Data Analytics for Accountants
Exam Answer Key
Course Introduction
Data Analytics for Accountants introduces students to the fundamental concepts, tools, and techniques used to analyze and interpret financial and non-financial data in accounting contexts. The course explores data-driven decision-making, visualization, and reporting, emphasizing the application of analytics in auditing, fraud detection, risk assessment, and performance evaluation. Students will gain practical experience using software and technologies relevant to the accounting profession, developing critical skills to leverage big data, identify trends, enhance transparency, and support ethical and effective business strategies.
Recommended Textbook
Accounting Information Systems 13th Edition by Marshall B. Romney
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Page 2
Chapter 1: Accounting Information Systems: an Overview
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Sample Questions
Q1) How can an AIS become part of the firm's value chain and add value to the business?
Answer: The AIS can add value by: helping to improve products and services an organization offers for sale; increasing the quality of products and services; creating greater efficiency by reducing costs and saving time; and improving the overall efficiency of the organization.Decision making is enhanced by the better availability of timely,complete,reliable,verifiable,and relevant information.A firm can enjoy a competitive advantage with better customer ordering,billing,and customer service made possible by an improved AIS.The AIS can also enhance overall communication and use of knowledge in a business by making the knowledge readily available to interested parties.
Q2) How can a well-designed AIS improve the efficiency and effectiveness of a company's value chain?
Answer: The AIS can be designed to allow customers direct access to a company's inventory and sales order entry systems.This allows the customer to do more of the work that traditionally has been done by sales,marketing,and administration personnel.This allows for faster ordering,and cuts the company's labor costs.It may also have the effect of allowing the customer more control in a purchase transaction that may bring more satisfaction and value to the customer.
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Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Sample Questions
Q1) ERP stands for
A) enterprise resource planning.
B) enterprise resource program.
C) enterprise reporting program.
D) none of the above
Answer: A
Q2) The quality assurance department at a large manufacturing business enters data into the AIS that is used to produce a weekly report that summarizes the proportion of defective units in each product line.This is an example of
A) internal financial information.
B) internal nonfinancial information.
C) external financial information.
D) external nonfinancial information.
Answer: B
Q3) When displayed on a monitor,data output is referred to as A) reports.
B) hard copy.
C) soft copy.
D) financials.
Answer: C
Page 4
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Chapter 3: Systems Documentation Techniques
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Sample Questions
Q1) In a program flowchart,branching to alternative paths is represented by A) a terminal.
B) data/information flow.
C) computer operation.
D) decision diamond.
Answer: D
Q2) More than one arrow is needed between symbols on a DFD if
A) data elements always flow together.
B) data elements flow at different times.
C) data elements flow to different locations.
D) there is no guideline on use of single or multiple arrows.
Answer: B
Q3) Which symbol would be used in a flowchart to indicate a wireless connection between a laptop and the mainframe?
A) #13
B) #12
C) #11
D) #14
Answer: A
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Page 5
Chapter 4: Relational Databases
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Sample Questions
Q1) Kai Keoni has created custom statues made out of scrap metal for over ten years.He lives above his shop in Martha's Vineyard,Maryland.Kai is an accounting fanatic and has kept detailed records of every statue he has ever created.For every sale,he obtains the customer's name and address,a description of the statue,and a picture of the statue sold to the customer.His unique style has recently attracted the attention of several celebrities.Ready to take his business to the next level,Kai has hired you to construct an accounting information system,which he wants modeled after his paper records.As you look over his records,you realize that sometimes the same customer is recorded by a slightly different name.For example,Mike Mulligan bought a horse statue,M.Mulligan bought a pig statue,and Mike M.all seem to be the same person.This is an example of what type of problem in the existing records?
A) entity integrity
B) referential integrity
C) update anomaly
D) insert anomaly
Q2) List the four DBMS "languages" and describe who uses each and for what purpose.
Q3) Explain the difference between file-oriented transaction processing systems and relational database systems.Discuss the advantages and disadvantages of each system.
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Page 6
Chapter 5: Computer Fraud
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Q1) What is the most prevalent opportunity within most companies to commit fraud?
A) lack of any internal controls
B) failure to enforce the internal controls
C) loopholes in the design of internal controls
D) management's failure to believe employees would commit fraud
Q2) A teller at a savings and loan drive-through accepted a cash payment from customer #1 for an auto loan.The teller appeared to process the payment,but told the customer the printer was jammed and she can't print a receipt.The customer accepted the excuse and drove away.The teller pocketed the cash and wrote down customer #1's loan number and payment amount for future reconciling.A couple of days before customer #1's monthly statement was printed,the teller recorded a cash payment from customer #2 as if it were made by customer #1.The teller pocketed the difference between the two payments.The teller continued to steal and misapply customer payments for the next two years without detection. Identify the type of fraud scheme described.Describe five controls you would implement to address the fraud risk,and label each control as preventive or detective.
Q3) Why do fraudulent acts often go unreported and are therefore not prosecuted?
Q4) Describe at least four ways a company can make fraud less likely to occur.
Q5) Why is computer fraud on the rise?
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Chapter 6: Computer Fraud and Abuse Techniques
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Q1) When a computer criminal gains access to a system by searching through discarded records,this is referred to as
A) data diddling.
B) dumpster diving.
C) eavesdropping.
D) data squatting.
Q2) Which of the following is the easiest method for a computer criminal to steal output without ever being on the premises?
A) dumpster diving
B) use of a Trojan horse
C) using a telescope to peer at paper reports
D) electronic eavesdropping on computer monitors
Q3) Steganography malware uses encryption to increase its effectiveness.
A)True
B)False
Q4) Which method of fraud is physical in its nature rather than electronic?
A) cracking
B) hacking
C) eavesdropping
D) scavenging
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Chapter 7: Control and Accounting Information Systems
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Q1) Which component of the COSO Enterprise Risk Management Integrated Framework is concerned with understanding how transactions are initiated,data are captured and processed,and information is reported?
A) information and communication
B) internal environment
C) event identification
D) objective setting
Q2) According to The Sarbanes-Oxley Act of 2002,the audit committee of the board of directors is directly responsible for
A) hiring and firing the external auditors.
B) performing tests of the company's internal control structure.
C) certifying the accuracy of the company's financial reporting process.
D) overseeing day-to-day operations of the internal audit department.
Q3) Which of the following is not a basic principle of the COSO ERM framework?
A) Companies are formed to create value for society.
B) Management must decide how much uncertainty it will accept to create value.
C) Uncertainty results in risk.
D) Uncertainty results in opportunity.
Q4) Describe the differences between general and specific authorization.
Q5) Explain why the Foreign Corrupt Practices Act was important to accountants.
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Chapter 8: Controls for Information Security
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Q1) Cloud computing can potentially generate significant cost savings for an organization.
A)True
B)False
Q2) The process that screens individual IP packets based solely on the contents of the source and/or destination fields in the packet header is known as
A) access control list.
B) deep packet inspection.
C) stateful packet filtering.
D) static packet filtering.
Q3) Cloud computing is generally more secure than traditional computing.
A)True
B)False
Q4) A demilitarized zone
A) routes electronic communications within an organization.
B) connects an organization's information system to the Internet.
C) permits controlled access from the Internet to selected resources.
D) serves as the main firewall.
Q5) Identify six physical access controls.
Q6) Explain the value of penetration testing.
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Chapter 9: Confidentiality and Privacy Controls
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Q1) In developing policies related to personal information about customers,Folding Squid Technologies adhered to the Trust Services framework.The standard applicable to these policies is
A) security.
B) confidentiality.
C) privacy.
D) availability.
Q2) Hjordis Marika took a call from a client."Hjordis,I need to interact online in real time with our affiliate in India,and I want to make sure that our communications aren't intercepted.What do you suggest?" Hjordis responded,"The best solution is to implement
A) a virtual private network."
B) multifactor authentication."
C) a private cloud environment."
D) an asymmetric encryption system with digital signatures."
Q3) The first steps in protecting the privacy of personal information is to identify
A) what sensitive information is possessed by the organization.
B) where sensitive information is stored.
C) who has access to sensitive information.
D) All of the above are first steps in protecting privacy.
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Page 11
Chapter 10: Processing Integrity and Availability Controls
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Q1) A validity check is an example of
A) a data entry control.
B) an output control.
C) a data transmission control.
D) an input control.
Q2) While this type of backup process takes longer than the alternative,restoration is easier and faster.
A) archive
B) cloud computing
C) differential backup
D) incremental backup
Q3) This determines if characters are of the proper type.
A) field check
B) alpha-numeric check
C) range check
D) reasonableness test
Q4) It is impossible to eliminate the risk of downtime.
A)True
B)False
Q5) Define and contrast a recovery point objective and a recovery time objective.
Page 12
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Chapter 11: Auditing Computer-Based Information Systems
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Sample Questions
Q1) Control risk is defined as the
A) susceptibility to material risk in the absence of controls.
B) risk that a material misstatement will get through the internal control structure and into the financial statements.
C) risk that auditors and their audit procedures will not detect a material error or misstatement.
D) risk auditors will not be given the appropriate documents and records by management who wants to control audit activities and procedures.
Q2) A system that employs various types of advanced technology has more ________ risk than traditional batch processing.
A) control
B) detection
C) inherent
D) investing
Q3) Explain the differences between each type of audit risk.
Q4) Name and describe the different types of audits.
Q5) Describe the risk-based audit approach.
Q6) Describe the disadvantages of test data processing.
Q7) How and to whom does an auditor communicate the audit results?
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) A company uses the method for tracking accounts receivable where customers pay according to individual sales invoices.This describes the ________ method.
A) monthly statement
B) open-invoice
C) balance forward
D) cycle billing
Q2) Describe the two methods to manage accounts receivable.
Q3) The accounts receivable management method typically used by credit card companies is
A) balance forward.
B) postbilling.
C) monthly statement.
D) open-invoice.
Q4) When a customer pays off the balance on an invoice,the payment is credited to the ________ file.
A) customer master
B) sales transaction
C) cash receipts master
D) All of the above are correct.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash Disbursements
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Q1) The first major business activity in the expenditure cycle is
A) ordering inventory, supplies, or services.
B) a customer sale.
C) shipping goods to customers.
D) receiving goods from vendors.
Q2) Which of the following would be the best control to prevent receiving department employees from stealing inventory and claiming the ordered quantity wasn't received from the vendor?
A) Reconcile quantity on packing slip to physical count when accepting delivery.
B) Restrict physical access to the receiving area.
C) Require all deliveries be made at the receiving area.
D) Require dual signatures on the move ticket when receiving delivers the inventory to the warehouse.
Q3) 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
Q4) Under what conditions is MRP more suitable than JIT and vice versa?
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Chapter 14: The Production Cycle
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Q1) What issue did Airbus encounter when using CAD software to help design the A380 Superjumbo airliner?
A) The actual A380 was heavier than the CAD model.
B) The actual A380 was not able to carry as much weight as the CAD model.
C) Design teams used different versions of the same CAD software, resulting in key information loss.
D) The CAD software was not advanced enough to help design the A380.
Q2) Why might an organization find it most beneficial to involve accountants in product design?
A) because generally at least 65% of product costs are determined in the design stage and accountants can help minimize product costs
B) because accountants are generally able to improve the quality of new products
C) because involving accountants in product design boosts firm morale
D) because accountants are generally able to identify what consumers want in a new product
Q3) Implementing a modern costing approach often results in short-term declines in profitability.
A)True
B)False
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Page 16
Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) Which of the following is a control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee?
A) The cashier should sign all payroll checks.
B) Sequentially prenumber all payroll checks.
C) Use an imprest account to clear payroll checks.
D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.
Q2) What controls are available to address the threat of payroll errors?
Q3) Accountants can help executive compensation plan boards
A) comply with legal and regulatory requirements.
B) by identifying the best ways to keep the details of compensation plans out of the hands of external parties.
C) avoid paying excessive amounts of "perks" to executives.
D) distribute information regarding how well each executive is performing their job.
Q4) Explain the functions of the payroll register,deduction register,and earnings statement.
Q5) Discuss the various types and sources of input into the HRM/payroll cycle.
Page 17
Q6) Identify the two types of payroll deductions and give two examples of each type.
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Chapter 16: General Ledger and Reporting System
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Sample Questions
Q1) Adjusting entries that reflect a change in accounting principle used to value inventories are classified as
A) corrections.
B) estimates.
C) deferrals.
D) revaluations.
Q2) Organizations should set their balanced scorecard targets to reflect industry benchmark values.
A)True
B)False
Q3) Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers.
A) cost
B) profit
C) investment
D) revenue
Q4) What is responsibility accounting?
Q5) Explain the purpose of a journal voucher file.
Q6) Discuss the value and role of budgets as managerial reports.
Page 18
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Chapter 17: Database Design Using the Rea Data Model
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Q1) Describe the three basic rules that apply to the REA model pattern.
Q2) An REA diagram must link every event to at least one ________ and two ________.
A) resource; agents
B) agent; resources
C) transaction; entities
D) resource; relationships
Q3) The process of defining a database so that it faithfully represents all aspects of the organization including its interactions with the external environment is called
A) data modeling.
B) data designing.
C) data development.
D) data definition.
Q4) How many types of relationships are possible between entities?
A) one
B) two
C) three
D) an infinite number
Q5) Describe an REA data model.
Q6) Describe the possible relationships between entities,in terms of cardinalities.
Page 19
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) How many tables are needed to implement an REA data model that has six distinct entities,three M:N relationships and four 1:N relationships in a relational database?
A) 6
B) 9
C) 11
D) 13
Q2) Which entity is most likely to be part of the payroll cycle,expenditure cycle,and the revenue cycle?
A) Customer
B) Cash
C) Supplier
D) Inventory
Q3) In an integrated REA diagram,every agent must be must be linked to
A) at least one resource.
B) at least two resources.
C) at least one event.
D) at least two events.
Q4) Explain the five rules for drawing integrated REA diagrams.
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Q5) What are the advantages of the REA data model over the traditional AIS model?
Chapter 19: Special Topics in Rea Modeling
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Q1) In which entity would information about depreciation formula(s)and assumption(s)be stored in an REA model?
A) Resource
B) Event
C) Agent
D) Both A and B
Q2) The ________ entity is used to collect and summarize data about the raw materials,labor,and machine operations used during production of inventory.
A) Finished Goods Inventory
B) Raw Materials
C) Issue Raw Materials
D) Work-in-Process
Q3) In which entity would an item's actual cost information most likely be maintained?
A) Inventory entity
B) Order_Inventory entity
C) Inventory-Order_Inventory entity
D) none of the above
Q4) Why is the event Issue Debt often modeled as a separate event entity?
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Chapter 20: Introduction to Systems Development and Systems Analysis
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Q1) In which phase of the systems development life cycle are the broad needs of the users converted into detailed specifics that are coded and tested?
A) conceptual design
B) implementation and conversion
C) physical design
D) systems analysis
Q2) Describe the five phases of systems analysis.
Q3) An effective project development team consists of
A) systems analysts.
B) accountants.
C) users.
D) all of the above
Q4) Who is responsible for planning and monitoring a project to ensure timely and cost-effective completion?
A) information systems steering committee
B) management
C) project development team
D) accountants
Q5) Describe the importance of the master plan in systems development.
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Chapter 21: Ais Development Strategies
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Q1) As part of the bidding process required for bidding on providing a new software system to Kinect Incorporated,Thorton Wilder prepared a functional program that simulated the new system's input and output interface.This program is an example of A) CASE.
B) an operational prototype.
C) a RFP.
D) a nonoperational prototype.
Q2) What is the basic function of a help desk?
A) control access to corporate data
B) provide technical maintenance and support
C) train end users and assist with application development
D) All of the above are basic functions of a help desk.
Q3) Identify the system below where development would not likely benefit from treating a prototype.
A) decision support systems
B) executive information systems
C) expert systems
D) systems that cross a number of organizational boundaries
Q4) Describe the difficulties that could be encountered when developing an AIS.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) Identify the question that is not an important consideration in procedures and controls design.
A) Are customer data stored in alphabetical order in a master file?
B) Are payments made only to legitimate vendors?
C) Are data processed and stored accurately?
D) Can the system be modified without affecting system availability?
Q2) Step-by-step reviews of procedures or program logic early in the system design that focus on inputs,files,outputs,and data flows are called
A) acceptance tests.
B) operating tests.
C) processing of test transactions.
D) walk-throughs.
Q3) What is the objective of output design? What are the output design considerations? What are the various categories of outputs?
Q4) Which of the following activities is not part of data conversion?
A) changing data content
B) moving file servers
C) changing file formats
D) moving files to a new storage medium
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