Chapter 1 Accounting Information Systems & the Accountant- True/False
A good audit trail within the financial accounting system should allow a manager or auditor to trace any source document back from a report to the original data entry.
True
A major output of financial accounting is the preparation of financial statements such as an income statement.
True
AISs often create information that is useful to non-accountants.
True
An ABC inventory system refers to an "activity-based costing" system.
True
An example of a corporate scandal that was mentioned in this chapter is the Enron case.
True
An example of a financial report that would be prepared by a managerial accountant (instead of a financial accountant) is a budget report.
True
An example of a value-added reseller (VAR) is a computer dealer that adds software to the hardware it sells.
True
As a result of corporate bankruptcies in 2002, some of the largest public accounting firms are no longer engaged in any consulting work.
True
As used in Chapter 1, a dashboard is an up-to-the-minute graphic depiction of one or more business activities.
True
It costs some companies over $1 million to comply with the requirements of the Sarbanes-Oxley Act.
True
Managerial accounting principally provides decision making information to a company's internal managers.
True
One major difference between financial accounting and managerial accounting is that financial accountants prepare financial statements for external investors while managerial accountants prepare financial statements for internal managers.
True
One of the motivations for SAR is to identify money laundering activities.
True
One possible career for AIS majors is in the traditional area of financial or managerial accounting.
True
Predictive analytics use large data warehouses to help organizations improve performance.
True
Section 352 of the Patriot Act requires auditors to verify that their organizations have adequate risk assessment systems.
True
Sections of the Patriot Act mandate suspicious activity reporting.
True
Some possible career opportunities for AIS majors or minors include consulting positions, computerized auditing, or computer security positions.
True
The CISA is an acronym for a professional accounting certification.
True
The Sarbanes-Oxley Act includes a provision that prohibits corporations from making personal loans to executives.
True
The Sarbanes-Oxley Act prohibits companies from using the same auditing firms for performing both auditing and management consulting services
True
The authors consider accountants to be "knowledge workers."
True
The path that data follow in an AIS, for example from manual source document to completed output report, is called an audit trail.
True
The purpose of CPA Trust Services is to provide assurance that a company engaged in electronic commerce can provide the goods or services it promises.
True
The series of steps leading from data recorded in transaction records to the information reported on financial statements is called the accounting cycle.
True
The starting point for an audit trail of a payroll system might be an employee time card
True
The starting point for an audit trail of a production department might be the purchase of raw materials
True
The term "Patriot" is an acronym for "providing appropriate tools required to intercept and obstruct terrorism."
True
The term information overload refers to providing too much data to management, often resulting in managers ignoring it
True
Today's AIS is an enterprise-wide information system that focuses on interdepartmental business processes.
True
Within the traditional AIS, a sales order would not be considered an accounting transaction.
True
XBRL is a business reporting language that is used to define interactive financial data.
True
A company's audit trail is normally easier to follow under a manual data processing system compared to a computerized information processing system.
True
"Cost accounting" tasks are usually performed by financial accountants.
False
AISs are only concerned with financial information
False
Accountants are usually classified as "line workers" within business organizations.
False
Accounting information systems must be computerized to be effective.
False
Accounting systems are useful for performing accounting tasks, but cannot be used for such security purposes as countering terrorism.
False
Activity-based costing systems focus on allocating overhead on the basis of direct labor hours used.
False
An advantage of computerized AISs is that they do not need to be programmed to catch simple input errors such as entering "4.0" instead of "40.0" for hours worked in a payroll application.
False
As a result of computerized information processing systems in many organizations today, the need for accountants in these organizations has significantly declined.
False
As used in chapter 1, the term "dashboard" refers to a quick and easy plan to install a computerized accounting system in an organization.
False
As used in this chapter, the acronym SAR stands for "suspicious accounting reports."
False
Because accountants are not normally computer programmers working within the information processing subsystem, it is unnecessary for them to understand the capabilities and limitations of computers.
False
Computers tend to make audit trails easier to follow because everything is computerized.
False
In a responsibility accounting system, every person within a company takes responsibility for the performance of every business unit.
False
In order to be useful, raw accounting data must be processed by a computer.
False
It is best to view an AIS as an accounting system that must be computerized.
False
One major difference between financial accounting and managerial accounting is that financial accountants use dashboards while managerial accountants do not
False
Students majoring in AIS are unlikely to assume jobs in traditional accounting positions because they know too much.
False
The acronym AIS stands for "Accounting Information Standards."
False
The acronym ERP stands for "electronic reporting plan."
False
The acronym ERP stands for "enterprise reporting system."
False
The purpose of the assurance services of an accounting firm is to give a company's managers moral support when they are audited by the federal or state government.
False
There are limited career opportunities available for students who study both accounting and information systems
False
