1. Information is a business resource.

Chapter 1

• Information is a business resource.

*a. True

• False
• IT outsourcing is location -independent computing.
• True

*b. False

• Transaction processing systems convert non -financial transactions

into financial transactions.

• True

*b. False

• Information lacking reliability may still have value.
• True

*b. False

• A balance sheet prepared in conformity with GAAP is an example of

discretionary reporting.

• True

*b. False

• The management reporting system provides the internal financial

information needed to manage a business.*a. True

• False
• Most of the inputs to the general ledger system come from the

financial reporting system.

• True

*b. False

• When preparing discretionary reports, organizations can choose what

information to report and how to present it.*a. True

• False

Accounting Information Systems 10e James A. Hall (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

• Retrieval is the task of permanently removing obsolete or redundant

records from the database.

• True

*b. False

• Systems development represents 80 to 90 percent of the total cost

of a computer system.

• True

*b. False

• The database administrator is responsible for the security and

integrity of the database.*a. True

• False
• Custom software is developed and maintained by enterprise resource

planners.

• True

*b. False

• The internal auditor represents the interests of third -party

outsiders.

• True

*b. False

• Information technology (IT) audits can be performed by both

internal and external auditors.*a. True

• False
• Custom software is the most affordable systems development option.
• True

*b. False

• A database is a collection of interconnected computers and

communications devices that allows users to communicate, access data and applications, and share information and resources.

• True

*b. False 2 / 4

• Systems maintenance consumes the majority of a system’s total

costs.

*a. True

• False

• Cloud computing is a practice in which the organization sells its

IT resources to a third -party outsourcing vendor then leases back IT services from the vendor for a contract period.

• True

*b. False

• A potential benefit of cloud computing is that the client firm does

not need to know where its data are being processed.

• True

*b. False

• One of the greatest disadvantages of database systems is that all

data is always available to all users.

• True

*b. False

• Under SOX legislation public accounting firms are no longer allowed

to provide consulting services to audit clients.

*a. True

• False

• One member of a company’s audit committee must be an independent

CPA.

• True

*b. False

• Which of the following is not a business resource?

• raw material
• labor
• information

*d. all are business resources

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• Which level of management is responsible for short-term planning and

coordination of activities necessary to accomplish organizational objectives?

• operations management

*b. middle management

• top management
• line management

• Which level of management is responsible for controlling day-to-day

operations?

• top management
• middle management

*c. operations management

• executive management

• Location-independent computing in which shared data centers deliver hosted IT

services over the Internet is called

• IT outsourcing
• network administration

*c. cloud computing

• custom software

• The value of information for users is determined by all of the following except

• reliability
• relevance

*c. convenience

• completeness

• An example of a nonfinancial transaction is

• sale of products
• cash disbursement

*c. log of customer calls

• purchase of inventory

• An example of a financial transaction is

*a. the purchase of computer

• a supplier’s price list
• a delivery schedule
• an employee benefit brochure

• Which subsystem is not part of the accounting information system?
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