Question 1 .4 out of 4 points

An accounting information system (AIS) processes ________ to provide users with ________.

A) data; information 

B) data; transactions 

C) information; data

D) data; benefits 

Question 2 .4 out of 4 points

Paid time-off policies, job descriptions, and procedures manuals are examples of information needed to support key decisions in what business process?

A) Hire and train employees

B) Acquire inventory

C) Sell merchandise

D) Collect payment from customers

Question 3 .4 out of 4 points

Which of the following is a primary activity in the value chain?

A) infrastructure 

B) technology 

C) purchasing 

D) marketing and sales 

Question 4 .4 out of 4 points

A change in the AIS that makes information more easily accessible and widely available within an organization is most likely to first influence the

A) organizational culture. 

B) customer base. 

C) external financial statement users. 

D) production activity.

Question 5 .4 out of 4 points

A frantic Stro Frinzel called the home office from Des Moines. “You have got to help me. I am about to close a great sale, but I have to be able to guarantee delivery by the fourteenth. I can’t get through to the company Web site to verify delivery!” “Thank you for calling. Your call is very important to us. However, all of our lines are currently in use. Please try again later.” Which of the following characteristics of useful information is absent in the situation described above?

A) relevant

B) reliable

C) complete

D) timely

E) understandable

F) verifiable

G) accessible

Question 6 .4 out of 4 points

The coding technique most likely used for sales orders is called a

A) group code.

B) block code.

C) data code.

D) sequence code.

Question 7 .4 out of 4 points

The quality assurance department at a large manufacturing business enters data into the AIS that is used to produce a weekly report that summarizes the proportion of defective units in each product line. This is an example of

A) internal financial information.

B) internal nonfinancial information.

C) external financial information.

D) external nonfinancial information.

Question 8 .4 out of 4 points

A specialized journal

A) is used to record infrequent or non-routine transactions.

B) simplifies the process of recording large numbers of repetitive transactions.

C) records all detailed data for any general ledger account that has individual sub-accounts.

D) contains summary-level data for every account of the organization.

Question 9 .4 out of 4 points

Data must be collected about three facets of each business activity. What are they?

A) the business activity, the resources it affects, the people who participate

B) the business activity, the transactions it creates, the impact on the financial statements

C) the inputs, outputs and processes used

D) who is involved, what was sold, how much was paid

Question 10 .4 out of 4 points

A specialized journal would be most likely to be used to enter

A) sales transactions.

B) monthly depreciation adjustments.

C) annual closing entries.

D) stock issuance transactions.

Question 11 .4 out of 4 points

The Union Soup Kitchen is a non-profit organization that collects, stores, prepares and provides food to the homeless in Erie, Pennsylvania. Donations of food are recorded in a database and a receipt is provided to the donor. When food is used, the database is updated so that it always reflects the amounts and types of food that are available. In a data flow diagram, which type of symbol would be used to represent the flow of data from the donor into the system?


Question 12 .4 out of 4 points

A flowchart that depicts the relationships among the input, processing, and output of an AIS is

A) an internal control flowchart.

B) a document flowchart. 

C) a system flowchart. 

D) a program flowchart. 

Question 13 .4 out of 4 points

In a data flow diagram of the customer payment process, “Customer payment” will appear above or in

A) a square. 

B) a circle. 

C) two horizontal lines. 

D) none of the above 

Question 14 .4 out of 4 points

In general, a data destination will be shown by

A) an arrow pointing away. 

B) an arrow pointing in. 

C) arrows pointing both ways. 

D) no arrows, only two horizontal lines. 

Question 15 .4 out of 4 points

In preparing a DFD, when data are transformed through a process, the symbol used should be

A) a circle. 

B) an arrow. 

C) a square. 

D) two horizontal lines. 

Question 16 .4 out of 4 points

When the human resources manager wants to gather data about vacation and personal day usage by employees and by departments, the manager would use which language?

A) Data Query Language

B) Data Manipulation Language

C) Data Report Language

D) Data Definition Language

Question 17 .4 out of 4 points

The potential inconsistency that could occur when there are multiple occurrences of a specific data item in a database is called the

A) update anomaly. 

B) insert anomaly. 

C) inconsistency anomaly. 

D) delete anomaly. 

Question 18 .4 out of 4 points

The schema that provides an organization-wide view of the entire database is known as the

A) external-level schema. 

B) internal-level schema. 

C) conceptual-level schema. 

D) logical view of the database. 

Question 19 .4 out of 4 points

The database requirement that foreign keys must be null or have a value corresponding to the value of a primary key in another table is formally called the

A) entity integrity rule. 

B) referential integrity rule. 

C) rule of keys. 

D) foreign key rule. 

Question 20 .4 out of 4 points

In a relational database, requiring that every record in a table have a unique identifier is called the

A) entity integrity rule. 

B) referential integrity rule. 

C) unique primary key rule. 

D) foreign key rule. 

Question 21 .4 out of 4 points

Which of the following is an opportunity that could contribute to employee fraud?

A) an employee’s spouse loses their job

B) an employee suddenly acquires lots of credit cards 

C) an employee is upset that he was passed over for a promotion

D) close association with suppliers or customers 

Question 22 .4 out of 4 points

Which of the following is the greatest risk to information systems and causes the greatest dollar losses?

A) human errors and omissions 

B) physical threats such as natural disasters

C) dishonest employees

D) fraud and embezzlement 

Question 23 .4 out of 4 points

One fraudulent scheme covers up a theft by creating cash through the transfer of money between banks. This is known as

A) lapping. 

B) misappropriation of assets. 

C) kiting. 

D) concealment. 

Question 24 .4 out of 4 points

Most frauds are detected by

A) external auditors.

B) internal auditors.

C) accident.

D) hotline tip.

Question 25 .4 out of 4 points

The most efficient way to conceal asset misappropriation is to

A) write-off a customer receivable as bad debt.

B) alter monthly bank statements before reconciliation.

C) alter monthly physical inventory counts to reconcile to perpetual inventory records.

D) record phony payments to vendors.

Question 26 .4 out of 4 points

A fraud technique that slices off tiny amounts from many projects is called the ________ technique.

A) Trojan horse 

B) round down 

C) salami 

D) trap door 

Question 27 .4 out of 4 points

Computer fraud perpetrators that modify programs during systems development, allowing access into the system that bypasses normal system controls are using

A) a Trojan horse. 

B) a trap door. 

C) the salami technique. 

D) superzapping.

Question 28 .4 out of 4 points

A fraud technique that allows a perpetrator to bypass normal system controls and enter a secured system is called

A) superzapping. 

B) data diddling. 

C) using a trap door. 

D) piggybacking. 

Question 29 .4 out of 4 points

Computer fraud perpetrators who use telephone lines to commit fraud and other illegal acts are typically called

A) hackers. 

B) crackers. 

C) phreakers. 

D) jerks. 

Question 30 .4 out of 4 points

A ________ is similar to a ________, except that it is a program rather than a code segment hidden in a host program.

A) worm; virus 

B) Trojan horse; worm 

C) worm; Trojan horse 

D) virus; worm 

Question 31 .4 out of 4 points

________ controls prevent, detect and correct transaction errors and fraud.

A) Application

B) Detective

C) General

D) Preventive

Question 32 .4 out of 4 points

According to the ERM, these objectives help ensure the accuracy, completeness and reliability of internal and external company reports.

A) Compliance objectives

B) Operations objectives

C) Reporting objectives

D) Strategic objectives

Question 33 .4 out of 4 points

Generally in a risk assessment process, the first step is to

A) identify the threats that the company currently faces. 

B) estimate the risk probability of negative events occurring. 

C) estimate the exposure from negative events. 

D) identify controls to reduce all risk to zero. 

Question 34 .4 out of 4 points

The process that a business uses to safeguard assets, provide accurate and reliable information, and promote and improve operational efficiency is known as

A) a phenomenon. 

B) internal control. 

C) an AIS threat. 

D) a preventive control. 

Question 35 .4 out of 4 points

According to the ERM, these help the company address all applicable laws and regulations.

A) Compliance objectives

B) Operations objectives

C) Reporting objectives

D) Strategic objectives

Question 36 .4 out of 4 points

Which of the following is an example of a corrective control?

A) Physical access controls

B) Encryption

C) Intrusion detection

D) Incident response teams

Question 37 .4 out of 4 points

The process of turning off unnecessary features in the system is known as

A) deep packet inspection.

B) hardening.

C) intrusion detection.

D) war dialing.

Question 38 .4 out of 4 points

The process that screens individual IP packets based solely on the contents of the source and/or destination fields in the packet header is known as

A) access control list.

B) deep packet inspection.

C) stateful packet filtering.

D) static packet filtering.

Question 39 .4 out of 4 points

According to the Trust Services Framework, the reliability principle of integrity is achieved when the system produces data that

A) is available for operation and use at times set forth by agreement. 

B) is protected against unauthorized physical and logical access. 

C) can be maintained as required without affecting system availability, security, and integrity. 

D) is complete, accurate, and valid. 

Question 40 .4 out of 4 points

Compatibility tests utilize a(n) ________, which is a list of authorized users, programs, and data files the users are authorized to access or manipulate.

A) validity test 

B) biometric matrix 

C) logical control matrix 

D) access control matrix 

Question 41 .4 out of 4 points

Which of the following is not one of the three important factors determining the strength of any encryption system?

A) Key length

B) Key management policies

C) Encryption algorithm

D) Privacy

Question 42 .4 out of 4 points

Which of the following descriptions is not associated with symmetric encryption?

A) A shared secret key

B) Faster encryption

C) Lack of authentication

D) Separate keys for each communication party

Question 43 .4 out of 4 points

An electronic document that certifies the identity of the owner of a particular public key.

A) Asymmetric encryption

B) Digital certificate

C) Digital signature

D) Public key

Question 44 .4 out of 4 points

Which of the following is not one of the 10 internationally recognized best practices for protecting the privacy of customers’ personal information?

A) Providing free credit report monitoring for customers

B) Inform customers of the option to opt-out of data collection and use of their personal information

C) Allow customers’ browsers to decline to accept cookies

D) Utilize controls to prevent unauthorized access to, and disclosure of, customers’ information

Question 45 .4 out of 4 points

These are used to create digital signatures.

A) Asymmetric encryption and hashing

B) Hashing and packet filtering

C) Packet filtering and encryption

D) Symmetric encryption and hashing

Question 46 .4 out of 4 points

This determines the correctness of the logical relationship between two data items.

A) Range check

B) Reasonableness test

C) Sign check

D) Size check

Question 47 .4 out of 4 points

This determines if characters are of the proper type.

A) Field check

B) Alpha-numeric check

C) Range check

D) Reasonableness test

Question 48 .4 out of 4 points

Check digit verification is an example of a(n)

A) data transmission control.

B) output control.

C) processing control.

D) input control.

Question 49 .4 out of 4 points

This batch processing data entry control sums a non-financial numeric field.

A) Record count

B) Financial total

C) Hash total

D) Sequence check

Question 50 .4 out of 4 points

What is the most effective way to ensure information system availability?

A) High bandwidth

B) Maintain a hot site

C) Maintain a cold site

D) Frequent backups


1. In the ________ stage of an operational audit, the auditor measures the actual system against an ideal standard.

evidence collection

evidence evaluation


internal control

2. An auditor finds that employee absentee rates are significantly higher on Mondays and Fridays than on other work days. This is an example collecting audit evidence by




analytical review

3. The ________ to auditing provides auditors with a clear understanding of possible errors and irregularities and the related risks and exposures.

risk-based approach

risk-adjusted approach

financial audit approach

information systems approach

4. According to the risk-based auditing approach, when a control deficiency is identified, the auditor should inquire about

tests of controls. 

the feasibility of a systems review. 

materiality and inherent risk factors.

compensating controls. 

5. Control risk is defined as the

susceptibility to material risk in the absence of controls. 

risk that a material misstatement will get through the internal control structure and into the financial statements. 

risk that auditors and their audit procedures will not detect a material error or misstatement. 

risk auditors will not be given the appropriate documents and records by management who wants to control audit activities and procedures. 

6. During the sales order entry process, a ________ is performed to verify that each transaction record contains all appropriate data items.

completeness test 

redundant data check 

field check 

reasonableness test

7. The shipping department at Squishy Things Toy Company follows policies that determine which carrier will deliver orders according to the size, weight, and destination of the shipment. It maintains standing agreements with shippers that specify legal responsibility for the shipment while it is in transit. The terms of the agreements are documented on

picking tickets.

bills of lading.

packing slips.

RFID tags.

8. When an ERP is used, it is assumed that there will be increases in efficiency and the effectiveness of the activities related to the revenue cycle. However, what must be in place and functioning well to fully realize these benefits?

an effective marketing staff 

all the components of the expenditure cycle 

adequate controls 

adequate system flowchart documentation 

9. Which of the following documents would normally trigger the process to record a customer payment?

Remittance advice

Customer monthly statement

Deposit slip

Sales invoice

10. A type of business document in which part of the original document is returned to the source for further processing is called a ________ document.





11. Duties in the expenditure cycle should be properly segregated to promote internal control. This means that the authorization function is performed by ________, the recording function is performed by ________, and cash handling is performed by the ________.

A) accounts payable; purchasing; cashier 

B) purchasing; accounts payable; cashier 

C) purchasing; cashier; accounts payable 

D) purchasing; accounts payable; treasurer 

12. Procurement cards differ from corporate credit cards in which of the following ways?

A) Credit limits can be set for procurement cards, but not corporate credit cards.

B) Credit cards can be used to make purchases without an explicit sign off by supervisors, but procurement cards require a sign off.

C) Procurement cards can only be used with approved vendors, but credit cards can be used anywhere.

D) Procurement card invoices are sent separately for each card, whereas corporate credit cards are consolidated into a single invoice.

13. What control should be put in place that assigns responsibility for EFT payments made to vendors?

A) Encrypt all EFT transmissions.

B) Time stamp all EFT transactions.

C) Establish a control group to monitor EFT transactions for validity and accuracy.

D) Number all EFT transactions.

14. Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size. One variable, the costs associated with holding inventory, is referred to as

A) ordering costs. 

B) carrying costs. 

C) the reorder point. 

D) stockout costs. 

15. The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as

A) safety stock. 

B) just-in-time production. 

C) economic order quantity. 

D) optimal inventory quantity. 

16. When using electronic documents, ________ increase the accuracy of data entry.

A) access controls 

B) separation of duties 

C) general controls 

D) application controls 

17. Which department should have the sole ability to provide information to the AIS about hiring, terminations, and pay rate changes?

A) payroll 

B) timekeeping 

C) production 


18. The document that lists each employee’s gross pay, payroll deductions, and net pay in a multicolumn format is called

A) an employee earnings statement. 

B) the payroll register. 

C) a deduction register. 

D) an employee time sheet summary.

19. Companies that specialize in processing payroll are known as

A) paycheck distribution companies.

B) payroll service bureaus.

C) professional employer organizations.

D) semi-governmental organizations.

20. Which of the following will limit a firm’s potential loss exposure from paycheck forgery?

A) Segregation of check distribution from payroll duties

B) Prompt redeposit of unclaimed paychecks

C) A separate payroll bank account

D) Direct deposit of checks

21. Recording interest earned on an investment is an example of which type of adjusting journal entry?

A) accrual entry 

B) deferral entry 

C) revaluation entry 

D) correcting entry 

22. Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers.

A) cost 

B) profit 

C) investment 

D) revenue 

23. Cheryl Liao is an accountant at Folding Squid Technologies. While making an adjusting entry to the general ledger, she received the following error message, “Your journal entry must be a numeric value. Please reenter.” This message was the result of a

A) validity check.

B) closed loop verification.

C) zero-balance check.

D) completeness test.

24. Budgets and performance reports should be developed on the basis of

A) responsibility accounting. 

B) generally accepted accounting principles. 

C) financial accounting standards. 

D) managerial accounting standards. 

25. An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n)

A) accrual entry. 

B) deferral entry. 

C) revaluation entry. 

D) correcting entry. 

26. Each event in an REA model will in most cases have at least one ________ agent and one ________ agent involved with the event.

A) internal; resource 

B) external; entity 

C) internal; employee 

D) internal; external 

27. The REA data model

A) is used in many areas of business and science.

B) was developed solely for use in designing accounting information systems.

C) classifies data into relationships, entities and accounts.

D) all of the above

28. Which of the following transactions is represented by the diagram below?

A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.

B) A grocery store sells products to consumers.

C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.

D) A firm sells movies to consumers through an online downloading service.

29. An entity-relationship (E-R) diagram

A) can represent the contents of any database.

B) are only used in conjunction with REA models.

C) can show a limited number of entities and relationships.

D) are used only to design new databases.

30. Relationships that affect the quantity of a resource are sometimes referred to as ________ relationships.

A) commitment

B) exchange

C) stockflow

D) duality

31. Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the net present value criterion?

A) Project A

B) Project B

C) Project C

D) Project D

32. When using the payback method to determine economic feasibility of projects, the company usually accepts the project with the

A) longest payback period. 

B) mid-range payback period. 

C) payback period that is equal to the project’s economic life. 

D) shortest payback period. 

33. Who is responsible for preparing the specifications that are used to create the programs?

A) management 

B) programmers 

C) systems analysts 

D) the information systems steering committee

34. Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the payback criterion?

A) Project A

B) Project B

C) Project C

D) Project D

35. The capital budgeting technique where estimated future cash flows are discounted back to the present is referred to as

A) the future value method. 

B) the internal rate of return. 

C) the net present value method. 

D) the payback method. 

36. When canned software is used for systems acquisition, the maintenance aspect of the operations and maintenance phase of the SDLC

A) involves a make-or-buy decision. 

B) is combined with the physical design phase. 

C) is eliminated. 

D) is the same. 

37. Benathir Donathat, director of the project committee, has received approval from management for implementation of a new accounting information system. After putting out an RFP, the committee settled on a vendor that will provide an industry standard software package and post-sale technical support. The committee decided to go with

A) canned software.

B) a turnkey system.

C) an outsourced system.

D) an end-user developed system.

38. The ________ method calculates and compares the processing times of different AIS to compare system performance.

A) benchmark problem 

B) mandatory requirements 

C) point scoring 

D) requirements costing 

39. End-user computing is likely to result in a(n)

A) well tested system.

B) well documented system.

C) rapidly developed system.

D) efficient system.

40. What would be one duty of second-line help desk personnel?

A) handling complicated queries requiring research 

B) provide callers with scripted answers 

C) using expert systems to quickly find answers 

D) None of the duties listed above pertain to second-line help desk personnel.

41. One process used to uncover and eliminate program errors is known as

A) black box testing. 

B) debugging. 

C) desk checking. 

D) white box testing. 

42. Who is responsible for identifying such risk factors in an implementation plan?

A) implementation team 

B) steering committee 

C) systems analysis team 

D) systems development team 

43. Which of the following describes a phase-in conversion?

A) Both the old and new AIS are operated simultaneously.

B) Elements of the old AIS are replaced gradually with elements of the new AIS.

C) The new AIS is introduced into a segment, rather than the whole organization.

D) The old AIS is terminated as the new AIS is introduced.

44. Phil in Marketing got a call from Chuck in ITS. “Phil, the system just generated a stock-out report. I wanted to give you a heads up. I’m sending it right over.” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

45. Chuck in ITS got a call from Phil in Marketing. “Chuck, I need you to do something for me. Query sales data for the first quarter and pull out all of the invoices that include the snow blower discount. I need a count and the total amount of the discount. Thanks.” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

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