Chapter 01
Accounting Information Systems and Firm Value
True / False Questions
1. Accounting and Finance is a primary activity in the value chain.
True False
2. Accounting Information Systems at this date are all computerized.
True False
3. Business value includes all those items, events and interactions that determine the financial
health and well-being of the firm.
True False
4. The Certified Information Technology Professional (CITP) is a professional designation for
those with broad range of technology knowledge and does not require a CPA.
True False
5. The Certified Information Systems Auditor (CISA) is a professional designation generally
sought by those performing IT audits.
True False
6. Information is defined as being data organized in a meaningful way to be useful to the user.
True False
,7. Data is defined as being information organized in a meaningful way to be useful to the user.
True False
8. A systems analyst analyzes a business problem that might be addressed by an information
system and recommends software or systems to address that problem.
True False
9. A value chain is defined as the flow of materials, information, payments, and services from
customer to supplier.
True False
10. Relevant information is that information that is free from bias and error.
True False
11. The characteristics of relevant information include predictive value, feedback value and
timeliness.
True False
12. The characteristics of reliable information are that the information is verifiable, without bias
and timely.
True False
13. Information overload is defined as the difficulty a person faces in understanding a problem
and making a decision as a consequence of too much information.
True False
14. The main financial benefit of Customer Relationship Management practices reduces the cost
of goods sold.
True False
,15. An efficient Enterprise System can significantly lower the cost of support processes included
in sales, general, and administrative expenses.
True False
16. An accounting information system (AIS) is defined as being an information system that
records, processes and reports on transactions to provide financial information for decision
making and control.
True False
17. An enterprise system is a centralized database that collects data from throughout the firm.
This includes data from orders, customers, sales, inventory and employees
True False
18. Outbound logistics are the activities associated with receiving and storing raw materials and
other partially completed materials, and distributing those materials to manufacturing when
and where they are needed.
True False
19. Service Activities as defined in the value chain are those activities that provide the support of
customers after the products and services are sold to them (e.g. warranty repairs, parts,
instruction manuals, etc.).
True False
20. A well-designed and well-functioning AIS can be expected to create value by providing
relevant information helpful to management to increase revenues and reduce expenses.
True False
21. Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is
an example of discretionary information.
True False
, 22. An enterprise system is primarily used to manage and nurture a firm's interactions with its
current and potential clients.
True False
23. The Sarbanes-Oxley Act of 2002 is a federal law in the United States that set new and
enhanced standards for all U.S. public companies, management and public accounting firms.
True False
24. CRM software often includes the use of database marketing tools to learn more about the
customers and to develop strong firm-to-customer relationships.
True False
25. The Certified Information Technology Professional is the position created by the AICPA to
recognize CPAs who have the ability to provide skilled professional services on Information
Technology.
True False
Multiple Choice Questions
26. Accounting information systems are:
A. Always computerized.
B. Report only accounting information.
C. Records, processes and reports
D. Are for computer games
Accounting Information Systems and Firm Value
True / False Questions
1. Accounting and Finance is a primary activity in the value chain.
True False
2. Accounting Information Systems at this date are all computerized.
True False
3. Business value includes all those items, events and interactions that determine the financial
health and well-being of the firm.
True False
4. The Certified Information Technology Professional (CITP) is a professional designation for
those with broad range of technology knowledge and does not require a CPA.
True False
5. The Certified Information Systems Auditor (CISA) is a professional designation generally
sought by those performing IT audits.
True False
6. Information is defined as being data organized in a meaningful way to be useful to the user.
True False
,7. Data is defined as being information organized in a meaningful way to be useful to the user.
True False
8. A systems analyst analyzes a business problem that might be addressed by an information
system and recommends software or systems to address that problem.
True False
9. A value chain is defined as the flow of materials, information, payments, and services from
customer to supplier.
True False
10. Relevant information is that information that is free from bias and error.
True False
11. The characteristics of relevant information include predictive value, feedback value and
timeliness.
True False
12. The characteristics of reliable information are that the information is verifiable, without bias
and timely.
True False
13. Information overload is defined as the difficulty a person faces in understanding a problem
and making a decision as a consequence of too much information.
True False
14. The main financial benefit of Customer Relationship Management practices reduces the cost
of goods sold.
True False
,15. An efficient Enterprise System can significantly lower the cost of support processes included
in sales, general, and administrative expenses.
True False
16. An accounting information system (AIS) is defined as being an information system that
records, processes and reports on transactions to provide financial information for decision
making and control.
True False
17. An enterprise system is a centralized database that collects data from throughout the firm.
This includes data from orders, customers, sales, inventory and employees
True False
18. Outbound logistics are the activities associated with receiving and storing raw materials and
other partially completed materials, and distributing those materials to manufacturing when
and where they are needed.
True False
19. Service Activities as defined in the value chain are those activities that provide the support of
customers after the products and services are sold to them (e.g. warranty repairs, parts,
instruction manuals, etc.).
True False
20. A well-designed and well-functioning AIS can be expected to create value by providing
relevant information helpful to management to increase revenues and reduce expenses.
True False
21. Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is
an example of discretionary information.
True False
, 22. An enterprise system is primarily used to manage and nurture a firm's interactions with its
current and potential clients.
True False
23. The Sarbanes-Oxley Act of 2002 is a federal law in the United States that set new and
enhanced standards for all U.S. public companies, management and public accounting firms.
True False
24. CRM software often includes the use of database marketing tools to learn more about the
customers and to develop strong firm-to-customer relationships.
True False
25. The Certified Information Technology Professional is the position created by the AICPA to
recognize CPAs who have the ability to provide skilled professional services on Information
Technology.
True False
Multiple Choice Questions
26. Accounting information systems are:
A. Always computerized.
B. Report only accounting information.
C. Records, processes and reports
D. Are for computer games
