Module 1 and Module 2 Reviewer PDF

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Summary

This is the graphical representation of the physical relationships among key elements of a system. a. Program flowchartb. System flowchartc. Data flow diagramd. Flowchart symbol These elements of system flowcharts may include a. organizational departments, manual activities, hard-copy accounting rec...

Description

1. This is the graphical representation of the physical relationships among key elements of a system. a. Program flowchart b. System flowchart c. Data flow diagram d. Flowchart symbol 2. These elements of system flowcharts may include a. organizational departments, manual activities, hard-copy accounting records and digital records. b. organizational departments, manual activities, computer programs, and digital records c. organizational departments, manual activities, computer programs, and hard-copy accounting records.

5. The primary objective of flowcharting activities should provide an unambiguous description of the system, therefore , certain rules and conventions need to be observed: a. The flowchart should be labeled to clearly identify the system that it represents; b. the correct symbols should be used to represent the various entities in the system; c. all symbols on the flowchart should be labeled; lines should have arrowheads to clearly show the process flow and sequence of events and if complex processes need additional explanation for clarity, a text description should be included on the flowchart or in an attached document referenced by the flowchart. d. all of the above

d. organizational departments, manual activities, computer programs, hard-copy accounting records and digital records 3. The following are described in the system flowchart specifically the type of computer media being employed in the system, such as a. magnetic tape, magnetic disks, and terminals.

6. The oblong symbol identified as customer is a. process

b. magnetuc tape and terminal only only

b. page connector

c. magnetic disc only

c. source of document

d. terminal only

d. accounting record

4. The need to flowchart a sales order system to evaluate its internal controls and procedures is being done by

7. It is represented as vertical columns of events and actions separated by lines of demarcation. Generally, each of these areas of activity is a separate column with a heading.

a. Controller b. IT Professional c. Auditor d. Risk manager

a. lay out the physical areas of activity and label each of them. b. transcribe the written facts into visual format

c. show the processing of a single transaction only d. None of the above

10. When the sales clerk receives credit approval, he or she files Copy 1 and the customer order in the department. The clerk sends copy of the credit approval to a. the warehouse and to the shipping department. b. the sales department and the shipping department c. the warehouse and the sales department d. the sales department and the credit department

8. The symbol which are labeled : Check Credit; Pick Goods; Prepare sales order are examles of

11. The shipping department receives copy of the sales and the goods from the warehouse, attaches Copy 2 of the sales order as a packing slip, and ships the goods to the

a. source destination

a. Sales clerk

b. source document

b. cashier

c. process

c. warehouse clerk

d. accounting record

d. customer. .

8.

12. System flowcharts show the processing of a. a multiple transaction only b. a single transaction only c. a double transaction only d. any of the above 9. The Sales Department ; the Credit Department ; The Warehouse and Shipping Department are the departments involved in Sales order processing. This is an indication in the designed system of an embed internal control specifically a. accounting records b. independent verification c. segregation of duties d. any of the above

13. ___________________________ permits the efficient management of a large volume of transactions. a. Real-time processing b. Real-time processing and batch processing c. Batch processing d. Either real-time or batch processing 14. General advantages when group of similar transactions (such as sales orders) that are accumulated over time and then processed together are the following:

a. Organizations improve operational efficiency by grouping together large numbers of transactions into batches and processing them as a unit of work rather than processing each event separately. b. Real-time processing provides control over the transaction process.

18. When it is used to process financially significant transactions, auditors need to know how to evaluate and test them. a. Computerized based system b. Legacy system c. Manual System

c. The accuracy of the process is established by periodically reconciling the real-time process against the control figure.

d. none of the above

d. All of the above

a. to be client-server based and process transactions with lag time.

15. In designing a batch system, the _____________________ should seek a balance between the economic advantage of large batches and the troubleshooting advantage of small batches. a. programmer b. data administrator c. accountant d. controller 16. Batch System is assembled transactions into groups for processing. There is always a ______________ between point at which an economic event occurs and the point reflected in the firm’s accounts.

19. Modern systems tends

b. to be client-server based and process transactions with lag time. c. to be client-server based and process transactions in real time. d. to be web- based and process transactions in real time. 20. It is well suited to systems that process lower transaction volumes and those that do not share common records Terminals at distributed sited throughout the organization are used for receiving, processing and sending information about current transactions. a. Legacy system b. Real-time systems

a. dead line

c. Manual systems

b. time lag

d. None of the above

c. timeline

1. It pertains to the principles of conduct that individuals use in making choices and guiding their behavior in situations that involve the concepts of right and wrong.

d. scheduled time 17. Real-time processing in systems that handle large volumes of transactions each day can a . create operational inefficiencies. b. create strategic inefficiencies. c. create operational efficiencies. d. create strategic efficiencies.

a. Internal Control b. Ethics c. Fraud d. Risk 2. Ethical issues in business can be divided into four areas:

a. Equity, Rights, Honesty and Exercise of Corporate Power

b. Republic Act of 2002 c. Sarbanes-Oxley Act of 2002

b. Equity, Professionalism, Honesty and Exercise of Corporate Power

d. None of the above

c. Equity, Rights, Punctuality and Exercise of Corporate Power

6. Fraudulent act must meet the following conditions

d. Equity, Rights, Honesty and Exercise of Due Diligence

a. False representation; Immaterial fact; Intent,Justifiable reliance. and Injury or loss.

3. Copyright laws have been invoked in an attempt to protect those who develop software from having it copied.

b. False representation; Material fact; No Intent,Justifiable reliance. and Injury or loss.

a. Privacy b. Proof of Ownership c. Equity of Access d. Ownership of Property 4. Computers can be misused in many ways. a, Copying proprietary hardware, using a company’s computer for personal benefit, and snooping through other people’s files are just a few obvious examples. b. Copying proprietary software, using a company’s computer for personal benefit, and snooping through other people’s files are just a few obvious examples. c. Copying proprietary systems, using a company’s computer for personal benefit, and snooping through other people’s files are just a few obvious examples. d. Copying proprietary rights, using a company’s computer for personal benefit, and snooping through other people’s files are just a few obvious examples. 5. This is a federal law that established sweeping auditing and financial regulations for public companies. Lawmakers created the legislation to help protect shareholders, employees and the public from accounting errors and fraudulent financial practices. a. Data Privacy Act

c. False representation; Material fact; Intent, Not Justifiable reliance. and Injury or loss. d. False representation; Material fact; Intent,Justifiable reliance. and Injury or loss. 7. In accounting literature, fraud is also commonly known as a. blue-collar crime, defalcation, embezzlement, and irregularities. b. white-collar crime, defalcation, embezzlement, and regularities. c. white-collar crime, defalcation, embezzlement, and irregularities. d. white-collar crime, defalcation, no embezzlement, and irregularities. 8. This is generally designed to directly convert cash or other assets to the employee’s personal benefit. a. Employee fraud by management employees, b. Employee fraud by non-management employees, c. Management fraud by Officers d. Management fraud and Employee fraud 9. Management fraud typically contains three special characteristics:

a. The fraud is perpetrated at levels of management above the one to which internal control structures generally relate. b. The fraud frequently involves using the financial statements to create an illusion that an entity is healthier and more prosperous than, in fact, it is.

c. very strong situational pressure; with great opportunity and have access and with a compromising attitude therefore it's evident of the commission of fraud d. no situational pressure of the need; with great opportunity and have access and with a compromising attitude therefore it's evident of the commission of fraud

c. If the fraud involves misappropriation of assets, it frequently is shrouded in a maze of complex business transactions, often involving related third parties. d. All of the above 10. This consists of three factors that contribute to or are associated with management and employee fraud a. Bermuda Triangle b. Fraud Triangle c. Triangle formula d. None of the above

12. Objectives of Internal Control includes the following Except a. To safeguard assets of the firm. b. To ensure the accuracy and reliability of accounting records and information. c. To promote inefficiency in the firm’s operations. d. To measure compliance with management’s prescribed policies and procedures 13. The following are the types of physical controls Except: a. Transaction Authorization

11. The figure is described as

b. Segregation of Duties

a. very strong situational pressure; with no opportunity and have access and with a compromising attitude therefore it's evident of the commission of fraud

c. Supervision

b. very strong situational pressure; with great opportunity and have access and with an uncompromising attitude therefore it's evident of the commission of fraud

d. Change of passwords 14. Management can assess the performance of individuals, the integrity of the transaction processing system, and the correctness of data contained in accounting through a. Supervision

b. Segregation of duties and responsibilities

d. Transaction approval

______________________ the SOX Act of 2002 with their intention was to create a law which would restore the faith of investors back into Corporate America.

15. Application controls ensure the integrity of specific systems as follows Except:

a. Paul Sarbanes of Ohio and U.S. Representative Michael Oxley of Maryland

a. controls over sales order processing,

b. Michael Oxley of Maryland and U.S. Representative Paul Sarbanes of Ohio

c. Independendent verification

b. accounts payable c. program maintenance d. payroll applications 16. General controls pertain to the entity-wide computer environment Except a. control over sales processing b. controls over the data center c. organization databases d. systems development, and program maintenance

c. Paul Sarbanes of Maryland and U.S. Representative Michael Oxley of Ohio d. Paul Oxley of Maryland and U.S. Representative Michael Sarbanes of Ohio, 19. The SOX Act of 2002 was passed due to the accounting scandals that resulted in billions of dollars in corporate and investor losses of a. Tyco Scandal (2002) b. Freddie Mac Scandal (2003) c. American International Group (AIG) Scandal (2005) d. Enron Scandal (2001) 20. Three broad categories of fraud schemes Except a. fraudulent statements b. economic extortion c. corruption

17. The above diagram means that

d. asset misappropriation

a. Fraud committed by post graduate is higher than college but lower than high school.

21. Enron’s auditor' Arthur Andersen were also their internal auditors and their management consultants. This is a typical problem for

b. Fraud committed by post graduate is the smallest as compared to college but higher than high school. c. Fraud committed by post graduate lower than college but higher than high school. d. Fraud committed by post graduate is higher than college and high school. 18. It was introduced by the U.S. Senator – __________________ and

a. Lack of consistency b. Lack of control c. Lack of sustainability d. Lack of independence 22. Inappropriate Accounting Practices use of special-purpose entities to hide liabilities through

a. window dressing b. off-balance-sheet accounting c. full disclosure d. going concern 23. Corruption involves an executive, manager, or employee of the organization in collusion with an outsider. Examples are the following Except: a. Conflict of interest b. Bribery c. illegal gratuities d. Check tampering 24. Which of the following situations is NOT a segregation of duties violation? a. The treasurer has the authority to sign checks but gives the signature block to the assistant treasurer to run the checksigning machine. b.The warehouse clerk, who has custodial responsibility over inventory in the warehouse, selects the vendor and authorizes purchases when inventories are low. The sales manager has the responsibility to approve credit and the authority to write off accounts. c. The department time clerk is given the undistributed payroll check to mail to absent employees. d. The accounting clerk who shares the recordkeeping responsibility for the accounts receivable subsidiary ledger performs the monthly reconciliation of the subsidiary ledger and the control account. 25. The fraud scheme that is similar to the “borrowing from Peter to pay Paul” scheme is a. expense account fraud b. bribery c. lapping d. transaction fraud

26. The underlying assumption of reasonable assurance regarding implementation of internal control means that a. auditor is reasonably assured that fraud has not occurred in the period. b. auditors are reasonably assured that employee carelessness can weaken an internal control structure. c. implementation of the control procedure should not have a significant adverse effect on efficiency or profitability. d. management assertions about control effectiveness should provide auditors with reasonable assurance. 1. They are involve in specifying certain operational rules, reporting requirements and framing internal control. a. IT professional b. Accountant c. Risk Manager d. Data Adminstrator 2. An information system isa. the set of formal procedures by which data are collected, processed into information, and distributed to users. b. the set of formal procedures by which data processed into information, and distributed to users. c. the set of informal procedures by which data are collected, processed into information, and distributed to users. d. the set of formal procedures by which data are collected, and processed into information 3. This as an event that affects or is of interest to the organization and is processed by its information system as a unit of work. a. Authorization b. Accounting Verification

c. Transaction d. Control 4. It Is a tool that can help growing business deal with their increasing number of transaction. An information system that collects, stores modifies and retrieves transactions of an organization. a. Transaction processing b. Sales processing c. Purchases processing d. Loan Processing 5. This is a book of accounts that reflects the financial effects of the firm’s transactions after they are posted from the various journals. a. Cash Disbursement Book b. General Journal c. Cash Receipts Book d. General Ledger 6. General ledgers and subsidiary ledgers are examples of accounting records. Which of the following is true of the relationship between subsidiary ledgers and general ledger accounts? a. All general ledger accounts have subsidiaries. b. The two contain different and unrelated data. c. The relationship between the two provides an audit trail from the financial statements to the source documents. d. The total of subsidiary ledger accounts usually exceeds the total in the related general ledger account. 7. An accounting as an information system (AIS) is a system of collecting, storing and processing financial and accounting data. An accounting information system is generally a computerbased method for tracking accounting activity in conjunction

with information technology resources. The objectives of all accounting information systems are as follows : a. support for management decision making b. support only for the day-to-day operations of the firm c. support for the stewardship function of management and debtors d. all of the above are objectives 8. For better appreciation, there are three subsystems of the Accounting Information System, EXCEPT a. Transaction Processing System b. Human Resource System c. General Ledger/Financial Reporting System d. Management Reporting System 9. . A financial transaction is an agreement, or communication, carried out between a buyer and a seller. In the financial transaction system, which is NOT a financial transaction? a. update valid vendor file b. cash receipts c. purchase of products d. sale of inventory 10. Data management activities is an administrative process that includes acquiring, validating, storing, protecting, and processing required data to ensure the accessibility, reliability, and timeliness of the data for its users. Which of the following is NOT a database management task? a. retrieval b. storage c. summarization d. deletion 11. A System is a group of two or more interrelated components or subsystems that serve a common purpose. Elements of a System are as follows EXCEPT: a. Relatedness b. System vs Subsystem

c. Purpose d. Summary

d. converts economic events into financial transactions, records financial transactions in journals and ledgers.

12. The information system accepts ________________, called transactions;

15. External Users of financial statements are EXCEPT:

a. processed data b. output c. computer d. input 13. AIS subsystems process financial transactions and nonfinancial transactions that directly affect the processing of financial transactions. The three major subsystems are: a. Transaction Processing System b. General Ledger/Financial Reporting System c. Management Reporting System d. Accounts Receivable System 14. Transaction Processing System a. converts economic events into financial transactions, records financial transactions in journals and ledgers, and distributes essential financial information to operations personnel to support daily operations. b. converts economic events into nonfinancial transactions, records financial transactions in journals and ledgers, and distributes essential financial information to operations personnel to support daily operations. c. converts non-economic events into financial transactions, records financial transactions in journals and ledgers, and distributes essential financial information to operations pe...