Forensic Accounting Information Systems
Mock Exam
Course Introduction
Forensic Accounting Information Systems explores the integration of information technology and accounting principles to detect, investigate, and prevent financial fraud. The course delves into computerized accounting systems, digital evidence collection, data analysis techniques, and the use of specialized forensic software. Students will learn how to identify red flags of fraudulent activities, understand the legal and ethical considerations of digital investigations, and apply data-driven methodologies to uncover irregularities in financial records. Through case studies and practical applications, this course prepares students to effectively utilize information systems in forensic accounting engagements and contribute to organizational risk management.
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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Q1) When properly deployed,accounting information systems can provide firms with a competitive advantage.
A)True
B)False
Answer: True
Q2) Arranging delivery of products to customers constitutes ________ in value chain analysis.
A) shipping
B) inbound logistics
C) outbound logistics
D) delivery
Answer: C
Q3) When the AIS provides information in a timely and accurate manner,it stands as an example of
A) improved decision making.
B) improving the quality and reducing the costs of products or services.
C) improving efficiency.
D) all of the above
Answer: D
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Page 3
Chapter 2: Overview of Transaction Processing and Enterprise Resource Planning Systems
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Q1) What is the first step in the data processing cycle?
A) input
B) output
C) storage
D) purchasing
Answer: A
Q2) When printed on paper,data output is referred to as
A) reports.
B) hard copy.
C) soft copy.
D) financials.
Answer: B
Q3) Traditionally,accounting information systems have been used to collect,process,store and report non-financial information.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Systems Documentation Techniques
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Q1) In a data flow diagram of the vendor payment process,"Vendor" will appear above or in
A) a square.
B) a circle.
C) two horizontal lines.
D) none of the above
Answer: A
Q2) Which symbol would be used in a flowchart to represent a connection to another part of the flowchart on the same page?
A) #4
B) #13
C) #14
D) #15
Answer: C
Q3) Which symbol would be used in a flowchart to represent a computer process?
A) #1
B) #2
C) #5
D) #15
Answer: C
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Chapter 4: Relational Databases
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Q1) In the database design approach known as normalization,the first assumption made about data is
A) there is no redundancy in the data.
B) the delete anomaly will not apply since all customer records will be maintained indefinitely.
C) everything is initially stored in one large table.
D) the data will not be maintained in 3NF tables.
Q2) Ama Afolayan is chair of the National Owl Society,which maintains a database of all rare owls within the United States.One table will store the name,birth date,and other characteristics of all of the owls that have been registered.Each owl is uniquely identified by a registration number.A second table will contain data that link each owl to its male and female parents by means of their registration numbers.The primary key in the second table is
A) name.
B) birth date.
C) the same as the primary key in the first table.
D) a combination of primary keys in the first table.
Q3) Describe a major advantage of database systems over file-oriented transaction processing systems.
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Page 6
Chapter 5: Computer Fraud
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Q1) Identify the 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.
Q2) Why do fraudulent acts often go unreported and are therefore not prosecuted?
Q3) Which of the following is not an example of one of the basic types of fraud?
A) While straightening the store at the end of the day, a shoe store employee finds and keeps an expensive pair of sunglasses left by a customer.
B) An executive devised and implemented a plan to accelerate revenue recognition on a long-term contract, which will allow the company to forestall filing for bankruptcy. The executive does not own any stock, stock options or grants, and will not receive a bonus or perk because of the overstated revenue.
C) A purchasing agent places a large order at higher-than-normal unit prices with a vendor that gave the agent tickets to several football games.
D) A salesperson approves a large sales discount on an order from a company owned partially by the salesperson's sister.
Q4) What are some of the distinguishing characteristics of fraud perpetrators?
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Page 7
Chapter 6: Computer Fraud and Abuse Techniques
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Q1) Recall that students used Facebook and VKontakte to identify Russian money laundering mules.What fraud case did these students help foil?
A) Zeus
B) Trident Breach
C) Nigerian Banking
D) InfraGard
Q2) Which of the following is not an example of social engineering?
A) obtaining and using another person's Social Security number, credit card, or other confidential information
B) creating phony websites with names and URL addresses very similar to legitimate websites in order to obtain confidential information or to distribute malware or viruses
C) using e-mail to lure victims into revealing passwords or user IDs
D) setting up a computer in a way that allows the user to use a neighbors unsecured wireless network
Q3) Steganography malware uses encryption to increase its effectiveness.
A)True
B)False
Q4) How can a system be protected from viruses?
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Chapter 7: Control and Accounting Information Systems
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Q1) 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.
Q2) Explain why the Foreign Corrupt Practices Act was important to accountants.
Q3) ________ is not a risk responses identified in the COSO Enterprise Risk Management Framework.
A) Acceptance
B) Avoidance
C) Monitoring
D) Sharing
Q4) Describe the differences between general and specific authorization.
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Chapter 8: Controls for Information Security
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Q1) Multi-factor authentication
A) involves the use of two or more basic authentication methods.
B) is a table specifying which portions of the systems users are permitted to access.
C) provides weaker authentication than the use of effective passwords.
D) requires the use of more than one effective password.
Q2) This is used to identify rogue modems (or by hackers to identify targets).
A) war chalking
B) war dialing
C) war driving
D) none of the above
Q3) The Trust Services Framework reliability principle that states that users must be able to enter,update,and retrieve data during agreed-upon times is known as A) availability.
B) security.
C) maintainability.
D) integrity.
Q4) Describe what a man-trap is and how it contributes to information security.
Q5) Explain social engineering.
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Chapter 9: Confidentiality and Privacy Controls
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Q1) Which of the following is not one of the three important factors determining the strength of any encryption system?
A) key length
B) key management policies
C) encryption algorithm
D) privacy
Q2) If an organization asks you to disclose your social security number,but fails to establish a set of procedures and policies for protecting your privacy,the organization has likely violated which of the Generally Accepted Privacy Principles?
A) Management
B) Notice
C) Choice and consent
D) Use and retention
Q3) Identify the item below that is not a step you could take to prevent yourself from becoming a victim of identity theft.
A) Shred all documents that contain your personal information.
B) Only print your initial and last name on your personal checks.
C) Do not place checks in your outgoing mail.
D) Refuse to disclose your social security number to anyone or any organization.
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Page 11
Chapter 10: Processing Integrity and Availability Controls
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Q1) Prompting is a control that helps ensure
A) transaction data are not lost.
B) transactions data are accurate.
C) transactions data are complete.
D) transaction data are valid.
Q2) Identify the most important component of a disaster recovery plan below.
A) documentation
B) operating instructions
C) periodic testing
D) on-site and off-site storage
Q3) The Spontaneous Combustion Rocket Shoppe in downtown Fargo,North Dakota,generates three quarters of its revenue from orders taken over the Internet.The revenue clearing account is debited by the total of cash and credit receipts and credited by the total of storefront and Internet sales.This is an example of a
A) data integrity test.
B) zero-balance test.
C) trial balance audit.
D) cross-footing balance test.
Q4) Define and contrast a recovery point objective and a recovery time objective.
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Chapter 11: Auditing Computer-Based Information Systems
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Q1) With regards to an accounting information system,a financial audit is most concerned with
A) the system's output.
B) the system's input.
C) the system's processing.
D) the system's storage.
Q2) Describe how audit evidence can be collected.
Q3) What role should an auditor play in system development?
A) an independent reviewer only
B) a developer of internal controls
C) an advisor and developer of internal control specifications
D) A and B above
Q4) Expanding a firm's operations to include a manufacturing facility in Russia will
A) reduce inherent risk.
B) reduce control risk.
C) increase inherent risk.
D) increase control risk.
Q5) a)What is test data processing? b)How is it done? c)What are the sources that an auditor can use to generate test data?
Page 13
Q6) Name and describe the different types of audits.
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) Which of the following duties could be performed by the same individual and not violate segregation of duty controls?
A) handling cash and posting to customer accounts
B) issuing credit memos and maintaining customer accounts
C) handling cash and authorizing credit memos
D) handling cash receipts and mailing vendor payments
Q2) A serious exposure in the revenue cycle is loss of assets.What is the related threat and applicable control procedure that address this exposure?
A) shipping errors; reconciliation of sales order with picking ticket and packing slip
B) theft of cash; segregation of duties and minimization of cash handling
C) making sales that turn out to be uncollectible; force sales people to make collection calls on customers with past due balances
D) poor performance; preparation and review of performance reports
Q3) Explain how validity checks,completeness tests and reasonableness tests can be implemented to ensure accuracy of customer orders.
Q4) Describe four threats in the revenue cycle and identify appropriate controls for each threat.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash
Disbursements
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Q1) 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.
Q2) Which of the following is least likely to be a major criterion in vendor selection?
A) prices of goods
B) credit rating of the vendor
C) quality of goods
D) ability to deliver on time
Q3) MacDougalKids is a mid-sized manufacturer of organic baby food.MacDougalKids uses a JIT inventory management approach.Which of the following factors would likely be least important when selecting inventory suppliers?
A) product price
B) product quality
C) vendor delivery dependability
D) All would be equally important
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Chapter 14: The Production Cycle
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Q1) Elif Package Delivery determines the cost per delivery by averaging total cost over the number of deliveries.What costing approach does Elif Package Delivery use?
A) unit-based
B) job-order
C) process
D) activity-based
Q2) Sule Technologies installed a new production monitoring system that will reduce system breakdowns by 35%.The new system will increase throughput by
A) increasing productive capacity.
B) increasing yield.
C) increasing productive processing time.
D) increasing all components of throughput.
Q3) "Pull manufacturing" is also known as
A) manufacturing resource planning (MRP).
B) just-in-time manufacturing system (JIT).
C) the economic order quantity (EOQ) system.
D) ahead-of-time production implementation (ATPI).
Q4) Discuss the role the accountant can play in the production cycle.
Q5) What role does the AIS play in the production cycle?
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Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) Which type of payroll report contains information such as the employees' gross pay,payroll deductions,and net pay in a multicolumn format?
A) payroll register
B) deduction register
C) employee earnings statement
D) federal W-4 form
Q2) Falk Noam is the internal auditor for Matan Incorporated.Before investigating the HRM / payroll cycle at Matan,Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes.For strongest segregation of duties,the ________ should periodically observe the paycheck distribution process.
A) accounts payable department
B) cashier
C) internal audit department
D) external auditor
Q3) A "zero balance check" refers to which of the following control procedures?
A) a type of batch total
B) cross-footing the payroll register
C) the payroll clearing account shows a zero balance once all entries are posted
D) trial balance showing that debits equal credits
Page 17
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Chapter 16: General Ledger and Reporting System
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Q1) Marina Filimena is an accountant at Jasmina 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
A) validity check.
B) field check.
C) zero-balance check.
D) completeness test.
Q2) Immediately after the adjusting entries are posted,the next step in the general ledger and reporting system is to prepare A) an adjusted trial balance.
B) closing entries.
C) financial statements.
D) an unadjusted trial balance.
Q3) Describe three threats in the general ledger and reporting system and identify corresponding controls for each threat.
Q4) What is responsibility accounting?
Q5) Explain the purpose of a journal voucher file.
Q6) Explain the benefits of XBRL.
18
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Chapter 17: Database Design Using the Rea Data Model
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Q1) REA models are usually depicted in which diagramming form?
A) entity-relationship diagrams
B) decision tree diagrams
C) if-then diagrams
D) stock-flow diagrams
Q2) Describe an REA data model.
Q3) Describe the three basic rules that apply to the REA model pattern.
Q4) Identify the item below that would be classified as an event by the REA data model.
A) an IOU from a customer
B) the CFO
C) a customer sale
D) none of the above
Q5) Relationships that affect the quantity of a resource are sometimes referred to as ________ relationships.
A) commitment
B) exchange
C) stockflow
D) duality
Q6) Define cardinality.
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) Which of the statements below is false with regards to creating database tables from an REA diagram?
A) M:N relationships must be implemented as separate tables.
B) 1:N relationships are implemented with the primary key of the 1 side becoming a foreign key on the N side.
C) 1:1 relationships are implemented with the primary key of either entity included as a foreign key in the table representing the other entity.
D) All of the above are true.
Q2) Because information about temporal imbalances between two ________,such as accounts receivable and accounts payable,is needed so frequently,such calculated values are sometimes stored as ________ in the appropriate tables.
A) events; agents
B) events; attributes
C) resources; agents
D) resources; attributes
Q3) Explain the five rules for drawing integrated REA diagrams.
Q4) Explain a completeness check.
Q5) What are the advantages of the REA data model over the traditional AIS model?
Page 20
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Chapter 19: Special Topics in Rea Modeling
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Q1) Sales order number is most likely to be a primary key in which entity of an expanded revenue cycle REA diagram?
A) Call on Customers
B) Fill Customer Order
C) Ship Order
D) Take Customer Order
Q2) Where are depreciation expenses recorded in a database created using an REA modeling approach?
A) as a resource
B) as an event
C) as an agent
D) Depreciation expenses would not be modeled.
Q3) Identify the entity linked to almost every other entity in an REA diagram for HRM/payroll cycles.
A) Employee
B) Job title
C) Payroll
D) Worker I.D.
Q4) Why might an REA diagram show relationships between resources and agents?
Q5) Give an example of an M:N Agent-Event relationship.
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Chapter 20: Introduction to Systems Development and Systems Analysis
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Q1) It is most difficult to quantify ________ when assessing economic feasibility.
A) benefits
B) costs
C) the payback period
D) costs, benefits, and the payback period
Q2) Estimating benefits and expenditures to determine whether a proposed system would be beneficial is known as
A) the "best guess" model of benefit analysis.
B) the "value added" benefit model.
C) the capital budgeting model.
D) the estimated benefits model.
Q3) The task of improving the efficiency of Crawford Insurance's accounting information system was given to a project development team.During the ________ step in the systems development life cycle,the team defined the procedures needed to back up and secure the new system's data.
A) operations and maintenance
B) implementation and conversion
C) physical design
D) conceptual design
Q4) Identify the main reasons why companies change existing systems?
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Chapter 21: Ais Development Strategies
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Q1) Firms should consider preparing a software prototype if the software
A) will be used for a critical function like accounts receivable.
B) automates an unstructured or semi-structured task.
C) can be produced using expertise available in-house.
D) is available as a canned package.
Q2) Firms should consider preparing a software prototype if the application A) will be used for a critical function like inventory management.
B) automates a structured task.
C) can be produced using outside developers.
D) inputs and outputs are not clearly defined.
Q3) The unauthorized disclosure of sensitive information is an example of what risk associated with outsourcing?
A) a locked-in system
B) a loss of control
C) a reduced competitive advantage
D) inflexibility
Q4) Describe outsourcing and identify the two types of outsourcing agreements.
Q5) Discuss how information system outsourcing can provide the organization with both a business solution and asset management.
Page 23
Q6) Explain the concept of an application service provider.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) Which of the following is not one of the ways data may need to be modified during data conversion?
A) resolve data inconsistencies
B) validate new files
C) identify files to be converted
D) remove unnecessary fields from data files
Q2) Implementing a new system at a branch location before company-wide adoption is called
A) direct conversion.
B) parallel conversion.
C) phase-in conversion.
D) pilot conversion.
Q3) Subdividing program code into small,well-defined modules is
A) called debugging.
B) known as structured programming.
C) part of program maintenance.
D) done during testing.
Q4) Describe the approaches to system conversion.
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Q5) What is the objective of output design? What are the output design considerations? What are the various categories of outputs?