Acc 300 Final
The Sarbanes-Oxley Act, passed in July 2002, was designed to help address financial statement fraud and includes the following requirements except:
A regulation requiring auditors to detect and report fraud if it has occurred.
Which of the following is true about the AIS and MIS within a business organization
An AIS records the results of financial transactions
Which of the following represents the fundamental accounting model
Assets = Liabilities - Equities OR Liabilities = Assets - Equities
Data redundancy results in many problems. Which of the following is not one of those problems?
Efficient updates to data stored in the system.
A typical accounting information system (AIS) is composed of three sub-systems. Which of the following is not one of those sub-systems?
Enterprise reporting system (ERS).
A closed database architecture shares data easily.
False
According to the REA philosophy, information systems should support only the needs of accounting professionals.
False
Collusion among employees in the commission of a fraud is difficult to prevent but easy to detect.
False
Data redundancy is eliminated under the database approach to information system design.
False
Foreign keys are data items that appear in a table to uniquely identify each occurrence of the entity in the table.
False
Identifying associations in our database model is important but not critical to the design of an organized database.
False
In a flat-file implementation data updates can be performed with just a single procedure
False
Resources in an REA model are given reasonable names using verbs.
False
The Management Reporting System summarizes data in the TPS and the GL/FRS to create reports for external users.
False
The REA model captures financial transactions but does not include non-financial data.
False
The four basic forms of cardinality are: zero-to-zero, one-to-one, one-to-many, and many-to-many.
False
The front of the Cube indicates that the elements set forth in the cube apply throughout the organization, at the levels of the overall entity, division, operating unit, and individual business function level.
False
The term "relation" is the mathematical term for "file."
False
Under the database approach, data is viewed as proprietary or owned by users.
False
Step 3 of what your text refers to as the "view modeling process" involves
Identifying the agents associated with events that take place in the organization.
Goals of ERP include all of the following except
Improvements of legacy systems
The development of modern accounting is generally attributed to
Luca Pacioli
Which of the following associations requires a separate link (a.k.a. junction) table?
M:M
Which of the following is not a purpose of the transaction processing system (TPS)?
Managing and reporting on the status of financial investments
Which of the following represents the order of the evolutionary steps in the development of accounting information systems over time?
Manual processes, flat-file/large mainframe, database, ERP
Which of the following elements in the COSO framework involves the assessment of the quality and completeness of the internal control system?
Monitoring
Which of the following is usually not part of an ERP's core applications?
OLAP applications
Which of the following is not true?
Physical controls relate only to human activities outside of computer operations.
Which of the following is not a problem usually associated with the flat-file approach?
Restricting access to data to the primary user
Which of the following elements in the COSO framework involves identifying and analyzing the risks faced by the organization and how to manage and control those risks.
Risk assessment
Which of the following is not a database management task?
Summarization
Which of the following is not true?
The COSO framework is the only framework accepted by the PCAOB and SEC.
Which of the following is not true of the REA approach to systems design?
The REA model is account-oriented rather than event-oriented.
The two widely acknowledged types of information systems in large businesses are
The accounting information system (AIS), and the management information system (MIS).
Which of the following is not true?
The author of your textbook includes an image of the cube in your book.
Which of the following is not true of the traditional approach to processing accounting data?
The data in unfiltered form was recorded in a journal.
The Transaction Processing System (TPS) of an accounting information system is composed of the three following cycles:
The revenue cycle, expenditure cycle, and conversion cycle.
Which of the following is not true of "user views?"
Traditional accounting systems have evolved to address the many user views required by modern managers.
A key characteristic of a financial transaction is that they are measured monetarily.
True
All financial transactions are classified as transactions, but not all transactions are classified as financial transactions.
True
An association (i.e., a relationship or link) is some logical or physical connection between entities.
True
Cardinalities are represented in the REA model by labeling the lines connecting the entities in the UML notation.
True
Cardinalities represent the associations that exist in the underlying economic reality of business processes.
True
Cardinality describes the number of possible occurrences in one entity that are associated with a single occurrence in a related entity.
True
Data redundancy occurs when the same data item or file is stored in multiple locations in a computing system implementation.
True
Enterprise Resource Planning systems enable total business data and process integration by integrates key process of the organization.
True
Events refer to activities that affect changes in resources, such as production, exchange, consumption, and distribution.
True
Modern managers need both financial and nonfinancial information that traditional GAAP-based accounting systems are incapable of providing.
True
Most contemporary database systems are implemented using a relational database model.
True
OLAP includes decision support, modeling, information retrieval, and what-if analysis.
True
The REA approach and model is an alternative framework to the traditional debit/credit, journal/ledger model for our AIS design.
True
The REA modeling concepts can be applied to the design of any information system, not just an accounting information system.
True
The data items in the link (a.k.a. junction) table include the two primary keys from the two tables that are related.
True
The distinction between AIS and MIS centers on the concept of a transaction
True
The entity "Student" would include all students in an REA model prepared for NAU.
True
The organizing structure of data processing and storage in the traditional AIS is based upon the fundamental accounting model of assets = liabilities + owners' equity. The journals and chart of accounts and the double entry system were developed to maintain the equity of this model.
True
The preventive, detective, corrective control framework introduced in class, while helpful in certain respects, is somewhat weak in providing practical guidance.
True
The recommended data architecture for an ERP includes separate operational and data warehouse databases.
True
The top of the COSO cube reflects the internal control objectives of promoting efficiency of operations, accuracy and reliability of accounting records and reporting, and compliance with management policy, including all applicable laws and government regulation.
True
There are very few pure manual models used in practice but most systems include some components or subsystems that are manual in nature.
True
Those in higher management positions can extract more dollars of resources in fraud than those lower in the organization.
True
To the user, data processing procedures for routine transactions, such as entering sales orders, appear to be identical in the database environment and in the traditional environment.
True
View integration is the process of consolidating multiple REA models, each created in its own view modeling process, into a single global or enterprise model.
True
We use the term "entity" when building an REA model. An "entity" is a class of things where a single member is one occurrence of the broader class.
True
Where a one-to-many association exists between tables, the primary key of the one side is embedded as a foreign key in the table of the many side.
True
Which flowcharting notation do we use to illustrate the components of an REA model?
UML
Which of the following is not true of the flat-file approach in a computing system implementation?
Updating data does not require significant coordination
Which statement about ERP installation is least accurate?
When a business is diversified, little is gained from ERP installation.
In the double entry accounting system, after closing an expense account that had increased during the period will result in
a decrease in retained earnings
Closed database architecture is
a limitation inherent in traditional information systems that prevents data sharing.
A department within the organization would best be classified as what within the REA framework?
agent
Which of the following is not one of the elements of the COSO framework?
all of the items listed under this question are elements of the COSO framework.
Which of the following best describes lapping?
applying cash receipts to a different customer's account in an attempt to conceal previous thefts of funds
An employee inflates the amount owed as stated on an invoice received from a vendor. The employee receives a kickback from the vendor once the vendor receives the payment. This type of fraud is classified as
billing fraud
Issues associated with management philosophy and management style and their impact on internal control relate to which of the following elements in the COSO framework?
control environment
Inspecting products for defects in production would best fall into which of the following transactions cycles?
conversion
Suppose that a given product can be assembled from many parts, and that a given part can be used to assemble many products. This association would be implemented by
creating a new table containing the primary keys from both the product table and part table.
In the double entry accounting system increases in liabilities are recorded by
crediting a liability account.
In the double entry accounting system decreases in equities are recorded by
debiting an equity account.
A user view
defines how a particular user sees the database
An information system is the set of formal procedures and components by which information is collected, processed into data, and distributed to users.
false
When two or more employees collude, that is work together to steal and conceal, they are able to steal less, but the percentage of such frauds is lower than when a person acts alone.
false
Similar financial transactions are grouped into cycles. Which of the following is not one of these cycles
financial
Legacy systems are
flat file mainframe systems developed before client-server computing became standard.
On-line transaction processing programs
handle large numbers of relatively simple transactions
Step 1 of what your text refers to as the "view modeling process" involves
identifying the events that take place in the organization.
Think about the association between students at NAU and majors (e.g. the accounting major in the FCB). The cardinality of the association would be
many-to-many
The cardinality of the association between the order event and the agent "purchasing clerk" in an organization's expenditure cycle would be
many-to-one
Think about the association between class rooms at NAU and buildings at NAU. The cardinality of the association would be
many-to-one
Think about the association between fathers and biological children. The cardinality of the association would be
one-to-many
Suppose that a given customer can place many customer orders, but a given customer order can be placed by only one customer. This association would be implemented by
placing the primary key from the customer table as a foreign key in the customer order table
Suppose that a given supplier can receive many cash disbursements, but a given cash disbursement is sent to only one supplier. This association would be implemented by
placing the primary key from the supplier table as a foreign key in the cash disbursement table.
The focus of a MIS is
primarily on non-financial transactions
The REA acronym stands for
resources, events, and agents.
Which of the following is not one of the types of associations that we discussed in class?
singular
Cash larceny involves
stealing cash from an organization after it has been recorded
Skimming involves
stealing cash from an organization before it is recorded
A transaction is an event that affects or is of interest to an organization.
true
Every entity in an REA model must have a primary key so we can distinguish all occurrences of the entity from one another.
true
The key objective of the General Ledger/Financial Reporting System is to summarize data from the TPS to update the general ledger accounts and create reports that are for both internal and external users.
true
