AIS Final Quiz
A 31-year-old programmer unleashed a Visual Basic program by deliberately posting an infected document to an alt.sex Usenet newsgroup using a stolen AOL account. The program evaded security software and infected computers using the Windows operating system and Microsoft Word. On March 26, the Melissa program appeared on thousands of e-mail systems disguised as an important message from a colleague or friend. The program sent an infected e-mail to the first 50 e-mail addresses on the users' Outlook address book. Each infected computer would infect 50 additional computers, which in turn would infect another 50 computers. The program spread rapidly and exponentially, causing considerable damage. Many companies had to disconnect from the Internet or shut down their e-mail gateways because of the vast amount of e-mail the program was generating. The program caused more than $400 million in damages. a. worm b. spyware c. virus d. Trojan Horse
a
A data flow diagram A) is a graphical description of the source and destination of data that shows how data flow within an organization. B) is a graphical description of the flow of documents and information between departments or areas of responsibility. C) is a graphical description of the relationship among the input, processing, and output in an information system. D) is a graphical description of the sequence of logical operations that a computer performs as it executes a program.
a
A disbursement voucher contains A) a list of outstanding invoices. B) the net payment amount after deducting applicable discounts and allowances. C) the general ledger accounts to be debited. D) All of the above are correct.
a
A well-planned and drawn context data flow diagram will include how many processes? A) One B) Between 5 and 7 C) Between 2 and 7, but no more than 7 D) As many as are needed to accurately depict the process being documented
a
A(n) ________ system posts an approved invoice to the vendor account and stores it in an open invoice file until payment is made by check. A) nonvoucher B) voucher C) cycle D) evaluated receipt settlement
a
All of the following are controls that should be implemented in a payroll process, except A) supervisors distribute paychecks since they should know all employees in their department. B) someone independent of the payroll process should reconcile the payroll bank account. C) sequential numbering of paychecks and accounting for the numbers. D) restrict access to blank payroll checks and documents.
a
All of the following are disadvantages of an ERP system except a. ERP's provide a integrated view of the organization's data b. ERP implementation can be cost prohibition for some companies c. ERP's are relatively complex d. ERP's frequently cause organizations to change their business processes to standardized ones
a
All of the following are guidelines for preparing data flow diagrams except A) show the most detail in the highest-level DFD. B) include all storage files, even if they are only temporary. C) uniquely name all data flows. D) sequentially number process bubbles.
a
All of the following are required for an act to be legally classified as fraudulent except a. unintentional negligence b. injury or loss c. false statement d. material fact e. justifiable reliance
a
All the information (name, GPA, major, etc.) about a particular student is stored in the same a. record b. data value c. attribute d. file e. field
a
An effective method of reducing of theft is a. requiring the warehouse and the shipping department to sign off on the transfer of goods b. requiring the sales staff and the shipping department to sign off on the transfer of goods c. an annual inventory count d. requiring the warehouse staff
a
At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the beginning ticket number is subtracted from the ending number to calculate the number of tickets sold. Then, ticket stubs collected at the theater entrance are counted and compared with the number of tickets sold. Which of the following situations does this control detect? A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the theater entrance (so the tickets didn't get torn.) B) A group of kids snuck into the theater through a back door when customers left after a show. C) The box office cashier accidentally gives too much change to a customer. D) The ticket taker admits his friends without tickets.
a
Business process diagram characteristics include all of the following except a. data stores do not show the type of storage medium b. does not show how tasks are performed c. does not show the documents used d. depicts segregation of duties swim lane
a
Chas Mulligan has been hired by Yardley Security as an assistant to the internal auditor. He has been asked to document the existing accounting information system, and focus on the activities and flow of data between activities. He decides to begin with a summary description of the sources and uses of data in the organization and how they are processed by the system. The documentation tool that he should employ for this purpose is a A) data flow diagram. B) document flowchart. C) system flowchart. D) program flowchart.
a
Data flow diagrams depict A) processes, but not who is performing the processes. B) processes, but not the data that flows between processes. C) who is performing processes, but not how they perform the process. D) who is performing processes, but not the data that flows between processes.
a
Data must be collected about three facets of each business activity. What are they? A) the business activity, the resources it affects, the people who participate B) the business activity, the transactions it creates, the impact on the financial statements C) the inputs, outputs and processes used D) who is involved, what was sold, how much was paid
a
Duc An Incorporated provides free coffee to employees. Starbucks delivers coffee packages, sugar, creamer, and filters as needed each week. Starbucks sends Duc An an invoice. This arrangement is best described as a A) blanket purchase order. B) set purchase order. C) fixed purchase order. D) standard purchase order.
a
For good internal control, who should sign checks? a. cashier b. accounts payable c. purchasing agent d. controller
a
For recording time spent on specific work projects, manufacturing companies usually use a A) job time ticket. B) time card. C) time clock. D) labor time card.
a
In a payroll processing DFD, the "prepare reports" activity will be represented by ________, the "employee payroll file" will be represented by ________, and the "management" will be represented by ________. A) a circle; two horizontal lines; a square B) a circle; two horizontal lines; two horizontal lines C) a rectangle; a square; a circle D) a square; two horizontal lines; a circle
a
In aDFD, the data source will be represented by ___, and the data destination will be represented by ___. a. a square; a square b. a rectangle; a square c. a square; a rectangle d. a rectangle; a rectangle
a
In preparing a DFD, when data are transformed through a process, the symbol used should be A) a circle. B) an arrow. C) a square. D) two horizontal lines.
a
Independent checks on performance include all the following except A) recalculating the total of a batch of invoices and comparing it with your first total B) bank reconciliation C) preparing a trial balance report. D) periodic comparison of subsidiary ledger totals to control accounts
a
Marina is an accountant at Jasmine Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The account number referenced in your journal entry does not exist. Create a new account?" This is an example of A) validity check. B) closed loop verification. C) zero-balance check. D) completeness test.
a
Marina is an accountant at Jasmine Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "This journal entry will cause the cash account to have a credit balance. Do you want to continue?" This is an example of A) sign check. B) field check. C) zero-balance check. D) completeness test.
a
Nolwenn Limited, has been diligent in ensuring that their operations meet modern control standards. Recently, they have extended their control compliance system by incorporating policies and procedures that require the specification of company objectives, uncertainties associated with objectives, and contingency plans. They are transitioning from a ________ to a ________ control framework. A) COSO-IC; COSO-ERM B) COSO-ERM; COBIT C) COBIT; COSO-IC D) COSO-IC; COBIT E) COBIT; COSO-ERM
a
Of the following examples of fraud, which will be the most difficult to prevent and detect? Assume the company enforces adequate segregation of duties. A) Jim issues credit cards to him and Marie, and when the credit card balances are just under $1,000, Marie writes off the accounts as bad debt. Jim then issues new cards. B) An employee puts inventory behind the dumpster while unloading a vendor's delivery truck, then picks up the inventory later in the day and puts it in her car. C) A mail room employee steals a check received from a customer and destroys the documentation. D) The accounts receivable clerk does not record sales invoices for friends or family, so they can receive free goods.
a
Once fraud has occurred, which of the following will reduce fraud losses? a. insurance b. segregation of duties c. fraud risk assessment d. access controls
a
Perpetrators of theft of company assets typically exhibit all the following characteristics except that they A) attempt to return or pay back stolen amounts soon after the initial theft, but find they are unable to make full restitution. B) use trickery or lies to gain the confidence and trust of others at the organization they defraud. C) become bolder and more greedy the longer the theft remains undetected. D) begin to rely on stolen amounts as part of their income.
a
Prenumbered invoices and prenumbered purchase orders are examples of a. sequence code b. mnemonic code c. group code d. product code
a
Rauol is a receptionist for South American Paper Company, which has strict corporate policies on appropriate use of corporate resources. The first week of March, Raoul saw Jim, the branch manager, putting printing paper and toner into his briefcase on his way out the door. This situation best reflects a weakness in which aspect of internal environment, as discussed in the COSO Enterprise Risk Management Framework? A) Integrity and ethical values B) Risk management philosophy C) Restrict access to assets D) Methods of assigning authority and responsibility
a
Separating the shipping and billing functions is designed to reduce the threat of A) failure to bill customers. B) billing customers for wrong quantities. C) billing customers before merchandise has been shipped. D) shipping the wrong merchandise.
a
Someone redirects a website's traffic to a fake website, usually to gain access to personal information. What is this technique called? a. pharming b. phishing c. podslurping d. posing
a
Store policy that allows retail clerks to process sales returns for $500 or less, with a receipt dated within the past 30 days, is an example of A) general authorization. B) specific authorization. C) special authorization. D) generic authorization.
a
The ________ authorizes the transfer of raw materials from the storeroom to the production floor. A) bill of materials B) production order C) materials requisition D) move ticket
a
The accounts receivable clerk destroys all invoices for sales made to family and friends and does not record the sales in the accounts receivable subsidiary ledgers. The family and friends usually give the clerk cash as a "thank you." Which procedure will not prevent or detect this fraud? A) Send monthly statements to all customers with balances owed. B) Reconcile sales invoices in the billing department to the total debits to accounts receivable subsidiary ledgers. C) Sequentially prenumber all invoices and prepare a sequence check at the end of each day. D) Reconcile the accounts receivable control account to the accounts receivable subsidiary ledger.
a
The accounts receivable management method typically used by credit card companies is A) balance forward. B) postbilling. C) monthly statement. D) open-invoice.
a
The call to tech support was fairly routine. A first-time computer user had purchased a brand new PC two months ago and it was now operating much more slowly and sluggishly than it had at first. Had he been accessing the Internet? Yes. Had he installed any "free" software? Yes. The problem is likely to be a(an) A) virus. B) zero-day attack. C) denial of service attack. D) dictionary attack.
a
The data processing activity for updating a record is the same as a. revising a record b. deleting a record c. entering a record d. reviewing a record
a
The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date. A) cashier B) treasurer C) controller D) accounts payable department
a
The document a customer returns with their payment and that identifies the source and the amount of the payment is called a A) remittance advice. B) remittance list. C) credit memorandum. D) debit memorandum.
a
The objective of approving vendor invoices is to ensure that a. the company pays only for goods ordered and received b. the company pays only for goods ordered and shipped c. the company pays only for goods sold and received d. the company pays only for goods ordered and invoiced
a
The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfthrall, has leveraged computer technology to provide a superior level of customer service. In particular, the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible. Price information and condition are also provided for each inventory item. In this database, action figures (collectively) are a(an) A) entity. B) attribute. C) field. D) record.
a
The receiving clerk at Wattana Technologies examines incoming shipments and reconciles their contents with the relevant purchase orders. A receiving report is then sent to accounts receivable and the vendor's invoice is approved for payment. Which of the following would correct control weaknesses related to these activities? A) Accounts payable should reconcile the purchase order and the receiving report. B) The invoice should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled. C) Invoices, purchase orders, and receiving reports should be reconciled by the receiving clerk. D) Controls are adequate under the current system.
a
To minimize the number of checks that need to be written to pay vendor invoices a company should use a A) voucher system. B) just-in-time inventory system. C) nonvoucher system. D) evaluated receipt settlement system.
a
What is a denial of service attack? A) A denial of service attack occurs when the perpetrator sends hundreds of messages from randomly generated false addresses, overloading an Internet service provider's e-mail server. B) A denial of service attack occurs when an e-mail message is sent through a re-mailer, who removes the message headers making the message anonymous, then resends the message to selected addresses. C) A denial of service attack occurs when a cracker enters a system through an idle modem, captures the PC attached to the modem, and then gains access to the network to which it is connected. D) A denial of service attack occurs when the perpetrator e-mails the same message to everyone on one or more Usenet newsgroups LISTSERV lists.
a
What is the first step in the data processing cycle? a. inout b. storage c. output d. purchasing
a
What is the main reason for a separate payroll bank account? a. to provide a zero-balance check each period b. to make bank reconciliations easier c. to eliminate the need to transfer money from the operating bank account d. to give more control of payroll funds to the payroll department
a
What type of risk exists before management takes any steps to mitigate it? a. inherent risk b. risk appetite c. residual risk d. risk assessment
a
When a proper segregation of duties exists in the area of handling cash receipts, the ________, who reports to the ________, actually handles the cash and is not the same person who posts cash receipts to customer accounts. A) cashier; treasurer B) cashier; controller C) accountant; treasurer D) accountant; controller
a
Which control procedures is probably the least effective in reducing the threat of inventory loss? a. materials usage reports b. periodic inventory counts c. documenting transfers of inventory d. limiting physical access to inventory
a
Which data processing method would be the most appropriate for making an airline reservation? a. online real time processing b. batch processing
a
Which data processing method would be the most appropriate for registering a university course? a. online real time processing b. batch processing
a
Which department creates the Bill of Materials? a. engineering b. operations c. accounting d. production
a
Which department should have the responsibility for authorizing pay rate changes? a. human resources b. accounting c. operations d. payroll
a
Which document is used to authorize the release of merchandise from inventory control (warehouse) to shipping? a. picking ticket b. packing slip c. shipping order d. sales invoice
a
Which document lists all the components needed to manufacture a product? a. bill of materials b. operations list c. production order d. materials requisition
a
Which document records time spent by salaried employees on various tasks for specific clients? a. time sheet b. time clock c. time card d. job time ticket
a
Which document should always be included with a merchandise shipment to a customer? A) Packing slip B) Picking ticket C) Remittance advice D) Sales invoice
a
Which electronic files are either read or updated when goods are ordered from a vendor? A) inventory, vendors, and accounts payable B) vendors and accounts payable C) inventory, vendors, and open purchase orders D) open purchase orders and accounts payable
a
Which method is most likely used when a company offers customers discounts for prompt payment? a) open-invoice method b) balance-forward method c) accountings receivable aging method d) cycle billing method
a
Which of the following Human Resource Standards are intended to prevent the concealment of theft? a. mandatory vacations b. background checks c. confidentiality agreements d. continuing education
a
Which of the following conditions is not necessary for a fraud to occur? a. authorization b. pressure c. rationalization d. opportunity
a
Which of the following documents normally triggers the billing process in the revenue cycle? A) Packing slip received from the shipping department B) Sales order received from the sales department C) Picking ticket received from the sales department D) Journal voucher received from the shipping department
a
Which of the following is a threat to the Sales Order Entry activity of the Revenue Cycle? a. Uncollectible accounts. b. Failure to bill. c. Billing errors. d. Theft of inventory.
a
Which of the following is not a management characteristic that increases pressure to commit fraudulent financial reporting? A) close relationship with the current audit engagement partner and manager B) pay for performance incentives based on short-term performance measures C) high management and employee turnover D) highly optimistic earnings projections
a
Which of the following is not a preventative control? a. closed-loop verification b. completeness test c. field check d. validity check
a
Which of the following is not an example of the fraud triangle characteristic concerned with rationalization? A) Revenge against the company B) Sense of entitlement as compensation for receiving a lower than average raise C) Intent to repay "borrowed" funds in the future D) Belief that the company won't suffer because an insurance company will reimburse losses
a
Which of the following is not enforced by the PCAOB? a. audit committee b. audit quality c. auditing ethics d. auditor independence
a
Which of the following is not usually a consideration when designing a coding system? A) Government regulations on coding systems B) Standardization C) Future expansion needs D) Facilitating report preparation
a
Which of the following is the greatest risk to information systems and causes the greatest dollar losses? A) human errors and omissions B) physical threats such as natural disasters C) dishonest employees D) fraud and embezzlement
a
Which of the following is true regarding revenue cycle controls? a. The warehouse releases inventory to shipping on an approved sales order b. both receiving and the warehouse sign off on the transfer of goods c. both receiving and the warehouse sign off on the packing slip d. both receiving and the warehouse sign off on the picking ticket
a
Which of the following statements about the internal control environment is false? a. management's attitudes toward internal control and ethical behavior have little impact on employee beliefs or actions b. a written policy and procedures manual is an important tool for assigning authority and responsibility c. supervision is especially important in organizations that are too small to ahem an adequate control system d. an overly complex or unclear organizational may be indicative of problems that are more serious
a
Which of the following would probably be the least effective control to mitigate the risk of paying a phony invoice payable for inventory purchases that were never made? A) Only pay from original invoices. B) Require three-way match for all inventory purchase invoices. C) Cancel all invoices and supporting documentation when paid. D) Establish strict access and authorization controls for the approved vendor master file.
a
Which report contains only current period employee hours, pay rate, gross pay, deductions, and net pay? a. payroll register b. earnings statement c. deduction register d. pay stub
a
Which type of control prevents detects and corrects trnasaction errors and fraud? a. application b. detective c. preventive d. general
a
Which type of file would be used when changing a customer address change? a. master file b. transaction file
a
Which type of file would be used when changing a customer credit limit? a. master file b. transaction file
a
Which type of file would be used when changing an employee office location? a. master file b. transaction file
a
Which type of file would be used when changing an employee pay rate? a. master file b. transaction file
a
Which type of file would be used when updating product pricing? a. master file b. transaction file
a
Who should be allowed to authorize new customers? a. sales manager b. sales manager, salesperson, or AR c. AR d. salesperson e. sales manager or salesperson, especially if the salesperson is in the field
a
A chart of accounts is an example of (select all that apply) A) sequence codes. B) block codes. C) group codes. D) mnemonic codes.
b
A master production schedule is used to develop a. daily reports on direct labor needs b. timetables of daily production and determine raw material needs c. reports on daily production and material usage d. inventory charts
b
A surprise count of an imprest petty cash fund should find the total of ________ equal to the amount authorized for the fund. A) cash and credit memos B) cash and vouchers C) cash D) cash and checks
b
A voucher package should include A) a purchase requisition, vendor invoice, and receiving report. B) a purchase order, vendor invoice, and receiving report. C) a purchase requisition, purchase order, and receiving report. D) a bill of lading and vendor invoice.
b
According to the Sarbanes-Oxley Act of 2002, the audit committee of the board of directors is directly responsible for a. performing tests of internal controls b. hiring and overseeing the external auditors c. certifying the accuracy of the financial reporting process d. acting as Director for the internal audit department
b
An accounting policy that requires a purchasing manager to sign off an all purchases over $5000 is an example of A) general authorization. B) specific authorization. C) special authorization. D) generic authorization.
b
An arrangement where a bank receives customer payments through the postal system, scans the remittance advices, and transmits payment data to the business electronically is known as A) e-commerce. B) an electronic lockbox. C) electronic funds transfer (EFT). D) electronic data interchange (EDI).
b
Callow Youth Clothing (CYC) is a boutique retailer located in Estes Park, Colorado. During the peak tourist season, it has average daily cash and credit card sales in excess of $5,000. What is the best way for CYC to ensure that sales data entry is efficient and accurate? A) Well-designed paper forms B) Source data automation C) Turnaround documents D) Sequentially numbered sales invoices
b
Carly Jackson is a staff auditor for KPMG. She has been asked to document the client's existing accounting information system so the engagement team can assess the client's adequacy of controls around financial reporting. She decides to begin by creating a flowchart to describe, analyze, and evaluate internal controls. What documentation tool should she use for this purpose? a. system flowchart b. internal control flowchart c. document flowchart d. data flow diagram
b
Carly Jackson is a staff auditor for KPMG. She has been asked to document the client's existing accounting information system so the engagement team can assess the client's adequacy of controls around financial reporting. She decides to begin by examining the client's key software applications, examining a flowchart that illustrates the sequence of logical operations performed by the system in executing the application. To do this, Carly should ask the client for what type of flowchart? a. system flowchart b. program flowchart c. internal control flowchart d. document flowchart
b
Chas Mulligan has been hired by Yardley Security as an assistant to the internal auditor. He has been asked to document the existing accounting information system, and focus on the activities and flow of data between activities. He decides to begin with a summary description of the sources and uses of data in the organization and how they are processed by the system. The documentation tool that he should employ for this purpose is a A) data flow diagram. B) document flowchart. C) system flowchart. D) program flowchart.
b
Criminals in Russia used a vulnerability in Microsoft's server software to add a few lines of Java code to users' copies of Internet Explorer. The code recorded the users' keyboard activities, giving the criminals access to usernames and passwords at many banking Web sites. The attacks caused $420 million in damage a. botnet b. keylogger c. back door d. phishing
b
Customers sending orders digitally in a format compatible with the vendor's sales order processing system is an example of a. FEDI b. EDI c. EFT d. ACH
b
Customers that send their payments electronically directly to the company's bank are using A) electronic data interchange (EDI). B) electronic funds transfer (EFT). C) procurement cards. D) an electronic lockbox.
b
Duplicate checking of calculations is an example of a ________ control, and procedures to resubmit rejected transactions is an example of a ________ control. A) corrective; detective B) detective; corrective C) preventive; corrective D) detective; preventive
b
EFT payments are generally performed by A) the treasurer. B) a cashier. C) an accounts payable clerk. D) a credit manager.
b
Gaining control of someone else's computer to carry out illicit activities without the owner's knowledge is known as A) hacking. B) hijacking. C) phreaking. D) sniffings.
b
Graphical representations of information are often supplemented by A) product specifications. B) narrative descriptions. C) logic charts. D) oral descriptions from management.
b
How should sales commissions be calculated? a. based on sales invoices b. based on cash collections c. based on sales orders to new customers d. based on sales orders
b
Identify opportunity below that could enable an employee to commit fraud. A) An employee's spouse loses her job. B) An employee has a close association with suppliers or customers. C) An employee suddenly acquires lots of credit cards. D) An employee is upset that he was passed over for a promotion.
b
Identify the most accurate statement below. A) Several purchase requisitions are often created to fill one purchase order. B) Several purchase orders are often created to fill one purchase requisition. C) Every purchase requisition should lead to the creation of one purchase order. D) Every purchase order should lead to the creation of one purchase requisition.
b
In a revenue cycle with proper controls, the ________ who reports to the ________, is not involved in any cash handling activities. A) accounts receivable clerk; treasurer B) accounts receivable clerk; controller C) cashier; controller D) cashier; treasurer
b
In general, a data destination will be shown by A) an arrow pointing away. B) an arrow pointing in. C) arrows pointing both ways. D) no arrows, only two horizontal lines.
b
Is it acceptable for management to override internal controls in order to process a transaction? a. Yes b. No c. Yes, if the timing is critical
b
Marina is an accountant at Jasmine Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The amounts debited and credited are not equal. Please correct and try again." This is an example of A) validity check. B) field check. C) zero-balance check. D) completeness test.
b
Marina is an accountant at Jasmine Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The journal entry amount must be a numeric value. Please reenter." This is an example of A) validity check. B) field check. C) zero-balance check. D) completeness test.
b
Marina is an accountant at Jasmine Hair Products. While making an adjusting entry to the general ledger. Marina entered the general ledger, account number, and then reviewed the name of the general ledger account displayed on the screen. This is an example of A) completeness check B) validity check. C) closed-loop verification D) account check
b
More than one arrow is needed between symbols on a DFD if A) data elements always flow together. B) data elements flow separately C) data elements flow to different locations. D) there is no guideline on use of single or multiple arrows.
b
One of the basic activities in the expenditure cycle is the receiving and storage of goods, supplies, and services. What is the counterpart of this activity in the revenue cycle? A) sales order entry process B) shipping function C) cash collection activity D) cash payments activity
b
One of the key objectives of segregating duties is to a. make sure that people handle different transactions b. make sure that different people handle different parts of the same transaction c. ensure that no collusions will occur d. achieve an optimal division of labor for efficient operations
b
Source data automation refers to a. using an accounting information system to electronically bill customers b. using devices to capture transaction data in machine readable form at the time the transaction is made c. using an accounting information system to automate a previously manual transaction process d. using the internet as the operating platform of an accounting information process
b
Supervisors should approve any Materials Requisition that are in excess of the necessary amount listed the a. Move Ticket b. Bill of Materials c. Production Order d. Master Production Schedule
b
The COSO-ERM framework specifies four types of objectives that management must meet to achieve company goals. Which of the following is not one of those types? a. operations objectives b. responsibility objectives c. compliance objectives d. strategic objectives
b
The ________ is the production cycle document that identifies the transfer of parts from one factory workstation to another a. materials requisition b. move ticket c. bill of materials d. operations list
b
The ________ specifies the point at which inventory is needed. A) company inventory policies B) reorder point C) economic order quantity D) stockout point
b
The basic document created in the billing process is called a ________. A) bill of lading B) sales invoice C) sales order D) packing list
b
The data processing activity used to delete a record is the same as a. revising a record b. purging a record c. entering a record d. reviewing a record
b
The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfthrall, has leveraged computer technology to provide a superior level of customer service. In particular, the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible. Price information and condition are also provided for each inventory item. In this database, the price of figures is a(an) A) entity. B) attribute. C) field. D) record.
b
The primary purpose of the Foreign Corrupt Practices Act of 1977 was A) to require corporations to maintain a good system of internal control. B) to prevent the bribery of foreign officials by American companies. C) to require the reporting of any material fraud by a business. D) to require companies to have an independent audit committee
b
The trial balance provides all of the following controls except a. Examining transactions that occur near the end of the accounting period b. Ensuring that journal entries are approved by a manager before being posted c. Reconciling general ledger control accounts to subsidiary ledgers d. Confirming that Clearing and Suspense accounts have zero balances at the end of the accounting period
b
There is a symmetrical interdependence between a firm's expenditure cycle and its suppliers' A) production cycle. B) revenue cycle. C) expenditure cycle. D) general ledger and reporting system.
b
This document is a legal contract that defines responsibility for goods that are in transit. A) packing slip B) bill of lading C) picking list D) back order
b
To increase effectiveness of internal controls, which of the following should not be known to the receiving department when accepting a delivery? a. counted and inspected by b. quantity of time c. price of the order d. purchase order number
b
Wally Hewitt is an accountant with a large accounting firm. The firm has a very strict policy of requiring all users to change their passwords every sixty days. In early March, Wally received an email from the firm that explained that there had been an error updating his password and that provided a link to a Web site with instructions for re-entering his password. Something about the email made Wally suspicious, so he called the firm's information technology department and found that the email was fictitious. The email was an example of A) social engineering. B) phishing. C) piggybacking. D) spamming.
b
What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items? A) requiring all suppliers to have the carrier verify quantities and item numbers before shipment B) requiring all suppliers to include RFID tags on their items C) requiring all suppliers to use EDI to expedite the receiving department function D) requiring all delivery trucks to have satellite data terminals to expedite the receiving department function
b
What is one reason why AIS threats are increasing? A) LANs and client/server systems are easier to control than centralized, mainframe systems. B) Many companies do not realize that data security is crucial to their survival. C) Computer control problems are often overestimated and overly emphasized by management. D) Many companies believe that protecting information is a strategic requirement.
b
Which characteristic of the fraud triangle often stems from a lack of internal controls within an organization? A) pressure B) opportunity C) rationalization D) concealment
b
Which control procedure would be most effective in detecting the failure to prepare a paycheck for a new employee before paychecks are distributed? a. use of separate payroll bank account b. record counts of timecards submitted and time cards processed c. zero balance check d. validity checks on the employee number on each time card
b
Which data processing method would be the most appropriate for preparing a daily bank deposit? a. online real time processing b. batch processing
b
Which data processing method would be the most appropriate for preparing biweekly payroll checks? a. online real time processing b. batch processing
b
Which department creates the Operations List a. operations b. engineering c. production d. accounting
b
Which document lists the components needed to manufacture a product? a. materials requisition b. bill of materials c. production order d. operation list
b
Which document records the arrival and departure times of hourly employees? a. time check b. time card c. job time ticket d. time sheet
b
Which of the following expenditure cycle activities can be eliminated through the use of technology? a. ordering goods b. approving vendor invoices c. receiving goods d. cash disbursements
b
Which of the following is NOT a control for mitigating the risk of posting errors in accounts receivable? A. Data entry controls. B. Set proper credit limits. C. Reconciliation of batch totals. D. Mailing monthly statements to customers.
b
Which of the following is NOT an advantage pf an ERP system? a. improved monitoring capabilities b. simplicity and reduced costs c. standardized of production and reports d. better access control
b
Which of the following is an example of source data automation? A) a utility bill B) POS (point-of-sale) scanners in retail stores C) a bill of lading D) a subsidiary ledger
b
Which of the following is not a risk response identified in the COSO ERM framework a. avoidance b. managing c. sharing d. acceptance
b
Which of the following is sued to manage IT controls? A) COSO-IC B) COBIT C) SOX D) COSO-ERM
b
Which of the following is true regarding expenditure cycle controls? a. shipping should examine each package for signs of obvious damage b. both receiving and the warehouse sign off on the transfer of goods c. both purchasing and production sign off on the transfer of goods d. the warehouse inventory to shipping based on an approved sales order
b
Which of the following is true? a. it is easier to verify the accuracy of invoices for purchases of services than invoices for purchases of raw materials. b. setting up petty cash as an imprest fund violates segregation of duties c. The EOQ formula is used to identify when to reorder inventory d. A voucher package usually includes a debit memo
b
Which of the following matches is performed in evaluated receipt settlement (ERS)? a. the vendor invoice with the receiving report b. the purchase order with the receiving report c. the vendor invoice with the purchase order the vendor invoice, the receiving report, and the purchase order
b
Which of the following procedures is designed to prevent the purchasing agent from receiving kickbacks? a. maintaining a list of approved suppliers and requiring all purchases to be made from suppliers on that list b. requiring purchasing agents to disclose any financial investments in potential suppliers c. requiring approval of all purchase orders d. prenumbering and periodically accounting for all purchase orders
b
Which of the following provides a means to both improve the efficiency of processing customer payments and also enhance control over those payments? a) VMI b) lockboxes c) aging AR d) EDINT
b
Which of the following statements is not correct? A) The audit trail is intended to verify the validity and accuracy of transaction recording. B) The audit trail consists of records stored sequentially in an audit file. C) The audit trail provides the means for locating and examining source documents. D) The audit trail is created with document numbers and posting references.
b
Which of the following threats is not specific to the purchase requisition process of the expenditure cycle? A) stockouts B) purchasing from unauthorized vendors C) requisitioning goods not needed D) All of the above are threats in the purchase requisition process.
b
Which organization provides payroll processing as well as other human resources services, such as employee administration? a. professional employer organization b. payroll employer organization c. payroll service bureau d. paycheck distribution organization
b
Which step below is not considered to be part of the data processing cycle? A) data input B) feedback from external sources C) data storage D) data processing
b
Which type of file would be used to record payroll checks? a. master file b. transaction file
b
Which type of file would be used to record purchases? a. master file b. transaction file
b
Which type of file would be used to record sales commissions? a. master file b. transaction file
b
Which type of file would be used when recording daily sales? a. master file b. transaction file
b
Which type of payroll report lists the voluntary deductions for each employee? A) payroll register B) deduction register C) earnings statement D) pay stub
b
Yazmin owns and operates a small deli in Miami. Each morning she prepares a list that describes the quantity and variety subs that will be prepared during the day. This list is an example of a(n) a. materials requisition b. production order c. bill of materials d. operations list
b
A ________ system prepares and mails monthly statements to customers throughout the entire month, instead of just at the end of the month. A) continuous B) open-invoice C) cycle billing D) balance forward
c
A flowchart that depicts the relationships among the input, processing, and output of an AIS is A) an internal control flowchart. B) a document flowchart. C) a system flowchart. D) a program flowchart.
c
A fraud technique that allows a perpetrator to bypass normal system controls and enter a secured system is called A) superzapping. B) data diddling. C) using a trap door. D) piggybacking.
c
A product number using one digit for the type, one digit for the size, one digit for the color, and two digits for the year is an example of a a. sequence code b. mnemonic code c. group code d. product code
c
According to generally accepted accounting principles, a sale is recognized when A) cash is received from the customer. B) inventory is removed from the warehouse. C) inventory becomes the legal property of the customer. D) a sales order is approved by sales, inventory control, and credit departments.
c
All other things equal, which of the following is true? a. corrective controls are superior to detective controls b. preventive controls are equivalent to detective controls c. preventive controls are superior to detective controls d. detective controls are superior to preventive controls
c
Chas Mulligan has been hired by Yardley Security as an assistant to the internal auditor. He has been asked to thoroughly document the existing accounting information system in preparation for making recommendations for improvements. He decides to begin by meeting with the information technology staff in order to develop an understanding of the overall operation of the AIS, including data entry, storage, and output. The documentation tool that he should employ for this purpose is a A) data flow diagram. B) document flowchart. C) system flowchart. D) program flowchart.
c
Documents sent to an external party and then returned to the company as machine-readable input are a. external input documents b. source data automation c. turnaround documents d. transaction documents
c
For good internal control over customer remittances, the mailroom clerk should separate the checks from the remittance advices and send the customer payments to which department? a) billing b) AR c) cashier d) sales
c
For good internal control over customer remittances, the mailroom clerk should separate the checks from the remittance advices and send the customer payments to which department? a. billing b. accounts receivable c. cashier d. sales
c
How does the chart of accounts list general ledger accounts? a. chronological order b. size order c. the order in which they appear in the financial statements d. alphabetical order
c
Identify the item below that is not one of the four different types of data processing activities a. creating b. reading c. upgrading d. deleting
c
In Petaluma, California, electric power is provided to consumers by the Power To The People Electrical Company (PTTP), a local co-op. Each month PTTP mails bills to 70,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate? A) Well-designed paper forms B) Source data automation C) Turnaround documents D) Sequentially numbered bills
c
In the ________ method of tracking accounts receivable, customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance. A) specific identification B) open-invoice C) balance forward D) remittance advice
c
In transaction processing, generally which activity comes first? A) recording data in a journal B) posting items to special journals C) capturing data on source documents D) recording data in a general ledger
c
Intentional or reckless conduct that results in materially misleading financial statements is called A) financial fraud. B) misstatement fraud. C) fraudulent financial reporting. D) audit failure fraud.
c
Is it important to physically count inventory when using a perpetual inventory system? a. only if discrepancies are suspected b. no c. yes
c
Ngai Nhung is the sales manager at Hung Technologies. At lunch with the company CEO, Ngai proudly announced that he had received a ________ from a client. The client had just requested a large quantity of components from Hung. A) blanket purchase order B) voucher C) purchase order D) purchase requisition
c
One good way to eliminate paper paychecks is to A) pay in cash only. B) pay with money orders. C) use direct deposit. D) use Electronic Funds Transfer.
c
Recording and processing information about a transaction at the time it takes place is referred to as to which of the following? a. batch processing b. chart of accounts processing c. online real-time processing d. captured transaction processing
c
Spyware is A) software that tells the user if anyone is spying on his computer. B) software that monitors whether spies are looking at the computer. C) software that monitors computing habits and sends the data it gathers to someone else. D) none of the above
c
Street Smarts (SS) is a retailer located in Naperville, Illinois. During the peak tourist season, it has average daily cash and credit card sales in excess of $7,000. What is the best way for SS to ensure that sales data entry is efficient and accurate? a. turnaround documents b. well-designed paper forms c. source data automation d. sequentially numbered sales invoices
c
The AIS complies and feeds information among the business cycles. What is the relationship between the revenue and production cycles regarding the exchange of information? a. The revenue cycle receives information from the production cycle about raw material needs b.The production cycle does not exchange information with the revenue cycle c. The revenue cycle provides sales forecast and customer order information to the production cycle, but the production cycle sends information back to revenue about finished goods production d. The production cycle sends cost of goods manufactured information back to the revenue cycle
c
The COSO-IC framework identifies components of internal control. Which of the following is not one of this five? a. risk assessment b. monitoring c. internal control policies d. information nd communication
c
The amount of risk a company is willing to accept in order to achieve its goals and objectives is A) Inherent risk B) Residual risk C) Risk appetite D) Risk assessment
c
The data processing activity of creating a record is the same as a. revising a record b. deleting a record c. entering a record d. reviewing a record
c
The data processing activity used of reading a record is the same as a. revising a record b. purging a record c. retrieving a record d. reviewing a record
c
The most important feature of prenumbered source documents is that they help to a. facilitate source data automation b. ensure that an audit trail exists c. identify gaps in recorded transactions d. ensure that documents have been used in order
c
The objectives of internal control do not include a. adhering to managerial policies b. promoting operational efficiency c. ensuring that fraud will not occur d. safeguarding assets
c
The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfthrall, has leveraged computer technology to provide a superior level of customer service. In particular, the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible. Price information and condition are also provided for each inventory item. In this database, the data about an individual figure's price is stored in a(an) A) entity. B) attribute. C) field. D) record.
c
The threat of inaccurate inventory records can be mitigated by which of the following controls? a. verification of invoice accuracy b. review of purchase orders c. RFID d. supplier audits
c
This component of the fraud triangle explains how perpetrators justify their fraudulent behavior a. company financial statement pressure b. pressure c. rationalization d. opportunity
c
To control for risks associated with the threat of inventory loss, who should have primary responsibility for work-in-process inventories? a. the inventory stores department b. the receiving department c. factory supervisor d. purchasing
c
To ensure proper segregation of duties, only the ________ has authority to issue credit memos. A) accounts receivable supervisor B) controller C) credit manager D) cashier
c
To maximize the effectiveness of internal controls over payroll, which of the following persons should be responsible for distributing paychecks? a. employee supervisor b. payroll clerk c. cashier d. controller
c
What is altering some part of an electronic communication to make it look as if someone else sent the communication in order to gain the trust of the recipient? a. posing b. pharming c. spoofing d. phishing
c
What is the final step in the data processing cycle? a. storage b. input c. output d. processing
c
Which activity is part of the sales order entry process? a. setting customer credit limits b. preparing a bill of lading c. checking customer credit d. approving sales returns
c
Which activity is part of the sales order entry process? a. setting customer credit limits b. preparing a bill of lading c. checking inventory d. approving sales returns
c
Which document is used to establish a contract for the purchase of goods or services from a vendor? a. vendor invoice b. purchase requisition c. purchase order d. disbursement voucher
c
Which document is used to record adjustments to accounts payable based on the return of unacceptable inventory to the supplier? a. receiving report b. credit memo c. debit memo d. purchase order
c
Which document lists the current amount and year to date totals of gross pay , deductions, and net pay for one employee? a. paycheck b. payroll register c. earnings statement d. deductions register
c
Which inventory system attempts to minimize inventory costs by only purchasing goods required for actual sales orders a. MRP b. ACH c. JIT d. EOQ
c
Which method would provide the greatest efficiency improvements for the purchase of non inventory items such as miscellaneous office supplies? a. bar-coding b. EDI c. procurement cards d. EFT
c
Which of the following inventory control methods is most likely to be used for a product for which sales can be reliably forecast? a. JIT b. EOQ c. MRP d. ABC
c
Which of the following is least likely to be a major criterion in vendor selection? A) prices of goods B) quality of goods C) credit rating of the vendor D) ability to deliver on time
c
Which of the following is not a basic activity of the revenue cycle? A) sales order entry B) shipping C) receiving D) billing
c
Which of the following is not a common control for ensuring inventory is secure and inventory counts accurate? A) control of physical access to the inventory storage areas B) transfers of inventory with proper documentation C) sending "blind" copies of purchase orders to inventory control for data entry D) making physical counts of inventory at least once per year
c
Which of the following is not a threat to the revenue cycle sales order entry process? A) incomplete orders B) invalid orders C) cash flow problems D) uncollectible accounts
c
Which of the following is the correct listing of the accounting related duties that must be segregated? a. control, custody, and authorization b. monitoring, recording, and planning c. authorization, recording, and custody d. control, recording, and monitoring
c
Which of the following is the correct order of the risk assessment steps? a. identify controls, estimate the likelihood and impact, identify threats, and estimate costs and benefits b. estimate the likelihood and impact, identify controls, identify threats, and estimate costs and benefits c. identify threats, estimate the likelihood and impact, identify controls, estimate costs and benefits, and estimate costs and benefits d. estimate costs and benefits, identify threats, identify controls, and estimate costs and benefits
c
Which of the following is the most effective control to reduce the risk of paying the same invoice twice? a. the sales invoice should be matched with the sales order b. the sales invoice should be matched with the picking ticket and packing slip c. pay only from original invoices d. sales invoices should be ,asked as paid
c
Which of the following is true regarding fraud prosecutions? a. companies are eager to report because it improves their operations b. local law enforcement is devoting more time to fraud investigation than other crimes c. law enforcement and lawyers often lack the computer knowledge to investigate fraud d. fraud is becoming easier and less costly to prosecute
c
Which of the following revenue cycle activities can potentially be eliminated by technology? a) sales order entry b) shipping c) billing d) cash collections
c
Which of the following techniques is the most efficient way to process customer payments and update accounts receivable? a. EFT b. UPIC c. FEDI d. ACH
c
Which of the following will not reduce the likelihood of an occurrence of fraud? A) encryption of data and programs B) use of forensic accountants C) adequate insurance coverage D) required vacations and rotation of duties
c
Which type of control is associated with making sure an organization's control environment is stable? a. detective b. application c. general d. preventive
c
Yazmin owns and operates a small deli in Miami, Florida. She maintains a file that contains the ingredients used to make her famous subs. The ingredients needed to make a specific sub are most similar to a(n) a.) production order b.) operation list c.) bill of materials d.) materials requisition
c
Yazmin owns and operates a small deli in Miami. She maintains a file that lists the steps required to make each of her famous subs. these step by step instructions are examples of a(n) a. production order b. bill of materials c. operations list d. materials requisition
c
Yazmin owns and operates a small deli in Miami. each afternoon she prepares a shopping list that describes the quantity and variety of ingredients that she will purchase in the evening from her wholesaler. The shopping list is an example of a(n) a. bill of materials b. operations list c. materials requisition d. production order
c
A DFD created at the highest-level or summary view is referred to as a A) process diagram. B) overview diagram. C) content diagram. D) context diagram.
d
A picking ticket is generated by the a. billing process b. packing process c. shipping process d. sales order entry process
d
A receiving clerk notes that a delivery of 10 units has been received, but the purchase order specified 12 units. A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received. Who should prepare this document? A) the receiving clerk B) the controller C) the vendor D) the purchasing department manager
d
A set of unauthorized computer instructions in an otherwise properly functioning program is known as a A) logic bomb. B) spyware. C) trap door. D) Trojan horse.
d
A typical source document could be A) in some paper form. B) a computer data entry screen. C) a notepad entry. D) both A and B
d
An organization can implement which of the following controls to reduce the threat of inventory theft or damage? A) review and approval of fixed asset acquisitions B) improved and more timely reporting C) better production and planning systems D) document all movement of inventory through the production process
d
If an employee wanted to do a quick search of the database to see which inventory items were out of stock because of an increase in back orders, the employee would create a(n) a. performance dashboard b. report c. output document d. query
d
In the expenditure cycle, Financial Electronic Data Interchange (FEDI) increases efficiency by A) eliminating the need for receiving reports. B) eliminating the need for vendor invoices. C) eliminating the need for purchase orders. D) eliminating the need to prepare and mail checks.
d
Insiders are frequently the ones who commit fraud because A) they are more dishonest than outsiders. B) they need money more than outsiders. C) they are less likely to get caught than outsiders. D) they know more about the system and its weaknesses than outsiders.
d
Jim Chan decided to Christmas shop online. He linked to Amazon.com, found a perfect gift for his daughter, registered, and placed his order. It was only later that he noticed that the Web site's URL was actually Amazom.com. Jim was a victim of A) Bluesnarfing. B) splogging. C) vishing. D) typosquatting.
d
Marina is an accountant at Jasmine Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The data you have entered does not include a source reference code. Please enter this data before saving?" This is an example of A) validity check. B) field check. C) zero-balance check. D) completeness test.
d
Misappropriation of assets is a fraudulent act that involves A) dishonest conduct by those in power. B) misrepresenting facts to promote an investment. C) using computer technology to perpetrate. D) theft of company property.
d
Ordering unnecessary items can result from a. not requiring receiving employees to sign the receiving report b. not matching the picking ticket with the packing slip c. competitive bidding d. inaccurate perpetual inventory records
d
The Cape Fear Rocket Club heads out to the dunes of Kittyhawk, North Carolina every August to pierce the sky with their fiery projectiles. An enterprising seller of t-shirts has devised a series of designs that capture the spirit of the event in silk-screened splendor. His employees can be found on many of the major intersections hawking his wares out of the backs of station wagons and pickup trucks. What is the best way for this business to ensure that sales data entry is efficient and accurate? A) Well-designed paper forms B) Source data automation C) Turnaround documents D) Sequentially numbered forms
d
The Gwallter Reece Chihuahua Sweater Co. (GRCCo) was established in 2013. It recently signed a large contract with PetCo pet stores. GRCCo will be required to track and forecast sweater sales by linking in to PetCo's sales database. GRCCo will then be responsible for shipping products to PetCo as needed. The relationship between GRCCo and PetCo is an example of A) sales force automation. B) electronic data interchange. C) optical character recognition. D) vendor-managed inventory.
d
The Sarbanes-Oxley Act (SOX) applies to A) all companies with gross annual revenues exceeding $5 million. B) publicly held companies with gross annual revenues exceeding $5 million. C) all private and publicly held companies incorporated in the United States. D) all publicly traded companies
d
The best control for preventing managers from creating fraudulent journal entries is a. Most managers should be given read-only access to data b. have an independent review of all special journal entries in the general ledger c. Journal entries should be approved by a supervisor d. Managers should have a read only access to specific portions of the system
d
The practice of allowing kickbacks a. improves the positions of the company b. improves vendor pricing c. results in higher quality purchases d. impairs the objectivity of the purchaser
d
The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfthrall, has leveraged computer technology to provide a superior level of customer service. In particular, the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible. Price information and condition are also provided for each inventory item. In this database, the actual price of an individual figure(s) is a(an) A) entity. B) attribute. C) field. D) data value
d
The premier buyer and seller of vintage action figures in the San Francisco Bay area is Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfthrall, has leveraged computer technology to provide a superior level of customer service. In particular, the store's database system was designed to make detailed information about each individual action figure's characteristics easily accessible. Price information and condition are also provided for each inventory item. In this database, the data about an individual figure is a(an) A) entity. B) attribute. C) field. D) record.
d
The risk of receiving unordered goods is prevented most effectively by a. segregating the shipping b. matching the sales order with the packing slip c. matching the picking ticket with the packing slip d. instructing the receiving department to accept deliveries only with an approved purchase order
d
Upon getting into your new car, you suddenly became worried that you might become injured in an auto accident. You decided to buckle your seatbelt in response. You chose to ___ the risk of being injured in an auto accident. a. share b. avoid c. accept d. reduce
d
Using a Master Production Schedule would be most effective in preventing which of the following threats? a. posting errors b. loss of inventory c. poor quality goods d. excess production
d
Vendor invoices are approved by the ________, which reports to the ________. A) purchasing department; controller B) accounts payable department; treasurer C) purchasing department; treasurer D) accounts payable department; controller
d
What is a network of powerful and dangerous hijacked computers that are used to attack systems or spread malware? a. spyware b. virus c. hijacking d. botnet
d
What is a report listing the balances of all accounts from the Chart of Accounts? a. chart of accounts analysis b. balance sheet c. general ledger d. trial balance
d
What is the best control procedure to prevent paying the same invoice twice? a. segregate check-preparation and check-signing functions b. prepare checks only for invoices that have been matched to receiving reports and purchase orders c. require two signatures on all checks above a certain limit d. cancel all supporting documents when the check is signed
d
What is the key difference between the MRP and JIT inventory management approaches? A) Only JIT reduces costs and improves efficiency. B) MRP is especially useful for products such as fashion apparel. C) JIT is more effectively used with products that have predictable patterns of demand. D) MRP schedules production to meet estimated sales needs; JIT schedules production to meet customer demands.
d
What should be allowed to authorize new vendors? a. purchasing agent b. purchasing manager or purchasing agent, especially if the purchasing agent is in the field c. purchasing manager, purchasing agent, or AP d. purchasing manager d. AP
d
What type of risk remains after management implements internal controls? a. inherent risk b. risk assessment c. risk appetite d. residual risk
d
Which document lists all the procedures required to manufacture a product? a. bill of materials b. production order c. move ticket d. operations list
d
Which of the following is NOT a direct threat to the revenue cycle billing process a. accounts receivable errors b. inaccurate credit memos c. failure to bill d. loss of customers
d
Which of the following is NOT a threat associated with billing and accounts receivable? a. Failure to bill customers b. An error in billing c. Posting errors in updating accounts receivable d. Theft of cash
d
Which of the following is a financial pressure that could cause an employee to commit fraud? A) a feeling of not being appreciated B) failing to receive a deserved promotion C) believing that their pay is too low relative to others around them D) having a poor credit rating
d
Which of the following is not a violation of the Sarbanes-Oxley Act (SOX)? The management a. did not mention to auditors that the company experienced significant losses due to fraud b. selected the CEO, who was also a financial expert, to chair the audit committee c. asked their auditors to make recommendations for the redesign of their information technology system and to aid in the implementation process d. assessed the effectiveness of internal controls without the permission of the external auditors
d
Which of the following is not a way to improve fraud detection? A) Install fraud detection software. B) Implement a fraud hotline. C) Employ a computer security officer. D) Implement computer-based controls over input, processing, storage, and output activities.
d
Which of the following is not an activity performed in the expenditure cycle? A) ordering B) receiving C) cash disbursement D) shipping
d
Which of the following is not threat to the shipping process? a. wrong shipping address b. picking the wrong items c. inventory theft d. incomplete orders
d
Which of the following is the most important and effective control to increase the difficulty of committing fraud? a. fraud detection program b. mandatory vacation c. computer access controls d. segregation of duties
d
Which of the following matches is performed using a voucher package? a. the sales invoice, the picking ticket, and the packing slip b. the vendor invoice, the receiving report, and the sales order c. the sales invoice, the receiving report, and the purchase order d. the vendor invoice, the receiving report, and the purchase order
d
Which of the following provide useful information for evaluating current credit policies and for deciding whether to increase the credit limit for specific customers? a. Cash budget b. Profitability analysis reports c. Sales analysis reports d. Accounts receivable aging report e. None of the above.
d
Which of the following requires management to establish, maintain, and assess an adequate system of internal controls? a. Sarbanes-Oxley Act of 2002 b. Foreign Corrupt Practices Act of 1977 c. Securities Exchange Act of 1934 d. SOX Section 404
d
Which of the following systems documentation techniques illustrate the flow of data among area of responsibility in an organization? a. system flowchart b. program flowchart c. internal control flowchart d. document flowchart
d
Which organization maintains the payroll master data for a client and performs payroll processing? a. paycheck distribution organization b. payroll employer organization c. professional employer organization d. payroll service bureau
d
Which type of control is associated with making sure an organization's control environment is stable? a. guaranteed assurance b. absolute assurance c. conditional assurance d. reasonable assurance
d
Who should have the authorization to approve vendor payments after considering cash flow? a. purchasing agent b. cashier c. AP d. controller
d