ACC 535 Midterm
In the top-down partitioning of process 3.0, the next level's process bubbles would be labeled (assuming there are four subprocesses):
3.1, 3.2, 3.3, 3.4
Of the following options, a database that is in ____ form has the best design.
3NF
To make a logical data flow diagram (DFD) readable, how many bubbles should be used?
5-7
These are relatively permanent portions of master data.
Standing data
Which of the following statements is true of a network database model?
Both a and b
The advantage of a physical data flow diagram (DFD) versus a logical data flow diagram (DFD) is that we can concentrate on what activities a system is performing without having to specify how, where or by whom.
False (physical DFD specifies how, where & by whom)
An acceptance stub is a data flow that leaves a bubble but does not go to any other bubble or file and indicates processing that is performed in other than normal situations.
False (reject stub)
In a systems flowchart, a square represents a source or destination of data outside the system.
False (represents a process, function, or action)
Fraud is the possibility that an event or action will cause an organization to fail to meet its objectives (or goals).
False (risk)
A computer crime technique called worm involves the systematic theft of very small amounts from a number of bank or other financial accounts.
False (salami slicing)
Data flow diagrams (DFDs) present a comprehensive picture of the management, operations, information systems and process controls embodied in business processes.
False (systems flowchart)
The successive subdivision, or exploding, of logical data flow diagrams (DFDs) is called bottom up partitioning.
False (top-down partitioning)
The ____ module plays a central role in the SAP system by collecting business events from other modules.
Financial accounting
If attribute A determines a single value for attribute B at any time, we say that attribute B is ____.
Functionally dependent on attribute A
The ____ database model works well for simple data structures, but falls apart quickly when the data becomes more complex.
Hierarchial
A postal ZIP code is an example of which of the following coding schemes?
Hierarchical code
This includes functions related to accounting events, internal operations and financial statement preparation.
Information processing
A man-made system that generally consists of an integrated set of computer-based components and manual components established to collect, store, and manage data and to provide output information to users.
Information system
Why is there usually no control goal called update validity?
Input and update completeness achieve update validity
In a physical data flow diagram (DFD), this is something within the system that transforms data.
Internal entity
Which data flow diagram (DFD) symbol is usually portrayed with a circle?
Internal entity or process
This component of the ERM framework that encompasses the tone of an organization and sets the basis for how risk is viewed and addressed by an entity's people, including risk management philosophy and risk appetite, integrity and ethical values and the environment in which they operate.
Internal environment
Which of the following is not a relationship type?
One-to-few
Regarding management problem structure and information requirements, which of the following represents the vertical information flows from lowest to highest?
Operations and business event processing, operations management, tactical management, strategic management
____ requires information that focuses on the day to day management of the business.
Operations management
A man-made system consisting of people, equipment, organization, policies and procedures with the objective of accomplishing the work of the organization.
Operations process
Which of the following advantages of the centralized database approach does not occur because of a reduction in data redundancy?
Reduced user and programmer training
____ requires information to assess the environment and to project future events and conditions.
Strategic management
At which level of the organization are decisions most unstructured?
Strategic management level
Which of the following segments violates guidelines for creating systems flowcharts?
Segment A
Software that helps execute steps such as demand planning, acquiring inventory, manufacturing, distribution, and sales is known as
Supply chain management (SCM) software
helps plan & execute demand planning; acquiring inventory; and manufacturing, distributing and selling a product
Supply chain management (SCM) software
Which of these represent a comprehensive picture of management, operations and information systems?
Systems Flowchart
The section of Sarbanes Oxley that prohibits a CPA firm that audits a public company from engaging in certain nonaudit services with the same client is:
Title II - Auditor Independence
The section of Sarbanes Oxley that requires a company's CEO and CFO to certify quarterly and annual reports is:
Title III - Corporate Responsibility
The section of Sarbanes Oxley that requires each annual report filed with the SEC to include an internal control report is:
Title IV - Enhanced Financial Disclosures
The section of Sarbanes Oxley that sets forth criminal penalties applicable to CEOs and CFOs of up to $5 million and up to 20 years imprisonment if they knowingly or willfully certify false or misleading information contained in periodic reports is:
Title IX - White-Collar Crime Penalty Enhancements
The section of Sarbanes Oxley that requires financial analysts to properly disclose in research reports any conflicts of interest they might hold with the companies they recommend is:
Title V - Analysts Conflicts of Interests
The section of Sarbanes Oxley that makes it a felony to knowingly destroy, alter, or create records and or documents with the intent to impede, obstruct, or influence an ongoing or contemplated federal investigation and offers legal protection to whistle blowers is:
Title VIII - Corporate & Criminal Fraud Accountability
The section of Sarbanes Oxley that provides for fines and imprisonment of up to 20 years to individuals who corruptly alter, destroy, mutilate, or conceal documents with the intent to impair the document's integrity or availability for use in an official proceeding, or to otherwise obstruct, influence or impede any official proceeding is:
Title XI - Corporate Fraud and Accountability
Why do auditors and systems analysts use systems documentation?
To understand, explain, and improve complex systems
Which of the following is not a benefit of electronic data interchange (EDI)?
Training employees
A context diagram is a top-level diagram of a system that depicts the system and all its activities as a single bubble.
True
A data flow diagram (DFD) is a graphical representation of a system, which depicts the system's components, data flows and the sources, destinations and storage of data.
True
A field is a collection of related characters that comprise an attribute, such as a customer number or name.
True
A partial dependency happens when an attribute that is dependent on a portion of the primary key not on the entire key.
True
A physical data flow diagram (DFD) uses bubbles to specify where, how, and by whom a system's processes are accomplished.
True
A systems flowchart is a graphical representation of both the physical and logical features of an information system.
True
According to the Sarbanes-Oxley Act's Section 409, material changes in the organization's financial condition must be disclosed to the public on a rapid and current basis.
True
An enterprise systems centralized database can make data, such as inventory data, visible throughout the organization.
True
Business process management (BPM) provides a comprehensive method for integrating manual and automated internal processes, applications, and systems, as well as integration to external partners and services.
True
Customer relationship management (CRM) software builds and maintains an organization's customer-related database.
True
Data flow diagrams (DFDs) depict a system's components; the data flows among the components; and the sources, destinations, and storage of data.
True
Data flow diagrams (DFDs) portray a business process' activities, stores of data, and flows of data among those elements.
True
Early adopters of ERP systems were in the business of making products.
True
Enterprise Services Bus (ESB) is a type of communications-broker software that uses standardized protocols to let event-driven applications communicate in a less-expensive manner than can the tightly-coupled, synchronous enterprise application integration (EAI) platforms.
True
Enterprise application integration (EAI) links together two or more systems and allows them to work together.
True
Enterprise systems potentially integrate the business process functionality and information from all of an organization's functional areas.
True
External entities are persons, places, or things outside the context of the system.
True
Flowcharts are commonly used for new systems implementations, business process reengineering, finance function transformations, and assessments of internal controls.
True
If you have made a Web purchase such as with Amazon.com you have experienced some of the functionality of a CRM system where the vendor keeps track of your name, address, and purchases.
True
In a data flow diagram (DFD), a bubble symbol shown below depicts an entity or a process within which incoming data flows are transformed into outgoing data flows.
True
In a data flow diagram (DFD), an external entity symbol portrays a source or a destination of data outside the system.
True
In a data flow diagram (DFD), two parallel lines represent the data store symbol.
True
In an enterprise system, we would have one data store/disk symbol labeled "enterprise database" instead of two or more data store symbols.
True
In event driven architecture (EDA) the business unit "pushes" the event to the recipient rather than waiting for the recipient to request or "pull", the event.
True
Include within the system context any entity that performs one or more information processing activities.
True
Information processing activities retrieve data from storage, transform data, or file data.
True
Information processing includes data processing functions related to accounting events, internal operations and financial statement preparation.
True
Internal entities are included on both data flow diagrams (DFDs) and systems flowcharts.
True
Microsoft Dynamics Snap line of tools is an example of an Application Programming Interface.
True
Microsoft Dynamics and Sage Group focus on small and mid market sized companies.
True
On a systems flowchart the start/stop symbol can also be an external entity.
True
One of the primary goals of implementing an ERP system is to standardize systems across multiple locations and multiple divisions.
True
Processes that handle other-than-normal situations are called exception routines.
True
Product life-cycle management (PLM) software manages product data from design through manufacture, and disposal.
True
SAP has a primary focus on large Fortune 500 type companies.
True
Segregation of duties includes separating the sales and credit departments.
True
Supplier relationship management (SRM) software manages the interactions with the organization's that supply the goods and services to an enterprise.
True
Supply chain management (SCM) software helps plan and execute steps such as demand planning, acquiring inventory, manufacturing, distributing, and selling the product.
True
Systems documentation is used to understand, explain, evaluate, and improve complex business processes, information systems, and internal controls.
True
Telling the customer when they will receive an item is known as available to promise (ATP).
True
The activities in the value chain, the value activities, are business processes that convert inputs to valued outputs.
True
The benefits of electronic document management (EDM) include improved staff productivity, reduced cost of handling and storing paper and faster processing.
True
The bottom line is that without integrated information systems organizations have difficulty being managed on a day-to-day basis and being successful in the long run.
True
To create a systems flowchart, divide the flowchart into columns, one for each internal entity, and label each column
True
When the context diagram and the level 0 diagram have equivalent external data flows, the DFDs are said to be balanced.
True
When we convert to an enterprise system, reengineered processes often result from the installation and can cause changes throughout the systems flowcharts.
True
The major reasons for exercising control of the organization's business processes include:
all the above (provide reasonable assurance that the goals of the business are being achieved, mitigate risks of fraud & other intentional & unintentional acts, provide reasonable assurance that the company is in compliance with applicable legal & regulatory obligations)
A resource, event, or agent about which data are collected is called:
an entity
A data flow diagram (DFD) could contain each of the following symbols except:
an octagon
In EDI, the software that includes the purchasing system at the origin and the order entry system at the destination is known as
application software
Core applications of an ERP
are all the above
The enterprise system might facilitate the purchase of office equipment by all of the following except
assisting the vendor with the selection of the appropriate purchase order
Purchasing function benefits from e-business include
automatic price checking by the computer
The AICPA has identified all but which of the following as assurance services?
consulting
Approvals, authorizations, verifications, reconciliations, reviews of operating performance, security procedures, supervision, audit trails, and segregation of duties are examples of:
control activities
The correct sequence of the control hierarchy, from top to bottom, is:
control environment, pervasive controls, IT general controls, business process controls
The business process objectives that an internal control system is designed to achieve are:
control goals
A tool designed to assist you in evaluating the potential effectiveness of controls in a business process by matching control goals with relevant control plans is:
control matrix
Information-processing policies and procedures that assist in accomplishing control goals are known as:
control plans
A control that involves reprocessing transactions that are rejected during initial processing is an example of:
corrective controls
Electronic document management (EDM) systems are capable of performing all of the following except:
creation of data
Software that builds and maintains an organization's customer-related database is known as
customer relationship management (CRM) software
Software that allows an organization's customers to complete inquiry without the aid of the organization's employees is known as
customer self service (CSS) software
A process, effected by an entity's board of directors, management and other personnel, applied in strategy settings and across the enterprise, designed to identify potential events that may effect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives is:
enterprise risk management
When a transaction cannot be processed in a routine fashion because of an error or other processing problems, the transaction must be handled by a(n):
exception routine
The information system which emulates the problem-solving techniques of humans is called a(n):
expert system
Those entities which perform no information processing activities for the system are called:
external entities
A database management system (DBMS) is a set of standalone programs designed to complicate the tasks of creating, accessing, and managing data.
false
According to the 2008 Report to the Nation on Occupational Fraud and Abuse, frauds are more likely to be detected by audits or internal controls than through tips.
false
According to the Sarbanes-Oxley Act of 2002 and PCAOB Auditing Standard No. 5, management must audit and report on auditors' assertions about the organizations' systems of internal controls.
false
Adding, deleting, or replacing standing data is called transaction processing.
false
Another name for sequential coding is block coding.
false
Applications such as ANSI (X12) and EDIFACT are referred to as transaction software.
false
As a designer of an AIS the accountant will test a new system's controls.
false
As a user of an AIS an accountant must know how systems are developed.
false
Batch mode is the data processing mode in which there is little or no delay between any two data processing steps.
false
Customer relationship management (CRM) functionality includes procurement and contract management.
false
Data maintenance refers to the recording of business event data and transactions.
false
E-business is the application of electronic networks to undertake business processes among the functional areas in an organization.
false
Effective internal control systems provide complete assurance against the occurrence of material frauds and embezzlements.
false
Electronic data interchange (EDI) is the capture, storage, management, and control of electronic document images for the purpose of supporting management decision making and facilitating business event processing.
false
Electronic document management (EDM) is the computer-to-computer exchange of business data in structured formats that allow direct processing of those electronic documents by the receiving computer system.
false
Enterpriseware might be used to stitch together a number of legacy systems, an enterprise system, best-of-breed applications, and Web-based applications.
false
Expected gross risk is a function of the initial expected gross risk, reduced risk exposure due to controls, and cost of controls.
false
Group Support Systems (GSS) focus on such functions as e-mail, scheduling, and document sharing.
false
Immediate mode is the data processing mode in which there is delay between data processing steps.
false
Implementing key controls to determine their operating efficiency is a requirement of SOX Section 404
false
In a network database model, data are logically organized into two-dimensional tables.
false
In an assurance service the accountant will provide the original information used for decision making.
false
Information about a customer's credit history that is received after the decision to grant additional credit lacks completeness.
false
Internal control is a process that provides complete assurance that the organization is meeting its objectives, such as efficiency and effectiveness of operations and reliable reporting.
false
Internet assurance is a service provided for a fee to vendors in order to provide absolute assurance to users of the vendor's web site that the site is in fact reliable and event data security is reasonable.
false
It is best to combine authorization of data-maintenance activities with authorization of business event processing activities.
false
Local area networks (LANs) are communication networks that link up distributed users and local networks into an integrated communication network.
false
Operations related and accounting related processes are designed by those external to the organization.
false
Organizations adopting an events-driven system are focused on capturing data for the purpose of generating reports
false
Processes that include distribution, manufacturing, and accounting operations are front office processes.
false
Strategic management requires more detailed information than operations management.
false
Tactical management uses the most detailed and accurate information.
false
The AICPA Internet assurance program that includes a certification and seal is called VeriSign.
false
The MIS is a subsystem of the AIS.
false
The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not-for-profit entities.
false
The control goal called efficiency of operations strives to assure that a given operations system is fulfilling the purpose(s) for which it was intended.
false
The correct sequence of the three steps in the materials management process is (1) record vendor invoice (2) create purchase order (3) receive the goods.
false
The credit limit within a customer record always provides unlimited authorization to accept a customer order.
false
The event-driven approach focuses on how users interact with business events and processes.
false
The management process includes marketing and sales.
false
The most important information for tactical management involves information about the organization's environment.
false
The three themes of the text are operating systems, e-business, and internal control.
false
To be reliable information must be relevant.
false
With a best-of-breed approach an organization can minimize the number of different software modules employed to implement an enterprise system.
false
expert systems (ES) only work well for simple decisions
false
In a hierarchical database model, all record relationships are 3:N.
false (1:N)
A table is in second normal form (2NF), if it does not contain repeating groups.
false (1NF)
A relation is in third normal form (3NF) if it is in first normal form and no nonkey attribute is dependent on only a portion of the primary key.
false (2NF)
A table is in first normal form (1NF) if it has no partial dependencies; that is, no non-key attribute is dependent on only a portion of the primary key.
false (2NF)
Executive information systems use complex processing and calculations to determine a solution to a problem.
false (DDS)
Under the Sarbanes Oxley Act of 2002, the section on Auditor Independence establishes an independent board to oversee public company audits.
false (Title I - PCAOB)
The centralized database approach to data management concentrates on the process being performed, rather than on the data themselves.
false (applications approach)
The applications approach to data management decouples the data from the applications or other users of the data.
false (centralized approach)
An attribute is equivalent to a field and may also be known as a row.
false (column)
External directives are the policies and procedures that help ensure that management directives are carried out.
false (control activities)
In the construction of data flow diagrams (DFDs) sources and destinations are depicted by parallel horizontal lines between which the name of the entity is shown
false (data storage)
A corrective control plan is designed to discover problems that have occurred.
false (detective control plan)
In the centralized database approach, data and applications are dependent on each other
false (interdependent)
The external environment is a system of integrated elements, people, structures, processes, and procedures acting together to provide reasonable assurance that an organization achieves both its operations system and its information system goals.
false (internal environment)
The control matrix is a computer virus that takes control of the computer's operating system for malicious purposes.
false (malware)
Maximum cardinality is used to specify the minimum level of participation that one entity can have with another entity.
false (maximum)
Because it uses alphabetic characters, a sequential coding system is most understandable to human beings.
false (mnemonic coding)
An intelligent agent is a computer-based system of hardware and software that mimics the human brain's ability to recognize patterns or predict outcomes using less-than-complete information.
false (neural network)
A secondary key uniquely identifies any row within a relational table.
false (primary key)
A sale to a customer is entered into the system properly, but the event does not accurately update the customer's outstanding balance. This type of processing error would be classified as a user error.
false (programming error)
A scanner is used to access a database and to produce inquiry reports.
false (query language)
Data redundancy allows non-technical users to bypass the programmer and to access the database directly.
false (query language)
Under the Sarbanes Oxley Act of 2002, the section on Corporate Tax Returns conveys a sense of the Senate that the corporate federal income tax returns be signed by the treasurer.
false (signed by CEO)
Both the mnemonic and the hierarchical coding schemes attach specific meaning to particular character positions.
false (significant digit & hierarchical coding)
Salami slicing is program code that can attach itself to other programs (i.e., "infect" those programs), that can reproduce itself, and that operates to alter the programs or to destroy data.
false (worm)
All of the following are components of reliability except:
feedback value
A collection of related characters that comprise an attribute such as a customer number or name is known as a
field
System flowchart logic should:
flow from left to right & top to bottom while minimizing crossed lines and connectors
A deliberate act or untruth intended to obtain unfair or unlawful gain is a(n):
fraud
A manager of a manufacturing plant alters production reports to provide the corporate office with an inflated perception of the plant's cost effectiveness in an effort to keep the inefficient plant from being closed. This action would be classified as a(n):
fraud
All of the following are "guidelines" for grouping activities in a level 0 DFD except:
group activities if they occur at different times in the same place
The applications approach to business event processing:
has a data redundancy
The model that only works well for simple data structures is the:
hierarchial database model
In a(n) ____ database model, records are organized in a pyramid structure.
hierarchical
In creating an entity-relationship diagram, the correct sequence of steps is:
identify entities, identify relationships, create tables
The processing mode in which there is no or little delay between any two data processing steps is referred to as:
immediate mode
The effect of an event's occurrence is:
impact
With the centralized database approach to data management, we expect to have:
improved data integrity
Object-oriented databases:
include abstract data types
In the applications approach to business event processing, a data change in one application before updating another application could lead to:
inconsistent data
____ is (are) data presented in a form that is useful to decision makers.
information
A system that consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users is a(n)
information system
The sequence of components in the functional model of an information system is
input, processing, output, users
A software program that may be integrated into DSS or other software tools is a(n):
intelligent agent
Efficiency and effectiveness of operations are goals of:
internal control
A person, place, or thing within a system that transforms data is called:
internal entity
WebTrust is a(n):
internet assurance service
A business event which is not properly authorized is an example of:
invalid item
The principal difference between an executive information system (EIS) and a decision support system (DSS) is that an EIS:
is primarily about collecting and presenting information without doing additional processing or calculations
The Sarbanes-Oxley Act of 2002 dramatically changed the daily work of financial accountants and auditors because
it required that external auditors report on the effectiveness of an organization's system of internal controls
The correct sequence of elements leading to an "available to promise" (ATP) is
item is on shelf, item is not committed to another customer, determine pricing, check customer credit limit
The proper sequence of activities in a manual accounting system is:
journalize, post, summarize
Benefits of electronic data management (EDM) include all of the following except
less disc storage
On a systems flowchart, a solid line with an arrow indicates a(n):
logical flow
Establishing a viable internal control system is primarily the responsibility of:
management
Who is legally responsible for establishing and maintaining an adequate system of internal control?
management
A man-made system consisting of people, authority, organization, policies and procedures whose objective is to accomplish the work of planning and controlling the operations of the organization.
management process
Decision-making is an activity of the
management process
An information system:
may consist of both computer-based and manual components
The coding system that is most understandable by human information processors is:
mnemonic coding
This component of the ERM framework concerns the entirety of enterprise risk management and is accomplished through ongoing management activities, separate evaluations, or both.
monitoring
____ is a process that evaluates the quality of internal control performance over time.
monitoring
In a(n) ____ database model, a child record may have more than one parent.
network
The computer-based system of hardware and software that mimics the human brain's ability to recognize patterns or predict outcomes using less-than-complete information is referred to as:
neural networks
On a logical data flow diagram (DFD), data flows:
never go from a higher-numbered to a lower-numbered bubble
A relation is in second normal form (2NF) if it is in first normal form (1NF) and:
no non-key attribute is dependent on only a portion of the primary key.
The model that includes abstract types that allow users to define data to be stored in the database is the:
object-oriented database model
Data redundancy:
occurs when data is stored in multiple locations
A disadvantage of periodic mode systems is
online master data are only up to date right after the processing has been completed
In drawing a context diagram, we should include:
only normal processing routines
The ERM framework addresses four categories of management objectives. Which category addresses the effective and efficient use of resources?
operations
Accounting is an activity of the
operations process
Events that could have a positive impact on organizational objectives:
opportunities
The three logical components of a business process include all of the following except:
organization process
A process by which organizations select objectives, establish processes to achieve objectives, and monitor performance is:
organizational governance
The processing mode in which there is a delay between the various data processing steps is referred to as:
periodic mode
Control plans that relate to a multitude of goals and processes are called:
pervasive control plans
Which of the following is not a database model discussed in Chapter 5:
physical
Which of the following is one of the three most prominent management activities?
planning
Controls that stop problems from occurring are called:
preventative controls
A unique identifier that serves as an address for each row in a database is called:
primary key
Software that manages the product, beginning with the design of the product, continuing through manufacture and culminating in the disposal of the product, is known as
product lifecycle management (PLM) software
Which of the following is an element of the operations process?
production
Generally, which of the following is NOT one of the three roles an accountant typically fills in relation to the AIS?
programmer
The feature of a database management system that enables nontechnical users to access a database and to produce inquiry reports is the:
query language
Steps in the sales and distribution process include all of the following except
receiving
A collection of related data fields pertaining to a particular entity or event is known as a
record
On a systems flowchart, computer processing is represented by a:
rectangle
The risks of Internet commerce include all of the following except:
redesign of existing business processes
The benefits of electronic document management (EDM) include all of the following except:
reduced computer processing requirements
In a(n) ____ database model, data are logically organized into two-dimensional tables.
relational
Which of the following database types has dominance in contemporary systems?
relational
The model that logically organizes data into two-dimensional tables is the:
relational database model
The ERM framework addresses four categories of management objectives. Which category addresses the reliability of the financial statements?
reporting
A systems flowchart varies from a data flow diagram (DFD) because it:
represents the management system, the operations systems, and the information system
What is the correct sequence of the purchase-to-pay process?
requirements determination; purchase order processing; goods receipt; invoice verification; payment processing
What is the correct sequence of the order-to-cash process?
responding to customer inquiries; sales order processing; pick and pack; shipping; billing; payment
The three themes of the text book include all of the following except:
risk assessment
Events that could have a negative impact on organizational objectives:
risks
Software that automates sales tasks such as order processing and tracking is known as
sales force automation (SFA) software
In a DBMS, a complete description of the configuration of record types, data items and the relationships among them is known as:
schema
Control goals of operations processes include:
security of resources
An information processing activity could be any of the following except:
sending or receiving data between entities
Assigning numbers to objects in chronological sequence is known as:
sequential coding
Another name for sequential coding is:
serial coding
Steps in the materials management process include all of the following except
shipment
The ERM framework addresses four categories of management objectives. Which category concerns high-level goals, aligned with and supporting its mission?
strategic
For the following diagram, which item is the entity?
students
A ____ describes a portion of a DBMS' configuration of record types and data items and the relationships among them.
subschema
A system can be further divided into
subsystems
Software that manages the interactions with the organization's that supply the goods and services to an enterprise is known as
supplier relationship management (SRM) software
A set of interdependent elements that together accomplish specific objectives is a
system
The approach to business event processing in which facts are stored in a relational database is:
the centralized database approach
In an event-driven architecture (EDA)
the enterprise operates in real time
A record layout depicts:
the fields comprising a record
Risk assessment is best described by:
the likelihood and impact of risks are analyzed, as a basis for determining how they should be managed
Data flow labels in context diagrams usually describe:
the nature of the data (logical labels)
The data flows in a logical data flow diagram (DFD) show:
the nature of the data being transmitted
A disadvantage of the periodic mode is:
timeliness
If information arrives too late to impact a decision, then there is a problem with
timeliness
According to the 2008 Report to the Nation on Occupational Fraud and Abuse, frauds are more likely to be detected by:
tips
A process in which successive layers of data flow diagrams (DFDs) are constructed by "exploding" the bubbles on a less detailed DFD to show more detailed data flows is called:
top-down partitioning
On a systems flowchart, a paper file is represented by a:
triangle
A DBMS is a set of integrated computer programs designed to simplify the tasks of creating, accessing, and managing a centralized database.
true
A batch of business events is accurately entered into a business event data store, but the computer operator fails to use the data to update master data. This type of processing error would be classified as an operational error.
true
A character is a basic unit of data such as a letter, number, or special character.
true
A check digit is a code that includes an extra digit to a code in order to check the accuracy with which the code is keyed into a computer.
true
A computer abuse technique called a back door involves a programmer's inserting special code or passwords in a computer program that will allow the programmer to bypass the security features of the program.
true
A computer configuration in which certain equipment is directly connected to the computer is said to be online.
true
A data model depicts user requirements for data stored in a database.
true
A data model for a database is often depicted using entity-relationship diagrams.
true
A description of a portion of a schema is referred to as a subschema.
true
A fraud is a deliberate act or untruth intended to obtain unfair or unlawful gain.
true
A logic bomb is a computer abuse technique in which unauthorized code is inserted in a program, which, when activated, may cause a disaster such as shutting down a system or destroying data.
true
A major reason management must exercise control over an organization's business processes is to provide reasonable assurance that the company is in compliance with applicable laws and regulations.
true
A record is a collection of related data fields pertaining to a particular entity or event.
true
A spreadsheet is a typical component of a decision support system.
true
A type of intranet, which has been extended to limited external access, is referred to as an extranet.
true
According to the Sarbanes-Oxley Act of 2002, management must identify, document, and evaluate significant internal controls.
true
Accuracy is the correspondence or agreement between the information and the actual events or objects that the information represents.
true
An Application Programming Interface (API) is a means for connecting to a system or application provided by the developer of that application.
true
An add-on software module in an enterprise system might be a customer relationship management system (CRM).
true
An attribute is an item of data that characterizes an entity or relationship.
true
An expert system helps make complex decisions consistently.
true
An information system consists of an integrated set of computer-based and manual components established to provide information to users.
true
An object-oriented database system is a database that allows both simple and complex objects to be stored using abstract data types.
true
An unnormalized table is a table that contains repeating attributes (or fields) within each row (or record).
true
Batch processing is the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system.
true
Billing/accounts receivable is traditionally part of the AIS.
true
Business process control plans relate to those controls particular to a specific process or subsystem, such as billing or cash receipts.
true
Business processes, such as hiring employees, purchasing inventory, and collecting cash from customers, are called events.
true
Classifying data refers to grouping or categorizing data according to some common attributes.
true
Client/server technology is the physical and logical division between user-oriented application programs that are run at the client (user) level and the shared data that must be available through the server (i.e. separate computer containing a database that handles centrally shared activities.
true
Cloud computing is the use of the Internet to provide scalable services, such as software, and resources, such as data storage, to users.
true
Customer self service (CSS) software is often an extension of CRM software.
true
Data independence refers to decoupling the data from the system applications, and it is a major difference between the centralized database approach and the applications approach.
true
Data mining refers to the exploration, aggregation, and analysis of large quantities of varied data from across the organization.
true
Data warehousing and data mining are driving many new DBMS implementations.
true
Data warehousing is the use of information systems facilities to focus on the collection, organization, integration, and long-term storage of entity-wide data.
true
Deciding how much credit to grant to a customer is a structured decision.
true
Dell's value chain takes raw materials, manufactures computers and other products, and delivers them to customers in a timely manner at an attractive price.
true
E-Business is the application of electronic networks (including the Internet) to exchange information and link business processes among organizations and individuals.
true
E-mail is the electronic transmission of nonstandardized messages between two individuals who are linked via a communications network.
true
ERP systems can be modified using add-on software
true
Each relationship has a characteristic, called a cardinality that shows the degree to which each entity participates in the relationship.
true
Electronic store fronts are Internet-located resources for displaying goods and services for sale and for conducting related sales transactions.
true
Ensuring the security of resources is the control goal that seeks to provide protection of organization's resources from loss, destruction, disclosure, copying, sale, or other misuse of an organization's resources.
true
Enterprise systems integrate an organization's business processes and information from all of an organization's functional areas.
true
Establishing and maintaining a viable internal control system is the responsibility of management.
true
Ethical behavior and management integrity are products of the "corporate culture".
true
Event driven-architecture (EDA) is an approach to designing and building enterprise systems in which business events trigger messages to be sent by middleware between independent software modules that are completely unaware of each other.
true
Historically the purpose of an accounting information system is to collect, process, and report financial aspects of business events.
true
In a hierarchical database model, a child record may only have one parent.
true
In a relational database model, data are logically organized into two-dimensional tables.
true
In an enterprise system, once a customer order is completed, the purchasing function can be immediately informed that the merchandise has been sold and may need to be replenished.
true
In an online transaction entry (OLTE) system, use of data entry devices allows business event data to be entered directly into the information system at the time and place that the business event occurs.
true
In set theory, a two-dimensional collection of information is called a relation.
true
In the following diagram 1.0 logical data flow diagram (DFD), the DFD follows DFD guidelines.
true
In the network database model, a child record can have more than one parent record.
true
Information systems reliability and electronic commerce have been identified by the AICPA as potential assurance services.
true
Information that is capable of making a difference in a decision-making situation, by reducing uncertainty or increasing knowledge for that particular decision, has the quality of relevance.
true
Internet commerce is computer-to-computer exchange of business event data in structured or semi-structured formats via Internet communication that allows the initiation and consummation of business events.
true
Internet market exchanges enable suppliers to put their products online, by feeding into electronic catalogs that sort through alternatives from different suppliers and electronically place an order.
true
Knowledge management is the process of capturing, storing, retrieving, and distributing the knowledge of the individuals in an organization for use by others in the organization to improve the quantity and/or efficiency of decision making.
true
Management is responsible for establishing and maintaining an adequate system of internal control.
true
Management's legal responsibility to prevent fraud and other irregularities is implied by laws such as the Foreign Corrupt Practices Act.
true
Master data are repositories of relatively permanent data maintained over an extended period of time.
true
Monitoring is a process that assesses the quality of internal control performance over time.
true
Network providers are companies that provide a link into the Internet by making their directly connected networks available for access by fee-paying customers.
true
Operations management requires information that is more accurate and timely than strategic management.
true
Opportunities are events that could have a positive impact on organization objectives.
true
Organizational governance is a process by which organizations select objectives, establish processes to achieve objectives, and monitor performance.
true
Parent records can have many child records in hierarchical DBMS
true
Periodic mode is the data processing mode in which there can be a delay between data processing steps.
true
Production and personnel are part of the operations process.
true
Risk assessment is the entity's identification and analysis of relevant risks to the achievement of its objectives, forming a basis for determining how the risks should be managed.
true
Risks are those events that could have a negative impact on organization objectives.
true
SAS No. 99 emphasizes auditors should brainstorm fraud risks, increase professional skepticism, use unpredictable audit test patterns, and detect management override of internal controls.
true
SPAM is unsolicited unwanted mail.
true
Sarbanes-Oxley Section 404 compliance is a major line of business for the biggest accounting firms.
true
Standing data is relatively permanent portions of master data.
true
Strategic managers use more information from outside the organization than do operations managers.
true
The Internet is a massive interconnection of computer networks worldwide that enables communication between dissimilar technology platforms.
true
The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of financial accountants and auditors.
true
The Sarbanes-Oxley Act's Section 404 creates changes in both how companies document and evaluate internal control and how auditors audit and report on internal control.
true
The centralized database approach to business event processing, in which facts about events are stored in relational database tables instead of separate files, solves many of the problems caused by data redundancy.
true
The control environment reflects the organization's general awareness of and commitment to the importance of control throughout the organization.
true
The control goal of input accuracy is concerned with the correctness of the transaction data that are entered into a system.
true
The correct sequence of the three steps in the sales and distribution process are (1) order entry (2) shipment process and (3) billing process.
true
The database administrator is responsible for administrative and technical issues related to the database management system.
true
The database management system, containing data related to all an organization's applications, supports normal data processing needs and enhances the organization's management activities by providing data useful to managers.
true
The normalization process involves the application of various rules (called normal forms) that yields relational tables that are free of anomalies.
true
The role of the accountant has evolved to include non-financial information and information technology.
true
The three steps in decision making take place in the sequence of (1) intelligence (2) design (3) choice.
true
The traditional applications approach to business event processing concentrates on the process being performed.
true
The uniform product codes (UPCs) used by supermarkets and other retailers are examples of a block coding scheme.
true
Under the Sarbanes Oxley Act of 2002, the section on Corporate Responsibility requires a company's CEO and CFO to certify quarterly and annual reports.
true
Under the Sarbanes Oxley Act of 2002, the section on Enhanced Financial Disclosures requires each annual report filed with the SEC to include an internal control report.
true
Update anomalies are problems in a relation table caused by the existence of functional dependencies.
true
Valid input data are appropriately authorized and represent actual economic events and objects.
true
Value-added network (VAN) service acts as the EDI "post office."
true
Web browsers are software programs designed specifically to allow users to view the various documents and data sources available on the Internet.
true
What controls will be necessary is a question that an accountant answers in the design of the AIS.
true
When different information about the same fact is stored in different files the integrity of the data is violated.
true
With a more structured decision, there is a need for well defined, more accurate data.
true
A data model depicts the requirements for data as specified by the:
user
All of the following are components of relevance except:
verifiability
The ability of more than one individual to come to the same measurement is known as
verifiability
Data flows that provide a basis for managerial decisions are called ____ information flows.
vertical
Service-oriented architectures (SOAs) are independent functions (or applications) that can be distributed over a network via:
web services
In a physical data flow diagram (DFD), a bubble or circle could be used to specify each of the following except:
what process is performed
Which of the following is an unstructured decision?
which research and development projects should be undertaken
A computer abuse technique called a ____ involves a virus that replicates itself on disks, in memory, or across networks.
worm
How many circles (bubbles) are included in a correctly drawn context diagram?
One
The vast majority of e-business volume is
business to business
Each relationship in an E-R diagram has a ____ that shows the degree to which each entity participates in the relationship.
cardinality
A basic unit of data such as a letter, number, or special character is known as a
character
An extra character added to a numeric code as a device to test the accuracy of data entered into a computer system is called a:
check digit
Grouping or categorizing data according to common attributes is called:
classifying data
The technology that is the physical and logical division between user-oriented application programs that are run at the client level and the shared data that must be available through a separate computer (server) that handles centrally shared activities is:
client server technology
In batch processing, business event data are
collected and processed in groups
A primary reason that the FASB requires that GAAP be consistently applied from one period to the next is
comparability
The information quality that enables users to identify similarities and differences in two pieces of information is
comparability
A process captures only authorized transactions but fails to record them only once. Which control goal does this fail to achieve?
completeness
The degree to which information includes data about every relevant object or event necessary to make a decision is
completeness
The ERM framework addresses four categories of management objectives. Which category of concerns laws and regulations?
compliance
The ___ is violated when a firm uses straight-line depreciation one year and changes to declining balance depreciation the next year.
consistency principle
Failing to record a customer's order for the purchase of inventory violates the control goal of:
ensure input completeness
The information process control goal which relates to preventing fictitious events from being recorded is termed:
ensure input validity
Assuring that cash collections recorded in the cash receipts event data are credited to the right customer in the accounts receivable master data addresses the control goal of:
ensure update accuracy
Assuring that the accounts receivable master data reflects all cash collections recorded in the cash receipts event data addresses the control goal of:
ensure update completeness
Technology that can connect together ERP systems and third party add-on modules is called
enterprise application integration (EAI)
A(n) ____ depicts user requirements for data stored in a database.
All of the above
By selling tickets over the Internet, airlines have.
All the above
Which of the following questions might the accountant answer in the design of the AIS?
All the above
Historically, the relationship between an information system and an accounting information system has been:
AIS is part of the IS
The ____ concentrates on the process being performed with data playing a secondary or supporting role.
Applications approach
In an object-oriented database model, what types of objects can be stored through use of abstract data types, inheritance, and encapsulation?
Both simple and complex
This provides a comprehensive method for integrating manual and automated internal processes, applications, and systems, as well as integration to external partners and services.
Business Process Management (BPM)
____ relate to a specific AIS process, such as billing or cash receipts.
Business process control plans
Customer relationship management (CRM) software aggregates, manages, and retains data across the entire organization for the identification, acquisition, and retention of vendors to maximize the benefits of those relationships.
False
DreamWeaver is a Web services platform from SAP that can be used to build applications that integrate business processes and databases from a number of sources within and between organizations.
False
The ____ module of the SAP system handles internal accounting including cost center accounting, activity-based accounting, and budgeting.
Controlling and profitability analysis
Which of the following is not a function that a database management system performs?
Coordinates access to data stored in the applications program
ERP systems have proved to be quite easy to install and in short periods of time.
False
Generally, when processing a customer order, one does not need to know the total price of the goods before credit authorization can be made.
False
This framework was issued in 1996 (and updated in 2007) by the Information Systems Audit and Control Association (ISACA) because of the influence of IT over information systems, financial reporting and auditing.
COBIT
In a logical data flow diagram (DFD) for a cash receipts system, each of the following labels might appear in a bubble except:
Cashier
Which of the following is the least detailed of the data flow diagrams?
Context diagram
The ERM framework is comprised of eight components. Which component includes the policies and procedures established and implemented to help ensure the risk responses are effectively carried out?
Control activities
____ are the policies and procedures that help ensure that the risk responses are effectively carried out.
Control activities
____ sets the tone of the organization, influencing the control consciousness of its people.
Control environment
In a disaggregated information system, the customer will be notified immediately whether the item is on the shelf and not committed to another customer.
False
Internal entities are those persons, places, or things that send data to, or receive data from, the system.
False
Large multilocation and multidivision companies are challenged to see the greatest benefits from ERP systems.
False
Primary activities of the value chain provide infrastructure such as procurement, information technology, human resources, and accounting.
False
System flowcharts use only four symbols.
False
The dominant player in the large system ERP arena is Microsoft.
False
The order-to-cash process includes events surrounding the purchase of goods from a vendor, the recognition of those costs, and the payment to the vendor.
False
The purchase-to-pay process includes the events surrounding the sale of goods to a customer, the recognition of revenue, and the collection of the customer payment.
False
The value chain is a chain of activities performed by the organization to transform outputs into inputs valued by the customer.
False
Which of the following Internet applications would not be categorized as a customer relationship management (CRM) system?
Customer designs a product
The value chain works to separate the functional activities or silos of the organization.
False
There can be only one correct logical data flow diagram (DFD) for any system.
False
With an enterprise system an organization will conduct business in a more costly manner.
False
Systems flowcharts portray business process activities, stores of data, and flows of data among those elements without presenting the physical details of those elements.
False (DFDs)
The control goal of ensuring input materiality strives to prevent fictitious items from entering an information system.
False (ensure input validity)
In a data flow diagram (DFD), a square represents an internal entity.
False (external entity)
A neural network is a software program that may be integrated into DSS or other software tools.
False (intelligent agents)
An external entity is a person, place, or thing within the system that transforms data.
False (internal entity)
The successive subdividing, or "exploding," of physical data flow diagrams (DFDs) is called top-down partitioning.
False (logical DFDs, not physical)
Internal entities are included on data flow diagrams (DFDs) but not on systems flowcharts.
False (on both)
Which data flow diagram (DFD) symbol is usually portrayed with an arrow?
Data flow
Which of the following data flow diagram (DFD) symbols is represented by two parallel lines?
Data store symbol
The mapping of the relationships between entities would be used in the development of a(n):
E-R Diagram
E-business does not include
ERP systems
Enterprise systems can include
ERP systems
As a result of an inadequate design, a production process yields an abnormally high amount of raw material scrapped. Which control goal is being violated?
Ensure efficient employment of resources
Achieving which control goal requires that all valid objects or events are captured and entered into a system's database once and only once?
Ensure input completeness
A programming error causes the sale of an inventory item to be added to the quantity on hand attribute in the inventory master data. Which control goal was not achieved?
Ensure update accuracy
Which of the following is a control goal regarding master data?
Ensure update accuracy
Which of the following is not a cost of electronic data interchange (EDI)?
Entering data only once
The central repository for all the data related to the enterprise's business activities and resources.
Enterprise database
A(n) ____ reflects a system's key entities and the relationship among them.
Entity-relationship diagram
Which component of the ERM framework is best described here: Internal and external events affecting achievement of an entity's objectives must be identified, distinguishing between risks and opportunities. Opportunities are channeled back to management's strategy or objective-setting processes.
Event identification
An approach to designing and building enterprise systems in which business events trigger messages to be sent by middleware between independent software modules that are completely unaware of each other.
Event-driven architecture (EDA)
Which data flow diagram (DFD) symbol is usually portrayed with a square?
External entity
Which data flow diagram (DFD) symbol portrays a source or destination of data outside the system?
External entity symbol/square symbol
An organization creates a competitive advantage by creating less value for its customers than does its competition.
False
Data flows that mirror and monitor business operations are called ____ flows.
Horizontal information
The ____ module of the SAP system handles payroll processing.
Human resources
The text takes the following view of the relationship between an IS and an AIS:
IS and AIS are one in the same
These are applied to all IT service activities.
IT general controls
____ is (are) communication networks that link several different local user machines with printers, databases, and other shared devices.
LANs
Which of the following is usually not part of an ERP's core applications?
Legacy systems
A computer abuse technique called a ____ involves inserting unauthorized code in a program, which, when activated, may cause a disaster, such as shutting the system down or destroying files.
Logic bomb
In which of the following data flow diagrams does the bubble symbol represent a process and not the entire system?
Logical data flow diagram
Which of the following is not a benefit of Internet commerce?
Maintaining security of the internet site
These are repositories of relatively permanent data maintained over an extended period of time.
Master data
The general term for software that connects third-party modules to ERP systems is known as:
Middleware
Which of the following is the most likely coding scheme for college courses?
Mnemonic coding
Internal control is a process designed to provide absolute assurance regarding achieving objectives in which of the following?
None of the above
A system that supports constantly up-to-date reporting of data is
OLRT
Systems that gather business event data at the time of occurrence, update the master data essentially instantaneously, and provide the results arising from the business event within a very short amount of time are referred to as:
OLRT
In a(n) ____ system, use of data entry devices allows business event data to be entered directly into the information system at the time and place the business event occurs.
OLTE
____ databases include abstract data types that allow users to define characteristics of the data to be stored when developing an application.
Object-oriented
The ____ suggests that technology improves information available for decision making.
Occupational Outlook Handbook
Which type of data flow diagram specifies where, how, and by whom a system's processes are performed?
Physical DFD
A(n) ____ is a computer abuse technique where unauthorized instructions are inserted into a program to systematically steal very small amounts, usually by rounding to the nearest cent in financial transactions.
Salami slicing
____ improves the decision maker's capacity to predict, confirm, or correct earlier expectations.
Predictive value and feedback value
What is the best sequence of activities for drafting DFDs for an existing system?
Prepare a table of entities and activities, draw a context diagram, draw a physical data flow diagram, prepare an annotated table of entities and activities, draw a logical data flow diagram
Which of the following tracks a product from design, continuing through manufacture, and culminating with the disposal of the product at the end of its life?
Product life cycle management (PLM)
What is the first step in the purchase-to-pay process?
Requirements determination
Which of the following is included in the first step in the order-to-cash process?
Responding to customer inquiries
Which of the following is not a cost of EDI?
Responsiveness to customers' needs
Which component of the ERM framework is best described here: Management selects whether to avoid, accept, reduce, or share risk, developing a set of actions to align risks with the entity's risk tolerances and risk appetite.
Risk response
The most dominant player in the ERP market for large companies is:
SAP
In an event-driven architecture (EDA)
business events are pushed immediately and simultaneously to all interested parties
A relation that is in ____ form contains repeating attributes within each row or record.
Unnormalized
To implement a secure EDI system between two or more companies, they might use a(n):
VAN
Which statement about ERP installation is least accurate?
When a business is diversified, little is gained from ERP installation.
The four Ws of capturing data do not include:
Why
Back-office functions include:
accounting
Supporting activities of the value chain include
accounting
The correspondence or agreement between the information and the actual events or objects that the information represents is known as
accuracy
Which of the following is NOT one of the three steps in decision making as described in the text.
action
Information processing activities include:
activities that retrieve, transform, and file data
Cloud computing uses the Internet to provide services such as:
all of the above
As described in COSO, elements of a control environment might include the following:
all of the above (commitment to the importance of control, reward systems, tone at the top of the organization)
Electronic document management (EDM) includes all of the following except:
all the above
Enterprise systems support an organization by:
all the above
In an event-driven architecture (EDA)
all the above
Information technology (IT) has been able to create additional value by
all the above
Some third-party modules can extract data from:
all the above
When two data flow diagrams (DFDs) have equivalent external data flows, we say that the two data flow diagrams are:
balanced
The uniform product codes (UPC) used in supermarkets is a type of:
block code
Internet market exchanges:
bring together buyers and sellers in the same industry
Vendor online catalogs can be viewed by customers through a(n):
browser
A symbol used in data flow diagrams (DFDs) to depict an entity or process within which incoming data flows are transformed into outgoing data flows is a(n):
bubble symbol
According to the text, these represent the "book of original entry"
business event data
An online transaction entry (OLTE) system merges the traditional subprocesses of:
business event occurences and record business event data
The correct sequence of subprocesses for the batch processing of accounting data is
business event occurs, record business event data, update master data, generate outputs
____ are facts and figures in raw form.
data
Decoupling the data from the system applications is a major difference between the centralized database approach and the applications approach and is known as:
data independence
The exploration, aggregation, and analysis of large quantities of varied data from across the organization is known as:
data mining
Running an applications approach to sales and inventory programs leads to:
data redundancy
The use of information systems facilities to focus on the collection, organization, integration, and long-term storage of entity-wide data is known as:
data warehousing
The computer software needed to implement a database approach to data management that is not needed with the applications approach to data management is:
database management system software
A decision maker prepares a presentation in a suitable format for a given decision at a given point in time when using a(n):
decision support system
In an entity-relationship diagram, ____ are used to show the characteristics of relationships.
diamonds
A control goal that is a measure of success in meeting a set of established goals is called:
effectiveness
With the installation of an enterprise system an organization should experience all of the following except
empowerment of decentralized operations
Discrepancies between data items recorded by a system and the underlying economic events or objects they represent are a violation of the control goal of:
ensure input accuracy
