) Enterprise application language (EAL)

Question 30

What is a feature or benefit of comparative reporting?

A) It arranges records in order of severity of the problem with the most severe at the beginning of the report.
B) It arranges together actual data for a current period with either budget data for the current period or actual data for a prior period.
C) It allows management to focus on data with significant deviations from expected results.
D) It provides reports of production hours worked to production personnel.

Question 31

Reference identifiers are necessary to provide adequate audit trails for which of the following reasons?

A) A reference identifier is unique to each event, account, and document.
B) The identifier allows an auditor to trace a data item's location to its preceding location.
C) The reference identifier sets up the processing references for an audit trail.
D) All of the above are reasons why reference identifiers are necessary.

Question 32

What type of reporting includes data that measure activities over which a particular manager has some authority?

A) Comparative reporting
B) Exception reporting
C) Functional reporting
D) Responsibility reporting

Question 33

Production managers usually prefer the use of which measure of performance in reports that cover a short period of time?

A) Financial measures
B) Exception measures
C) Physical measures
D) Comparative measure

Question 34

Which of the following languages uses standardized tags for business and financial data so they can be easily searched with web browsers?

A) Hypertext Markup Language (HTML)
B) Structured Query Language (SQL)
C) Query by Example (QBE)
D) Extensible Business Reporting Language (XBRL)

Question 35

What is one problem with exception reporting?

A) It allows management to focus on data with significant deviations from expected results.
B) It requires selection based on differences.
C) It may have the most severe problems appearing on the report's back pages.
D) It directs management to unusual results.

Question 36

Providing reports of production hours worked to production personnel, dollar denominated data to sales personnel, and financial reports to the chief financial officer are examples of what kind of reporting?

A) Reporting by exception
B) Reporting by function
C) Reporting by responsibility
D) Reporting by comparison

Question 37

Which of the following statements is correct regarding extensible business reporting language (XBRL)?

A) XBRL is used to identify the content of financial data.
B) XBRL is used to format the presentation of financial data on web pages.
C) XBRL uses hypertext markup language (HTML) tags.
D) XBRL reports words and figures as standalone blocks of data.

Question 38

The most common reporting of physical units is for which of the following?

A) Unassigned hours in a CPA firm
B) Hours billed
C) Inventory
D) Employee turnover rate

Question 39

What is the format the Securities and Exchange Commission (SEC) has mandated for filing financial information?

A) Comma-delimited files
B) XML files
C) HTML files
D) XBRL files

Question 40

Which of the following defines the specific tags for individual items of data when converting a human-readable financial report to HTML?

A) Taxonomy
B) Namespace
C) Element
D) Instance document

Question 41

Which of the following is the appropriate format for an element in XBRL?

A) 40000
B) 40000
C) Inventories:40000:/Inventories
D)

Question 42

Numbers that should be used for unique identifiers for coding an audit trail are pre- numbered documents that represent the initiation of a transaction and numbers of externally generated documents.

Question 43

What is the advantage of extensible business reporting language (XBRL) over extensible markup language (XML)?

A) XBRL employs standardized tags.
B) XBRL is objective.
C) XBRL is independent.
D) XBRL allows the user to define the tags.

Question 44

Which of the following identifies the organization that maintains the definitions of elements used in XBRL?

A) Namespace
B) Taxonomy
C) Element
D) Instance document

Question 45

What is a document that has been tagged according to the rules of XBRL?

A) Extensible document
B) Interchange document
C) Instance document
D) X.12 document

Question 46

Generally, the less frequently accounting data are reported, the better.

Question 47

Concise reports contain only physical measures.

Question 48

Generally, the more frequently accounting data are reported, the better.

Question 49

Which of the following statements is correct regarding extensible business reporting language (XBRL)?

A) XBRL avoids errors by eliminating the need to reenter data.
B) XBRL is equivalent to hypertext markup language (HTML).
C) XBRL does NOT require the use of tags.
D) XBRL was developed by a single company.

Question 50

Production managers usually prefer the use of financial measure of performance over physical measures of performance in reports that cover a short period of time.

Question 51

Numbers that should be used for unique identifiers for coding an audit trail are prenumbered documents that represent the completion of a transaction and numbers of internally generated documents.

Question 52

Receipt of a sales order could be used for event coding in accounting information systems.

Question 53

Extensible business reporting language (XBRL) has which of the following characteristics?

A) XBRL allows for reliable and automatic exchange of financial information across all software formats.
B) XBRL essentially is hypertext markup language (HTML) for financial data and t therefore is basically the same as HTML.
C) XBRL does NOT require the use of tags.
D) XBRL was developed by a single company, whereas HTML was developed by a consortium of many companies, government agencies, and organizations.

Question 54

Which of the following computer languages would best support the activity of identifying the balances of the cash and cash equivalent accounts of several companies and extracting them to an electronic spreadsheet for analysis?

A) Extensible markup language (XML)
B) Extensible business reporting language (XBRL)
C) Electronic data gathering and retrieval (EDGAR)
D) Hypertext markup language (HTML)

Question 55

What are dictionaries of element names that represent financial report concepts?

A) Namespaces
B) Taxonomies
C) Elements
D) Instance documents

Question 56

Effective exception reporting requires the ability to select records based on the similarities between an account's current balance and its prior year's balance.

Question 57

A purchase order number would not be suitable as a reference identifier in an audit trail.

Question 58

Most accounting software packages provide the capability for exception reporting.

Question 59

Which of the following is/are TRUE with regard to XBRL?

A)XBRL has tags which provide financial information in a context.
B)XBRL adds the ability to search across platforms.
C)XBRL facilitates the handling of financial data and reduces the potential for errors.
D) All of these are true statements about XBRL.

Question 60

Record sequencing is the process of placing data in a specified order.

Question 61

What are the disadvantages of using mnemonic codes? Include at least two examples.

Question 62

The more frequently data are reported, the better.

Question 63

Responsibility reporting is the process of reporting data to a manager that measure activities over which the manager has some authority and for which the manager is held responsible.

Question 64

Explain why reference identifiers are necessary to provide adequate audit trails.

Question 65

A sequence code uniquely identifies an object and is assigned in numerical sequence.

Question 66

What numbers should NOT be used for unique reference identifiers?

Question 67

Explain the meaning of exception reporting.

Question 68

Explain what is meant by bidirectional and multidimensional aspects of audit trails.

Question 69

Describe a situation where a report should be generated weekly or even daily and give two examples of reports a manager would probably want to receive daily.

Question 70

A block code leads an accountant or auditor from a data item's specific location in the accounting information system to its preceding or successor location.

Question 71

What are the reporting principles discussed in this chapter?

Question 72

What is an audit trail?

Question 73

Production managers prefer the use of physical measures of performance rather than monetary measures in reports covering short reporting periods.

Question 74

Define what an audit trail is and what it does. Give two examples of numbers that should NOT be used as identifiers.

Question 75

Exception reporting is the arrangement together of actual data for a current period with either budget data for the current period or actual data for a prior period, thereby facilitating comparison of the data.

Question 76

The meaning of comparative reporting is that only data reflecting a significant deviation from expected, budgeted, or normal should be reported to managers.

Question 77

Describe in what situations the frequency of reporting should be weekly or even daily.

Question 78

Reporting by function presents data according to the functional duties of managers.

Question 79

A reference identifier assigns meaning to various positions in a code.

Question 80

Below is an exception report for records selected because of the size of their variance. If the system would allow you to order the list of customers from the most severe variance to the lease severe variance, what would be the order of the records?