Chapter 1Introduction to Accounting Information Systems

Chapter 1—Introduction to Accounting Information Systems

TRUE/FALSE

1.The three themes of the text are operating systems, e-business, and internal control.

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2.It is critical for accountants to understand enterprise resource planning (ERP) systems.

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3.Information systems reliability and electronic commerce have been identified by the AICPA as potential assurance services.

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4.E-business is the application of electronic networks to undertake business processes among the functional areas in an organization.

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5.The role of the accountant has evolved to include non-financial information and information technology.

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6.Enterprise systems integrate an organization's business processes and information from all of an organization's functional areas.

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7.An information system consists of an integrated set of computer-based and manual components established to provide information to users.

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8.Internal control is a process that provides complete assurance that the organization is meeting its objectives, such as efficiency and effectiveness of operations and reliable reporting.

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9.The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of financial accountants and auditors.

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10.According to the Sarbanes-Oxley Act of 2002, management must identify, document, and evaluate significant internal controls.

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Accounting Information Systems 10e Ulric Gelinas Richard Dull Patrick W heeler (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

11.According to the Sarbanes-Oxley Act of 2002 and PCAOB Auditing Standard No. 5, management must audit and report on auditors' assertions about the organizations' systems of internal controls.

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12.According to the Sarbanes-Oxley Act's Section 409, material changes in the organization's financial condition must be disclosed to the public on a rapid and current basis.

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13.The Sarbanes-Oxley Act's Section 404 creates changes in both how companies document and evaluate internal control and how auditors audit and report on internal control.

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14.Sarbanes-Oxley Section 404 compliance is a major line of business for the biggest accounting firms.

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15.The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not-for-profit entities.

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16.Historically the purpose of an accounting information system is to collect, process, and report financial aspects of business events.

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17.The MIS is a subsystem of the AIS.

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18.Sales/marketing information system is traditionally part of the AIS.

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19.Billing/accounts receivable is traditionally part of the AIS.

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20.Production and personnel are part of the operations process.

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21.The management process includes marketing and sales.

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22.Information that is capable of making a difference in a decision-making situation, by reducing uncertainty or increasing knowledge for that particular decision, has the quality of relevance.

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23.Information about a customer's credit history that is received after the decision to grant additional credit lacks completeness.

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24.The consistency principle is violated when a firm uses straight-line depreciation one year and changes to declining balance depreciation the next year.

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25.Accuracy is the correspondence or agreement between the information and the actual events or objects that the information represents.

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26.Information has understandability when it is capable of making a difference in a decision-making situation..

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27.The most important information for tactical management involves information about the organization's environment.

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28.Deciding how much credit to grant to a customer is a structured decision.

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29.Strategic management requires more detailed information than operations management.

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30.The three steps in decision making take place in the sequence of (1) intelligence (2) design (3) choice.

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31.Strategic managers use more information from outside the organization than do operations managers.

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32.Operations management requires information that is more accurate and timely than strategic management.

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33.What controls will be necessary is a question that an accountant answers in the design of the AIS.

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34.As a designer of an AIS the accountant will test a new system's controls.

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• As a user of an AIS an accountant may be called upon to participate in the AIS design process.

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MULTIPLE CHOICE

1. The three themes of the text book include all of the following except:

• enterprise systems
• risk assessment
• e-business
• internal control

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2. Efficiency and effectiveness of operations are goals of:

• enterprise systems
• risk assessment
• e-business
• internal control

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• A set of interdependent elements that together accomplish specific objectives is a
• system
• subsystem
• database
• accounting information system

ANS: A PTS: 1

• A system can be further divided into
• input data
• subsystems
• databases
• enterprise systems

ANS: B PTS: 1

• A system that consists of an integrated set of computer-based and manual components established to

collect, store, and manage data and to provide output information to users is a(n)

• output
• ERP
• database
• information system

ANS: D PTS: 1

6. An information system:

• is composed of only the computer-based information resources of an organization
• may consist of both computer-based and manual components
• is different from a data processing system because it uses computers
• is not generally used for transaction processing

ANS: B PTS: 1

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