Acct 384 Final – Fall 2002 Page 8
Accounting 384 – Final Name ______
Fall 2002 (300 points) Section ______
Please note: By taking the exam at this time, I believe you agree to the following ethical conduct:
1. You will not discuss the exam with any person until after Friday, December 20, since some people will not take the exam until Friday.
2. If you are taking this exam on Friday, December 20, you did not solicit information about the exam from anyone.
3. Anyone completing the exam on Thursday, December 19, may use item two as your reason for refusing to discuss the exam, i.e., you are helping the students who take the exam on Friday, December 20, avoid the situation of responding that they did receive assistance.
Good luck as you finish your degree at ISU!! Have a great holiday break!!!
Multiple Choice (5 points each * 30 questions = 150 total points)
1. The narratives, diagrams, charts, and other written materials that explain how a system works are called collectively the:
a. documentation. b. data flows.
c. flowcharts. d. instructions.
2. A data base model that represents all data as stored in two-dimensional tables is the _____ model.
a. tuple. b. relational.
c. hierarchy. d. object.
3. Linking the tables can be done by using
a. primary keys. b. foreign keys.
c. object keys. d. alien keys.
4. The groups of people about whom an organization collects data to help it better plan, control, and evaluate performance of its basic business activities are the
a. employees. b. events.
c. agents. d. entities.
5. While computer processing reduces the potential for clerical errors, it may increase the risks of
a. unauthorized access and modification of data files.
b. purchase of incompatible hardware.
c. logic errors in the software by programmers.
d. loss of data due to incorrect filing.
6. Unintentional acts pose an AIS threat to companies. Which item below would NOT be considered a reason behind an unintentional act?
a. a number of systems were damaged by falling debris after an earthquake
b. a computer operator failed to follow an established backup procedure
c. a programmer made a logic error when writing a new sub-routine
d. a user accidentally erased several files while searching for a certain data file.
7. The potential dollar loss that could result if an unwanted event occurs is called a(n)
a. threat. b. exposure.
c. risk. d. extraordinary loss.
8. The likelihood that an adverse or unwanted event could occur is referred to as a(n)
a. threat. b. exposure.
c. risk. d. loss.
9. The plan of organization that a business uses to safeguard assets, provide accurate and reliable information, and promote and improve operational efficiency is known as
a. a phenomenon. b. internal control.
c. an AIS threat. d. a preventive control.
10. Organizations use IT to operate their businesses, manufacture products, and perform services. Achieving adequate security and control over an organization's information resources should be a top priority. Which statement below is false regarding this organization objective?
a. Organizations must link their information systems to those with which they frequently interact such as customers, vendors, and employees.
b. The way information security and control is achieved has not changed in recent years.
c. As information systems evolve, so must internal control systems.
d. An unreliable information system harms the company's supply chain.
11. A plan can be created, implemented, and maintained that is a direct response to an organization's problems with inadequate monitoring of system controls and security. This plan is a
a. a system reliability plan. b. a strategic plan.
c. a master budget. d. a disaster recovery plan.
12. There are many reasons why systems may become unavailable to users. Hardware or software malfunctions may become a serious threat to system availability. Regularly testing system components and replacing those in poor condition is called
a. fault tolerance maintenance.
b. uninterruptible maintenance scheduling.
c. preventive maintenance.
d. a system upgrade.
13. A disaster recovery plan may be considered incomplete until
a. it is approved by the board of directors of the organization.
b. it includes insurance coverage for extraordinary losses.
c. the plan is tested by simulating a disaster.
d. it passes a quality assurance inspection from the audit committee of the board of directors.
14. A computer operator is allowed to work as a programmer on a new payroll software project. Does this create a potential problem from an internal control perspective?
a. No-however, if the computer operator also works as a programmer, the operator should be paid for all programming using a different pay schedule.
b. Yes-this person has unrestricted access to both computer operations and programs, and the computer operator could, in theory, alter the company's payroll program to increase his salary while processing the payroll.
c. Yes-this would create a potential problem unless the computer operator is properly supervised and monitored during working hours.
d. No-this combination of duties is typically found in the majority of IS organizations.
15. An organization should have physical access restrictions in place to ensure that only authorized individuals have the physical ability to use computer equipment. Which control below is NOT a physical access control?
a. installing smoke and fire detectors in rooms which house computers and peripherals
b. requiring all computer users to have an authorized password, which must be changed every 30 days
c. requiring that visitors sign a log when they enter and leave a site
d. placing computer equipment in locked rooms and restricting access
16. What is one common way to hide a theft?
a. by creating cash through the transfer of money between banks
b. by the conversion of stolen assets into cash
c. by stealing cash from customer A and then using customer B's balance to pay customer A's accounts receivable
d. by charging the stolen item to an expense account
17. In many cases of fraud, the ______takes more time and effort than the ______is worth.
a. concealment; theft b. theft; concealment
c. conversion; theft d. conversion; concealment
18. Which situation below makes it easy for someone to commit a fraud?
a. the organization placing excessive trust in key employees
b. inadequate staffing within the organization
c. company policies within the organization are unclear
d. All of the above situations make it easy for someone to commit a fraud.
19. Most fraud perpetrators are insiders because
a. insiders are more dishonest than outsiders.
b. insiders know more about the system and its weaknesses than outsiders.
c. outsiders are more likely to get caught than insiders.
d. insiders have more need for money than outsiders.
20. Much of the effort spent in an audit entails the collection of evidence. Verifying the accuracy of certain information, often through communication with certain third parties, is known in the language of the auditor as
a. reperformance. b. confirmation.
c. substantiation. d. documentation.
21. The ______audit examines the reliability and integrity of accounting records.
a. financial b. informational
c. information systems d. operational
22. The purpose of ______is to determine why, how, when, and who will perform the audit.
a. audit planning b. the collection of audit evidence
c. the communication of audit results d. the evaluation of audit evidence
23. During all stages of the audit, findings and conclusions are documented in
a. audit trails. b. audit working papers.
c. audit reports. d. audit objectives.
24. What is the primary objective of the revenue cycle?
a. to maximize revenue and minimize expense
b. to reduce outstanding accounts receivable balances through increased cash sales
c. to provide the right product in the right place at the right time at the right price
d. to sell as much product as possible and/or to maximize service billings
25. To accomplish the objectives set forth in the expenditure cycle, a number of key management decisions must be addressed. Which of the decisions below is NOT ordinarily found as part of the expenditure cycle?
a. How can cash payments to vendors be managed to maximize cash flow?
b. What is the optimal level of inventory and supplies to carry on hand?
c. Where should inventories and supplies be held?
d. What are the optimal prices for each product or service?
26. Which of the following is NOT one of the major sources of input to the payroll system?
a. payroll reports
b. time and attendance
c. checks for insurance and benefits
d. withholdings and deduction requests from employees
27. The general ledger system of an organization should be designed to serve the information requirements of both financial and nonfinancial users. This means that the system should
a. support producing regular periodic reports.
b. support the real-time inquiry needs of all users.
c. support producing regular periodic reports and respond to real-time inquiry needs.
d. support access by investors and creditors of the organization to general ledger balances.
28. In which phase of the systems development life cycle are the new hardware and software for a system tested?
a. conceptual design b. physical design
c. implementation and conversion d. operations and maintenance
29. End-user development is inappropriate for some types of systems. What is an example of a system that end users should NOT be allowed to develop?
a. a program that performs "what-if" statistical modeling
b. a payroll processing program
c. developing an application using prewritten software such as a spreadsheet or database system
d. preparing a schedule or list such as a depreciation schedule
30. What is an important benefit to be considered when allowing end users to develop a system?
a. systems are more likely to be incompatible with other systems within the organization
b. systems are developed when they are needed
c. systems are more likely to be inefficient
d. systems are often poorly controlled and documented
Problems
Tables for Holiday Bowl Football Jerseys, Inc.
Table / AttributesInventory / ProductWeight, ReorderPoint, ProductNumber, Description, UnitCost, UnitPrice, QuantityOnHand
Cash / BankID, Balance, AccountNumber
TakeOrder / CustomerNumber, SalespersonNumber, Terms, SalesOrderNumber, OrderDate, DesiredDeliveryDate,…
ShipOrder / ShippingClerkNumber, CarrierNumber, CustomerNumber, AmountDue, ShipmentNumber, InvoiceNumber, ShipmentDate
ReceivePayments / CustomerNumber, CashierNumber, InvoiceNumber, AccountNumber, RemittanceNumber, RemittanceDate, RemittanceAmount
Salesperson / EmployeeName, DateHired, BirthDate, EmployeeNumber, Salary, ManagerNumber
WarehouseClerk / EmployeeName, DateHired, BirthDate, EmployeeNumber, Salary, ManagerNumber
ShippingClerk / EmployeeName, DateHired, BirthDate, EmployeeNumber, Salary, ManagerNumber
Carrier / CarrierPhone, CarrierAddress, CarrierNumber, CarrierName, PrimaryContact,
Customer / CustomerName, BillingAddress, CustomerNumber, CustomerPhone)
Cashier / EmployeeName, DateHired, BirthDate, EmployeeNumber, Salary, ManagerNumber
Inventory-TakeOrder / ActualSalesPrice, OrderQuantity, ProductNumber, SalesOrderNumber, AccountingCost
Inventory-ShipOrder / ShipmentQuantity, ProductNumber, InvoiceNumber,
Refer to the Holiday Bowl Football Jerseys, Inc. tables to answer questions 31 to 35.
31. Identify the best primary key(s) for each table. (5 points)
Inventory ______
ShippingClerk ______
Inventory-TakeOrder ______
ReceivePayment ______
Customer ______
TakeOrder ______
Inventory-ShipOrder ______
Cashier ______
ShipOrder ______
32. Identify how each of the following tables are linked (i.e. identify foreign key and corresponding primary key for each relationship). (15 points)
Customer and ShipOrderReceivePayment and ShipOrder
Inventory and TakeOrder
TakeOrder and Customer
Carrier and ShipOrder
33. Write an SQL query to determine the number of Holiday Bowl Jerseys (item # 921) ordered. (8 points)
34. Write an SQL query to identify the date each order from the vendor named ‘Cy Cyclone Athletics’ was received. (8 points)
35. Write an SQL query to list the item number, description and quantity of all items ordered from vendor named ‘Beat Boise State Now Distributor’. (8 points)
36. Describe three of the five components of internal control. (9 points)
37. Define the term XBRL. Describe two benefits of XBRL. (8 points)
38. Describe two similarities and two differences between a data flow diagram and a flowchart. (8 points)
39. Describe two ways information technology has impacted the reporting cycle (8 points)
40. Describe the four basic audit activities. (8 points)
41. Identify the business rules diagrammed in the following REA segments. (16 points)
a.
b.
c.
d.
42. Following is a context diagram for a current Payroll Processing System. (14 points)
Identify the data sources and destinations, data flows, and transformations process marked by
questions marks.
1 – ______
2 – ______
3 – ______
4 – ______
5 – ______
6 – ______
7 – ______
43. Describe the three activities that make up the revenue cycle (9 points)
44. Describe three threats and identify appropriate controls for each threat in the expenditure cycle. (9 points)
45. Describe the concept of the information systems steering committee. (8 points)
46. Describe the most common approach to physical design (i.e. the order in which system components are designed). (9 points)