, ACCOUNTING INFORMATION SYSTEMS (RICHARDSON 2ND EDITION)
Chapter 1 Accounting Information Systems and Firm Value
1) Accounting and Finance is a primary activity in the value chain.
Answer: FALSE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
2) Accounting Information Systems at this date are all computerized.
Answer: FALSE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
3) Business value includes all those items, events and interactions that determine the financial health
and well-being of the firm.
Answer: TRUE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
4) The Certified Information Technology Professional (CITP) is a professional designation for those
with a broad range of technology knowledge and does not require a CPA.
Answer: FALSE
Diff: 1
Topic: Role of Accountants in Accounting Information Systems
Learning Objective: 01-03 Distinguish the roles of accountants in providing information, and explain certifications
related to accounting information systems.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
5) The Certified Information Systems Auditor (CISA) is a professional designation generally sought
by those performing IT audits.
Answer: TRUE
Diff: 1
Topic: Role of Accountants in Accounting Information Systems
Learning Objective: 01-03 Distinguish the roles of accountants in providing information, and explain certifications
related to accounting information systems.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 1
, ACCOUNTING INFORMATION SYSTEMS (RICHARDSON 2ND EDITION)
6) Information is defined as being data organized in a meaningful way that is useful to the user.
Answer: TRUE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
7) Data is defined as being information organized in a meaningful way that is useful to the user.
Answer: FALSE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
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.
Answer: TRUE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
9) A value chain is defined as the flow of materials, information, payments, and services from
customer to supplier.
Answer: FALSE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
10) Relevant information is that information that is free from bias and error.
Answer: FALSE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 2
, ACCOUNTING INFORMATION SYSTEMS (RICHARDSON 2ND EDITION)
11) The characteristics of relevant information include predictive value, feedback value and timeliness.
Answer: TRUE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
12) The characteristics of reliable information are that the information is verifiable, without bias and
timely.
Answer: FALSE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
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.
Answer: TRUE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
14) The main financial benefit of Customer Relationship Management practices reduces the cost of
goods sold.
Answer: FALSE
Diff: 1
Topic: AIS, Firm Profitability, and Stock Prices
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
15) An efficient Enterprise System can significantly lower the cost of support processes included in
sales, general, and administrative expenses.
Answer: TRUE
Diff: 1
Topic: AIS, Firm Profitability, and Stock Prices
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 3
Chapter 1 Accounting Information Systems and Firm Value
1) Accounting and Finance is a primary activity in the value chain.
Answer: FALSE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
2) Accounting Information Systems at this date are all computerized.
Answer: FALSE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
3) Business value includes all those items, events and interactions that determine the financial health
and well-being of the firm.
Answer: TRUE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
4) The Certified Information Technology Professional (CITP) is a professional designation for those
with a broad range of technology knowledge and does not require a CPA.
Answer: FALSE
Diff: 1
Topic: Role of Accountants in Accounting Information Systems
Learning Objective: 01-03 Distinguish the roles of accountants in providing information, and explain certifications
related to accounting information systems.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
5) The Certified Information Systems Auditor (CISA) is a professional designation generally sought
by those performing IT audits.
Answer: TRUE
Diff: 1
Topic: Role of Accountants in Accounting Information Systems
Learning Objective: 01-03 Distinguish the roles of accountants in providing information, and explain certifications
related to accounting information systems.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 1
, ACCOUNTING INFORMATION SYSTEMS (RICHARDSON 2ND EDITION)
6) Information is defined as being data organized in a meaningful way that is useful to the user.
Answer: TRUE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
7) Data is defined as being information organized in a meaningful way that is useful to the user.
Answer: FALSE
Diff: 1
Topic: Data versus Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
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.
Answer: TRUE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
9) A value chain is defined as the flow of materials, information, payments, and services from
customer to supplier.
Answer: FALSE
Diff: 1
Topic: The Value Chain and Accounting Information Systems
Learning Objective: 01-04 Describe how business processes affect the firm's value chain.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
10) Relevant information is that information that is free from bias and error.
Answer: FALSE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 2
, ACCOUNTING INFORMATION SYSTEMS (RICHARDSON 2ND EDITION)
11) The characteristics of relevant information include predictive value, feedback value and timeliness.
Answer: TRUE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
12) The characteristics of reliable information are that the information is verifiable, without bias and
timely.
Answer: FALSE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-01 Define an accounting information system, and explain characteristics of useful information.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
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.
Answer: TRUE
Diff: 1
Topic: Definition of Accounting Information Systems; Attributes of Useful Information
Learning Objective: 01-02 Distinguish among data, information, and an information system.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
14) The main financial benefit of Customer Relationship Management practices reduces the cost of
goods sold.
Answer: FALSE
Diff: 1
Topic: AIS, Firm Profitability, and Stock Prices
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
15) An efficient Enterprise System can significantly lower the cost of support processes included in
sales, general, and administrative expenses.
Answer: TRUE
Diff: 1
Topic: AIS, Firm Profitability, and Stock Prices
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Bloom's: Remember
AACSB: Reflective Thinking
AICPA: BB Industry; FN Decision Making
Page 3
