AIS Midterm
A field check typically helps enhance which of the following common transaction-related objectives? Answers: A particular transaction is properly authorized A particular transaction is recorded accurately A particular transaction is recorded A particular transaction is valid
A particular transaction is recorded accurately
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay The AIS will not allow a sales order to be processed for a customer if the order total would exceed the customer's available credit limit balance.
Agreeing to sales with customers who won't pay
Which of the following departments is matched with their responsibilites (listed below)? Responsibility: 1. Hiring/Firing/Promotion of employees 2. Prints and mails payroll checks 3. Keeps track of time cards, approves overtime 4. Approves payroll for payment Answers: HR - 1 Cashier - 2 Departmental Management - 3 AP - 4 All of the above departments are appropriately matched with their responsibilities
All of the above departments are appropriately matched with their responsibilities
Match the risk to the control that would address each risk. Each control should be used only once. Record/pay the same vendor invoice twice
All vouchers (including the invoices within the voucher) should be reviewed and approved prior to payment
Which of the following statements about ERP's is true? Answers: An ERP system straightforward to use and therefore very easy to learn. A dog could use it. An ERP software separates an organization's data into silos of information which are not related to each other. An ERP software is significantly less expensive than an AIS software. An ERP software will have more features than an AIS software.
An ERP software will have more features than an AIS software.
Which of the following controls would detect the risk that incorrect financial statements have been posted to the public in March of this year? Answers: Financial statements are audited by an independent third party (external auditor) in January of this year before they are filed with the SEC. An internal audit in July of this year unveils a materially misstated journal entry. The AIS performs zero-balance checks on journal entries when they are being recorded. GL master and transactional data cannot be edited after the period has been "closed"
An internal audit in July of this year unveils a materially misstated journal entry.
Match if the form of processing described is batch processing or real-time processing. When an instructor requests a new class website during the day, it is processed along with all other instructor requests from that day at 11:59 PM that night.
Batch
Why does the audit trail exist? Answers: Because it is an alert mechanism to let you know when an audit failure is coming. Because three auditors walking in a row is more effective than if they walked sporadically. Because it is required by the IRS. Because it allows someone to drill down to the details of a transaction starting from an aggregation of all transactions; or it allows you to start with the details and see how it flows through to the end of the process and is aggregated with other transactions.
Because it allows someone to drill down to the details of a transaction starting from an aggregation of all transactions; or it allows you to start with the details and see how it flows through to the end of the process and is aggregated with other transactions.
Which of the following activities triggers a journal entry in the payroll cycle? Answers: A. When the company finalizes an employee's offer/contract before the employee begins work B. When the company pays the government payroll taxes C. When the company pays their employees D. Both B & C E. All of the above
Both B & C
The SAP module that is used for the functions of cost accounting and internal reporting is the ___ module. Answers: PP CO FI SD
CO
If you are looking at an unadjusted trial balance and dollar amounts are present for GL accounts, what should you assume? Answers: Adjusting entries have not been recorded yet but closing entries have. No journal entries - regular, adjusting, or closing - have been recorded. Closing entries have not been recorded yet but adjusting entries have. Closing and adjusting entries have not been recorded yet.
Closing and adjusting entries have not been recorded yet.
In SAP, the process through which the user sets values in tables to cause the system to function in a desired manner is known as Answers: Configuration Creation of master data Objective setting Determination of organizational structure
Configuration
Which is not a function facilitated by an Accounting Information System? Answers: Collect and store data Transform data into information Earn revenue Provide controls
Earn revenue
The General Ledger is a report/document which lists each general ledger account and its: Answers: Detailed history of activity (all debits and credits) over a period Brief description (e.g., "Cash") only Ending balance, from a financial standpoint The general ledger is not a report/document
Ending balance, from a financial standpoint
If there are differences between the purchase order or goods receipt and a vendor invoice, the system will automatically reject the invoice and return it to the vendor. Answers: True False
False
Which of the following is not an example of a specialized journal (which is a type of journal designated for grouping similar, high volume/repetitive transactions)? Answers: Sales Journal Cash Receipts Journal Cash Disbursements Journal General Journal
General Journal
I am an employee who works in a warehouse where inventory is stored and I am responsible for security of the inventory. What access should I have within the AIS when it comes to inventory on-hand balance? Answers: I should have recording and authorization access related to inventory I should have only recording functions access related to inventory I should have only authorization functions access related to inventory I should have no access to change inventory on-hand balances because I have custody of inventory
I should have no access to change inventory on-hand balances because I have custody of inventory
Which of the following is not an inherent weakness of internal control? Answers: Collusion between employees Improper segregation of duties Management override of controls All of the above are inherent weaknesses of internal control.
Improper segregation of duties
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay On a monthly basis, customers are sent a statement of their invoices owed. The statement includes a tear-off portion which they can send back with payment.
Incorrect cash receipts apply payments to customer balances incorrectly
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay The Mailroom opens mail received each day and sends a remittance slip to the A/R department, detailing the amount of the checks and the customer information.
Incorrect cash receipts apply payments to customer balances incorrectly
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay The AIS will check and ensure that the customer ID is valid before a sales order to that customer can be processed.
Invalid credit memos
Which document in the payroll cycle defines the amount of an employee's annual or hourly salary, communicated upon hiring the employee? Answers: Paychecks Time Cards Payroll Register Offer or Contract
Offer or Contract
Which of the following best describes general ledger activities? Answers: General ledger activities happen prior to activities in an individual business process cycle, such as the revenue cycle One goal of general ledger activities is to output complete and accurate financial statements General ledger activities are high-level activies a company should perform regarding financial reporting while specific ledger activities are the more specific activities a company should perform
One goal of general ledger activities is to output complete and accurate financial statements
Which of the following does not describe activities that a company would complete during their close process? Answers: Pay tribute to the 90's hit "Closing Time" by Semisonic through a corporate karaoke contest Record adjusting jounral entries, such as accruals and deferrals Record closing journal entries Reivew the Adjusted Trial Balance report to ensure that all adjustments have been made before finalizing the reporting period and producing financial reports
Pay tribute to the 90's hit "Closing Time" by Semisonic through a corporate karaoke contest
The IRS sends your company a letter saying that you missed paying your Q1 FICA tax for last year. Upon investigation, you've learned that the taxes were never processed for payment. Which department is likely going to be held responsible for this problem? Answers: Cashier Payroll Accounts Payable Human Resources
Payroll
You are reviewing a screen within the AIS. You notice the screen which lists multiple employees for a given pay date, their gross wages, their withholdings, and their net pay. What screen are you probably reviewing? Answers: Timecard data One individual paycheck Employee master data Payroll register
Payroll register
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay A perpetual inventory system and RFID tracking is used so the AIS has the ability to keep track of inventory balances real-time
Picking / shipping of inventory errors
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay Periodic inventory counts are performed. Discrepancies are investigated and resolved.
Picking / shipping of inventory errors
A company in the insurance industry would least likely have activities in which business process cycle? Answers: Expenditure cycle Revenue cyle Financing cycle HR/Payroll cyle Production cycle
Production cycle
Match if the form of processing described is batch processing or real-time processing. When an instructor grades scantrons, they grade all scantrons first and then record grades in the gradebook second. Lastly, all students see their grades at the same time when they are posted.
Real-time
Match if the form of processing described is batch processing or real-time processing. When an instructor grades scantrons, they grade one student's scantron and post it to the gradebook (which the student can immediately see) before moving on to the next scantron. With this process, the student whose scantron is graded first will see their grade earlier than the student who is graded last.
Real-time
Match the risk to the control that would address each risk. Each control should be used only once. One vendor is habitually slow with shipping inventory to us (to the point that we are missing customer sales opportunities because inventory is out of stock)
Reports that show purchase order activity with associated inventory receipt dates should be reviewed by the Purchasing department.
Match the risk to the control that would address each risk. Each control should be used only once. Misappropriation (theft) of checks/cash
Restrict access to cash to the Cashier department
The best practice in an organization is that the CFO-level employee should have access within the Accounting Information System (AIS) software: Answers: The CFO should have the ability to review transactions but not enter or approve transactions The ability to enter or record initial transcations in the software The ability to approve transactions created within the software The ability to both enter transactions and approve transcations within the software
The CFO should have the ability to review transactions but not enter or approve transactions
Which job title likely closes the books, assuming that proper segregation of duties are in place? Answers: The "closer" The Chair of the Audit Committee of the Board of Directors The Controller The Accounting clerk
The Controller
Which of the following controls that an instructor implements in their grading process would be an automated control? Answers: The instructor has a teaching assistant re-calculate grades before they are recorded. The electronic gradebook only accepts numbers when entering grades, not text or symbols. The instructor reviews the gradebook for trends and outlier high/low exam grades. The instructor utilizes a rubric while grading which specifies the amount of points to award or deduct for each question, depending on the answers.
The electronic gradebook only accepts numbers when entering grades, not text or symbols.
A salesperson's commission paycheck was double what it was supposed to be this period. Upon investigation, we learned that the employee was submitting fraudulent sales orders to boost commissions. Of course the employee will be held responsible. Who else would have been responsible (most likely) for catching this problem? Answers: Accounts Payable Human Resources The employee's direct supervisor Cashier
The employee's direct supervisor
Which of the following controls that an instructor implements in their grading process would detect the risk that grading errors occurred on exam and were recorded in the gradebook? Answers: The instructor reviews the gradebook for trends and outlier high/low exam grades. The instructor has a teaching assistant re-calculate grades before they are recorded. The instructor utilizes a rubric while grading which specifies the amount of points to award or deduct for each question, depending on the answers. The electronic gradebook only accepts numbers when entering grades, not text or symbols.
The instructor reviews the gradebook for trends and outlier high/low exam grades.
Match the risk to the control that would address each risk. Each control should be used only once. Invoices are paid for items which were rejected by the warehouse/shipping department because they were damaged in transit.
The vendor invoice and receipt (or receiving report) should be reviewed prior to the invoice being scheduled for payment.
Which of the following statement is more true about the zero-balance/impreset payroll checking account as a control, in respect of it addressing the risk of paycheck forgery? (Hint: If you've ever worked before for a large company, it is very likely that an imprest account was used for your paychecks) Answers: This control prevents paycheck forgery because employees are typically aware of the imprest account and are therefore discouraged from even attempting the forgery. This allows Accounting to detect that paycheck forgery has occurred because the payroll imprest account will overdraft.
This allows Accounting to detect that paycheck forgery has occurred because the payroll imprest account will overdraft.
Which of the following are types of data within the SAP system? Answers: Transaction data Configuration data Cycle data Master data
Transaction data Configuration data Master data
An employee paycheck is an example of: Answers: Master Data Transactional Data
Transactional Data
Match the type of data with it either being transactional data or master data. The grade a student received on their midterm exam
Transactional data
Match the type of data with it either being transactional data or master data. The attendance record of all students who attended class on the second day of class.
Transactional data
For each control listed, select the risk the control is most directly intended to address. A risk can be used more than once and you will not use all risks listed. All Answer Choices A. Unauthorized disclosure of customer information B. Theft of cash C. Invalid credit memos D. Picking / shipping of inventory errors E. Incorrect cash receipts apply payments to customer balances incorrectly F. Invalid sales orders are created G. Failure to bill H. Loss or destruction of master/transaction data I. Agreeing to sales with customers who won't pay Customer master data is encrypted and can only opened by the AIS software.
Unauthorized disclosure of customer information
Which of the following risks is least likely to cause a financial misstatement (in other words, an overstatement or understatement of a $ amount for a GL account)? Answers: Inaccurate time and attendance data Payroll department neglected to process payroll Failure to make required tax payments accurately or in a timely manner Unauthorized disclosure of sensitive information data
Unauthorized disclosure of sensitive information data
Which of the following determines what a user is allowed to do within the SAP system? Answers: User role Password Session configuration Master material configuration role
User role
You are sitting at the AIS entering a new transaction for a sale to Caroline Arnosky and receive this message when you clicked save: "Customer 'Caroline Arnosky' does not exist". Which ongoing processing integrity control triggered this error message? Answers: Limit Validity Format Completeness
Validity
This application control compares the data entered into a field for a transaction to that in a master record to verify the data entered exists. Answers: Sign check Completeness check Range check Validity Check
Validity Check
Which of the following statements is false regarding XBRL? Answers: XBRL is a specific programming language which helps organize financial data by topic/account so it is indexed and easily searchable XBRL-formatted financial statements are required by the SEC XBRL is intended to help external users download and analyze company financial data XBRL stands for eXtra Balancing of Revenues and Losses
XBRL stands for eXtra Balancing of Revenues and Losses
The integration of data in SAP for creating data for one document or record (such as the purchase order) based on data from another document or record (such as the purchase requisition) most enhances which of the following transaction-related control objectives? Answers: a particular transaction is recorded A particular transaction is properly authorized A particular transaction is valid a particular transaction is recorded accurately
a particular transaction is recorded accurately
When goods are received into the warehouse, they can be posted to which stock types? Answers: stock in quality inspection all other answer choices are viable options unrestricted-use stock blocked stock
all other answer choices are viable options
Match the activity that occurs in the expenditure / payroll cycles to the Segregation of Duties category of: recording, authorization, or custody. Approving unapproved purchase orders
authorization
Match the activity that occurs in the expenditure / payroll cycles to the Segregation of Duties category of: recording, authorization, or custody. Updating the address in vendor master data
authorization
The highest level in an SAP instance is the ____. Answers: cost center mandant client company code
client
The organizational unit that represents the independent legal accounting entity in SAP is the ______. Answers: cost center company code business group client
company code
Match the activity that occurs in the expenditure / payroll cycles to the Segregation of Duties category of: recording, authorization, or custody. Printing/cutting checks
custody
Match the activity that occurs in the expenditure / payroll cycles to the Segregation of Duties category of: recording, authorization, or custody. Receive inventory
custody
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. On a monthly basis, customers are sent a statement of their invoices owed. The statement includes a tear-off portion which they can send back with payment.
detective
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. Periodic inventory counts are performed. Discrepancies are investigated and resolved.
detective
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. Regular reconciliation of the bank account balance to the books cash account balance is performed by someone independent of the cash collections process.
detective
List in order the documents used in the expenditure cycle from first to last, assuming the vendor shipped the goods before they invoiced the customer. i. Goods Receipt ii. Purchase Requisition iii. Vendor Invoice iv. Purchase Order
ii, iv, i, iii
The material procurement process is completed by the _____________. Answers: on-hand goods update invoice verification invoice receipt goods receipt
invoice verification
Match the type of data with it either being transactional data or master data. A list of students enrolled in a course
master
Match the type of data with it either being transactional data or master data. The grading scale used in the syllabus (an A = 450-500 points, a B is 400-450 points, etc)
master
Before a material can be tracked through the SAP system, the material must be associated with a __________. Answers: material master record vendor master record routing assignment purchasing information record
material master record
The invoice verification function within Materials Management (MM) performs all of the following except: Answers: checking accuracy of the invoices payment of the invoice processing of credit memos executing account postings resulting from an invoice
payment of the invoice
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. A perpetual inventory system and RFID tracking is used so the AIS has the ability to keep track of inventory balances real-time
preventative
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. Customer master data is encrypted and can only opened by the AIS software.
preventative
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. The AIS will check and ensure that the customer ID is valid before a sales order to that customer can be processed.
preventative
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. The AIS will not allow a sales order to be processed for a customer if the order total would exceed the customer's available credit limit balance.
preventative
For each control listed, and considering the risk you selected for the previous question, indicate of you believe the control is intended to be preventative or detective in terms of the risk it addresses. The Mailroom opens mail received each day and sends a remittance slip to the A/R department, detailing the amount of the checks and the customer information.
preventative
The internal document that initiated the procurement process is the _________. Answers: goods receipt goods issue purchase requisition purchase order
purchase requisition
In order to purchase a material from a vendor, which of the following records must be in the system? Answers: purchase requisition purchasing info record quota arrangement vendor master record
purchasing info record
Match if the form of processing described is batch processing or real-time processing. When an instructor releases grades for a homework assignment, students can immediately see them in their gradebook.
real time
Match the activity that occurs in the expenditure / payroll cycles to the Segregation of Duties category of: recording, authorization, or custody. Create a purchase order
recording
Goods or materials that are purchased for later resale are known as ______. Answers: sale goods trade goods raw materials finished goods
trade goods
Application controls are useful for enhancing the reliability of transaction data and master data. Answers: True False
true
True or false: When saved, documents are used to record standard journal entries. Standard journal entries meaning any common, high volume transactions (such as sales and expenses).
true
The primary key contained in the vendor master record is the ______. Answers: vendor group vendor number vendor name vendor classification
vendor number
