Introduction to Accounting Information Systems
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Course Introduction
Introduction to Accounting Information Systems provides students with foundational knowledge of how accounting information systems (AIS) are designed, implemented, and used within organizations. The course covers the role of AIS in supporting business processes, decision-making, and internal controls, as well as the integration of technology into accounting functions. Students explore key concepts such as system documentation, data processing cycles, cybersecurity risks, and the ethical considerations related to financial data management. Through practical case studies and hands-on exercises, students gain skills in analyzing, designing, and evaluating accounting systems that facilitate accurate financial reporting and enhance organizational efficiency.
Recommended Textbook
Accounting Information Systems 10th Edition by James A. Hall
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Page 2
Chapter 1: The Information System: an Accountants Perspective
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Sample Questions
Q1) Two methods to acquire information systems are to __________________________ and to __________________________.
Answer: develop custom systems,purchase commercial systems
Q2) Explain the difference between data and information.
Answer: Data are facts which may or may not be processed; data have no particular impact on the user.Information is processed data that causes the user to take action.
Q3) Useful information must possess all of the following characteristics except A)relevance
B)precision
C)accuracy
D)completeness
Answer: B
Q4) Information is a business resource.
A)True
B)False
Answer: True
Q5) The tests that focus on the system itself and how it is designed to reduce risk is called ____________________.
Answer: tests of controls
Page 3
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Chapter 2: Introduction to Transaction Processing
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Sample Questions
Q1) Time lag is one characteristic used to distinguish between batch and real-time systems.Explain.Give an example of when each is a realistic choice.
Answer: Batch processing collects similar transactions into groups (batches)and processes them all at once.Hence,affected files are up to date immediately after the update,but can be expected to be out of date until the next run.Hence,there is a time lag between the event and its recording in the system.A payroll system is often handled with batch processing since it must be up to date on pay days,but does not need to be modified between pay dates.
Real-time systems process each transaction as it occurs,and files are always up to date-there is no time lag.This is preferred when there may be a need to query the system for the status of transactions.A sales order processing system would benefit from real-time processing.Hence,customer questions could be answered easily,without waiting for the next update (as would be required if the system was batch).
Q2) Batch processing of non-critical accounts improves operational efficiency.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Ethics,fraud,and Internal Control
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Sample Questions
Q1) The internal audit department recalculates payroll for several employees each pay period.This is an example of __________________________.
Answer: independent verification
Q2) An example of a hash total is
A)total payroll checks-$12,315
B)total number of employees-10
C)sum of the social security numbers-12,555,437,251
D)all of the above
Answer: C
Q3) The text describes six internal control activities.List four of them and provide a specific example of each one.
Answer: 11ea8d40_9750_0ad0_b445_d75a6de1f459_TB6581_00
Q4) The objective of SAS 99 is to seamlessly blend the auditor's consideration of fraud into all phases of the audit process.
A)True
B)False
Answer: True
Q5) What are the three broad categories of application controls?
Answer: input,processing,and output controls
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Chapter 4: The Revenue Cycle
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Sample Questions
Q1) Copies of the sales order can be used for all of the following except
A)purchase order
B)credit authorization
C)shipping notice
D)packing slip
Q2) A cash prelist is
A)a document that records sales returns and allowances
B)a document returned by customers with their payments
C)the source of information used to prepare monthly statements
D)none of the above
Q3) If a customer submits a written purchase order,there is no need to prepare a sales order.
A)True
B)False
Q4) The revenue cycle consists of
A)one subsystem-order entry
B)two subsystems-sales order processing and cash receipts
C)two subsystems-order entry and inventory control
D)three subsystems-sales order processing, credit authorization, and cash receipts
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Chapter 5: The Expenditure Cycle Part I: Purchases and Cash
Disbursements Procedures
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Q1) Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.
A)True
B)False
Q2) Inspection of shipments in the receiving department would be improved if the documentation showed the value of the inventory.
A)True
B)False
Q3) A purchasing system that employs electronic data interchange does not use a purchase order.
A)True
B)False
Q4) What is the objective of automated purchase approval?
Q5) When a cash disbursement in payment of an accounts payable is recorded
A)the liability account is increased
B)the income statement is changed
C)the cash account is unchanged
D)the liability account is decreased
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Q6) What are the key authorization issues in purchasing and cash disbursements?
Chapter 6: The Expenditure Cycle Part II: Payroll Processing and
Fixed Asset Procedures
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Q1) List four types of data that appear on a depreciation schedule.
Q2) Explain the integration of payroll with the human resource management (HRM)system that often happens in moderate- and large-sized organizations.
Q3) Describe several technologies developed for producing the time and attendance file in a modern business with telecommuting employees working from multiple locations.
Q4) Asset maintenance involves only the recording of depreciation charges.Physical improvements are always expensed.
A)True
B)False
Q5) The fixed asset systems does all of the following except
A)records acquisition of assets
B)records improvements to assets
C)estimates the fair market value of assets in service
D)records the disposal of assets
Q6) Fixed asset accounting systems include cost allocation and matching procedures that are not part of routine expenditure systems.
A)True
B)False
Page 8
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Chapter 7: The Conversion Cycle
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Sample Questions
Q1) Lead time times daily demand is
A)the economic order quantity
B)safety stock
C)the reorder point
D)total inventory
Q2) Traditional accounting assumes that _______________ cause costs.ABC assumes that _________________ cause costs.
Q3) Explain why traditional cost allocation methods do not work well in a CIM environment.
Q4) Which of the following is not an example of waste?
A)overproduction of products
B)safety hazards that cause injury
C)stand-alone processes that are not linked to upstream or downstream processes
D)All of the above are examples of waste.
Q5) What document signals the completion of the production process?
Q6) An example of a continuous process is the production of
A)wedding invitations
B)milk products
C)jet aircraft
D)all of the above
Page 9
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Chapter 8: Financial Reporting,and Management Reporting Systems
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Q1) Long-range planning involves
A)planning the marketing and promotion for a product
B)presenting department heads with budgetary goals for the next year
C)preparing a work force utilization budget for the next quarter
D)deciding the optimum size of the firm
Q2) Which statement is not correct?
A)the post-closing trial balance reports the ending balance of each account in the general ledger
B)one purpose of preparing the unadjusted trial balance is to ensure that debits equal credits
C)financial statements are prepared based on the unadjusted trial balance
D)the unadjusted trial balance reports control account balances but omits subsidiary ledger detail
Q3) Employees who are responsible for a task must have the __________________________ to make decisions within the limits of the responsibility delegated.
Q4) Responsibility refers to an individual's obligation to achieve desired results. A)True B)False
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Q5) Explain the purpose and contents of the general ledger master file.
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Chapter 9: Database Management Systems
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Sample Questions
Q1) What are two types of distributed databases?
Q2) An example of a distributed database is
A)partitioned database
B)centralized database
C)networked database
D)all are examples of distributed databases
Q3) Which term is not associated with the relational database model?
A)tuple
B)attribute
C)collision
D)relation
Q4) Which procedure will prevent two end users from accessing the same data element at the same time?
A)data redundancy
B)data replication
C)data lockout
D)none of the above
Q5) What is a partial dependency?
Q6) The ____________________ allows users to retrieve and modify data easily.
Q7) Why are the hierarchical and network models called navigational databases?
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Chapter 10: The Rea Approach to Business Process
Modeling
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Q1) Modeling economic transactions under the REA approach always includes depicting both internal and external agents.
A)True
B)False
Q2) Define view integration?
Q3) An example of an economic event is checking customer credit prior to processing a sale.
A)True
B)False
Q4) Which of the following tables would most likely have a composite key?
A)Take Order
B)Cash
C)Ship Product
D)Inventory Ship Link
Q5) Define the value chain.
Q6) Define cardinality.
Q7) The REA approach generates an information system based on a single holistic user view.
A)True
B)False Page 12
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Chapter 11: Enterprise Resource Planning Systems
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Sample Questions
Q1) Core applications are
A)sales and distribution
B)business planning
C)shop floor control and logistics
D)all of the above
Q2) What is the closed database architecture?
Q3) What is meant by the OLAP term: drill-down?
Q4) A problem with RBAC is that managers tend to create unnecessary roles.
A)True
B)False
Q5) A two-tier architecture approach is used primarily for wide area network (WAN)applications.
A)True
B)False
Q6) The big bang approach
A)is more ambitious and risky than the phased-in approach
B)is a popular alternative to the phased-in approach
C)reduces the chance of system failure
D)all of the above
Q7) Why must a data warehouse include both detail and summary data?
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Chapter 12: Electronic Commerce Systems
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Q1) What is a seal of assurance?
Q2) Business risk is the possibility of loss or injury that can reduce or eliminate an organization's ability to achieve its objectives.
A)True
B)False
Q3) Is cloud computing the best option for all companies? Why or why not?
Q4) Network protocols fulfill all of the following objectives except
A)facilitate physical connection between network devices
B)provide a basis for error checking and measuring network performance
C)promote compatibility among network devices
D)creation of inflexible standards
Q5) Protocols
A)facilitate the physical connection between the network devices
B)synchronize the transfer of data between physical devices
C)provide a basis for error checking and measuring network performance
D)all of the above
Q6) A bus topology is less costly to install than a ring topology.
A)True
B)False
Q7) Describe an advantage to the client-server topology.
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Chapter 13: Managing the Systems Development Life Cycle
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Q1) A cost-benefit analysis is a part of the detailed
A)operational feasibility study
B)schedule feasibility study
C)legal feasibility study
D)economic feasibility study
Q2) Which of the following is not an advantage of commercial software? Commercial software
A)can be installed faster than a custom system
B)can be easily modified to the user's exact specifications
C)is significantly less expensive than a system developed in-house
D)is less likely to have errors than an equivalent system developed in-house
Q3) When implementing a new system,the costs associated with transferring data from one storage medium to another is an example of
A)a recurring cost
B)a data conversion cost
C)a systems design cost
D)a programming cost
Q4) Name three items included in the detailed design report.
Q5) What is meant by object-oriented design? What does it mean for systems design?
Page 16
Q6) Name three benefits of modular programming.
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Chapter 14: Auditing It Controls Part I: Sarbanes-Oxley and It Governance
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Q1) An advantage of a recovery operations center is that
A)it is an inexpensive solution
B)the initial recovery period is very quick
C)the company has sole control over the administration of the center
D)none of the above are advantages of the recovery operations center
Q2) External auditing is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization.
A)True
B)False
Q3) External auditors can cooperate with and use evidence gathered by internal audit departments that are organizationally independent and that report to the audit committee of the board of directors.
A)True
B)False
Q4) The most common access point for perpetrating computer fraud is at the data collection stage.
A)True
B)False
Q5) Explain how IT outsourcing can lead to loss of strategic advantage.
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Chapter 15: Auditing It Controls Part II: Security and Access
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Q1) Examining programmer authority tables for information about who has access to data definition language commands will provide evidence about who is responsible for creating subschemas.
A)True
B)False
Q2) Explain how SYN flood attacks can be controlled.
Q3) What are biometric devices?
Q4) Operating system integrity is not of concern to accountants because only hardware risks are involved.
A)True
B)False
Q5) Describe two tests of controls that would provide evidence that the database management system is protected against unauthorized access attempts.
Q6) A software program that allows access to a system without going through the normal log-on procedures is called a
A)logic bomb
B)Trojan horse
C)worm
D)back door
Page 18
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Chapter 16: Auditing It Controls Part III: Systems
Development, program Changes, and Application Auditing
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Q1) Users need to be actively involved in the systems development process.
A)True
B)False
Q2) The results of a parallel simulation are compared to the results of a production run in order to judge the quality of the application processes and controls.
A)True
B)False
Q3) The black box approach to testing computer program controls is also known as auditing around the computer.
A)True
B)False
Q4) Describe parallel simulation.
Q5) All program modules must be thoroughly tested before they are implemented.
A)True
B)False
Q6) Contrast embedded audit modules with generalized audit software.
Q7) What is meant by auditing around the computer versus auditing through the computer? Why is this so important?
Q8) Describe and contrast the test data method with the integrated test facility. Page 19
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