Accounting Information Systems, 12e (Romney/Steinbart)
Chapter 7 Control and Accounting Information Systems
1) What is one reason why AIS threats are increasing?
A) LANs and client/server systems are easier to control than centralized, mainframe systems.
B) Many companies do not realize that data security is crucial to their survival.
C) Computer control problems are often overestimated and overly emphasized by management.
D) Many companies believe that protecting information is a strategic requirement.
Answer: B
Page Ref: 184
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic
2) Which of the following is not one of the risk responses identified in the COSO Enterprise Risk
Management Framework?
A) Monitoring
B) Avoidance
C) Acceptance
D) Sharing
Answer: A
Page Ref: 193
Objective: Learning Objective 6
Difficulty : Easy
AACSB: Analytic
3) A control procedure designed so that the employee that records cash received from customers does
not also have access to the cash itself is an example of a(n)
A) preventive control.
B) detective control.
C) corrective control.
D) authorization control.
Answer: A
Page Ref: 185
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Reflective Thinking
1
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
,4) At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the
beginning ticket number is subtracted from the ending number to calculate the number of tickets sold.
Then, ticket stubs collected at the theater entrance are counted and compared with the number of tickets
sold. Which of the following situations does this control detect?
A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the
theater entrance (so the tickets didn't get torn.)
B) A group of kids snuck into the theater through a back door when customers left after a show.
C) The box office cashier accidentally gives too much change to a customer.
D) The ticket taker admits his friends without tickets.
Answer: A
Page Ref: 199-200
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Reflective Thinking
5) At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the
beginning ticket number is subtracted from the ending number to calculate the number of tickets sold.
Cash is counted and compared with the number of tickets sold. Which of the following situations does
this control detect?
A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the
theater entrance (so the tickets didn't get torn.)
B) A group of kids snuck into the theater through a back door when customers left after a show.
C) The box office cashier accidentally gives too much change to a customer.
D) The ticket taker admits his friends without tickets.
Answer: C
Page Ref: 199-200
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Reflective Thinking
6) Which of the following is an example of a preventive control?
A) approving customer credit prior to approving a sales order
B) reconciling the bank statement to the cash control account
C) counting inventory on hand and comparing counts to the perpetual inventory records
D) maintaining frequent backup records to prevent loss of data
Answer: A
Page Ref: 185
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Analytic
2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, 7) Independent checks on performance include all the following except
A) data input validation checks.
B) reconciling hash totals.
C) preparing a trial balance report.
D) supervisor review of journal entries and supporting documentation.
Answer: A
Page Ref: 200
Objective: Learning Objective 7
Difficulty : Easy
AACSB: Analytic
8) A computer operator is allowed to work as a programmer on a new payroll software project. Does this
create a potential internal control problem?
A) Yes, the computer operator could alter the payroll program to increase her salary.
B) Yes, this is a potential problem unless the computer operator is supervised by the payroll manager.
C) No, ideal segregation of duties is not usually possible, and operators are often the best at
programming changes and updates.
D) No, as long as the computer operator separately accounts for hours worked in programming and in
operations.
Answer: A
Page Ref: 198
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Analytic
9) One of the objectives of the segregation of duties is to
A) make sure that different people handle different parts of the same transaction.
B) ensure that no collusion will occur.
C) make sure that different people handle different transactions.
D) achieve an optimal division of labor for efficient operations.
Answer: A
Page Ref: 196
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Analytic
10) Pam is a receptionist for Dunderhead Paper Co., which has strict corporate policies on appropriate
use of corporate resources. The first week of August, Pam saw Michael, the branch manager, putting
pencils, pens, erasers, paper and other supplies into his briefcase on his way out the door. This situation
best reflects a weakness in which aspect of internal environment, as discussed in the COSO Enterprise
Risk Management Framework?
A) Integrity and ethical values
B) Risk management philosophy
C) Restrict access to assets
D) Methods of assigning authority and responsibility
Answer: A
Page Ref: 189
Objective: Learning Objective 3
Difficulty : Easy
AACSB: Analytic
3
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
Chapter 7 Control and Accounting Information Systems
1) What is one reason why AIS threats are increasing?
A) LANs and client/server systems are easier to control than centralized, mainframe systems.
B) Many companies do not realize that data security is crucial to their survival.
C) Computer control problems are often overestimated and overly emphasized by management.
D) Many companies believe that protecting information is a strategic requirement.
Answer: B
Page Ref: 184
Objective: Learning Objective 1
Difficulty : Easy
AACSB: Analytic
2) Which of the following is not one of the risk responses identified in the COSO Enterprise Risk
Management Framework?
A) Monitoring
B) Avoidance
C) Acceptance
D) Sharing
Answer: A
Page Ref: 193
Objective: Learning Objective 6
Difficulty : Easy
AACSB: Analytic
3) A control procedure designed so that the employee that records cash received from customers does
not also have access to the cash itself is an example of a(n)
A) preventive control.
B) detective control.
C) corrective control.
D) authorization control.
Answer: A
Page Ref: 185
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Reflective Thinking
1
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
,4) At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the
beginning ticket number is subtracted from the ending number to calculate the number of tickets sold.
Then, ticket stubs collected at the theater entrance are counted and compared with the number of tickets
sold. Which of the following situations does this control detect?
A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the
theater entrance (so the tickets didn't get torn.)
B) A group of kids snuck into the theater through a back door when customers left after a show.
C) The box office cashier accidentally gives too much change to a customer.
D) The ticket taker admits his friends without tickets.
Answer: A
Page Ref: 199-200
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Reflective Thinking
5) At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the
beginning ticket number is subtracted from the ending number to calculate the number of tickets sold.
Cash is counted and compared with the number of tickets sold. Which of the following situations does
this control detect?
A) Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the
theater entrance (so the tickets didn't get torn.)
B) A group of kids snuck into the theater through a back door when customers left after a show.
C) The box office cashier accidentally gives too much change to a customer.
D) The ticket taker admits his friends without tickets.
Answer: C
Page Ref: 199-200
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Reflective Thinking
6) Which of the following is an example of a preventive control?
A) approving customer credit prior to approving a sales order
B) reconciling the bank statement to the cash control account
C) counting inventory on hand and comparing counts to the perpetual inventory records
D) maintaining frequent backup records to prevent loss of data
Answer: A
Page Ref: 185
Objective: Learning Objective 1
Difficulty : Moderate
AACSB: Analytic
2
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
, 7) Independent checks on performance include all the following except
A) data input validation checks.
B) reconciling hash totals.
C) preparing a trial balance report.
D) supervisor review of journal entries and supporting documentation.
Answer: A
Page Ref: 200
Objective: Learning Objective 7
Difficulty : Easy
AACSB: Analytic
8) A computer operator is allowed to work as a programmer on a new payroll software project. Does this
create a potential internal control problem?
A) Yes, the computer operator could alter the payroll program to increase her salary.
B) Yes, this is a potential problem unless the computer operator is supervised by the payroll manager.
C) No, ideal segregation of duties is not usually possible, and operators are often the best at
programming changes and updates.
D) No, as long as the computer operator separately accounts for hours worked in programming and in
operations.
Answer: A
Page Ref: 198
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Analytic
9) One of the objectives of the segregation of duties is to
A) make sure that different people handle different parts of the same transaction.
B) ensure that no collusion will occur.
C) make sure that different people handle different transactions.
D) achieve an optimal division of labor for efficient operations.
Answer: A
Page Ref: 196
Objective: Learning Objective 7
Difficulty : Moderate
AACSB: Analytic
10) Pam is a receptionist for Dunderhead Paper Co., which has strict corporate policies on appropriate
use of corporate resources. The first week of August, Pam saw Michael, the branch manager, putting
pencils, pens, erasers, paper and other supplies into his briefcase on his way out the door. This situation
best reflects a weakness in which aspect of internal environment, as discussed in the COSO Enterprise
Risk Management Framework?
A) Integrity and ethical values
B) Risk management philosophy
C) Restrict access to assets
D) Methods of assigning authority and responsibility
Answer: A
Page Ref: 189
Objective: Learning Objective 3
Difficulty : Easy
AACSB: Analytic
3
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
