AIS Ch.1-3 – Flashcards
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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 user is a set of linked activities referred to as:
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Supply Chain
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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:
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Supply Chain Management
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When discussing the supply chain:
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An entity may not be able to directly control all interrelated activities within the supply chain.
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Using IT systems to enhance efficiency and effectiveness of internal or supply chain processes is called:
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Information Technology Enablement
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The purposeful and organized changing of business processes to make them more efficient is referred to as:
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Business Process Reengineering
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The use of BPR (Business Process Reengineering) is two fold: (1) Aligns business processes with the IT systems used to record processes and, (2):
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Improves the efficiency and effectiveness of these processes.
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The smallest unit of information in a computer system can have only two values, zero or one, and is referred to as a(n):
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Bit
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A unit of storage that represents one character is referred to as a:
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Byte
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A set of related fields is referred to as a:
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Record
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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):
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Database
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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):
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Master File
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Accounting software traditionally uses two different types of files. The file type that is the set of relatively temporary records that will be processed to update the permanent file is referred to as a(n):
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Transaction File
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Two or more computers linked together to share information and/or resources is referred to as a(n):
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Computer Network
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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.
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Local Area Network (LAN)
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The global computer network, or "information super highway," is the:
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Internet
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A company's private network, accessible only to the employees of that company is the:
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Intranet
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A contemporary type of computer infrastructure that is used by an increasing number of companies involves the use of shared services, software, and/or data stored on servers in a remote location, which are accessible over a network, is referred to as:
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Cloud Computing
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The intercompany, computer-to-computer transfer of business documents in a standard business format is called:
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Electronic Data Interchange
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This term refers to a system of hardware and software that captures retail sales transactions by standard bar coding.
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Point of Sale System
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A system of computer hardware and software in which the software matches an invoice to its related purchase order and receiving report is called:
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Automated Matching
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An invoice-less system in which computer hardware and software complete an invoice-less match that is a comparison of the purchase order with the goods received is termed:
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Evaluated Receipt System
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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):
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Enterprise Resource Planning
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Management has the responsibility, and the ability, to take action to reduce risks or to lessen the impact at 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:
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Controls
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Which of the following groups of professionals within an organization have a history of designing and implementing the controls to lessen risks?
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Accountants
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A comprehensive report on enterprise risk management was issued by this organization.
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Committee on Sponsoring Organizations
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A process, enacted 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:
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Entity Risk Management
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In order to achieve the objective of managing risk, management should establish control structures that include, at a minimum:
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IT Controls, IT Governance, Corporate Governance, and Accounting Internal Controls
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The company's development and adherence to this should reduce the opportunities for management or employees to conduct fraud.
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Code of Ethics
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The COSO report, Internal Controls - Integrated Framework, identified interrelated components of internal control. Which of the following is NOT one of those components?
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Enterprise Risk Management
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The purpose of this 2002 act was to improve financial reporting and reinforce the importance of corporate ethics.
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Sarbanes-Oxley Act
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Which of the following is not one of the corporate functions interrelated within the corporate governance system?
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Risk Assessment
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The proper management, control, and use of IT systems are known as:
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IT Governance
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When a company receives returned goods from a customer, the business process to accept the return would most likely be a(n):
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Revenue Process
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Which of the following is least likely to be an output of the accounting information system:
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A Bar Code
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Which of the following is not true of the supply chain?
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The supply chain excludes customers
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Which of the following is not an objective of IT enablement?
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Reduced security problems
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The correct order of the computer data hierarchy is:
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Bit, byte, field, record, file, database
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The process of searching for identifiable patterns in data is called:
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Data mining
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An IT enabled system for purchasing that is an "invoice-less" system is called a(n):
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Evaluated Receipt System
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The COSO report written for the purpose of assisting managers in the challenge of managing risk in their organization is entitled:
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"Enterprise Risk Management-Integrated Framework"
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Accountants have some form of use of the AIS in all but which role?
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Programmer
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Which of the following is not true of unethical behavior?
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The only category of unethical behavior for accountants is inflating revenue
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A prescribed sequence of work steps completed in order to produce a desired result for an organization is the definition of:
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Business Process
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Which of the following correctly states the order of steps in a manual accounting system?
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Source documents, journals, ledgers, reports
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The choice of accounting information systems will depend on all of the following except:
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The ability of the company to capture information
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In order to organize the study of accounting information systems, the authors divided the systems in place into three categories. Which of the following is NOT one of those categories?
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Client-Server Systems
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A source document serves important functions in the accounting system. Which of the following is not one of those functions?
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Provides the output data for financial reports
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An output of the accounting system that can be used as an input in a different part of the accounting system is referred to as:
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Turnaround Document
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Many of the accounting software systems consist of modules. Which of the following statements is false related to these modules?
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Are referred to as special purpose systems
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An existing system within the organization that uses older technology is called a(n):
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Legacy System
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A set of processes, software and hardware tools, methodologies, and technologies to integrate software systems is referred to as:
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Enterprise-application integration
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A use of enterprise application integration would include:
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All listed items would be included: Bridge the legacy systems to the new hardware and software; intended to consolidate, connect, and organize all of the computer applications, data, and business processes; allow real-time exchange and management of all the critical information
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Which of the following statements is false?
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New programs sold by software development companies are not as user friendly as the legacy systems
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This type of computing means that there are two types of computers networked together to accomplish the application processing:
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Client-server computing
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Which of the following is not a main component of client-server system?
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The client does not participate in the processing or data manipulation
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Which of the following is not an example of cloud computing?
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Purchasing songs from iTunes and downloading those songs onto your computer
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Which of the following is not an advantage to a cloud model of e-mail?
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Costs associated with maintaining are higher but are more controllable.
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There are a number of advantages to cloud computing. Which of the following is one of those advantages?
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All of the above: As a company grows, it can easily purchase new capacity from the cloud provider; once the software and data are stored in the cloud, it can be accessed by multiple devices from multiple locations; the company has reduced need for servers and data storage
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There were four market segments identified by the authors in Chapter 2. Which of the following is not one of those segments?
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Legacy Company Systems
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A printed code consisting of a series of vertical, machine readable, rectangular bars and spaces, that vary in width and are arranged in specific ways to represent letters and numbers are referred to as:
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Bar Coding
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A method of using hardware and software that captures retail sales transactions by standard bar coding is referred to as:
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Point of Sale System
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The major difference between EDI and e-business is:
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EDI uses dedicated networks and e-business uses the internet
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After the accounting information has been input into the accounting system, it must be processed. Process accounting data involves:
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Calculations, classification, and summarization
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When all similar transactions are grouped together for a specified time and then processed together as a group, the process is referred to as:
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Batch Processing
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The processing system where transactions are processed immediately and where output is available immediately is referred to as:
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Real-time Processing
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The advantages to real-time processing include:
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All of the above: as data is entered, the system checks for input errors - therefore, errors can be corrected immediately; information is provided to users on a timely basis; all files are constantly up to date
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The disadvantages to real-time processing include:
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The single database that is shared is more susceptible to unauthorized access
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Documentation of the accounting system allows:
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The accountant to analyze and understand the procedures and business process and the systems that capture and record the accounting data
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A pictoral representation of business processes in which the actual flow and sequence of events in the process are presented in the diagram form - the start of the process, the steps within the process, and the finish of the process is referred to as:
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Process Map
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This method of system documentation is intended to show the entire system, including inputs manual and computerized processes, and outputs.
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System Flowcharting
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Which of the following statements is not true regarding business processes?
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Business processes categorized as expenditure processes are intended to be processes that serve customers
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In a manual system, an adjusting entry would most likely be initially recorded in a:
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General journal
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Which of the following is not a disadvantage of maintaining legacy systems?
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They contain invaluable historical data that may be difficult to integrate into newer systems
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Which of the following is a disadvantage of purchased accounting software, compared with software developed in-house?
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It is custom-designed for that company
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Which of the following is not a method of updating legacy systems?
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Backoffice ware
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When categorizing the accounting software market, a company with revenue of $8 million would most likely purchase software from which segment?
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Midmarket
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An IT system that uses touch-screen cash registers as an input method is called:
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Point of Sale System
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When similar transactions are grouped together for a specific time for processing, it is called:
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Batch Processing
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Which of the following is not correct regarding the ways that real-time systems differ from batch systems?
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Processing cho9ices are menu-driven
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In documenting systems, which pictorial method is described as a method that diagrams the actual flow and sequence of events?
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Process Map
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Each of the following companies was involved in fraudulent financial reporting during 2001 and 2002, except:
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Microsoft Corporation
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In addition to ethical practices, management has an obligation to maintain a set of processes and procedures to assure accurate financial reporting and protection of company assets. This obligation arises because:
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All of the above: Many groups have expectations of management; management has a stewardship obligation to its investors; management has an obligation to provide accurate reports to non-investors
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The careful and responsible oversight and use of the assets entrusted to management is referred to as:
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Stewardship
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If an organization's IT systems are not properly controlled, they may become exposed to the risks of:
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All of the above: unauthorized access; erroneous processing; service interruption
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Which individual or group has the responsibility to establish, enforce, and exemplify the principles of ethical conduct within an organization?
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Management
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The theft, concealment, and conversion of personal gain of another's money, physical assets, or information is termed:
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Fraud
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The theft of any item of value is referred to as:
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Misappropriation of Assets
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Financial pressures, market pressures, job-related failures, and addictive behaviors are all examples of which condition of the Fraud Triangle?
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Incentive
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Circumstances that provide access to the assets or records that are the objects of the fraudulent activity describes which condition of the Fraud Triangle?
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Opportunity
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Fraudsters typically try to justify their behavior by telling themselves that they intend to repay the amount stolen or that they believe the organization owes them the amount stolen. This justification is referred to as:
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Rationalization
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Which of the following is the most common method of detecting occupational fraud?
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Tip from an employee, customer, or vendor
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The falsification of accounting reports is referred to as:
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Earnings Management
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Management circumvention of systems or internal controls that are in place is termed:
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Management Override
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When two or more people work together to commit a fraud, it is called:
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Collusion
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Jamie Stark, a sales employee, stole merchandise from her employer, and Frank Adams, the accounting clerk, covered it up by altering the inventory records. This is an example of:
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Collusion
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The theft of proprietary company information is called:
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Espionage
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This type of external computer fraud is intended to overwhelm an intended target computer system with so much bogus network traffic so that the system is unable to respond to valid traffic:
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DoS Attack
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The Sarbanes-Oxley act was passed in 2002 as Congress's response to the many situations of fraudulent financial reporting discovered during 2001. The intention of the Act was:
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Reform accounting, financial reporting, and auditing functions of companies that are publicly traded
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The COSO report is also known as:
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Internal Control Integrated Framework
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One of the components of internal control identified by COSO required that management must be considering threats and the potential for risks, and stand ready to respond should these events occur. This component is referred to as:
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Risk Assessment
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The process of risk assessment would include all of the following actions, except:
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Report the risks to the audit committee
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The COSO report identified a component of internal control as the policies and procedures that help ensure that management directives are carried out and that management directives are achieved. The component is:
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Control Activities
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If an accounting supervisor were allowed to hire employees, approve the hours worked, prepare the paychecks, and deliver the paychecks, which of the categories of control activities would be violated?
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Segregation of Duties
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This activity serves as a method to confirm the accuracy and completeness of data in the accounting system:
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Independent Checks
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Which of the following was NOT listed as a procedure to accomplish independent checks?
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Review of Auditing Procedures
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The ongoing review and evaluation of a system of internal control is referred to as:
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Monitoring
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This level of assurance means that controls achieve a sensible balance of reducing risk when compared with the cost of control:
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Reasonable Assurance
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In order to have the segregation of duties by COSO, it would be necessary for a small organization to hire two additional individuals. At this time, there is not enough work for the one office employee to stay busy. The reason for not hiring the additional people would have to do with:
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Cost versus Benefit
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The Trust Services Principles document divided the risks and controls in IT into five categories. Which of the following is NOT one of those categories?
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Certification
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The main risk related to this category of Trust Services Principles is unauthorized access:
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Security
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The risk related to this category of Trust Services Principles could be inaccurate, incomplete, or improperly authorized information:
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Process Integrity
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The risk related to this category of Trust Services Principles is that personal information about customers may be used inappropriately or accessed by those either inside or outside the company:
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Online Privacy
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The careful and responsible oversight and use of the assets entrusted to management is called:
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Stewardship
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Which of the following is NOT a condition of the Fraud Triangle?
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Conversion
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There are many possible indirect benefits to management when management fraud occurs. Which of the following is NOT an indirect benefit of management fraud?
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Delayed exercise of stock options
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Which of the following is NOT an example of employee fraud?
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Earnings Management
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Which of the following is NOT a common form of employee fraud?
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Refund Fraud
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Segregation of duties is a fundamental concept in an effective system of internal controls. Nevertheless, the effectiveness of this control can be compromised through which situation?
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Collusion among employees
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The most difficult type of misstatement to discover is fraud that is concealed by:
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Nonrecorded Transactions
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The review of amounts charged to the company from a seller that it purchased from is called a:
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Vendor Audit
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Which of the following is generally an external computer fraud, rather than an internal computer fraud?
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Spoofing
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Which control activity is intended to serve as a method to confirm the accuracy or completeness of data in the accounting system?
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Independent Checks and Reconciliations
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COSO describes five components of internal control. Which of the following terms is best described as "policies and procedures that help ensure management directives are carried out and management objectives are achieved?"
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Control Activities
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Proper segregation of duties calls for separation of the functions of:
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Authorization, Recording, and Custody
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The AICPA Trust Services Principles identify five categories of risks and controls. Which category is best described by the statement, "Information processes could be inaccurate, incomplete, or not properly authorized?"
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Processing Integrity
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A company's cash custody function should be separated from the related cash record-keeping function in order to:
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Minimize opportunities for misappropriations of cash
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