Chapter 1 Introduction to Accounting Information Systems TRUE FALSE 1 The three themes of the text are operating systems e business and internal con trol ANS F ANS F ANS T ANS F ANS T ANS T ANS F ANS T 2 In an assurance service the accountant will provide the original information used for decision making 3 Financial care for the elderly has been identified by the AICPA as a potential as surance service ANS T 4 Wireless technologies was identified as one of the ten most important 2006 tech nological challenges and opportunities facing CPAs 5 Knowledge of Microsoft Access was identified as one of the ten most important 2006 technological challenges and opportunities facing CPAs 6 Enterprise systems provide complete integration of an organization s business events and information processing systems 7 An information system consists of an integrated set of computer based and man ual components established to provide information to users 8 Internal control is a process that provides complete assurance that the organiza tion is meeting its objectives such as efficiency and effectiveness of operations and reliable reporting 9 The Sarbanes Oxley Act of 2002 has dramatically changed the daily work of fi nancial accountants and auditors 10 According to the Sarbanes Oxley Act of 2002 management must identify docu ment and evaluate significant internal controls ANS T ANS F ANS T ANS T ANS T ANS F ANS F ANS T ANS T 11 According to the Sarbanes Oxley Act of 2002 management must audit and report on auditors assertions about the organizations systems of internal controls 12 According to the Sarbanes Oxley Act s Section 409 material changes in the orga nization s financial condition must be disclosed to the public on a rapid and cur rent basis 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 in ternal control 14 Sarbanes Oxley Section 404 compliance is a major line of business for the biggest 15 The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not for accounting firms ANS T profit entities ANS F 16 The purpose of an accounting information system is to collect process and re port financial aspects of business events 17 The MIS is a subsystem of the AIS 18 Sales marketing information system is traditionally part of the AIS 19 Billing accounts receivable is traditionally part of the AIS 20 Production and personnel are part of the operations process 21 The management process includes marketing and sales 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 23 Information about a customer s credit history that is received after the decision to grant additional credit lacks completeness 24 The consistency principle is violated when a firm uses straight line depreciation one year and changes to declining balance depreciation the next year 25 Accuracy is the information quality that refers to the extent to which information corresponds to agrees with underlying objects or events 26 Generally the benefits obtained from improved information are easier to measure than the costs of obtaining those benefits 27 The most important information for Tactical management involves information about the organization s environment 28 How much inventory to reorder is a structured decision 29 Strategic management requires more detailed information than operations man 30 The three steps in decision making take place in the sequence of 1 intelligence 2 design 3 choice 31 Much of the information used by strategic managers comes from outside the or ANS F ANS T ANS F ANS T ANS T ANS F ANS F ANS T agement ANS F ANS T ganization ANS T 32 Middle management requires information that is more accurate and timely than ANS F ANS T a b c d a b c d a b c d a b c d ANS B ANS D ANS A ANS B strategic management 33 Internal control issues are some of the questions the accountant answer in the design of the AIS MULTIPLE CHOICE 1 The three themes of the text book include all of the following except 2 Efficiency and effectiveness of operations are goals of enterprise systems risk assessment e business internal control enterprise systems risk assessment e business internal control system subsystem database accounting information system input data subsystems databases enterprise systems 3 A set of interdependent elements that together accomplish specific objectives is a 4 A system can be further divided into 5 A system that consists of an integrated set of computer based and manual com ponents established to collect store and manage data and to provide output in formation to users is a n ANS D 6 An information system output input database 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 risk assessment information systems reliability electronic commerce consulting Output Input Processing Users Input Processing Output Users Processing Input Users Output Users Processing Input Output The AIS is a part of the IS The IS is a part of the AIS The IS and the AIS are one in the same The IS and AIS are unrelated 7 The AICPA has identified all but which of the following as assurance services 8 The functional model of an information system can be described as 9 Historically the relationship between an information system and an accounting information system has been a b c d a b c d a b c d a b c d a b c d ANS B ANS A ANS B ANS A 10 The text takes the following view of the relationship between an IS and an AIS the AIS is part of the IS the IS is part of the AIS the IS and the AIS are one in the same the AIS is the primary system and the IS the subsystem 11 According to the text data retrieved by the information system from the external environment or from another area within the information system is 12 represent the books of original entry used for recording most business 13 A man made system consisting of people equipment organization policies and procedures with the objective of accomplishing the work of the organization is 14 A man made system consisting of people authority organization policies and procedures with the objective of accomplishing the work of the planning