(Test Bank) Accounting Information Systems

Richardson, 3

Business

Test Bank

3rd Edition

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Test Bank for Accounting Information Systems, The downloadable file consists of 370 pages, and the total size of the file is 8.15 MB. Purchase now only for highly discounted price.

Author(s): Richardson

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Study Note Preview

Version 1 1 CHAPTER 1 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Accounting and Finance is a primary activity in the value chain. ⊚ true ⊚ false 2) As of today, Accounting Information Systems are all computerized. ⊚ true ⊚ false 3) Business value includes all those items, events and interactions that determine the financial health and well-being of the firm. ⊚ true ⊚ false 4) The Certified Information Technology Professional (CITP) is a professional designation for those with a broad range of technology knowledge and does not require a CPA. ⊚ true ⊚ false 5) The Certified Information Systems Auditor (CISA) is a professional designation generally sought by those performing IT audits. ⊚ true ⊚ false 6) Information is defined as being data organized in a meaningful way that is useful to the user. ⊚ true ⊚ false 7) Data is defined as being information organized in a meaningful way that is useful to the user. Version 1 2 ⊚ true ⊚ false 8) A systems analyst analyzes a business problem that might be addressed by an information system and recommends software or systems to address that problem. ⊚ true ⊚ false 9) A value chain is defined as the cost of performing various activities inside a firm. ⊚ true ⊚ false 10) Relevant information’s most defining characteristic is that it is free from bias and error. ⊚ true ⊚ false 11) The characteristics of relevant information include predictive value, feedback value and timeliness. ⊚ true ⊚ false 12) A faithful representation of the underlying event should reflect the bias of the system analyst. ⊚ true ⊚ false 13) Information overload is defined as the difficulty a person faces in understanding a problem and making a decision as a consequence of too much information. ⊚ true ⊚ false 14) The main financial benefit of Customer Relationship Management practices reduces the cost of goods sold. Version 1 3 ⊚ true ⊚ false 15) An efficient Enterprise System can significantly lower the cost of support processes included in sales, general, and administrative expenses. ⊚ true ⊚ false 16) An accounting information system (AIS) is defined as being an information system that records, processes and reports on transactions to provide financial and nonfinancial information for decision making and control. ⊚ true ⊚ false 17) An enterprise system is a centralized database that collects data from throughout the firm. This includes data from orders, customers, sales, inventory and employees. ⊚ true ⊚ false 18) Outbound logistics are the activities associated with receiving and storing raw materials as well as activities that transform these inputs into finished goods. ⊚ true ⊚ false 19) Service Activities as defined in the value chain are those activities that provide the support of customers after the products and services are sold to them (e.g. warranty repairs, parts, instruction manuals, etc.). ⊚ true ⊚ false 20) A well-designed and well-functioning AIS can be expected to create value by providing relevant information helpful to management to increase revenues and reduce expenses. ⊚ true ⊚ false Version 1 4 21) Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is an example of discretionary information. ⊚ true ⊚ false 22) Enterprise Systems do not exist to facilitate decision making. ⊚ true ⊚ false 23) The Sarbanes-Oxley Act of 2002 is a federal law in the United States that set new and enhanced standards for all U.S. public companies, their management and public accounting firms. ⊚ true ⊚ false 24) CRM software often includes the use of database marketing tools to learn more about the customers and to develop strong firm-to-customer relationships. ⊚ true ⊚ false 25) The Certified Information Technology Professional is the position created by the AICPA to recognize CPAs who have the ability to provide skilled professional services on Information Technology. ⊚ true ⊚ false 26) Accounting Information Systems which are computerized do not need to maintain internal controls. ⊚ true ⊚ false Version 1 5 MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 27) Accounting information systems: A) Are always computerized. B) Report only accounting information. C) Include records, processes and reports. D) Are for computer games. 28) Which of the following is not an attribute of useful information? A) Bias. B) Feedback value. C) Predictive value. D) Verifiability. 29) Which of the following are considered to be mandatory information required by a regulatory body? A) Financial reports for the Securities and Exchange Commission. B) The amount of taxes saved by a merger. C) The total dollar value of fireworks that are sold on July 4. D) The cost to build an all-new Starbucks restaurant in Abu Dhabi. 30) The correct order of effects in the value chain are: A) Inbound Logistics → Operations → Service. B) Inbound Logistics → Outbound Logistics → Marketing & Sales. C) Inbound Logistics → Operations → Outbound Logistics. D) Inbound Logistics → Operations → Shipping. 31) Which designation would be most appropriate for those professionals possessing IT audit, control and security skills? Version 1 6 A) Certified Internal Auditor (CIA). B) Certified Public Accountant (CPA). C) Certified Information Technology Professional (CITP). D) Certified Information Systems Auditors (CISA). 32) Which designation is for CPAs with a broad range of technology knowledge and experience? A) Certified Internal Auditor (CIA). B) Certified Public Accountant (CPA). C) Certified Information Technology Professional (CITP). D) Certified Information Systems Auditors (CISA). 33) A supply chain: A) Refers to the supplies needed to build products. B) Refers to the flow of materials, information, payments and services. C) Refers to how costs are tracking in an AIS. D) Does not apply to a service firm like an accounting firm. 34) A supply chain system does not include information about: A) Current customers. B) Prospective customers. C) Availability of inventory. D) Current suppliers. 35) The income statement line item most likely affected by an AIS investment in enterprise systems would be: Version 1 7 A) Revenues. B) Cost of Goods Sold. C) Selling, General and Administrative Expenses. D) Unearned Revenue. 36) The income statement line item most likely affected by an AIS investment in supply chain that would interface with suppliers would be: A) Revenues. B) Cost of Goods Sold. C) Selling, General and Administrative Expenses. D) Research and Development Expenses. 37) The IT strategic roles of AIS investments are classified as: A) Automate, Informate, Transform. B) Value creation, Value Destruction, Value Neutral. C) Digitize, Report, Transform. D) Automate, Digitize, Transport. 38) According to a recent study, the transform IT strategic role is defined as systems that: A) Replace human labor in automating business processes. B) Provide information about business activities to all employees. C) Provide information about business activities to senior management. D) Fundamentally redefine business processes and relationships. 39) According to a recent study, the informate-up IT strategic role is defined as systems that: Version 1 8 A) Replace human labor in automating business processes. B) Provide information about business activities to all employees. C) Provide information about business activities to senior management. D) Fundamentally redefine business processes and relationships. 40) The income statement account most likely affected by an AIS investment in customer relationship management (CRM) would be: A) Revenues. B) Cost of Goods Sold. C) Selling, General and Administrative Expenses. D) Unearned Revenue. 41) Many fast food restaurants now have kiosks where customers can order without speaking to an employee. This is an example of the _____ strategic role. A) Automate B) Informate– up C) Transform D) Informate– down 42) When Uber (a ride sharing application) developed their unique platform to match drivers with riders, this was an example of _____ with IT Investments which fundamentally changed how people use car services. A) Automating B) Informating – up C) Transforming D) Informating – down 43) The Information Value Chain is defined as: Version 1 9 A) The flow of materials, information, payments, and services. B) The use of computer technology to provide information about business activities to employees across the firm. C) The overall transformation of data from a business need to the ultimate decision. D) A centralized database that collects data from throughout the firm. 44) Customer Relationship Management is best defined as: A) A system used to manage and nurture a firm's interactions with its current and potential customers. B) A system used to track a customer's past purchases. C) A system used to connect a firm's suppliers with a firm's customers. D) A system used to advertise current items on sale to customers. 45) The role of accountants in accounting information systems include all except: A) User. B) Manager. C) Coder. D) Evaluator. 46) A simple information system includes all of the following elements except: A) Processing. B) Storage. C) Input. D) Reporting. 47) Branch profitability is an example of: Version 1 10 A) Information overload. B) Mandatory information. C) Discretionary information. D) Enterprise System. 48) Bob’s manager complains that Bob suffers from “Analysis Paralysis;” that is, he spends too much time reviewing endless reports and is reluctant to make decisions. Bob most likely suffers from _____. A) Data gridlock. B) Discretionary information. C) Information overload. D) Data redundancy. 49) Which of the following systems would a company be most likely to employ for the primary purpose of generating additional sales revenue? A) MDBMS. B) CRM. C) SCM. D) OCR. 50) The primary transformation of data into information takes place in which of the following activities? A) Input. B) Storage. C) Processing. D) Output. 51) Discretionary information is most likely to be used in which of the following activities? Version 1 11 A) Preparing required Environmental Protection Agency emissions reports. B) Filing a 10-K with the SEC. C) Management decision-making. D) Payroll tax reporting. 52) Which of the following is not a primary activity in the Value Chain? A) Outbound Logistics. B) Marketing. C) Inbound Logistics. D) Information Technology. 53) One of the most important ways that ERPs benefit organizations and their business processes is: A) Current information is made available to all users involved in the activities and decisions associated with a company’s business processes. B) Information is stored in many specialized, distributed databases that each serve separate business processes. C) Reducing the amount of time to complete business processes by eliminating all controls associated with the processes. D) Preventing external business partners from accessing the organization’s data. 54) Investors reward companies most that announce IT initiatives with which type of strategic role? A) Automate. B) Informate – up. C) Transform. D) Informate – down. Version 1 12 55) A dental practice implemented an upgrade to its AIS that provides the dentists with daily and weekly patient and financial summaries. The practice’s upgrade is an example of which IT strategic role? A) Automate. B) Informate – up. C) Transform. D) Informate – down. 56) Which of the following diagrams most accurately illustrates an information system? Version 1 13 A) B) C) D) 57) The Sarbanes-Oxley Act of 2002 requires that a company’s attest auditors be able to perform which of the following activities? Version 1 14 A) Evaluate the internal controls in an AIS. B) Assess the value of a company’s IT assets. C) Take over the company’s AIS if necessary. D) Design and implement the controls used in the AIS. 58) Consider the non-profit organization Doctors without Borders (Médecins Sans Frontières), a Nobel Peace Prize winning organization that provides medical services in war zones and developing countries. For this type of organization, which of the following would likely be the best measure of business value? A) Fund balance (i.e., the net of revenues less expenditures). B) Lives saved. C) Donations raised. D) Volunteers deployed. 59) Effective use of Supply Chain Management software is generally expected to provide all of the following benefits except: A) Reduced inventory carrying costs. B) Lower production costs. C) Lower payroll costs. D) Better communications with suppliers. 60) Which of the following is usually the primary objective for companies when creating mandatory information? A) Increase stock price. B) Minimize cost. C) Improve business decisions. D) Ensure proper controls over business processes. 61) Which of the following is an example of information as opposed to just data: Version 1 15 A) Number of dresses sold. B) Color of dresses sold. C) Dress sales in Michigan at Walmart Store #3458. D) Types of dresses sold per region and season. 62) Which of the following statements is most true: A) Relevant information does not help predict the future. B) There are sometimes tradeoffs between information that is relevant and a faithful representation. C) Information must always be audited to be insightful an organization. D) Information does not need to be neutral or free from bias. ESSAY. Write your answer in the space provided or on a separate sheet of paper. 63) After a college football game, a box score is produced detailing the number of yards passing and running, receptions made and the number of interceptions and fumbles lost (among other statistics). Using the characteristics of useful information (including relevance and reliability), please explain how this box score meets (or does not meet) the characteristics of useful information. How would the football coach use this information to prepare for the next game, decide which players to start, etc.? 64) List and explain three ways that AIS affects the income statement and the firm’s profitability.