, Chapter 1
Accounting Information Systems: An Introduction
Answer Key
True / False Questions
1. Accounting and Finance is a primary activity in the value chain.
Answer: FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-04 Describe how business processes affect the firm’s value chain.
Topic: The Value Chain and Accounting Information Systems
2. Accounting Information Systems at this date are all computerized.
3. Business value includes all those items, events and interactions that determine the financial health and
well-being of the firm.
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.
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
5. The Certified Information Systems Auditor (CISA) is a professional designation generally sought by those
performing IT audits.
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
6. Information is defined as being data organized in a meaningful way that is useful to the user.
7. Data is defined as being information organized in a meaningful way that is useful to the user.
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.
9. A value chain is defined as the flow of materials, information, payments, and services from customer to
supplier.
10. Relevant information is that information that is free from bias and error.
11. The characteristics of relevant information include predictive value, feedback value and timeliness.
12. The characteristics of reliable information are that the information is verifiable, without bias and timely.
13. Information overload is defined as the difficulty a person faces in understanding a problem and making
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, a decision as a consequence of too much information.
14. The main financial benefit of Customer Relationship Management practices reduces the cost of goods
sold.
Answer: FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Topic: AIS, Firm Profitability, and Stock Prices
15. An efficient Enterprise System can significantly lower the cost of support processes included in sales,
general, and administrative expenses.
16. An accounting information system (AIS) is defined as being an information system that records,
processes and reports on transactions to provide financial and nonfinancial information for decision
making and control.
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.
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.
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.).
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.
21. Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is an
example of discretionary information.
22. An enterprise system is primarily used to manage and nurture a firm’s interactions with its current and
potential clients.
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, their management and public accounting firms.
Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
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.
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-07 Assess how AIS facilitates the firm’s external business processes.
Topic: AIS and External Business Processes
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.
Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems.
Topic: Data versus Information
Multiple Choice Questions
26. Accounting information systems:
a. Are always computerized.
b. Report only accounting information.
c. Include records, processes and reports.
Learning Objective: 01-01 Define an accounting information system and explain characteristics of useful information.
Topic: Definition of Accounting Information Systems
Learning Objective: 01-01 Define an accounting information system and explain characteristics of useful information.
Topic: Attributes of Useful Information
28. Which of the following are considered to be mandatory information required by a regulatory body?
a. Financial reports for the Securities and Exchange Commission
b. The amount of taxes saved by a merger
c. The total dollar value of fireworks that are sold on July 4
d. The cost to build an all-new Starbucks restaurant in Abu Dhabi
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-02 Distinguish between data, information and an information system.
Topic: Data versus Information
Learning Objective: 01-04 Describe how business processes affect the firm’s value chain.
Topic: The Value Chain and Accounting Information Systems
30. Which designation would be most appropriate for those professionals possessing IT audit, control and
security skills?
a. Certified Internal Auditor (CIA)
b. Certified Public Accountant (CPA)
c. Certified Information Technology Professional (CITP)
d. Certified Information Systems Auditors (CISA)
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems.
Topic:
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use.Role
Notof Accountants
authorized in Accounting
for sale Information
or distribution Systems
in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Accounting Information Systems: An Introduction
Answer Key
True / False Questions
1. Accounting and Finance is a primary activity in the value chain.
Answer: FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-04 Describe how business processes affect the firm’s value chain.
Topic: The Value Chain and Accounting Information Systems
2. Accounting Information Systems at this date are all computerized.
3. Business value includes all those items, events and interactions that determine the financial health and
well-being of the firm.
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.
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
5. The Certified Information Systems Auditor (CISA) is a professional designation generally sought by those
performing IT audits.
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
6. Information is defined as being data organized in a meaningful way that is useful to the user.
7. Data is defined as being information organized in a meaningful way that is useful to the user.
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.
9. A value chain is defined as the flow of materials, information, payments, and services from customer to
supplier.
10. Relevant information is that information that is free from bias and error.
11. The characteristics of relevant information include predictive value, feedback value and timeliness.
12. The characteristics of reliable information are that the information is verifiable, without bias and timely.
13. Information overload is defined as the difficulty a person faces in understanding a problem and making
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, a decision as a consequence of too much information.
14. The main financial benefit of Customer Relationship Management practices reduces the cost of goods
sold.
Answer: FALSE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-08 Assess the impact of AIS on firm profitability and stock prices.
Topic: AIS, Firm Profitability, and Stock Prices
15. An efficient Enterprise System can significantly lower the cost of support processes included in sales,
general, and administrative expenses.
16. An accounting information system (AIS) is defined as being an information system that records,
processes and reports on transactions to provide financial and nonfinancial information for decision
making and control.
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.
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.
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.).
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.
21. Production of a 1040 tax form from the AIS to be delivered to the Internal Revenue Service is an
example of discretionary information.
22. An enterprise system is primarily used to manage and nurture a firm’s interactions with its current and
potential clients.
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, their management and public accounting firms.
Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems
Topic: Role of Accountants in Accounting Information Systems
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.
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
, Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-07 Assess how AIS facilitates the firm’s external business processes.
Topic: AIS and External Business Processes
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.
Answer: TRUE
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems.
Topic: Data versus Information
Multiple Choice Questions
26. Accounting information systems:
a. Are always computerized.
b. Report only accounting information.
c. Include records, processes and reports.
Learning Objective: 01-01 Define an accounting information system and explain characteristics of useful information.
Topic: Definition of Accounting Information Systems
Learning Objective: 01-01 Define an accounting information system and explain characteristics of useful information.
Topic: Attributes of Useful Information
28. Which of the following are considered to be mandatory information required by a regulatory body?
a. Financial reports for the Securities and Exchange Commission
b. The amount of taxes saved by a merger
c. The total dollar value of fireworks that are sold on July 4
d. The cost to build an all-new Starbucks restaurant in Abu Dhabi
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-02 Distinguish between data, information and an information system.
Topic: Data versus Information
Learning Objective: 01-04 Describe how business processes affect the firm’s value chain.
Topic: The Value Chain and Accounting Information Systems
30. Which designation would be most appropriate for those professionals possessing IT audit, control and
security skills?
a. Certified Internal Auditor (CIA)
b. Certified Public Accountant (CPA)
c. Certified Information Technology Professional (CITP)
d. Certified Information Systems Auditors (CISA)
AACSB: Reflective Thinking
AICPA BB: Industry
AICPA FN: Decision Making
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 01-03 Distinguish the roles of accountants in providing information and explain certifications related to accounting information
systems.
Topic:
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use.Role
Notof Accountants
authorized in Accounting
for sale Information
or distribution Systems
in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
