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Chapter 9 MULTIPLE CHOICE 1.Which characteristics below is not a characteristic of auditing? a)evidence collection b)establishing audit criteria c)objectivity d)systems development 2.Auditing involves the a)collection, review, and documentation of audit evidence. b)planning and verification of economic events. c)collection of audit evidence and approval of economic events. d)testing, documentation, and certification of audit.
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SHORT ANSWER 75.Name the different types of audits. 76.Name the four major stages of all audits. 77.List the types of risk possible when conducting an audit. 78.Explain why the auditor's role in program development and acquisition should be limited. 79.How and to whom does an auditor communicate the audit results? 80.Why.
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71.Sad Clown Pajamas is an Internet-based wholesaler. The customer account manager at Sad Clown received a call from the manager at Callow Youth Clothing. The firm was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account. The account manager.
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11.Restricting access of users to specific portions of the system as well as specific tasks, is a)Authentication b)Authorization c)Identification d)Threat monitoring 12.Which of the following is an example of a preventive control? a)Encryption b)Log analysis c)Intrusion detection d)Emergency response teams 13.Which of the following is an example of a detective control? a)Physical access controls b)Encryption c)Log analysis d)Emergency response teams 14.Which of the following.
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31.This ensures that the correct and most current files are being updated. a)Cross-footing balance test b)Data matching c)File labels d)Write-protect mechanism 32.These find processing errors. a)Cross-footing balance test b)File labels c)Recalculation of batch totals d)Write-protect mechanisms 33.This compares the results produced by more than one method to verify accuracy. a)Concurrent update control b)Cross-footing balance test c)Data matching d)Recalculation of batch totals 34.This.
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31.Using the risk-based auditing approach, when the auditor identifies a control deficiency, the auditor should inquire about a)tests of controls. b)the feasibility of a systems review. c)materiality and inherent risk factors. d)compensating controls. 32.The __________ to auditing provides auditors with a clear understanding of possible errors and irregularities and the related.
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Chapter 8 MULTIPLE CHOICE 1.Concerning virtual private networks (VPN), which of the following is not true? a)VPNs provide the functionality of a privately owned network using the Internet. b)Using VPN software to encrypt information while it is in transit over the Internet in effect creates private communication channels, often referred to as tunnels, which.
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86.What is cycle billing? 87.Poor performance in the area of cash collections is a threat to the business.  What controls can be used to help neutralize this threat? 88.A well-designed AIS should provide adequate controls to ensure that objectives in the revenue cycle are met. What are those objectives? 89.Identify two.
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SHORT ANSWER 69.Identify a fundamental control procedure for protecting that confidentiality of sensitive information. 70.Identify four source data controls. 71.Identify four data entry controls. 72.Identify four processing controls. 73.What is fault tolerance? 74.Define and contrast a recovery point objective and a recovery time objective. .
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21.Another essential part of the revenue cycle is filling customer orders and shipping merchandise to customers.  Automating warehouse systems cut costs, improve efficiency, and enable more customer-responsive shipments.  The essential element(s) required for an automated perpetual inventory system consist(s) of a)conveyor belts and forklifts b)conveyor belts and forklifts equipped with RFDC c)conveyor.
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51. These are established to deal with major security breaches. a)CERTs b)CSOs c)FIRSTs d)Intrusion detection systems 52. The ___________  disseminates information about fraud, errors, breaches and other improper system uses and their consequences. a)Chief information officer b)Chief operations officer c)Chief security officer d)Computer emergency response team 53.In 2007, a major U.S. financial institution hired a security firm to attempt to.
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81.When doing an information systems audit, auditors must review and evaluate the program development process.  What two things could go wrong during the program development process? 82.Briefly describe tests that can be used to detect unauthorized program modifications. 83.What does an auditor examine when performing a detailed analysis of program.
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41.Information encrypted with the creator's private key that is used to authenticate the sender is. a)Asymmetric encryption b)Digital certificate c)Digital signature d)Public key 42.An electronic document that certifies the identity of the owner of a particular public key. a)Asymmetric encryption b)Digital certificate c)Digital signature d)Public key 43.The system and processes used to issue and manage asymmetric keys and digital certificates. a)Asymmetric.
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21.A special purpose hardware device or software running on a general purpose computer which filters information that is allowed to enter and leave the organization's information system. a)Demilitarized zone b)Intrusion detection system c)Intrusion prevention system d)Firewall 22.This protocol specifies the procedures for dividing files and documents into packets to be sent over the Internet. a)Access control.
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Chapter 10 MULTIPLE CHOICE 1.The credit manager reports to the __________ and the treasurer reports to the __________. a)controller; vice president of finance b)treasurer; controller c)marketing manager; vice president of finance d)treasurer; vice president of finance 2.The revenue cycle is a recurring set of business activities and related information processing operations associated.
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41.The stock exchange or FASB is best described as external influences that directly affect an organization's a)hiring practices b)philosophy and operating style c)internal environment d)methods of assigning authority 42.The internal control model developed by COSO is comprised of five interrelated components.  Among these components is the internal environment.  Which attribute below is not part.
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41.The __________ procedure for auditing computer process controls uses a hypothetical series of valid and invalid transactions. a)concurrent audit techniques b)test data processing c)integrated test facility d)dual process 42.The auditor uses __________ to continuously monitor the system and collect audit evidence while live data are processed. a)test data processing b)parallel.
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SHORT ANSWER 73.Identify the four basic principles that contribute to systems reliability according to the Trust Services framework developed by the AICPA and the CICA. 74.What are the three fundamental information security concepts? 75.What are three ways users can be authenticated? 76.What three factors determine the strength of any encryption system? 77.How does an intrusion.
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ESSAY 75.Identify four useful procedures for controlling access to system outputs. 76.Identify the 10 internationally recognized best practices for protecting the privacy of customers' personal information. 77.Describe some steps you can take to minimize your risk of identify theft. .
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80.What is a weakness of the internal control concept of the separation of duties? 81.Classify the following controls as preventive, detective, or corrective: Periodic bank reconciliation. Separation of cash and accounting records. Maintaining backup copies of master and transaction files. Pre-numbering of sales invoices. Chart of accounts. Retina scan before.
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51.Regarding project development and acquisition controls, this is developed to show all projects that must be completed to achieve long-range company goals. a)Performance evaluation b)Project development plan c)Steering committee d)Strategic master plan 52.Regarding project development and acquisition controls, a ________ is created to guide and oversee systems development and acquisition. a)Performance evaluation b)Project development plan c)Steering committee d)Strategic master.
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SHORT ANSWER 78.a) Define revenue cycle.  b) What are the basic revenue cycle activities? 79.Explain how validity checks, completeness tests and reasonableness tests can be users to ensure accuracy of customer ordes. 80.What is a CRM system? 81.How can EDI help the billing and account receivable process? 82.How does a company avoid.
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51.What is the primary purpose of computer audit software? a)to free the auditor from the attest phase of the audit b)to assist the auditor in reviewing and retrieving information in computer files  c)to look for unauthorized modifications and changes to system program code d)to assist the auditor in reviewing and.
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31.With a(n) __________ system, customers pay according to the amount showing on their monthly statement and payments are simply applied against the total account balance. a)closed invoice b)open invoice c)balance forward d)invoice forward 32.In billing systems, the __________ is sent to the customer that summarizes all transactions occurring during a.
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41.________ copies all changes made since the last full backup. a)Archive b)Backup c)Differential backup d)Incremental backup 42.While this type of backup takes longer, it's restoration is simpler. a)Archive b)Backup c)Differential backup d)Incremental backup 43.A copy of a database, master file, or software that will be retained indefinitely as a historical record. a)Archive b)Backup c)Differential backup d)Incremental backup 44.A location that is pre-wired for.
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21.This ensures that the input data will fit into the assigned field. a)Limit check b)Range check c)Size check d)Validity check 22.This tests a numerical amount to ensure that it does not exceed a predetermined value. a)Completeness check b)Limit check c)Range check d)Sign check 23.This tests a numerical amount to ensure that it does not exceed a predetermined value.
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11.During the sales order entry process, a __________ is performed to verify that each transaction record contains all appropriate data items. a)completeness test b)redundant data check c)field check d)reasonableness test 12.A number of edit checks should be performed to ensure that all of the data required to process an order.
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61.When new employees are hired by Folding Squid Technologies, they are assigned user names and appropriate permissions are entered into the information system’s access control matrix. This is an example of a(an) a)authentication control. b)biometric device. c)remote access control. d)authorization control. 62.When new employees are hired by Folding Squid Technologies, they are assigned user.
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11.Input validation checks are an example of a)Data entry controls b)Data transmission controls c)Output controls d)Source data controls 12.Parity checks are an example of a)Data entry controls b)Data transmission controls c)Output controls d)Processing controls 13.Error logs and review are an example of a)Data entry controls b)Data transmission controls c)Output controls d)Processing controls 14.Visual scanning is an example of a)Data entry controls b)Output controls c)Processing.
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41.Key differences exist when an integrated Enterprise Resource Planning system (ERP) replaces an existing AIS or legacy system.  For example, __________ are more accurate and timely, enabling sales order entry staff to provide customers more accurate information about delivery dates. a)inventory records b)cash receipts c)credit approval decisions d)exception reports 42.When.
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61.An expansion of a firm's operations to include production in Russia and China will have the effect of a)increasing inherent risk. b)reducing inherence risk. c)increasing control risk. d)reducing control risk. 62.An increase in the effectiveness of auditing software will have the effect of a)increasing detection risk. b)reducing detection risk. c)increasing control risk. d)reducing control risk. 63.An auditor examines all documents.
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61.River Rafting Adventures of Iowa provides rafts and tour guides to tourists eager to ride the wild rivers of Iowa. Management has determined that there is one chance in a thousand of a client being injured or killed. Settlement of resulting lawsuits has an average cost of $650,000. Insurance with.
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21.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. 22.The evidence collection method that examines all supporting documents to determine.
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SHORT ANSWER 74.What are the three functions of internal controls? 75.What are the two categories of internal controls? 76.What is the difference between general and specific authorization? 77.What was the primary objective of the Foreign Corrupt Practices Act?  78.What is COSO? 79.What are the major components of control as defined in.
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51.The accounting department at Synergy Hydroelectric records an average of 12,500 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 25,000 transactions. If the firm's recovery time objective is 120 minutes, then the worst case.
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51.All of the following edit checks for online editing of accounts receivable transactions would probably be included except a)validity checks on customer and invoice numbers. b)check digit verification on the amount of the sale. c)closed loop verification on the customer name to ensure the proper account is being updated. d)field.
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Chapter 11 MULTIPLE CHOICE 1.In the expenditure cycle, the primary external exchange of information occurs with a)customers. b)suppliers.  c)management. d)the audit committee. 2.Within the expenditure cycle, internal information flows a)from the production cycle to the expenditure cycle. b)from the revenue cycle to the expenditure cycle. c)to the general ledger from the expenditure.
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Chapter 7 MULTIPLE CHOICE 1.The AICPA and the CICA have created an evaluation service known as SysTrust.  SysTrust follows four principles to determine if a system is reliable.  The 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..
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11.One type of audit that is concerned with the economical and efficient use of resources and the accomplishment of established goals and objectives corresponds to the fourth and fifth standards set forth by the IIA.  This is known as a(n) __________ audit. a)financial b)information systems c)internal control d)operational or management  .
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31.The process of turning off unnecessary features in the system is known as a)Deep packet inspection b)Hardening c)Intrusion detection d)War dialing 32.The most common input-related vulnerability is a)Buffer overflow attack b)Hardening c)War dialing d)Encryption 33.The final layer of preventive controls. a)Authentication b)Authorization c)Encryption d)Intrusion detection 34.The process of transforming normal text into cipher text a)Encryption b)Decryption c)Filtering d)Hardening 35.Which of the following is not one of the.
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