47 Free Test Bank for Accounting Information Systems

10th Edition by Gelinas Multiple Choice Questions

Internal control is a process designed to provide absolute assurance
regarding achieving objectives in which of the following?
1.

a. efficiency and effectiveness of operations

2.

b. reliability of reporting

3.

c. compliance with applicable laws and regulations

4.

d. none of the above

The degree to which information includes data about every relevant

object or event necessary to make a decision is
1.

a. accuracy

2.

b. completeness

3.

c. neutrality

4.

d. comparability

____ are facts and figures in raw form.

1.

a. Data

2.

b. Information

3.

c. Objectives

4.

d. Goals

The three themes of the text book include all of the following
except:
1.

a. enterprise systems

2.

b. risk assessment

3.

c. e-business

4.

d. internal control

At which level of the organization are decisions most

unstructured?
1.

a. operations and business event processing level

2.

b. strategic management level

3.

c. operations management level

4.

d. tactical management level

The Sarbanes-Oxley Act of 2002 dramatically changed the daily work

of financial accountants and auditors because it
1.

a. expanded the scope of the audit beyond financial information

2.

b. required that organizations work with their auditors to design systems of

internal control

3.

c. required that external auditors report on the effectiveness of an organizations

system of internal control

4.

d. expanded the opportunities for auditors to engage in consulting activities with

their audit clients

____ improves the decision maker's capacity to predict, confirm, or

correct earlier expectations
1.

a. Understandability

2.

b. Feedback value

3.

c. Neutrality

4.

d. Comparability

Which of the following is one of the three most prominent

management activities?
1.

a. production

2.

b. finance

3.

c. marketing

4.

d. planning

The sequence of components in the functional model of an information

system is
1.

a. Output, Input, Processing, Users

2.

b. Input, Processing, Output, Users

3.

c. Processing, Input, Users, Output

4.

d. Users, Processing, Input, Output

Generally, which of the following is NOT one of the three roles an

accountant typically fills in relation to the AIS?
1.

a. designer

2.

b. programmer

3.

c. user

4.

d. auditor

Which of the following is an element of the operations

process?
1.

a. production

2.

b. planning

3.

c. controlling

4.

d. decision making

An information system:
1.

a. is composed of only the computer-based information resources of an

organization

2.

b. may consist of both computer-based and manual components

3.

c. is different from a data processing system because it uses computers

4.

d. is not generally used for transaction processing

Accounting is an activity of the

1.

a. management process

2.

b. operations process

3.

c. information process

4.

d. organization process

All of the following are components of reliability except:

1.

a. validity

2.

b. accuracy

3.

c. verifiability

4.

d. feedback value

A man-made system that generally consists of an integrated set of

computer-based components and manual components established to
collect, store, and manage data and to provide output information to
users.
1.

a. information system

2.

b. output system

3.

c. business event system

4.

d. database system

Historically, the relationship between an information system and an

accounting information system has been:
1.

a. the AIS is a part of the IS

2.

b. the IS is a part of the AIS

3.

c. the IS and the AIS are one in the same

4.

d. the IS and AIS are unrelated

A set of interdependent elements that together accomplish specific

objectives is a
1.

a. system

2.

b. subsystem

3.

c. database

4.

d. accounting information system

Which of the following is an unstructured decision?

1.

a. how much inventory to reorder

2.

b. how fast an assembly line should operate

3.

c. when scheduled maintenance should be performed

4.

d. which research and development projects should be undertaken

Which of the following statements is false?

1.

a. Strategic planning is relatively unstructured.

2.

b. Strategic planning uses much information from outside the firm.

3.

c. Tactical management focuses on relevant operations units and uses some

external information.

4.

d. Tactical management uses the most detailed and accurate information.

A system can be further divided into

1.

a. input data

2.

b. subsystems

3.

c. databases

4.

d. enterprise systems

The ability of more than one individual to come to the same

measurement is known as
1.

a. accuracy

2.

b. completeness

3.

c. verifiability

4.

d. comparability

The central repository for all the data related to the enterprise's
business activities and resources.
1.

a. information system

2.

b. management information system

3.

c. enterprise database

4.

d. strategic planning

Which of the following is NOT one of the three steps in decision

making as described in the text

1.

a. action

2.

b. intelligence

3.

c. design

4.

d. choice

The AICPA has identified all but which of the following as assurance
services?
1.

a. consulting

2.

b. information systems reliability

3.

c. electronic commerce

4.

d. All of these are assurance services identified by the AICPA.

The three logical components of a business process include all of the

following except:
1.

a. management process

2.

b. operations process

3.

c. information process

4.

d. organization process

____ is (are) data presented in a form that is useful to decision

makers.
1.

a. Activities

2.

b. Information

3.

c. Objectives

4.

d. Goals

Which of the following is NOT a business processes

element?
1.

a. Business operations

2.

b. Events processing

3.

c. Management decision making

4.

d. Technology

E-business does not include

1.

a. business processes between individuals and organizations

2.

b. electronic networks

3.

c. ERP systems

4.

d. interaction between back-office and front-office processes

____ requires information to assess the environment and to project

future events and conditions.
1.

a. Strategic management

2.

b. Tactical management

3.

c. Operations management

4.

d. Operations and business event processing

Which of the following statements is false?

1.

a. Management designs the operations and information processes and

establishes these processes with people, equipment, and policies.

2.

b. Information process users include operations personnel, management, and

people outside the organization.

3.

c. Operations related and accounting related processes are designed by those

external to the organization.

4.

d. None of the statements are false.

Regarding management problem structure and information

requirements, which of the following represents the vertical information
flows from lowest to highest?
1.

a. strategic management, tactical management, operations management,

operations and business event processing

2.

b. operations and business event processing, strategic management, tactical

management, operations management

3.

c. tactical management, operations management, strategic management,

operations and business event processing

4.

d. operations and business event processing, operations management, tactical

management, strategic management

A man-made system consisting of people, equipment, organization,

policies and procedures with the objective of accomplishing the work
of the organization.
1.

a. operations process

2.

b. management process c. information process

3.

d. planning process

Decision-making is an activity of the

1.

a. management process

2.

b. operations process

3.

c. information process

4.

d. organization process

All of the following are components of relevance except:

1.

a. feedback value

2.

b. predictive value

3.

c. verifiability

4.

d. timeliness

A man-made system consisting of people, authority, organization,

policies and procedures whose objective is to accomplish the work of
planning and controlling the operations of the organization.
1.

a. operations process

2.

b. management process

3.

c. information process

4.

d. planning process

Efficiency and effectiveness of operations are goals of:

1.

a. enterprise systems

2.

b. risk assessment

3.

c. e-business

4.

d. internal control

The text takes the following view of the relationship between an IS and
an AIS:
1.

a. the AIS is part of the IS

2.

b. the IS is part of the AIS

3.

c. the IS and the AIS are one in the same

4.

d. the AIS is the primary system and the IS the subsystem

Enterprise systems
1.

a. integrate back-office and front-office processes

2.

b. can include ERP systems

3.

c. have become fairly easy to implement

4.

d. facilitate business processes between organizations

A system that consists of an integrated set of computer-based and

manual components established to collect, store, and manage data
and to provide output information to users is a(n)
1.

a. output

2.

b. ERP

3.

c. database

4.

d. information system

Structured decision
1.

a. are usually tactical management decisions

2.

b. require the use of an organizations AIS system.

3.

c. are relatively routine and repetitive

4.

d. All of the above

The information quality that enables users to identify similarities and

differences in two pieces of information is
1.

a. Understandability

2.

b. Predictive value

3.

c. Neutrality

4.

d. Comparability

The ____ manager may be more concerned with accuracy than with
timeliness.
1.

a. strategic

2.

b. tactical

3.

c. operations

4.

d. All of the above.

According to the ____, one of the responsibilities of accountants is to

assess financial operations and make best-practices
recommendations to management.
1.

a. AICPA

2.

b. Sarbanes-Oxley Act of 2002

3.

c. Occupational Outlook Handbook

4.

d. Accounting Information System

Which of the following statements is true?

1.

a. The information process facilitates operations by maintaining data such as

inventory and customer data.

2.

b. The information process provides the means by which management monitors

the operations process.

3.

c. Management designs the operations and information processes.

4.

d. All of the statements are true.

The correspondence or agreement between the information and the

actual events or objects that the information represents is known
as

1.

a. accuracy

2.

b. completeness

3.

c. neutrality

4.

d. comparability

If information arrives too late to impact a decision then there is a

problem with
1.

a. timeliness

2.

b. relevance

3.

c. completeness

4.

d. neutrality

Which of the following questions might the accountant answer in the

design of the AIS?
1.

a. what will be recorded

2.

b. what controls are necessary

3.

c. what reports will be produced

4.

d. all of the above

The sequence of components in the functional model of an information

system is
1.

Output, Input, Processing, Users

2.

Input, Processing, Output, Users

3.

Processing, Input, Users, Output

4.

Users, Processing, Input, Output

Enterprise systems
1.

integrate back-office and front-office processes

2.

can include ERP systems

3.

have become fairly easy to implement

4.

facilitate business processes between organizations

Which of the following is one of the three most prominent

management activities?
1.

production

2.

finance

3.

marketing

4.

planning

The Sarbanes-Oxley Act of 2002 dramatically changed the daily work

of financial accountants and auditors because it
1.

expanded the scope of the audit beyond financial information

2.

required that organizations work with their auditors to design systems of internal
control

3.

required that external auditors report on the effectiveness of an organizations

system of internal control

4.

expanded the opportunities for auditors to engage in consulting activities with

their audit clients

A set of interdependent elements that together accomplish specific

objectives is a
1.

system

2.

subsystem

3.

database

4.

accounting information system

Internal control is a process designed to provide absolute assurance

regarding achieving objectives in which of the following?
1.

efficiency and effectiveness of operations

2.

reliability of reporting

3.

compliance with applicable laws and regulations

4.

none of the above

The ____ suggests that technology improves information available for

decision making
1.

AICPA

2.

Sarbanes-Oxley Act of 2002

3.

Occupational Outlook Handbook

4.

Accounting Information System

Which of the following is NOT one of the three steps in decision

making as described in the text
1.

action

2.

intelligence

3.

design

4.

choice

A system can be further divided into

1.

input data

2.

subsystems

3.

databases

4.

enterprise systems

A man-made system that generally consists of an integrated set of

computer-based components and manual components established to
collect, store, and manage data and to provide output information to
users.
1.

information system

2.

output system

3.

business event system

4.

database system

Which of the following is an unstructured decision?

1.

how much inventory to reorder

2.

how fast an assembly line should operate

3.

when scheduled maintenance should be performed

4.

which research and development projects should be undertaken

An information system:

1.

is composed of only the computer-based information resources of an

organization

2.

may consist of both computer-based and manual components

3.

is different from a data processing system because it uses computers

4.

is not generally used for transaction processing

A primary reason that the FASB requires that GAAP be consistently

applied from one period to the next is
1.

accuracy

2.

completeness

3.

neutrality

4.

comparability

____ are facts and figures in raw form.

1.

data

2.

information

3.

objectives

4.

goals

____ requires information to assess the environment and to project

future events and conditions.
1.

strategic management

2.

tactical management

3.

operations management

4.

operations and business event processing

The text takes the following view of the relationship between an IS and
an AIS:
1.

the AIS is part of the IS

2.

the IS is part of the AIS

3.

the IS and the AIS are one in the same

4.

the AIS is the primary system and the IS the subsystem

The three themes of the text book include all of the following
except:
1.

enterprise systems

2.

risk assessment

3.

e-business

4.

internal control

If information arrives too late to impact a decision then there is a

problem with
1.

timeliness

2.

relevance

3.

completeness

4.

neutrality

Which of the following statements is true?

1.

With a more structured decision, there is a need for less accurate information.

2.

With a more structured decision, there is a need for summarized data.

3.

With a more structured decision, there is a need for well defined, more accurate
data.

4.

With a less structured decision, there is a need for well defined more accurate
data.

The three logical components of a business process include all of the

following except:
1.

management process

2.

operations process

3.

information process

4.

organization process

All of the following are components of reliability except:

1.

validity

2.

accuracy

3.

verifiability

4.

feedback value

Efficiency and effectiveness of operations are goals of:

1.

enterprise systems

2.

risk assessment

3.

e-business

4.

internal control

____ improves the decision maker's capacity to predict, confirm, or

correct earlier expectations
1.

understandability

2.

predictive value and feedback value

3.

neutrality

4.

comparability

A man-made system consisting of people, authority, organization,

policies and procedures whose objective is to accomplish the work of
planning and controlling the operations of the organization.
1.

operations process

2.

management process

3.

information process

4.

planning process

Historically, the relationship between an information system and an

accounting information system has been:
1.

the AIS is a part of the IS

2.

the IS is a part of the AIS

3.

the IS and the AIS are one in the same

4.

the IS and AIS are unrelated

____ requires information that focuses on the day to day management

of the business.
1.

strategic management

2.

tactical management

3.

operations management

4.

operations and business event processing

A system that consists of an integrated set of computer-based and

manual components established to collect, store, and manage data
and to provide output information to users is a(n)
1.

output

2.

ERP

3.

database

4.

information system

The AICPA has identified all but which of the following as assurance
services?
1.

risk assessment

2.

information systems reliability

3.

electronic commerce

4.

consulting

Regarding management problem structure and information

requirements, which of the following represents the vertical information
flows from lowest to highest?
1.

strategic management, tactical management, operations management,

operations and business event processing

2.

operations and business event processing, strategic management, tactical

management, operations management

3.

tactical management, operations management, strategic management,

operations and business event processing

4.

operations and business event processing, operations management, tactical

management, strategic management

Which of the following statements is true?

1.

The information process facilitates operations by maintaining data such as

inventory and customer data.

2.

The information process provides the means by which management monitors the
operations process.

3.

Management designs the operations and information processes.

4.

All of the statements are true.

Generally, which of the following is NOT one of the three roles an

accountant typically fills in relation to the AIS?
1.

designer

2.

programmer

3.

user

4.

auditor

The degree to which information includes data about every relevant

object or event necessary to make a decision is
1.

accuracy

2.

completeness

3.

neutrality

4.

comparability

The ability of more than one individual to come to the same

measurement is known as
1.

accuracy

2.

completeness

3.

verifiability

4.

comparability

Decision-making is an activity of the

1.

management process

2.

operations process

3.

information process

4.

organization process

All of the following are components of relevance except:

1.

feedback value

2.

predictive value

3.

verifiability

4.

timeliness

The central repository for all the data related to the enterprise's
business activities and resources.
1.

information system

2.

management information system

3.

enterprise database

4.

strategic planning

Which of the following questions might the accountant answer in the

design of the AIS?
1.

what will be recorded

2.

what controls are necessary

3.

what reports will be produced

4.

all of the above

Which of the following statements is false?

1.

Management designs the operations and information processes and establishes

these processes with people, equipment, and policies.

2.

Information process users include operations personnel, management, and

people outside the organization.

3.

Operations related and accounting related processes are designed by those

external to the organization.

4.

None of the statements are true.

Which of the following statements is false?

1.

Strategic planning is relatively unstructured.

2.

Strategic planning uses much information from outside the firm.

3.

Tactical management focuses on relevant operations units and uses some

external information.

4.

Tactical management uses the most detailed and accurate information.

Accounting is an activity of the

1.

management process

2.

operations process

3.

information process

4.

organization process

E-business does not include

1.

business processes between individuals and organizations

2.

electronic networks

3.

ERP systems

4.

interaction between back-office and front-office processes

The correspondence or agreement between the information and the

actual events or objects that the information represents is known
as

1.

accuracy

2.

completeness

3.

neutrality

4.

comparability

The information quality that enables users to identify similarities and

differences in two pieces of information is
1.

understandability

2.

predictive value and feedback value

3.

neutrality

4.

comparability

Which of the following is an element of the operations

process?
1.

production

2.

planning

3.

controlling

4.

decision making

____ is (are) data presented in a form that is useful to decision

makers.
1.

activities

2.

information

3.

objectives

4.

goals

A man-made system consisting of people, equipment, organization,

policies and procedures with the objective of accomplishing the work
of the organization.
1.

operations process

2.

management process

3.

information process

4.

planning process

At which level of the organization are decisions most

unstructured?
1.

operations and business event processing level

2.

strategic management level

3.

operations management level

4.

tactical management level

35 Free Test Bank for Accounting Information Systems

10th Edition by Gelinas True - False Questions
According to the Sarbanes-Oxley Act of 2002 and PCAOB Auditing
Standard No. 5, management must audit and report on auditors'
assertions about the organizations' systems of internal
controls.
1.

True

2.

False

Information has understandability when it is capable of making a

difference in a decision-making situation..
1.

True

2.

False

Sales/marketing information system is traditionally part of the

AIS.
1.

True

2.

False

Information about a customer's credit history that is received after the

decision to grant additional credit lacks completeness.
1.

True

2.

False

As a user of an AIS an accountant may be called upon to participate in

the AIS design process.
1.

True

2.

False

Enterprise systems integrate an organization's business processes

and information from all of an organization's functional areas.
1.

True

2.

False

Accuracy is the correspondence or agreement between the

information and the actual events or objects that the information
represents.
1.

True

2.

False

It is critical for accountants to understand enterprise resource planning

(ERP) systems.
1.

True

2.

False

The Sarbanes-Oxley Act's Section 404 creates changes in both how

companies document and evaluate internal control and how auditors
audit and report on internal control.
1.

True

2.

False

Production and personnel are part of the operations process.

1.

True

2.

False

Historically the purpose of an accounting information system is to

collect, process, and report financial aspects of business
events.

1.

True

2.

False

E-business is the application of electronic networks to undertake

business processes among the functional areas in an
organization.
1.

True

2.

False

Strategic management requires more detailed information than

operations management.
1.

True

2.

False

The management process includes marketing and sales.

1.

True

2.

False

The three steps in decision making take place in the sequence of (1)
intelligence (2) design (3) choice.

1.

True

2.

False

Sarbanes-Oxley Section 404 compliance is a major line of business

for the biggest accounting firms.
1.

True

2.

False

Billing/accounts receivable is traditionally part of the AIS.

1.

True

2.

False

The consistency principle is violated when a firm uses straight-line

depreciation one year and changes to declining balance depreciation
the next year.
1.

True

2.

False

The three themes of the text are operating systems, e-business, and
internal control.

1.

True

2.

False

What controls will be necessary is a question that an accountant

answers in the design of the AIS.
1.

True

2.

False

The role of the accountant has evolved to include non-financial

information and information technology.
1.

True

2.

False

The Sarbanes-Oxley Act of 2002 has dramatically changed the daily

work of financial accountants and auditors.
1.

True

2.

False

As a designer of an AIS the accountant will test a new system's

controls.

1.

True

2.

False

According to the Sarbanes-Oxley Act of 2002, management must

identify, document, and evaluate significant internal controls.
1.

True

2.

False

Operations management requires information that is more accurate

and timely than strategic management.
1.

True

2.

False

Internal control is a process that provides complete assurance that the

organization is meeting its objectives, such as efficiency and
effectiveness of operations and reliable reporting.
1.

True

2.

False

According to the Sarbanes-Oxley Act's Section 409, material changes

in the organization's financial condition must be disclosed to the public
on a rapid and current basis.
1.

True

2.

False

Strategic managers use more information from outside the

organization than do operations managers.
1.

True

2.

False

Deciding how much credit to grant to a customer is a structured

decision.
1.

True

2.

False

The MIS is a subsystem of the AIS.

1.

True

2.

False

The most important information for tactical management involves

information about the organization's environment.
1.

True

2.

False

Information that is capable of making a difference in a decision-making

situation, by reducing uncertainty or increasing knowledge for that
particular decision, has the quality of relevance.
1.

True

2.

False

An information system consists of an integrated set of computer-based

and manual components established to provide information to
users.
1.

True

2.

False

The Sarbanes Oxley Act of 2002 applies to publicly traded companies

and not-for-profit entities.
1.

True

2.

False

Information systems reliability and electronic commerce have been

identified by the AICPA as potential assurance services.
1.

True

2.

False