AIS.15
Identify the year the SEC will require American companies to switch from U.S.-based GAAP to IFRS as the basis for preparing financial statements.
2015
Which of the following scenarios will not be allowed under IFRS?
A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory.
What control procedure(s) should be used to reduce the risk of unauthorized disclosure of the financial statements?
A) multifactor authentication B) physical security C) encryption D) all of the above
Which of the following tasks are facilitated by maintaining a strong and secure audit trail?
A) tracing a transaction from original source document to the general ledger to a report B) tracing an item in a report back through the general ledger to the original source document C) tracing changes in general ledger accounts from beginning to ending balances D) All of the above are facilitated by the audit trail
Which of the following are appropriate controls for the general ledger and reporting system?
A) using well-designed documents and records B) online data entry with the use of appropriate edit checks C) prenumbering documents and accounting for the sequence numbers D) All of the above are appropriate
Which of the following user groups generally receive information produced by the general ledger and reporting system?
All of the above
Who does the payroll system issue checks to? (15)
All of the above
Which of the following statements is false regarding the use of incentives, commissions and bonuses in the payroll system? (15)
All of the above are true
Which of the following statements is not true about an XBRL instance document?
An instance document includes instruction code as to how the document should be physically arranged and displayed.
Executive immersion experiences are important because
B) employees who have positive attitudes contribute to increasing company profits.
) Which of the following is generally not a major sourceDifficulty : of input to a payroll system? (15)
Check to insurance and benefit providers
Which of the following is true about accounting for fixed assets?
Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components.
________ are used to transmit time and attendance data directly to the payroll processing system.(15)
Electronic time clocks
Identify the item below that is not a desired result of an employee bonus systems. (15)
Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus.
IFRS is an acronym for what?
International Financial Reporting Standards
Which of the following is a control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee?
Paychecks should be physically distributed by someone who does not authorize time data or record payroll.
Identify the most correct statement with regard to how the various accounting subsystems update the general ledger.
Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.
As each payroll transaction is processed, the system should also
The HRM system should not perform either activity A or B.
The benefits of XBRL include
The benefits of XBRL include
Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs. Which statement regarding direct deposit is false?
The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account.
Which of the following is true about IFRS?
There is a global trend towards using IFRS for reporting purposes, though U.S. companies are not currently required to do so.
15) The balanced scorecard attempts to solve what major issue associated with traditional accounting reports?
Traditional accounting reports focus too narrowly on financial performance.
Who generally is responsible for providing the accounting department with information about financing and investing activities to create the appropriate general ledger journal entries
Treasure
Which of the following is not one of the principles of proper graph design for bar charts?
Use 3-D rather than 2-D bars to make reading easier.
Which of the following statements is not true regarding XBRL?
XBRL's adoption will require accountants and systems professionals tag data for their clients.
Communications technology and the Internet can be used to reduce the time and costs involved in disseminating financial statement information. Users of such financial information still struggle in that many recipients have different information delivery requirements and may have to manually reenter the information into their own decision analysis tools. The ideal solution to solve these problems and efficiently transmit financial information via the Internet is to use
XBRL.
Which of the following will limit a firm's potential loss exposure from paycheck forgery?
a separate payroll bank account
Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should record payroll.
accounts payable department
Not all journal entries affect cash flow. Adjusting entries that reflect events that have already occurred, but have no effect on cash, are classified as
accruals.
Source data automation is often effective in reducing
accuracy.
Immediately after the adjusting entries are posted, the next step in the general ledger and reporting system is to prepare
an adjusted trial balance.
The results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system. What is an applicable control that can help prevent this event from occurring in the future?
automation of data collection
What control procedure(s) should be used to reduce the risk of the destruction of financial statement master data?
backup and disaster recovery
What is the best control to reduce the risk of losing payroll data?
backup and disaster recovery procedures
Which type of graph is the most commonly used to display trends in financial data?
bar chart
As responsibility reports are rolled up into reports for higher level executives, they
become less detailed.
The ________ is the managerial report that shows planned cash inflows and outflows for major investments or acquisitions.
capital expenditures budget
Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should distribute paychecks.
cashier
A payroll clearing account is used to
check the accuracy of payroll costs.
) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The data you have entered does not include a source reference code. Please enter this data before saving." This is an example of a
completeness test.
Performance reports for cost centers should compare actual versus budget ________ costs.
controllable
Adjusting entries that are made to counteract the effects of errors found in the general ledger are called
corrections.
One way of ensuring that recurring adjusting journal entries are made each month would be to
create a standard adjusting journal entry file.
Which type of payroll report lists the voluntary deductions for each employee?
deduction register
Identify the adjusting entry that is made at the end of an accounting period to reflect an exchange of cash prior to the performance of a related event is classified as a(n)
deferral entry.
Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as
deferrals.
The operating budget
depicts planned revenues and expenditures for each organizational unit.
Identify the following item that should contribute to the efficiency of a payroll system
direct deposit of checks
Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals?
earnings statement
Which of the following is not a perspective reflected in the balanced scorecard?
efficiency and effectiveness perspective
Each specific data item in an XBRL document is called a(n)
element
Depreciation expense and bad debt expense are examples of which type of adjusting journal entry?
estimates
XBRL stands for
external business reporting language.
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "Your journal entry must be a numeric value. Please reenter." This is an example of a
field check.
Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want. This plan is normally called a(n)
flexible benefit plan.
If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in
general ledger account number order.
A listing of journal vouchers by numerical sequence, account number, or date is an example of
general ledger control report.
The threat of violation of employment laws relates directly to which activity?
hiring and recruiting
Which of the following is not a benefit of using a payroll service bureau or a professional employer organization?
increased internal control
The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports.
information processing; updating; creating
Which of the following balanced scorecard dimensions provides measures on new products?
innovation and learning
Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should periodically observe the paycheck distribution process.
internal audit department
Which of the following balanced scorecard dimensions provides measures on how efficiently and effectively the organization is performing key business processes?
internal operations
For recording time spent on specific work projects, manufacturing companies usually use a (15)
job time ticket
Which of the following are used to document entries made to update the general ledger
journal vouchers
Using financial incentives requires organizations to
link the payroll system to other cycles to calculate incentive payments.
If you believe not all adjusting entries were posted in the general ledger, you should prepare a general ledger control report listing journal vouchers in
numerical sequence.
Experts estimate that, on average, the costs associated with replacing an employee are about ________ the employee's annual salary. (15)
one and one half times
) What system privileges should an employee involved in the general ledger and reporting system be given?
only the specific privileges necessary to perform an employee's assigned duties
All of the following regarding payroll checks is correct except
payroll checks should be drawn on the organization's regular bank account(s).
Pay rate information should be stored in
payroll masterfile
Which type of payroll report contains information such as the employees' gross pay, payroll deductions, and net pay in a multicolumn format? (15)
payroll register
Payroll deductions fall into the broad categories of ________ and ________. (15)
payroll tax withholdings; voluntary deductions
The general ledger system of an organization should be designed to serve the information requirements of both internal and external users. This means that the system should support
producing regular periodic reports and respond to real-time inquiry needs.
Which organization provides payroll processing as well as other HRM services, like employee benefit design and administration?
professional employer organization
Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers.
profit
Which item below is not considered a major input to the general ledger and reporting system?
reports from managers
At a minimum, a switch to IFRS from GAAP will affect companies' accounting information system by
requiring the creation of additional fields in research and development (R&D) records to capture information about the stage of research and development that costs are incurred in
Budgets used for internal planning purposes and performance evaluation should be developed on the basis of
responsibility accounting.
Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called
revaluations.
Adjusting entries that reflect a change in accounting principle used to value inventories are classified as
revaluations.
Performance reports for sales departments should compare actual revenue versus budgeted
revenue.
Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file?
segregation of duties
The employer pays a portion of some payroll taxes and employee benefits. Both the employee and employer pay which benefit or tax listed below?
social security taxes
Which of the following is not classified as a voluntary deduction? (15)
social security withholdings
All of the following are controls that should be implemented in a payroll process, except
supervisors distribute paychecks since they should know all employees in their department.
A growing number of companies require some of their upper level executives to spend time performing job duties of rank-and-file employees. When the CEO of Loews Hotels assumed the role of bellman, he discovered
that the company's polyester uniform caused him to sweat a great deal.
Who should provide the adjusting entries in a well-designed general ledger and reporting system?
the controller's area
Corrections are entries made to correct errors found in
the general ledger.
A "zero balance check" refers to which of the following control procedures?
the payroll clearing account shows a zero balance once all entries are posted
Financial statements are prepared in a certain sequence. Which statement is prepared last?
the statement of cash flows
Which of the following documents would be likely to yield the greatest cost saving by converting from paper to electronic?
time card
The payroll transaction file should contain
time card data
Identify one way "rainbow tables" are often used.
to discover plaintext passwords associated with a hash
Variances for variable costs will be misleading when the planned output differs from budgeted output. A solution to this problem would be
to use flexible budgeting.
What is a potential threat to the specific activity of payroll processing
unauthorized changes to the payroll master file
An effective way an organization can eliminate paper paychecks while maintaining adequate accounting records is to
use direct deposit.
) A type of data entry control that would ensure that adjusting entries are posted to existing general ledger accounts is called a(n) ________ check.
validity
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The account number referenced in your journal entry does not exist. Create a new account?" This is an example of a
validity check.
) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The amounts debited and credited are not equal. Please correct and try again." This is an example of a
zero-balance check.
