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A. Byte, bit, record, field, file, database
B. Bit, byte, record, field, file, database
C. Bit, byte, field, record, file, database
D. Bit, byte, field, record, database, file
8. The COSO report written for the purpose of assisting managers in the challenge of managing risk
in their organization is entitled:
A. Internal Control – Integrated Framework
B. Enterprise Risk Management – Integrated Framework
C. Corporate Governance Guidance
D. IT Governance Guidance
9. Accountants have some form of use of the AIS in all but which role?
A. User
B. Programmer
C. Auditor
D. Designer
1. A prescribed sequence of work steps preformed in order to produce a desired result for the
organization is called a(n):
A. Accounting Information System
B. Business Process
C. Financial Transaction
D. Capital Transaction Process
2. The process that must identify the transactions to be recorded, capture all the important details
of the transactions, properly process the transaction details, and provide reports is termed the:
A. Revenue Process
B. Expenditure Process
C. Accounting Information System
D. Business Process
3. An accounting information system serves many functions - which of the following is NOT one of
those functions?
A. Capture the details of a transaction
B. Implement the start of a transaction
C. Provide reports of transactions
D. Process the transactions details into appropriate accounts
5. Which of the following is not one of the general types of business processes identified by the
textbook?
A. Revenue Processes
B. Expenditure Processes
C. Conversion Processes
D. Human Resource Processes
6. A company’s ____________ encompasses the tone of an organization and sets the basis for how
risk is viewed and addressed by an entity’s people.
A. Internal Environment
B. Internal Controls Framework
C. Code of Ethics
D. IT Governance Structure
8. Which of the following is least likely to be part of an accounting information system function?
A. Record the accounting data in the appropriate records.
B. Generation of data to be part of the information system.
C. Process the detailed accounting data.
D. Report the summarized accounting data.
9. Work steps that are internal controls within the business process would include:
A. Using an electronic register to record all sales transactions.
B. Combining both manual and computer based records.
C. Reconciling a cash register at the end of each day.
D. Preparation of internal reports to monitor the performance of a specific department.
10. Five different components of the accounting information system were presented in the
textbook. Which of the following is not one of those components?
A. Work steps within a business process intended to capture accounting data as the business
process occurs.
B. Work steps that are internal controls within the business process to safeguard assets and to
ensure the accuracy and completeness of the data.
C. Work steps that generate both internal and external reports.
D. Work steps to assure that all business processes are recorded using computer-based
procedures.
12. The entities, processes, and information flows that involve the movement of materials, funds,
and related information through the full logistics process, from the acquisition of raw materials
to the delivery of the finished products to the end use is a set of linked activities referred to as:
A. Management Information System
B. Supply Chain
C. Accounting Information System
D. Logistics Management
13. The organization and control of all materials, funds, and related information in the logistics
process, from the acquisition of raw materials to the delivery of finished products to the end
user is referred to as:
A. Supply Chain Management
B. Management Information System
C. Logistics Management
D. IT Enablement
15. Using IT systems to enhance efficiency and effectiveness of internal or supply chain processes is
called:
A. Information Technology Enablement
B. Information Systems Control
C. Information Technology Process Engineering
D. Information Technology Business Processes
16. The purposeful and organized changing of business processes to make them more efficient is
referred to as:
A. Information Technology Engineering
B. Information Systems Management
C. Business Process Reengineering
D. Business Process Supply Chain
18. The smallest unit of information in a computer system can have only one of two values, zero or
one, and is referred to as a(n):
A. Field
B. Record
C. Byte
D. Bit
20. IT Controls can be divided into two categories, general controls and application controls. Which
of the following is an example of a general control?
A. The alignment of a company’s IT strategy with its business strategy
B. The use of passwords to allow only authorized users to log into an IT-based accounting
system
C. The use of an elaborate set of checks and balances whereby a company’s leadership is held
accountable for building shareholder value
D. A company performing background checks on employees of its IT department
23. A collection of data stored on a computer in a form that allows the data to be easily accessed,
retrieved, manipulated, and stored is referred to as a(n):
A. Accounting Information System
B. Information Technology
C. Database
D. Master File
25. Accounting software traditionally uses two different types of files. The file type that is relatively
permanent and used to maintain the detailed data for each major process is a(n):
A. General Ledger
B. Master File
C. Transaction File
D. Subsidiary File
26. Accounting software traditionally uses two different types of files. The file type that is the set of
relatively temporary records that will be process to update the permanent file is referred to as
a(n):
A. Master File
B. General File
C. Transaction File
D. Subsidiary File
28. The organization of files in a computer system normally uses one of two different access
methods. The access method where the files store records in sequence, with one record stored
immediately after another, is referred to as:
A. Chronological Access
B. Sequential Access
C. Random Access
D. Numerical Access
29. The organization of files in a computer system normally uses one of two different access
methods. The access method where the files are not stored in sequence, one record not stored
immediately after another, is referred to as:
A. Indexed Access
B. Batch Access
C. Sequential Access
D. Random Access
31. There are two modes of processing transactions in accounting systems. The mode that will
record transactions, one at a time, is referred to as:
A. Batch Processing
B. Online Processing
C. Real-Time Processing
D. Sequential Processing
32. A type of online processing where a transaction is processed immediately so that the output is
available immediately is termed:
A. Virtual Processing
B. Sequential Processing
C. Real-Time Processing
D. Batch Processing
33. An integrated collection of enterprise-wide data that includes five to ten fiscal years of non-
volatile data, used to support management in decision making and planning is referred to as:
A. Operational Database
B. Relational Database
C. Data Storage
D. Data Warehouse
34. This type of database contains the data that are continually updated as transactions are
processed and includes data for the current fiscal year and supports day-to-day operations is
referred to as a(n):
A. Data Warehouse
B. Data Storage
C. Relational Database
D. Operational Database
35. The data in the data warehouse are said to be enterprise-wide because:
A. The data relate to all areas of the business.
B. The data are pulled from each of the operational databases and maintained in the data
warehouse for many fiscal periods.
C. All areas of the business are able to access the data warehouse.
D. All transactions across the all areas of the business are recorded in the data warehouse.
37. Two or more computers linked together to share information and / or resources is referred to as
a(n):
A. Computer Intranet
B. Computer Internet
C. Computer System
D. Computer Network
38. This type of computer network is one that spans a relatively small area - often confined to a
single building or group of buildings, and are intended to connect computers within an
organization.
A. Local Area Network
B. Land Arena Network
C. Extranet
D. Internet
40. A company’s private network, accessible only to the employees of that company is the:
A. WAN
B. Intranet
C. Internet
D. LAN
41. This computer network is similar to a company’s intranet except that it does allow access to
selected outsiders, such as buyers, suppliers, distributors, and wholesalers.
A. Ultranet
B. Internet
C. Extranet
D. LAN
45. Which of the following is NOT an objective of IT usage to support business processes?
A. Increased efficiency of business processes
B. Increased data to use in the data analytics process
C. Reduced cost of business processes
D. Increased accuracy of the data related to business processes
46. Which of the following is NOT one of the three components of electronic data interchange?
A. Commerce - encompasses all forms of electronic trading.
B. Intercompany - two or more companies conducting business electronically.
C. Standard business format - necessary so that the various companies can interact and trade
electronically.
D. Computer to computer - indicates that each company’s computers are connected via a
network.
47. This term refers to a system of hardware and software that captures retail sales transactions by
standard bar coding.
A. E-business
B. Electronic data interchange
C. Point of sale system
D. E-commerce
48. When a point of sale system is used and a customer checks out through a cash register, which of
the following processes occurs?
A. Net income is computed.
B. Inventory values are updated.
C. Accounts payable balances are updated.
D. Replacement inventory is purchased.
49. A system of computer hardware and software in which the software matches an invoice to its
related purchase order and receiving report is called:
A. Point of sale system
B. Electronic data interchange
C. Automated matching
D. Evaluated receipt settlement
51. This system enables a vendor to present an invoice to its trading partner via the internet,
eliminating the paper, printing, and postage costs of traditional paper invoicing.
A. Evaluated receipt settlement
B. Electronic invoice presentation and payment
C. Automated matching
D. Electronic data interchange
52. A multi-module software system designed to manage all aspects of an enterprise usually broken
down into modules such as financials, sales, human resources, and manufacturing, is referred to
as a(n):
A. Electronic data system
B. Electronic data interchange
C. Enterprise resource planning
D. Electronic resource program
53. Management has the responsibility, and the ability, to take action to reduce risks or to lessen
the impact al nearly all risks an organization faces. The steps taken by management to lessen
the risk or reduce the impact of the risk, are referred to as:
A. Programs
B. Risk assessment
C. Information evaluation
D. Controls
54. IT Controls can be divided into two categories, general controls and application controls. Which
of the following is an example of a general control?
A. The alignment of a company’s IT strategy with its business strategy.
B. The use of passwords to allow only authorized users to log into an IT-based accounting
system.
C. The use of an elaborate set of checks and balances whereby a company’s leadership is held
accountable for building shareholder value.
D. A company performing background checks on employees of its IT department.
55. Which of the following groups of professionals within an organization have a history of designing
and implementing the controls to lessen risks?
A. Management
B. Accountants
C. Human Resources
D. Lawyers
58. A comprehensive report on enterprise risk management was issued by this organization.
A. American Accounting Association
B. New York Stock Exchange
C. Institute of Internal Auditors
D. Committee on Sponsoring Organizations
59. A process, effected by an entity’s board of directors, management and other personnel, applied
in strategy setting and across the enterprise, designed to identify potential events that may
affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance
regarding the achievement of entity objectives is referred to as:
A. Enterprise resource planning
B. Enterprise risk management
C. IT system control structure
D. Corporate governance structure
60. In order to achieve the objective of managing risk, management should establish control
structures that include, at a minimum:
A. Accounting internal controls.
B. Accounting internal controls, IT controls, corporate governance, enterprise risk
management, and IT governance.
C. IT controls, IT governance, corporate governance, and accounting internal controls.
D. IT controls and accounting internal controls.
61. The company’s development and adherence to this should reduce the opportunities for
managements or employees to conduct fraud.
A. Code of ethics
B. Internal control structure
C. Application controls
D. Corporate governance
62. The COSO report, Internal Controls – Integrated Framework, identified interrelated components
of internal control. Which of the following is not one of those components?
A. Monitoring
B. Risk assessment
C. Control activities
D. Enterprise risk management
65. An elaborate system of checks and balances, whereby a company’s leadership is held
accountable for building shareholder value and creating confidence in the financial reporting
processes, is referred to as:
A. Enterprise risk management
B. Corporate governance
C. Application controls
D. Internal control structure
66. The purpose of this 2002 act was to improve financial reporting and reinforce the importance of
corporate ethics.
A. Foreign Corrupt Practices Act
B. Sarbanes-Oxley Act
C. Securities and Exchange Act
D. Treadway Act
67. Which of the following is not one of the corporate functions interrelated within the corporate
governance system?
A. Management Oversight
B. Ethical Conduct
C. Risk Assessment
D. Financial Stewardship
68. The proper management, control, and use of IT systems are known as:
A. IT Governance
B. IT Controls
C. IT Risk Management
D. IT Code of Ethics
71. There are many reasons for accountants to become aware of potential unethical behaviors.
Which of the following is not one of the reasons identified by the authors?
A. Accountants are responsible for identifying unethical and illegal activities.
B. Accounts assist in developing and implementing internal control structures that should
decrease the chance of unethical actions.
C. Accountants are often pressured to assist in, or cover up, unethical actions.
D. Accountants deal with assets or records that could easily tempt accountants to engage in
unethical behavior.
2. Each business process has a direct effect on the financial status of an organization.
FALSE: The process could have an indirect effect.
3. Few accounting information systems rely on computer hardware and software to track business
processes.
FALSE: Most accounting information systems rely on computer hardware and software.
4. The rethinking and redesigning that occur during business process reengineering are aided by
the use of information technology.
TRUE
5. There are very few business processes that have the potential to be improved by IT enablement.
FALSE
9. When files are organized as sequential access, the sequence is normally based on one key
record in each file.
FALSE: the key is a field – not a record
10. Batch processing is best suited to applications that have large volumes of similar transactions
that can be processed as regular intervals.
TRUE
14. Online processing is best suited to situations where there is a large volume of records but only a
few records are needed to process any individual transaction.
TRUE
15. Each time a new transaction is completed, parts of the data warehouse must be updated.
FALSE: parts of the operational database must be updated.
16. Data in the data warehouse are called nonvolatile because they do not change rapidly in the
same way that operational data change.
TRUE
17. A system of local area networks connected over any distance via other net work connections is
called a WAN, or wide area network.
TRUE
19. The “intercompany” component of electronic data interchange means that two or more
companies are conducting business electronically.
TRUE
20. In order to have an automated matching system it is necessary to have access to paper copies of
purchase orders and invoices.
FALSE: All of the related files need to be online.
22. The evaluated receipt settlement system is an IT enabled system that reduces the time and cost
of processing customer payments.
FALSE: processing vendor payments.
24. Traditional accounting software is much more comprehensive and encompassing that ERP
software.
FALSE
25. Before ERP software systems, modules such as human resources were in separate software but
well integrated with the accounting software.
FALSE: were NOT well integrated.
26. Although accountants are heavily involved in the creation, implementation, and monitoring of
the control structure, management has the ultimate responsibility to establish a control
environment.
TRUE
27. Once a company has decided on the control processes needed, it is not necessary to have an
ongoing assessment of risks.
FALSE: it is necessary to have an ongoing assessment of risks.
28. A code of ethics should reduce opportunities for employees to conduct fraud if management
emphasizes the cost and disciplines or discharges those who violate it.
TRUE
29. IT systems are to be chosen and implemented to support the attainment of strategies and
objectives.
TRUE
30. It is likely that an accountant will select a career path, within accounting, that will not in some
way, involve the use of an accounting information system.
FALSE
31. An auditor cannot make informed decisions necessary to complete the audit without an
understanding of the accounting information system.
TRUE
32. The accounting information system is often the tool used to commit or cover up unethical
behavior.
TRUE
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