Deck 5: Flow Charting

Question 1

The following figure applies to Questions 11 through 15:
In a flowchart, symbol "C" denotes a(n):

A) Manual process.
B) Decision.
C) Document.
D) On-page connector.

Answer 1

B

Question 2

To be well organized, flowcharts should: (i) have a title, (ii) be organized in columns, (iii) have plenty of white space.

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Answer 2

D

Question 3

Which type of flowchart depicts instructions for carrying out a task with a computer?

A) System.
B) Program.
C) Hardware.
D) Document.

Answer 3

B

Question 4

Which type of flowchart gives the user a "big picture" look?

A) System.
B) Program.
C) Hardware.
D) Document.

Question 5

Which type of flowchart most clearly depicts items like printers, monitors and input devices?

A) System.
B) Program.
C) Hardware.
D) Document.

Question 6

Documents in a flowchart should have: (i) a clear origin, (ii) a clear termination, (iii) multiple copies.

A) i and ii only.
B) ii and iii only.
C) i and iii only.
D) i, ii and iii.

Question 7

Flowcharts should have plenty of white space, meaning:

A) The use of color should be avoided.
B) They should have no more than six symbols.
C) They should be organized in columns.
D) They should be uncluttered.

Question 8

Columns in a flowchart typically depict:

A) People.
B) Documents.
C) Areas of responsibility.
D) Computer hardware components.

Question 9

Waldo wants to create a flowchart for a new client. Which of the following steps should he complete first?

A) Observe business processes.
B) Interview employees.
C) Read a textbook description of business processes.
D) Choose hardware and software.

Question 10

The following figure applies to Questions 11 through 15:
In a flowchart, symbol "B" denotes a(n):

A) Manual process.
B) Decision.
C) Document.
D) On-page connector.

Question 11

A well-constructed systems flowchart can help answer which of the following questions?

A) What hardware and software combination should a company use?
B) Is a company well equipped to respond to its risk exposures?
C) Are employees well trained?
D) What information should be included in a purchase order?

Question 12

Flowcharts should generally be read:

A) From top to bottom and left to right.
B) From top to bottom and right to left.
C) From bottom to top and left to right.
D) In whatever way makes sense to the user.

Question 13

The following figure applies to Questions 11 through 15:
In a flowchart, symbol "A" denotes a(n):

A) Manual process.
B) Decision.
C) Document.
D) On-page connector.

Question 14

Which of the following statements is (are) true: (i) flowcharts can aid in the development of procedures manuals, (ii) procedures manuals can aid in the development of flowcharts.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 15

Which of the following flowchart types would be most appropriate to document a course registration system?

A) System.
B) Program.
C) Hardware.
D) Document.

Question 16

The following figure applies to Questions 11 through 15:
Which of the following is not one of the four symbols shown above?

A) Terminator.
B) On-page connector.
C) Document.
D) Manual process.

Question 17

The following figure applies to Questions 11 through 15:
In a flowchart, symbol "D" denotes a(n):

A) Manual process.
B) Decision.
C) Document.
D) On-page connector.

Question 18

A new auditor wants to create a comprehensive picture of an accounting information system. Which of the following tools would be the most appropriate?

A) A set of financial statements.
B) The chart of accounts.
C) A systems flowchart.
D) A hardware flowchart.

Question 19

Which of the following AIS problems would be most easily detected with a systems flowchart?

A) Insufficient cash on hand.
B) Too much responsibility in one department.
C) Poorly trained employees.
D) Using the wrong software.

Question 20

Which type of flowchart would show how a purchase order is processed in the most detail?

A) System.
B) Program.
C) Hardware.
D) Document.

Question 21

Which of the following problems is evident in the systems flowchart above?

A) The cash receipts department should not be preparing bank deposits.
B) The accounting department should use the customer check to prepare journal entries.
C) Customer checks are not endorsed prior to deposit.
D) The company does not make bank deposits often enough.

Question 22

The following scenario applies to Questions:
Central Veterinary Hospital is organized in three departments: administrative, medical and custodial. When a client brings in a new pet, an administrative staff member manually fills out a pet profile; a different member of the administrative staff later inputs the pet profile into the hospital's information system. A veterinarian sees new pets and discusses necessary medical procedures (such as vaccinations) with the pet owner, who decides which procedures to have. The administrative staff schedule future appointments using the hospital's information system; the pet owner receives a computer printout which details future appointments before paying the bill.
Phil is preparing a flowchart of the preceding case. How many "manual process" symbols would the flowchart include?

A) One.
B) Two or three.
C) Four or five.
D) More than five.

Question 23

Which of the following is missing from the flowchart: (i) a computerized endorsement process, (ii) a terminator symbol?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 24

Which of the following statements about the flowchart is true: (i) terminator symbols are used correctly, (ii) the flowchart demonstrates strong internal control.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 25

The following scenario applies to Questions:
Paolo's Pizza offers both take-out and delivery service. Customers can order pizza in person, over the phone or via the Internet; Paolo's accepts cash, checks and credit cards in payment. The company offers a "30 minutes or it's free" guarantee for delivery orders. You've been asked to create a risk/control matrix.
The "control objectives" column of the risk-control matrix includes "prepare high-quality pizza. " Which of the following would you expect to find in the "WCGW" column?

A) Delivery takes longer than 30 minutes.
B) Pizza is cold.
C) Pizza is missing ingredients.
D) Driver gets lost.

Question 26

The following figure applies to Questions 21 through 25:
"Restrictive endorsement" would be found in:

A) Control objective.
B) WCGW.
C) Controls.
D) Tests.

Question 27

The following scenario applies to Questions:
Paolo's Pizza offers both take-out and delivery service. Customers can order pizza in person, over the phone or via the Internet; Paolo's accepts cash, checks and credit cards in payment. The company offers a "30 minutes or it's free" guarantee for delivery orders. You've been asked to create a risk/control matrix.
The "controls" column of the risk-control matrix lists "verify order with customer" for phone-in orders. Which columns would be checked under "type?"

A) P and M.
B) D and a.
C) P and d.
D) P and a.

Question 28

The following scenario applies to Questions:
Paolo's Pizza offers both take-out and delivery service. Customers can order pizza in person, over the phone or via the Internet; Paolo's accepts cash, checks and credit cards in payment. The company offers a "30 minutes or it's free" guarantee for delivery orders. You've been asked to create a risk/control matrix.
Consider the description of Paolo's Pizza. Which of the following would be included as a control objective in the matrix?

A) Deliver pizza on time.
B) Accept all forms of payment.
C) Maximize orders for delivery.
D) Check customer credit.

Question 29

The following scenario applies to Questions:
Central Veterinary Hospital is organized in three departments: administrative, medical and custodial. When a client brings in a new pet, an administrative staff member manually fills out a pet profile; a different member of the administrative staff later inputs the pet profile into the hospital's information system. A veterinarian sees new pets and discusses necessary medical procedures (such as vaccinations) with the pet owner, who decides which procedures to have. The administrative staff schedule future appointments using the hospital's information system; the pet owner receives a computer printout which details future appointments before paying the bill.
Phil is preparing a flowchart of the preceding case. The "start" symbol would appear in which column of the flowchart?

A) Client.
B) Administrative.
C) Both client and administrative.
D) Neither client nor administrative.

Question 30

The following figure applies to Questions 21 through 25:
A receiving clerk inspects each incoming shipment for quality. Which boxes would be checked in the "type" column?

A) P and d.
B) P and M.
C) D and a.
D) D and M.

Question 31

Who would prepare the "remittance advice" in the flowchart above?

A) The customer.
B) The mailroom.
C) The accounting department.
D) The bank.

Question 32

The following figure applies to Questions 21 through 25:
Which column would include "Safeguard inventory?"

A) Control objective.
B) WCGW.
C) Risk level.
D) Controls.

Question 33

Which of the following journal entries would the accounting department make based on the systems flowchart above?

A) Debit cash, credit accounts receivable.
B) Debit accounts receivable, credit cash.
C) Debit cash, credit inventory.
D) The accounting department should not make an entry.

Question 34

The following scenario applies to Questions:
Central Veterinary Hospital is organized in three departments: administrative, medical and custodial. When a client brings in a new pet, an administrative staff member manually fills out a pet profile; a different member of the administrative staff later inputs the pet profile into the hospital's information system. A veterinarian sees new pets and discusses necessary medical procedures (such as vaccinations) with the pet owner, who decides which procedures to have. The administrative staff schedule future appointments using the hospital's information system; the pet owner receives a computer printout which details future appointments before paying the bill.
Phil is preparing a flowchart of the preceding case. How many columns should the flowchart have?

A) One.
B) Two.
C) Three.
D) More than three.

Question 35

The following scenario applies to Questions:
Central Veterinary Hospital is organized in three departments: administrative, medical and custodial. When a client brings in a new pet, an administrative staff member manually fills out a pet profile; a different member of the administrative staff later inputs the pet profile into the hospital's information system. A veterinarian sees new pets and discusses necessary medical procedures (such as vaccinations) with the pet owner, who decides which procedures to have. The administrative staff schedule future appointments using the hospital's information system; the pet owner receives a computer printout which details future appointments before paying the bill.
Phil is preparing a flowchart of the preceding case. How many document symbols would be included?

A) One or two.
B) Three or four.
C) Five or six.
D) More than six.

Question 36

Based on the systems flowchart above:

A) The company uses general ledger software for journal entries.
B) The company's cash payments process has strong separation of duties.
C) Duties are appropriately separated between the mailroom, cash receipts and accounting.
D) The company makes daily cash deposits.

Question 37

The following figure applies to Questions 21 through 25:
Which column would include "lost or stolen?"

A) WCGW.
B) Controls.
C) Tests.
D) Freq.

Question 38

The following scenario applies to Questions:
Paolo's Pizza offers both take-out and delivery service. Customers can order pizza in person, over the phone or via the Internet; Paolo's accepts cash, checks and credit cards in payment. The company offers a "30 minutes or it's free" guarantee for delivery orders. You've been asked to create a risk/control matrix.
The "controls" column of the risk-control matrix lists "verify order with customer" for phone-in orders. Which column would be checked under the heading "COSO?"

A) E.
B) A.
C) I.
D) M.

Question 39

The following scenario applies to Questions:
Paolo's Pizza offers both take-out and delivery service. Customers can order pizza in person, over the phone or via the Internet; Paolo's accepts cash, checks and credit cards in payment. The company offers a "30 minutes or it's free" guarantee for delivery orders. You've been asked to create a risk/control matrix.
Each delivery driver uses an in-car navigation system to minimize the possibility of getting lost. Where in the risk-control matrix would you expect to find the system listed?

A) WCGW.
B) Controls.
C) Tests.
D) Risk level.

Question 40

The following figure applies to Questions 21 through 25:
Which column would include "Protect video surveillance equipment?"

A) Control objective.
B) WCGW.
C) Risk level.
D) Controls.

Question 41

In the flowchart above, the most appropriate label for "B" is:

A) Class list available?
B) Textbooks required?
C) Verify textbook prices?
D) Friends in class?

Question 42

Risk/control matrix
Aaron is the president of ARB Corporation. He recently made the following comments in a management meeting: Our fraud examination department recently discovered that employees in the purchasing department have been ordering goods for personal use. Inventory and cash are two of our most critical assets; it's therefore important that we only order the inventory items we need. While pre-numbered documents and separation of duties can help, it's also important to hire employees with integrity. Now that we have a good computer system for detecting fraud, I plan to hold meetings like this periodically to let you know how we're doing. Thanks for your attention.
Consider the following phrases from Aaron's speech and the structure of a risk/control matrix.
(1) In the first column, indicate whether each item is: (a) a control objective, (b) WCGW, (c) a control or (d) none of the above.
(2) For items you classify as "controls" in the first column, use the "PDMA" coding system to classify them in the second column.
(3) For each item listed in the first column, use the "ERAIM" coding system to indicate the relevant part of COSO in the third column.

Question 43

Identify and describe three symbols (other than those shown above) you might include in the systems flowchart.

Question 44

Distinguish system flowcharts from two other types of flowcharts.

Question 45

Which of the following symbols is used least appropriately?

A) Prepare purchase order.
B) Purchasing department receives inventory.
C) Ship inventory.
D) All three are used appropriately.

Question 46

Flowcharting symbols
Several common flowcharting symbols are shown below. Categorize them as (a) document symbols, (b) process and input symbols, (c) storage and filing symbols or (d) connector and terminator symbols.

Question 47

Which of the following is a strength of the flowchart: (i) it flows as it should, (ii) it has plenty of white space since no color is used.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 48

Consider the "decision" symbol in the flowchart. Which of the following is true?

A) It is appropriately used.
B) It should not be followed by an on-page connector.
C) It does not depict an appropriate decision.
D) It should be preceded by a document symbol.

Question 49

Consider the "start" and "end" symbols in the flowchart. Which of the following is most true?

A) "Start" is in the right place on the flowchart, but "end" is not.
B) They are unnecessary since the flowchart is so simple.
C) They use the correct symbols.
D) They should be in the same column.

Question 50

Which type of flowchart is depicted above?
a. Hardware.
b. Software.
c. Document.
D. Systems.

Question 51

In the flowchart above, the most appropriate label for "C" is:

A) Yes.
B) No.
C) If required.
D) Otherwise.

Question 52

Flowchart uses in the AIS
Consider the statements below regarding flowcharting and accounting information systems. In each case, assume the flowchart is properly prepared. Place an "X" in the appropriate column to indicate whether the statement is always true, sometimes true or never true.

Question 53

Systems flowchart
CRU Corporation builds custom computers based on client specifications. A systems flowchart for CRU's business process would include at least four columns: customer, sales department, credit department and manufacturing department. Several symbols from the flowchart appear below in the first column.
(1) In the second column, indicate whether the symbol would most likely appear in (a) the customer column, (b) the credit department column, (c) the sales department column or (d) the manufacturing department column.
(2) In the third column, suggest a specific name for the symbol based on the column. For example, a document in a purchasing department column might be a "purchase order."

Question 54

System flowchart creation
Prepare a systems flowchart based on the following narrative:
When a staff member at IGV Corporation needs to travel on company business, she first submits a travel request to her immediate supervisor. The travel request includes the employee's identifying information; dates, location and purpose of the trip; and a budget. The supervisor compares the travel budget to the department's total travel budget; if sufficient funds are available, the supervisor evaluates the need for the trip by comparing it to the department's strategic plan. If the trip is approved, the supervisor submits the budget to the cash expenditures department, where a staff member issues a travel advance to the employee. After the trip, the employee submits her receipts and either pays back any excess advance funds or receives additional reimbursement for expenses incurred. If insufficient funds are available or if the trip does not support the strategic plan, the request is filed by employee name.

Question 55

System flowchart creation
Prepare a systems flowchart based on the following narrative:
When Conner and Conner CPAs start an audit, a partner prepares and signs an engagement letter; one copy is filed and the original is sent to the client, who returns an acknowledgement. A partner files the acknowledgment and then assembles an audit team, usually including one manager, two seniors and two junior staff members. The manager holds a planning meeting and assigns specific audit tasks to each team member. The team conducts the audit, conferencing with the client as necessary and preparing audit work papers. At the conclusion of the audit, the team manager files the working papers by client name; the partner prints and signs the audit opinion on Conner and Conner's computer network. The partner delivers the audit opinion to the client.

Question 56

In the flowchart above, the most appropriate label for "D" is:

A) If.
B) Yes.
C) No.
D) Then.

Question 57

In the flowchart above, the most appropriate label for "A" is:

A) Generate class list.
B) Class list.
C) Textbook list.
D) Verify instructor.

Question 58

Explain how the partial flowchart demonstrates at least two flowchart design principles discussed in the text.

Question 59

Create one entry for a risk/control matrix. Use the following column headings: control objective, WCGW, control, type (PDMA) and COSO (ERAIM).

Question 60

Identify two ways you could use a completed systems flowchart in your work with the client.