Exam 1- AIS
Which term describes the unique identifier that identifies a specific record in a table? A foreign key A primary key A secondary key A schema
A primary key
What does the decision shape represent in a flowchart? A question to be answered Materials coming into or out of the process Data used in the process A manual input
A question to be answered
In which of the three types of business processes in the basic business model does a business deliver products to its customers? Sales and collections Acquisitions and payments Conversion Delivery contracts
Sales and collections
A manufacturer actively monitors a foreign country's political events whenever a supply chain disruption occurs within the country that exceeds 90 days. The manufacturer is following which of the following risk-response strategies? Share Avoid Accept Reduce
Accept
Controls are classified according to the categories preventive, detective, and corrective. Which of the following is a preventive control? Contingency planning Quality information Reconciliations Access control software
Access control software
In which of the three types of business processes in the basic business model does a business interact with vendors? Sales and collections Acquisitions and payments Conversion Accounts receivable
Acquisitions and payments
An example of an Internet of Things (IoT) technology is Tableau for creating data visualizations. a Microsoft Access database storing data about smart devices. Amazon's Alexa connecting to a task management system. QuickBooks processing accounting data.
Amazon's Alexa connecting to a task management system.
What type of accounting system provides a subscription-based model with no up-front investment? A desktop system with software installed locally and data storage residing in-house An ERP system installed locally and data storage residing in-house A cloud-based accounting solution with the software residing on the web and data storage provided by the vendor A batch-processing system with cloud storage
An ERP system installed locally and data storage residing in-house
How is a connector represented in a flowchart? As a line with an arrow As a circle As a triangle As a square
As a circle
How is a flowline represented in a flowchart? As parallel lines As a circle As a line with an arrow As a diamond
As a line with an arrow
Which underlying technology does blockchain not depend on? Network connectivity Cryptology Centralized ledgers Distributed ledgers
Centralized ledgers
What is the correct ascending hierarchy of data elements in a system? Character, record, file, field Field, character, file, record Character, field, record, file Field, record, file, character
Character, field, record, file
In which of the three types of business processes in the basic business model does a business transform resources into a product or service that customers want? Sales and collections Acquisitions and payments Conversion Accounts receivable
Conversion
Which of the following is not a type of flowchart? Document System Process Data
Data
Which of these business events does not result in an accounting transaction? Declare a dividend Pay a dividend Order supplies from vendor Deliver product to customer
Deliver product to customer
Mr. Shankley's Medical Services Corp. operates in all states and territories of the U.S. It is developing a new patient relationship management system that is approaching completion and is behind schedule. Which implementation method would be potentially fastest but also involves the most risk? Pilot testing Direct cutover Phased implementation Parallel implementation
Direct cutover
Which of the following is not a characteristic that makes information useful? Relevant Cost-effective Timely Neutral
Cost-effective
The following customer data is stored in the sales processing system of a regional produce distributor: CustomerNumber, CustomerName, CustomerPhone, CustomerContact, CustomerCreditLimit Which of the following is true? CustomerNumber is an example of a field. CustomerNumber is an example of a data value. CustomerNumber is an example of a record. CustomerNumber is an example of a file.
CustomerNumber is an example of a field.
U.S. health care reform legislation is a high-risk area for the pharmaceutical industry. This risk belongs to which risk category? Internal risk, strategic External risk, compliance External risk, strategic Internal risk, compliance
External risk, compliance
Pride College is an online university that grants various business degrees at a steep cost. These degrees are not yet competitive in the market. This is a risky situation for Pride College. In which risk category does this risk belong? Internal risk, reputational External risk, reputational Internal risk, operational External risk, strategic
External risk, strategic
Which of the following data elements refers to a collection of all the vendors in a relational database? Record Field File Byte
File
Jellyfish has a unique manufacturing process that is not suitable for one-size-fits-all, preconfigured systems software. The company maintains its competitive advantage because of the uniqueness of its process. You are a consultant advising Jellyfish on the implementation of a new system. What type of manufacturing process software would be most suitable for Jellyfish? General-purpose systems software Custom-built systems software Hybrid application software A custom-built database
General-purpose systems software
Which of the following KPIs (ratios) would be used to evaluate a company's profitability? Current ratio Inventory turnover ratio Debt to total assets ratio Gross margin ratio
Gross margin ratio
Which of the following is not a business event? Hire a new employee. Order raw materials. Deliver goods to customer. Accounts receivable.
Hire a new employee.
Which of the following is an example of proper segregation of duties for an invoice payment? Sarah authorizes the payment; Johanna inputs the data into the system and makes the payment. Sarah and Luke both authorize the payment; Sarah inputs the data into the system; Johanna makes the payment. Sarah authorizes the payment; Johanna and Luke both input data into the system; Luke makes the payment. Sarah authorizes the payment; Johanna inputs the data into the system; Luke makes the payment.
Sarah authorizes the payment; Johanna inputs the data into the system; Luke makes the payment.
What is the importance of a record retention plan? Identifying documents to be maintained or destroyed Providing insights into system operations Creating roadmaps for process improvement Keeping records with low importance to the organization
Identifying documents to be maintained or destroyed
In which stage of the systems development life cycle would user training occur? Planning phase Analysis phase Design phase Implementation phase
Implementation phase
What is a purpose of an acquisition? Replace organic growth Increase the stock price Achieve corporate growth Decrease complexities
Increase the stock price
What does a DFD represent? Execution of computer code Management decision points Information flow within a process or system Roles and responsibilities within a process
Information flow within a process or system
Which of the following performs self-assessments to determine the effectiveness of its own controls? Internal audit External audit Board of directors Management
Internal audit
Which term describes the policies, plans, and procedures implemented by management to provide reasonable assurance that the business achieves control objectives by mitigating risk to an acceptable level? Risk assessment Internal control Monitoring Continuous auditing
Internal control
Which of the following statements about residual risk are true? It is gross risk. It is the level of risk after considering controls and other mitigating factors. It is the natural level of risk inherent in a business process or activity. When an inherent risk is present and management chooses not to act, it has chosen to accept the risk.
It is the level of risk after considering controls and other mitigating factors.
A tire company is evaluating the following measures: customer lifetime value (the value the company realizes from each customer), customer acquisition cost (cost of acquiring each customer), customer satisfaction and retention, and number of new and existing customers. Which of the following best describes this initiative? Data analytics KPIs Audit data analytics Decision making
KPIs
Which of the following is responsible for overall program logic and functionality? IT Steering Committee Lead systems analyst Application programmers End users
Lead systems analyst
The risk score formula is: Likelihood - Impact Likelihood × Impact Likelihood/Outcome Likelihood/Average impact
Likelihood × Impact
Which is the most appropriate business rule for the business event "Billing customers for orders"? One customer may have many bills. One bill belongs to many customers. One customer has one bill. Many customers have one order.
One customer may have many bills.
The time-based model of controls equation is P < (D + C). (P + D) > C. P > D > C. P > (D + C).
P > (D + C).
Which of the phases in the business process maturity model includes a lack of documentation, inconsistencies, and some defined processes? Phase 1—Limited Phase 2—Informal Phase 3—Defined Phase 4—Optimized
Phase 2—Informal
Which of the following risk categories relate to external risk rather than internal risk? Physical, compliance, and strategic risk Physical, compliance, and reputational risk Operational, strategic, and financial risk Compliance, physical, and reputational risk
Physical, compliance, and strategic risk
The systems development life cycle (SDLC) is the traditional methodology for developing information systems. In which phase of the SDLC would the activity of identifying the problem(s) to be solved most likely occur? Analysis Implementation Planning Development
Planning
Which of the following types of data analysis can tell a company which of its products will have the highest sales next year? Descriptive Predictive Prescriptive Diagnostic
Predictive
Which role is responsible for understanding end-user requirements? Scrum master Business stakeholder Product owner Development team
Product owner
Which of these business events results in an accounting transaction? Monitor production defects Receive damaged goods back from customer Evaluate employee performance Measure carbon footprint
Receive damaged goods back from customer
Select the correct set of accounting functions that must be separated for effective segregation of duties. Planning, recording, monitoring Recording, authorizing, custody of assets Recording, authorizing, monitoring Data input, information output, database storage
Recording, authorizing, custody of assets
Which of the following is an important outcome of the use of blockchain? Closed-form accounting Reduced auditing and compliance costs Increased centralization of accounting systems Impenetrable authentication
Reduced auditing and compliance costs
Within the context of qualitative characteristics of accounting information, which of the following is a fundamental qualitative characteristic? Relevance Timeliness Comparability Confirmatory value
Relevance
Which of the following statements presents an example of a general control for a computerized system? Limiting entry of sales transactions to only valid credit customers Turning data into quality information using AIS reporting Restricting entry of accounts payable transactions to only authorized users Restricting access to the computer center by use of biometric devices
Restricting access to the computer center by use of biometric devices
According to COSO, which of the following components addresses the need to respond in an organized manner to significant changes resulting from international exposure, acquisitions, or executive transitions? Control activities Risk assessments Monitoring activities Information and communication
Risk assessments
In the Employee table, the field EmployeeStatus indicates whether employees are active, retired, or terminated. Which of the following SELECT statements returns all fields and records of employees who have not been terminated in the Employee table? SELECT * FROM Employee WHERE EmployeeStatus = 'Active' SELECT All FROM Employee WHERE EmployeeStatus <> 'Terminated' SELECT * FROM Employee WHERE EmployeeStatus <> 'Terminated' SELECT * FROM Employee WHERE EmployeeStatus = 'Terminated'
SELECT * FROM Employee WHERE EmployeeStatus <> 'Terminated'
Which of the following is not a cloud computing service model? Application as a service Software as a service Infrastructure as a service Platform as a service
Software as a service
Why might businesses use Access instead of Excel? Easier to use Advanced interface Stores larger amounts of data Creates better shortcuts and formulas
Stores larger amounts of data
Rose and McMullin, a regional public accounting firm, has recently accepted a contract to audit On-the-Spot, Inc., a mobile vending service that provides vending machines for large events. On-the-Spot uses a computerized accounting system, portions of which were developed internally to integrate with a standard financial reporting system that was purchased from a consultant. What type of documentation will be most useful to Rose and McMullin in determining how the system as a whole is constructed? Operator documentation Program documentation Systems documentation User documentation
Systems documentation
Which SQL command deletes all the records in a table but does not delete the table? DROP DELETE ROLLBACK TRUNCATE
TRUNCATE
Which of these statements about information systems is correct? They capture only financial data. They report information in standard format only. They collect, process, store, and analyze data and report information. They are difficult to analyze using traditional software tools.
They collect, process, store, and analyze data and report information.
What is confirmation bias? The inclination to interpret new information as validation of existing beliefs Confirmation of an accounts receivable balance that is incorrect A bias toward always seeing the positive side of an issue Sending a bank confirmation request to the wrong bank
The inclination to interpret new information as validation of existing beliefs
In the iterative relationship of data-driven decision making, what occurs after business events create data? Management decision making Business process updates Transformation of raw data into useful information Control activities through monitoring
Transformation of raw data into useful information
Which of the following questions does diagnostic analytics answer? What happened? What should we do? Why did it happen? What will happen?
Why did it happen?
A specialized version of a data warehouse that contains data that is preconfigured to meet the needs of specific departments is known as a functional warehouse. a data mart. a data store. an object-oriented database.
a data mart.
Traditional risk responses available to management are defeat, amplify, purchase, and accept. accept, mitigate, cancel, and amplify. accept, mitigate, transfer, and avoid. accept, implement internal controls, and ignore.
accept, mitigate, transfer, and avoid.
The two types of outputs that are generated with data created during a business event are reports and timesheets. invoices. analytics. decisions.
analytics.
At Mega-Construction, secured payments are sent to suppliers as soon as materials are received and scanned. Many attributes of the received goods are also scanned and recorded immediately on receipt (e.g., time received, quality indicators, item location through GPS functionality). This information is shared through a distributed ledger. Mega-Construction is likely using _______________. blockchain TCP/IP bitcoin STAMP
blockchain
Structured data can be displayed in tables. includes images and social media content. is difficult to analyze using traditional software tools. represents about 80% of a company's data.
can be displayed in tables.
Big data changes an entity's risk profile. is unrelated to financial reporting. is the monetization of data assets. is similar to automated authentication.
changes an entity's risk profile.
Auditors also refer to questionnaires as org charts. process question forms. checklists. vertical graphs.
checklists.
When a person in charge decides not to follow an internal control, it is called inadequate monitoring. collusion. lack of skilled employees. management override.
collusion.
Logical access controls prevent access to inventory storage areas. computer systems. databases only. computer hardware.
computer systems.
A business monitors the call answer rate every day to confirm that its call center answers calls in a timely manner. This is an example of a risk assessment. internal control. an external audit. continuous monitoring.
continuous monitoring.
The rapid growth of technological advancements in business creates new opportunities and increases risks related to their use. creates only new opportunities. does not increase risk. is not a consideration for risk management.
creates new opportunities and increases risks related to their use.
A cost-efficient way to store all the raw data that a business receives, including both structured and unstructured data, is by using a data warehouse. data mart. data lake. production database.
data lake.
Investigating anomalies in sales taxes paid by state to avoid sales tax payments is a type of predictive analytics. diagnostic analytics. descriptive analytics. prescriptive analytics.
diagnostic analytics.
An example of unstructured data is a sales order. cash payment. digital image. loan amount from a bank.
digital image.
Business transformation through blockchain is likely to occur _______________ and requires _________________ adoption. quickly; supplier eventually; widespread eventually; supplier quickly; widespread
eventually; widespread
Spirit Line Beverages sponsors a contest for its programmers, with prizes for the winning teams. This is an example of ___________________ that is intended to _______________________. online marketing; build social media data industrial espionage; build internal data gamification; build motivation and team rapport data mining; use big data
gamification; build motivation and team rapport
Waterfall methodology is best suited for systems development projects that have many initial requirements. require real-time decision making. have flexible budgets. allow developers to use creativity.
have many initial requirements.
A heat map used as a part of assessing risks plots the _________ on the vertical axis and the _________ on the horizontal axis. impact rating; likelihood rating inherent risk; risk appetite target residual risk; actual residual risk internal control; inherent risk
impact rating; likelihood rating
Anna wires money from her bank account to her brother Garin in Australia for a fee of $35. The role of her bank is that of intermediary. miner. blockchain participant. payee.
intermediary.
Covington Financial, a large financial services corporation, has a unit responsible for conducting regular, recurring reviews to prevent and detect fraud. This unit should be part of the _________ function at Covington. IT HR legal internal audit
internal audit
A synonym for faithful representation is accuracy. verifiability. neutrality. understandability.
neutrality.
The element of an object-oriented database that is most like a relational database record is the class. variable. object. query.
object.
In the COSO Cube model, all of the following are components of internal control except monitoring. control activities. operations control. risk assessment.
operations control.
Increasing sales, customers, and market share by using the company's own resources and business processes is called organic growth. merger. expansion of locations. acquisition.
organic growth.
The three ways of implementing a preconfigured ERP system like SAP do not include its being customizable. internally developed. configurable. out of the box.
out of the box.
While both views highlight risk severity, the _________ view of risk is from the entity-wide level, while the _________ view of risk is from the perspective of units or levels with the entity. incident; root cause root cause; incident portfolio; profile profile; portfolio
portfolio; profile
Risk severity can be evaluated by estimating the harm that could potentially result if a risk becomes a reality. estimating the probability of the risk occurring. prioritizing risks by ranking their likelihood of occurring and their potential impact to the organization. calculating "frequency" or "probability of the risk inherent in a scenario."
prioritizing risks by ranking their likelihood of occurring and their potential impact to the organization.
Sad Reginald wrote software for the Valencia Clown Revue. One fine day, however, having grown tired of computers and software, he became a juggler, fire eater, and fainting goat farmer. After his departure, the Valencia Clown Revue was unable to maintain and upgrade the systems that Sad Reginald had written. The best control for preventing this failure would be automated accruals and deferrals. user documentation. operator documentation. program documentation.
program documentation.
Wells Fargo suffered significant damage as a result of ignoring reputational risk. compliance risk. strategic risk. physical risk.
reputational risk.
Demanding higher performance usually requires accepting more tolerance. vision. risk. performance severity.
risk.
Determining current performance requirements for a database design project relates to data variety. purpose. data volume. scalability.
scalability.
A _________ manages the data and information flow across the hardware components and is the interface between the hardware components and the users. management information system network software computer screen
software
Blockbuster went out of business because its top management was unable to properly manage the company's operational risk. compliance risk. strategic risk. financial risk.
strategic risk.
SQL is most directly related to string question language processing. the "grandfather, father, son" method of record retention. electronic commerce. relational databases.
string question language processing.
The business function that aligns with the purchases and payments processes is production. customer relations. marketing. supply chain management.
supply chain management.
The part of a risk statement that gives management insights into why the risk matters is called risk assessment. risk identification. the outcome. risk management.
the outcome.
A data flow diagram helps a user understand the sources of data in a system and the destinations of that data. the flow of documents through an organization. the processing steps in an AIS the processing logic of application programs.
the sources of data in a system and the destinations of that data.
A company buys insurance to protect itself against a cyberattack. This type of traditional risk response is avoiding risk. residual risk. inherent risk. transferring risk.
transferring risk.
Data analytics is the process of using technology to transform business event data into business process data. data into useful information. accounting data into business data. unreliable data into reliable data.
unreliable data into reliable data.
McDonald's could have avoided massive financial losses from changing its conversion processes if it had used data to analyze market trends and customer desires. used robots to create the made-to-order meals. spent more money on marketing. changed them sooner.
used data to analyze market trends and customer desires.
The speed at which data is created and received by a company is called value. veracity. velocity. volume.
velocity.
The information quality characteristic that refers to knowledgeable and independent people reaching agreement about whether information is representative of a real-world fact or occurrence is relevance. faithful representation. verifiability. reliability.
verifiability.
Agile methodology focuses on all the following except ensuring customer satisfaction. reflecting on improvement opportunities. adjusting to change in real time. working in cascading sequential phases.
working in cascading sequential phases.
