Chapter 1—Introduction to Accounting Information SystemsTRUE/FALSE1. The three themes of the text are operating systems, e-business, and internal con-trol.ANS: F2. In an assurance service the accountant will provide the original information used for decision making.ANS: F3. Financial care for the elderly has been identified by the AICPA as a potential as-surance service.ANS: T4. Wireless technologies was identified as one of the ten most important 2006 tech-nological challenges and opportunities facing CPAs.ANS: T5. Knowledge of Microsoft Access was identified as one of the ten most important 2006 technological challenges and opportunities facing CPAs.ANS: F6. Enterprise systems provide complete integration of an organization’s business events and information processing systems.ANS: T7. An information system consists of an integrated set of computer-based and man-ual components established to provide information to users.ANS: T8. 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.ANS: F9. The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of fi-nancial accountants and auditors.ANS: T10. According to the Sarbanes-Oxley Act of 2002, management must identify, docu-ment, and evaluate significant internal controls.ANS: T11. According to the Sarbanes-Oxley Act of 2002, management must audit and reporton auditors’ assertions about the organizations’ systems of internal controls.ANS: F12. 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.ANS: T13. 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.ANS: T14. Sarbanes-Oxley Section 404 compliance is a major line of business for the biggestaccounting firms.ANS: T15. The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not-for-profit entities.ANS: F16. The purpose of an accounting information system is to collect, process, and re-port financial aspects of business events.ANS: T17. The MIS is a subsystem of the AIS.ANS: F18. Sales/marketing information system is traditionally part of the AIS.ANS: F19. Billing/accounts receivable is traditionally part of the AIS.ANS: T20. Production and personnel are part of the operations process.ANS: T21. The management process includes marketing and sales.ANS: F22. 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.ANS: T23. Information about a customer’s credit history that is received after the decision togrant additional credit lacks completeness.ANS: F24. The consistency principle is violated when a firm uses straight-line depreciation one year and changes to declining balance depreciation the next year.ANS: T25. Accuracy is the information quality that refers to the extent to which information corresponds to (agrees with) underlying objects or events.ANS: T26. Generally, the benefits obtained from improved information are easier to measurethan the costs of obtaining those benefits.ANS: F27. The most important information for Tactical management involves information about the organization’s environment.ANS: F28. How much inventory to reorder is a structured decision.ANS: T29. Strategic management requires more detailed information than operations man-agement.ANS: F30. The three steps in decision making take place in the sequence of (1) intelligence, (2) design, (3) choice.ANS: T31. Much of the information used by strategic managers comes from outside the or-ganization.ANS: T32. Middle management requires information that is more accurate and timely thanstrategic management.ANS: F33. Internal control issues are some of the questions the accountant answer in the design of the AIS.ANS: TMULTIPLE CHOICE1. The three themes of the text book include all of the following except:a. enterprise systemsb. risk assessmentc. e-businessd. internal controlANS: B2. Efficiency and effectiveness of operations are goals of:a. enterprise systemsb. risk assessmentc. e-businessd. internal controlANS: D3. A set of interdependent elements that together accomplish specific objectives is aa. systemb. subsystemc. databased. accounting information systemANS: A4. A system can be further divided intoa. input datab. subsystemsc. databasesd. enterprise systemsANS: B5. 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)a. outputb. inputc. databased. information systemANS: D6. An information system:a. is composed of only the computer-based information resources of an organizationb. may consist of both computer-based and manual componentsc. is different from a data processing system because it uses computersd. is not generally used for transaction processingANS: B7. The AICPA has identified all but which of the following as assurance services?a. risk assessmentb. information systems reliabilityc. electronic commerced. consultingANS: A8. The functional model of an information system can be described asa. Output, Input, Processing, Usersb. Input, Processing, Output, Usersc. Processing, Input, Users, Outputd. Users, Processing, Input, OutputANS: B9. Historically, the relationship between an information system and an accounting information system has been:a. The AIS is a part of the ISb. The IS is a part of the AISc. The IS and the AIS are one in the samed. The IS and AIS are unrelatedANS: A10. The text takes the following view of the relationship between an IS and an AIS:a. the AIS is part of the ISb. the IS is part of the AISc. the IS and the AIS are one in the samed. the AIS is the primary system and the IS the subsystemANS: C11. According to the text, data retrieved by the information system from the external environment or from another area within the information system isa. input datab. output datac. business event datad. master dataANS: A12. ____ represent the books of original entry used for recording most business events.a. Input datab. Output datac. Business event datad. Master dataANS: C13. A man made system consisting of people,