Deck 1: Significance of Accounting Information Systems and the Accountants Role

Question 1

Which of the following organizations can audit a company to determine whether the company has the correct number of licenses for the number of users?

A) Accenture Consultants
B) Business Program Accreditation Association
C) Business Software Alliance
D) All of these

Answer 1

C

Question 2

What are the roles of people in computerized accounting systems?

A) To monitor the processing of data and to interpret data
B) To manufacture hardware, write software, and maintain the accounting system
C) To supervise and control the accounting function
D) A and B, but not C
E) A, B, and C E

Answer 2

E

Question 3

Which of the following statements is false?

A) Internal auditors lack the necessary independence to express opinions about the financial statements of the organizations for which they work.
B) Internal auditors ensure that an organization's accounting system is properly designed to meet the organization's present and future needs.
C) An external auditor who performs a financial statement audit is not required by professional standards to gain an understanding of the client's accounting information system before expressing an opinion.
D) If an external auditor finds the controls over the accounting system to be adequate, he or she may be able to reduce the amount of testing of transactions and account balances necessary to support an opinion on the fairness of the financial statements.

Answer 3

C

Question 4

What essential functions are performed by computer hardware?

A) Input, processing, output, and instruction of data
B) Input, storage, and instruction of data, and decision making
C) Input, processing, storage, and output of data
D) Input, storage, and output of data and decision making

Question 5

Who is most responsible for operation of the accounting system in an organization?

A) The controller and the chief executive officer
B) The controller and the chief financial officer
C) The controller and the board of directors
D) A and B, but not C
E) B and C, but not A
B

Question 6

Which of the following groups requires accounting data with the broadest perspective?

A) Entry-level managers
B) First-level managers
C) Middle-level managers
D) Upper-level managers

Question 7

From what do accounting transactions result?

A) Both external and internal activities
B) External activities
C) Internal activities
D) Neither external nor internal activities

Question 8

For decision-making purposes, managers require data from which source(s) and in which terms?

A) Internal and external sources in only monetary terms
B) Internal sources in non-monetary terms and external sources in monetary terms
C) Internal sources in non-monetary terms and external sources in monetary terms
D) Internal and external sources in both monetary and non-monetary terms

Question 9

Who are the users of accounting systems?

A) Financial accountants, managerial accountants, and system developers
B) Financial accountants, managerial accountants, system developers, and tax accountants
C) Financial accountants, managerial accountants, system developers, and governmental accountants
D) Financial accountants, managerial accountants, governmental accountants, and tax accountants

Question 10

Which of the following is not accounting information?

A) Total direct/indirect labor hours
B) Delivery equipment cost
C) Computer training schedule
D) Next year's sales budget

Question 11

Which of the following best describes a manual accounting system?

A) Slow and prone to error
B) Limited in the volume of data it can process
C) Fast and accurate
D) A and C, but not B
E) A and B, but not C E

Question 12

With the implementation of e-commerce, many companies have dramatically reduced the number of their suppliers and/or customers.

Question 13

Which of the following statements does not apply to accounting information?

A) Accounting information meets the legitimate needs of external users.
B) Accounting information is generated by only external activities.
C) Accounting information communicates among parties transacting business with one another.
D) Accounting information provides a basis for informed management decision making.

Question 14

Which of the following statements about a manual accounting system is not correct?

A) Very little data beyond the basic elements are included.
B) Data are stored in only one location.
C) Errors and inconsistencies are common.
D) Data are processed for external reporting.

Question 15

Contemporary accounting information systems include data that could not be economically collected before the current level of computerization.

Question 16

In what terms can accounting information be expressed?

A) Units, percentages, and money
B) Money, ratios, and text
C) Money, percentages, and text
D) Units, percentages, and text

Question 17

Which of the following statements is not true?

A) An accounting system deals primarily with economic events that affect an organization's accounting equation.
B) Some accounting events may mature into accounting transactions while others may not.
C) Only accounting events that have matured into accounting transactions must be captured and reported by the accounting system.
D) Most accounting transactions result from an organization's day-to-day operations.

Question 18

Which of the following statements is not true?

A) Trustworthy accounting information and reliable computer equipment can prevent the failure of an organization, even if incompetent and dishonest people carry out the accounting function.
B) A good accounting system may not guarantee an organization's success, but a bad one can destroy an organization.
C) The difference between good and bad accounting systems lies in the way they are developed, operated, and controlled.
D) An accounting system is expected to carry out its tasks without the need for upper management's day-to-day concern.

Question 19

The Sarbanes-Oxley Act prohibits which of the following?

A) Consulting firms from forming alliances with software vendors
B) Consulting firms from advising on e-business and security issues
C) Public accounting firm partners from serving as members of boards of directors
D) Public accounting firms from providing consulting services to its auditing clients

Question 20

Which of the following certifications is specifically designed for internal auditors?

A) Certified information systems auditor
B) Certified internal auditor
C) Certified public accountant
D) Certified fraud examiner

Question 21

An auditor who performs a financial statement audit is required by professional standards to gain an understanding of the client's accounting information system before expressing an opinion.

Question 22

Auditors do not need substantial technical knowledge about accounting systems to be able to carry out their responsibilities.

Question 23

The largest volume of accounting information is prepared for external reporting purposes.

Question 24

The content and format of accounting information for external reporting are regulated by internal policies and procedures, while the content and format of accounting information for internal reporting are determined by accounting rule-making bodies.

Question 25

One purpose of an accounting information system is to meet an organization's statutory reporting requirements.

Question 26

The most common mode of acquiring accounting software systems today is for a company to develop its own systems internally.

Question 27

External transactions arise largely from the accumulation of cost data and the assignment of costs to products, business units, or activities.

Question 28

Accounting information is expressed only in monetary terms.

Question 29

Several professional organizations that provide support to auditors include the American Institute of Certified Public Accountants, the Institute of Internal Auditors, the Information Systems Audit and Control Association, the Association of Certified Fraud Examiners, The Association of Government Accountants, and the Central Intelligence Agency.

Question 30

The Certified Internal Auditor certification program is sponsored by the Information Systems Audit and Control Association.

Question 31

Under the Sarbanes-Oxley Act of 2002, auditors are prohibited from providing any non-audit services to its clients.

Question 32

The information used for external reporting and the information supporting management decision making and operations come from the same primary source.

Question 33

Describe the importance of an accounting system in an organization.

Question 34

The "beginning ERP market" includes companies with revenues of $500 million or more.

Question 35

What are the major components of a computerized accounting system?

Question 36

What are the purposes of an accounting information system?

Question 37

The Sarbanes-Oxley Act prohibits public accounting firms from providing consulting services to its auditing clients.

Question 38

Another purpose of an accounting information system is to provide relevant and accurate accounting information to those who need it and when they need it.

Question 39

Order entry and billing, sales information, financial analysis, and cash management are all included in the definition of an events-based accounting system.

Question 40

An events-based accounting system captures and stores only the data needed for financial reporting.

Question 41

What are four possible categories for accounting software if based on the size of company it services?

Question 42

Define the difference between an event and a transaction.

Question 43

Identify the various types of auditors and briefly describe what they do.

Question 44

What are the key components of an accounting information system?

Question 45

Below is a list of several certification designations. Another list provides the names of organizations that sponsor the certifications. Record the letter of the correct sponsoring organization beside the certification designation. One organization may sponsor more than one certification.