121 test bank for accounting information systems 9th edition

121 Test Bank for Accounting Information Systems 9th
Edition

Multiple Choice Questions
All of the following are components of reliability except:
1.

validity

2.

accuracy

3.

verifiability

4.

feedback value

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

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


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

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

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


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

____ 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

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.

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 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

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 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.

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

A man-made system that generally consists of an integrated set of computerbased 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 NOT one of the three steps in decision making as
described in the text
1.

action

2.

intelligence


3.

design

4.

choice

____ 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 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

The ability of more than one individual to come to the same measurement is
known as
1.

accuracy

2.

completeness

3.

verifiability

4.

comparability


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

A system can be further divided into
1.

input data

2.

subsystems

3.

databases

4.

enterprise systems

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

____ 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

If information arrives too late to impact a decision then there is a problem
with
1.

timeliness

2.

relevance

3.

completeness

4.

neutrality

Decision-making is an activity of the
1.

management process

2.

operations process

3.

information process

4.

organization process

____ are facts and figures in raw form.
1.

data

2.

information

3.

objectives

4.

goals

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.

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

Which of the following is one of the three most prominent management
activities?
1.

production

2.

finance

3.

marketing

4.

planning


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

Accounting is an activity of the
1.

management process

2.

operations process

3.

information process

4.

organization process

____ is (are) data presented in a form that is useful to decision makers.
1.

activities

2.

information

3.

objectives

4.

goals

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.

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

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

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 an element of the operations process?
1.

production

2.

planning

3.

controlling

4.

decision making

A set of interdependent elements that together accomplish specific objectives
is a
1.

system

2.

subsystem

3.

database

4.

accounting information system

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

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

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

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

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


Efficiency and effectiveness of operations are goals of:
1.

enterprise systems

2.

risk assessment

3.

e-business

4.

internal control

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

All of the following are components of relevance except:
1.

feedback value

2.

predictive value

3.

verifiability

4.

timeliness

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


True - False Questions
An information system consists of an integrated set of computer-based and
manual components established to provide information to users.
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 three steps in decision making take place in the sequence of (1)
intelligence (2) design (3) choice.
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

Operations management requires information that is more accurate and timely
than strategic management.
1.

True

2.

False


Sales/marketing information system is traditionally part of the AIS.
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

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

The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of
financial accountants and auditors.
1.

True

2.

False


Sarbanes-Oxley Section 404 compliance is a major line of business for the
biggest accounting firms.
1.

True

2.

False

Production and personnel are part of the operations process.
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

Strategic management requires more detailed information than operations
management.
1.

True

2.

False

The role of the accountant has evolved to include non-financial information
and information technology.
1.

True

2.

False

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

As a user of an AIS an accountant must know how systems are developed.
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

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

Strategic managers use more information from outside the organization than
do operations managers.
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

In an assurance service the accountant will provide the original information
used for decision making.
1.

True

2.

False

Information systems reliability and electronic commerce have been identified
by the AICPA as potential assurance services.
1.

True

2.

False

The Sarbanes Oxley Act of 2002 applies to publicly traded companies and notfor-profit entities.
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 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

Billing/accounts receivable is traditionally part of the AIS.
1.

True

2.

False

To be reliable information must be relevant.
1.

True

2.

False

The management process includes marketing and sales.
1.

True

2.

False

The most important information for tactical management involves information
about the organization's environment.
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

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

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


Free Text Questions - Page 1
Software packages that can be used for the core systems necessary to
support enterprise systems are called ______________________________.
Answer Given

enterprise resource planning (ERP) systems enterprise resource planning systems
ERP systems

______________________________ decisions are those for which all three
decision phases (intelligence, design, and choice) are relatively routine or
repetitive.
Answer Given

Structured

The ______________________________ is a man-made system consisting of
the people, equipment, organization, policies, and procedures whose
objective is to accomplish the work of the organization.
Answer Given

operations process

______________________________ is a process¾effected by an entity's board
of directors, management, and other personnel¾designed to provide
reasonable assurance regarding achieving objectives in the following
categories: efficiency and effectiveness of operations, reliability of reporting,
and compliance with applicable laws and regulations.
Answer Given

Internal control


A(n) ______________________________ system generally consists of both
computerized and manual components that operate to collect, store, and
manage data and to provide output information to users.
Answer Given

information management information

The ______________________________ units of the Big Four public
accounting firms have accounted for a significant percentage of the firm's
business and, prior to the Sarbanes-Oxley Act of 2002, were growing faster
than the accounting, auditing, and tax portions of their businesses.
Answer Given

business consulting

The ______________________________ Act of 2002 changed the daily work of
financial accountants, auditors, and others.
Answer Given

Sarbanes-Oxley

A(n) ______________________________ is designed to collect, process, and
report information related to financial transactions.
Answer Given

accounting information system (AIS) accounting information system AIS

______________________________, ______________________________, and
______________________________ are the three themes of the textbook.
Answer Given

Enterprise systems, e-business, internal control


Three of the five proposed core services of the
______________________________ are assurance and information integrity,
management consulting and performance measurement, and technology
services.
Answer Given

CPA Vision Project

Historically, the accountant has performed a(n)

______________________________ function to determine the reliability of
financial information presented in printed financial statements.
Answer Given

attest

To present the results of their endeavors effectively, accountants must
possess strong ______________________________.
Answer Given

oral and written communication skills

______________________________ is the application of electronic networks
(including the Internet) to undertake business processes between individuals
and organizations.
Answer Given

E-business

Input, processing, ______________________________, and users are included
in a functional model of an information system.
Answer Given

output