Test Bank Complete_
Accounting Information Systems 3rd Edition, (2020)
By Vernon Richardson, Chengyee Janie Chang & Rod E. Smith
All Chapters 1-18| 5 Units| Latest Version With Verified Answers| Rated A+
From: [Bestmaxsolutions.stuvia
,PART ONE: AIS AND THE BUSINESS _______________________________________________ 3
Chapter 1: Accounting Information Systems And Firm Value _______________________________ 3
Chapter 2: Accountants as Business Analysts ___________________________________________ 37
Chapter 3: Data Modeling __________________________________________________________ 60
Chapter 4: Relational Databases and Enterprise Systems _________________________________ 86
PART TWO: BUSINESS PROCESSES ______________________________________________ 113
Chapter 5: Sales and Collections Business Process ______________________________________ 113
Chapter 6: Purchases and Payments Business Process ___________________________________ 136
Chapter 7: Conversion Business Process ______________________________________________ 168
Chapter 8: Integrated Project ______________________________________________________ 193
Chapter 9: Reporting Processes and eXtensible Business Reporting Language (XBRL) __________ 203
PART THREE: DATA ANALYTICS AND EMERGING TECHNOLOGIES IN AIS _______________ 226
Chapter 10: Data Analytics in Accounting: Concepts and the AMPS Model __________________ 226
Chapter 11: Data Analytics in Accounting: Tools and Practice _____________________________ 241
Chapter 12: Emerging Technologies: Blockchain and AI Automation _______________________ 255
PART FOUR: MANAGING AND EVALUATING AIS __________________________________ 271
Chapter 13: Accounting Information Systems and Internal Controls________________________ 271
Chapter 14: Information Security and Computer Fraud __________________________________ 297
Chapter 15: Monitoring and Auditing AIS _____________________________________________ 322
PART FIVE: OPTIONAL AIS TOPICS ______________________________________________ 350
Chapter 16:The Balanced Scorecard, Business Model Canvas, and Business Value of Information
Technology _____________________________________________________________________ 350
Chapter 17: Evaluating AIS Investments ______________________________________________ 370
Chapter 18: Systems Development and Project Management for AIS_______________________ 386
,PART ONE: AIS AND THE BUSINESS
Chapter 1: Accounting Information Systems And Firm Value
Vernon Richardson: Accounting Information Systems 3rd Edition, (2020) Test Bank
1) After A College Football Game, A Box Score Is Produced Detailing The Number Of
Yards Passing And Running, Receptions Made And The Number Of Interceptions And
Fumbles Lost (Among Other Statistics). Using The Characteristics Of Useful Information
(Including Relevance And Reliability), Please Explain How This Box Score Meets (Or
Does Not Meet) The Characteristics Of Useful Information. How Would The Football
Coach Use This Information To Prepare For The Next Game, Decide Which Players To
Start, Etc.?
(Answer May Vary)
ANSWER: The Box Score Is Relevant And Reliable As It Provides Detailed Statistics
About Individual And Team Performances, Which Directly Influence Game Outcomes. It
Is Relevant Because The Coach Can Identify Key Areas Such As Offensive Efficiency
(Passing/Running Yards), Defensive Performance (Interceptions), And Ball Security
(Fumbles Lost). It's Reliable If The Data Is Accurate And Consistently Recorded. This
Helps The Coach Analyze The Strengths And Weaknesses Of Players Or Strategies. For
Example, If A Quarterback Throws Many Interceptions, The Coach Might Focus On
Improving Decision-Making. If A Running Back Has A High Number Of Yards, They
Might Start That Player Again. Thus, The Coach Can Use This Information To Adjust
Strategies And Player Selection For The Next Game.
2) List And Explain Three Ways That AIS Affects The Income Statement And The
Firm’s Profitability.
(Answer May Vary)
ANSWER:
,Revenue Recognition: An Accounting Information System (AIS) Ensures That Sales
Revenue Is Accurately Recorded, Helping To Recognize Revenue In The Correct Period.
This Affects Profitability By Accurately Reflecting The Company’s Income.
Expense Tracking: AIS Helps Track Expenses Related To Production, Labor, And
Overhead, Ensuring That Costs Are Accurately Captured. Proper Expense Management
Can Help Improve Profitability By Identifying Areas For Cost-Cutting Or Inefficiencies.
Inventory Management: AIS Allows For Better Inventory Tracking, Which Helps In
Avoiding Overstocking Or Stockouts. Managing Inventory Efficiently Reduces Waste,
Optimizes Working Capital, And Ultimately Increases Profitability.
3) Some Would Argue That The Role Of Accounting Is Simply As An Information
Provider. Others Suggest That Accountants Serve The Role Of Business Analyst. Which
Role Produces More Value For A Company Like Starbucks? In The Area Of Accounting
Information Systems, What Specifically Can The Accountant Do To Serve As A
Business Analyst To Help Address Business Opportunities?
(Answer May Vary)
ANSWER: The Role Of A Business Analyst Produces More Value For A Company Like
Starbucks. While Providing Financial Information Is Crucial, Analyzing That Data
Allows The Company To Make Strategic Decisions. An Accountant, Using AIS, Can
Analyze Customer Purchasing Patterns, Inventory Turnover, And Cost Structures To
Identify Opportunities For Product Expansion Or Cost-Saving Measures. For Instance,
Using Sales Data, An Accountant Could Identify Which Menu Items Are
Underperforming And Recommend Adjustments To The Pricing Or Promotion Strategy.
4) Explain The Types Of Discretionary Information A Company Like Google Would
Collect From Its Accounting Information System.
(Answer May Vary)
,ANSWER: Discretionary Information Refers To Non-Mandatory Data Collected Beyond
Regulatory Requirements. For Google, This May Include Detailed Customer
Segmentation Data, Such As Browsing Habits, Advertising Clicks, And Engagement
Rates With Various Google Services. They Might Also Track Advertising Revenue Per
User And Monitor Trends In Specific User Demographics. This Information Can Be
Used For Targeted Advertising, Improving User Experience, And Strategic Decision-
Making, Such As Exploring New Market Segments Or Adjusting Ad Pricing Models.
5) Why Would The Transform IT Strategic Role Be More Impactful On Stock Price Than
The Automate IT Strategic Role?
(Answer May Vary)
ANSWER: The Transform IT Strategic Role Has A Higher Potential To Impact Stock
Prices Because It Drives Innovation, Creates New Business Models, And Enhances
Customer Experiences. For Example, Transforming How A Company Operates By
Leveraging Cutting-Edge Technologies Can Differentiate It In The Marketplace,
Increasing Revenue Potential. On The Other Hand, The Automate IT Strategic Role
Focuses On Efficiency Gains By Automating Processes, Which May Reduce Costs But
Does Not Necessarily Drive Revenue Growth Or Innovation, Thus Having A Less Direct
Impact On Stock Price.
6) Stephen Gillett, Starbucks CIO, Argues That His Most Crucial Duty Is To Enhance
Starbucks’ Ability To Mine Its Customer Data To Help “Reignite Our Passion With Our
Customers.” Starbucks Used Loyalty Cards (Starbucks’ Reward Cards) And Surveys To
Track Its Customers’ Purchases And Build Profiles Of Their Customers As Mentioned In
The Opening Chapter Vignette. Why Is This A Good Example Of Customer Relationship
Management (CRM)?
(Answer May Vary)
ANSWER: This Is A Good Example Of CRM Because Starbucks Is Using Customer
Data (From Loyalty Cards And Surveys) To Build Detailed Profiles Of Its Customers
,And Tailor Their Experiences Accordingly. By Analyzing Purchase Behavior And
Preferences, Starbucks Can Offer Personalized Rewards, Promotions, And Marketing,
Which Fosters Deeper Customer Loyalty And Satisfaction. This Strategy Also Enables
Starbucks To Better Understand Customer Needs And Improve Its Offerings, Which Is
Central To CRM.
7) Michael Dell Of Dell Computer Explained: "We Tell Our Suppliers Exactly What Our
Daily Production Requirements Are So It Is Not, "Well, Every Two Weeks Deliver 5,000
To This Warehouse, And We'll Put Them On The Shelf, And Then We'll Take Them Off
The Shelf." It Is, "Tomorrow Morning We Need 8,562, And Deliver Them To Door
Number Seven By 7 Am." How Does The Supply Chain Management Software Allow
This To Happen? And How Does It Save Dell Money?
(Answer May Vary)
ANSWER: The Supply Chain Management Software Enables Dell To Communicate
Real-Time, Accurate, And Precise Demand Forecasts To Suppliers, Which Helps Ensure
Timely Delivery Of Components As Needed. By Eliminating Excess Inventory And
Ensuring That Parts Are Delivered Just In Time, Dell Reduces Warehousing Costs And
The Risk Of Obsolete Inventory. This Results In Cost Savings And Efficient Cash Flow
Management, Contributing To Improved Profitability.
8) Amazon.Com Is One Of The Best At Fostering Its Interaction With Their Customers
By Keeping A Record Of Their Past Purchases And Product Searches And Using That
Information To Recommend Other Similar Products For The Customer To Consider.
How Can They Use That Information To Help Them In Their Marketing Efforts?
(Answer May Vary)
ANSWER: Amazon Uses Past Purchase And Search Data To Segment Customers And
Personalize Marketing Efforts. By Recommending Products Based On Customer History,
Amazon Increases The Likelihood Of A Purchase. This Data-Driven Approach Helps
Improve Conversion Rates, Enhances Customer Satisfaction, And Encourages Repeat
,Business. It Also Allows Amazon To Target Specific Advertisements, Promotions, And
Even Seasonal Discounts To Increase Sales And Customer Loyalty.
9) The Certified Information Systems Auditors (CISA) Designation Identifies Those
Professionals Possessing IT Audit, Control, And Security Skills. How Do You Think A
Professional Designation Is Helpful For IT Auditors?
(Answer May Vary)
ANSWER: The CISA Designation Ensures That IT Auditors Possess The Necessary
Expertise In Auditing Information Systems, Controls, And Security. It Provides
Assurance To Organizations That The Auditor Has The Skills To Identify Risks, Ensure
Compliance With Regulations, And Evaluate The Integrity Of IT Systems. This Is
Crucial In Protecting Sensitive Data, Maintaining System Reliability, And Minimizing
Cybersecurity Threats, Which Ultimately Helps Organizations Build Trust With Clients
And Stakeholders.
10) The American Institute Of Certified Public Accountants (AICPA) And International
Federation Of Accountants (IFAC) Assume That, At A Minimum, All Accountants Will
Be Proficient In The AIS User Role And At Least One Other Role Listed Above
(Manager Or Designer Or Evaluator). Why Would The AICPA And IFAC Expect This
Proficiency?
(Answer May Vary)
ANSWER: The AICPA And IFAC Expect Proficiency In These Areas Because
Accounting Is Increasingly Intertwined With Technology, And Accountants Need To
Understand Not Just How To Use AIS, But How To Manage, Design, Or Evaluate It To
Ensure Its Effectiveness. This Proficiency Enables Accountants To Make Informed
Decisions, Improve Internal Controls, Enhance Data Integrity, And Better Serve Their
Organizations By Leveraging AIS For Strategic Decision-Making.
,11) The International Federation Of Accountants Says: “IT Has Grown (And Will
Continue To Grow) In Importance At Such A Rapid Pace And With Such Far-Reaching
Effects That It Can No Longer Be Considered A Discipline Peripheral To Accounting.
Rather, Professional Accounting Has Merged And Developed With IT To Such An
Extent That One Can Hardly Conceive Of Accounting Independent From IT.” In Your
Opinion, Why Is Accounting Now Interdependent With IT?
(Answer May Vary)
ANSWER: Accounting And IT Have Become Interdependent Because Technology
Drives Efficiency, Accuracy, And The Ability To Analyze Large Volumes Of Data. IT
Systems Enable Real-Time Financial Reporting, Automate Routine Tasks, And Provide
Better Insights Into Business Performance. As Financial Data Becomes More Complex
And Organizations Grow, IT Systems Are Integral To Managing, Storing, And Analyzing
That Data. Without IT, Modern Accounting Would Be Slow, Error-Prone, And Less
Effective In Supporting Decision-Making.
12) Wal-Mart’s Retail Link Database Is One Of The World’s Largest Databases And
Allows Many Of Their Suppliers To View Real-Time Sales Data Of Their Products For
Each Store. This Allows Suppliers To Assess The Demand For Their Products And To
Optimize Their Own Level Of Inventory And Related Logistics Costs. How Is This Cost
Savings Ultimately Passed On To Wal-Mart And Its Customers?
(Answer May Vary)
ANSWER: By Giving Suppliers Real-Time Sales Data, Wal-Mart Allows Them To
Optimize Their Inventory And Reduce Costs Related To Overstocking Or Understocking.
This Reduces Wal-Mart’s Supply Chain Costs And Allows Them To Negotiate Better
Pricing With Suppliers. These Cost Savings Are Passed On To Customers In The Form
Of Lower Prices, Which Strengthens Wal-Mart's Competitive Advantage.
13) Business Value Is Defined As All Items, Events, And Interactions That Determine
The Financial Health And Well-Being Of The Firm. This Value May Come From
,Suppliers, Customers, Or Employees Or Even Information Systems. How Would A Not-
For-Profit Group Like The International Red Cross Define Business Value For Its Group?
(Answer May Vary)
ANSWER: For A Not-For-Profit Like The International Red Cross, Business Value
Would Be Defined In Terms Of Its Impact And Effectiveness In Fulfilling Its Mission,
Such As Delivering Aid, Reducing Disaster Relief Costs, Or Increasing Donor
Engagement. The Value Would Not Be Measured Solely By Financial Profit But By How
Efficiently And Effectively It Serves Its Beneficiaries, Maintains Financial Sustainability,
And Fosters Trust With Donors And The Public.
14) Google Is Known For Gathering Large Quantities Of Data On Its Users. Describe
What Types Of Data May Be Gathered On A User And How That Data Is Transformed
Into Useful Information. Include In Your Answer Why The Information May Be Useful
To Google.
(Answer May Vary)
ANSWER: Google Collects Data Such As Search History, Location, Browsing
Behavior, Device Usage, And Interactions With Advertisements. This Data Is Processed
And Analyzed To Create User Profiles And Identify Patterns In Behavior. The
Information Is Useful For Google To Serve Personalized Ads, Improve Search
Algorithms, And Optimize User Experience Across Its Products. By Understanding
Users' Preferences, Google Can Increase User Engagement, Enhance Ad Targeting, And
Maximize Revenue From Advertisers.
15) Accounting Information Systems:
A) Are Always Computerized.
B) Report Only Accounting Information.
C) Include Records, Processes, And Reports.
D) Are For Computer Games.
, ANSWER: C
Accounting Information Systems (AIS) Are Comprehensive Systems That Include Not
Only Computerized Records But Also Processes And Reports That Assist In Accounting
Functions. They Capture Financial Data, Process It, And Provide Relevant Reports To
Stakeholders. They Are Not Limited To Accounting Information Only Nor Are They
Related To Computer Games.
16) Which Of The Following Is Not An Attribute Of Useful Information?
A) Bias.
B) Feedback Value.
C) Predictive Value.
D) Verifiability.
ANSWER: A
Bias Is Not An Attribute Of Useful Information. In Fact, Useful Information Must Be
Objective And Free From Bias To Ensure That Decisions Made Based On That
Information Are Sound. The Other Options—Feedback Value, Predictive Value, And
Verifiability—Are Characteristics That Make Information Useful In Decision-Making.
17) 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.
ANSWER: A
Accounting Information Systems 3rd Edition, (2020)
By Vernon Richardson, Chengyee Janie Chang & Rod E. Smith
All Chapters 1-18| 5 Units| Latest Version With Verified Answers| Rated A+
From: [Bestmaxsolutions.stuvia
,PART ONE: AIS AND THE BUSINESS _______________________________________________ 3
Chapter 1: Accounting Information Systems And Firm Value _______________________________ 3
Chapter 2: Accountants as Business Analysts ___________________________________________ 37
Chapter 3: Data Modeling __________________________________________________________ 60
Chapter 4: Relational Databases and Enterprise Systems _________________________________ 86
PART TWO: BUSINESS PROCESSES ______________________________________________ 113
Chapter 5: Sales and Collections Business Process ______________________________________ 113
Chapter 6: Purchases and Payments Business Process ___________________________________ 136
Chapter 7: Conversion Business Process ______________________________________________ 168
Chapter 8: Integrated Project ______________________________________________________ 193
Chapter 9: Reporting Processes and eXtensible Business Reporting Language (XBRL) __________ 203
PART THREE: DATA ANALYTICS AND EMERGING TECHNOLOGIES IN AIS _______________ 226
Chapter 10: Data Analytics in Accounting: Concepts and the AMPS Model __________________ 226
Chapter 11: Data Analytics in Accounting: Tools and Practice _____________________________ 241
Chapter 12: Emerging Technologies: Blockchain and AI Automation _______________________ 255
PART FOUR: MANAGING AND EVALUATING AIS __________________________________ 271
Chapter 13: Accounting Information Systems and Internal Controls________________________ 271
Chapter 14: Information Security and Computer Fraud __________________________________ 297
Chapter 15: Monitoring and Auditing AIS _____________________________________________ 322
PART FIVE: OPTIONAL AIS TOPICS ______________________________________________ 350
Chapter 16:The Balanced Scorecard, Business Model Canvas, and Business Value of Information
Technology _____________________________________________________________________ 350
Chapter 17: Evaluating AIS Investments ______________________________________________ 370
Chapter 18: Systems Development and Project Management for AIS_______________________ 386
,PART ONE: AIS AND THE BUSINESS
Chapter 1: Accounting Information Systems And Firm Value
Vernon Richardson: Accounting Information Systems 3rd Edition, (2020) Test Bank
1) After A College Football Game, A Box Score Is Produced Detailing The Number Of
Yards Passing And Running, Receptions Made And The Number Of Interceptions And
Fumbles Lost (Among Other Statistics). Using The Characteristics Of Useful Information
(Including Relevance And Reliability), Please Explain How This Box Score Meets (Or
Does Not Meet) The Characteristics Of Useful Information. How Would The Football
Coach Use This Information To Prepare For The Next Game, Decide Which Players To
Start, Etc.?
(Answer May Vary)
ANSWER: The Box Score Is Relevant And Reliable As It Provides Detailed Statistics
About Individual And Team Performances, Which Directly Influence Game Outcomes. It
Is Relevant Because The Coach Can Identify Key Areas Such As Offensive Efficiency
(Passing/Running Yards), Defensive Performance (Interceptions), And Ball Security
(Fumbles Lost). It's Reliable If The Data Is Accurate And Consistently Recorded. This
Helps The Coach Analyze The Strengths And Weaknesses Of Players Or Strategies. For
Example, If A Quarterback Throws Many Interceptions, The Coach Might Focus On
Improving Decision-Making. If A Running Back Has A High Number Of Yards, They
Might Start That Player Again. Thus, The Coach Can Use This Information To Adjust
Strategies And Player Selection For The Next Game.
2) List And Explain Three Ways That AIS Affects The Income Statement And The
Firm’s Profitability.
(Answer May Vary)
ANSWER:
,Revenue Recognition: An Accounting Information System (AIS) Ensures That Sales
Revenue Is Accurately Recorded, Helping To Recognize Revenue In The Correct Period.
This Affects Profitability By Accurately Reflecting The Company’s Income.
Expense Tracking: AIS Helps Track Expenses Related To Production, Labor, And
Overhead, Ensuring That Costs Are Accurately Captured. Proper Expense Management
Can Help Improve Profitability By Identifying Areas For Cost-Cutting Or Inefficiencies.
Inventory Management: AIS Allows For Better Inventory Tracking, Which Helps In
Avoiding Overstocking Or Stockouts. Managing Inventory Efficiently Reduces Waste,
Optimizes Working Capital, And Ultimately Increases Profitability.
3) Some Would Argue That The Role Of Accounting Is Simply As An Information
Provider. Others Suggest That Accountants Serve The Role Of Business Analyst. Which
Role Produces More Value For A Company Like Starbucks? In The Area Of Accounting
Information Systems, What Specifically Can The Accountant Do To Serve As A
Business Analyst To Help Address Business Opportunities?
(Answer May Vary)
ANSWER: The Role Of A Business Analyst Produces More Value For A Company Like
Starbucks. While Providing Financial Information Is Crucial, Analyzing That Data
Allows The Company To Make Strategic Decisions. An Accountant, Using AIS, Can
Analyze Customer Purchasing Patterns, Inventory Turnover, And Cost Structures To
Identify Opportunities For Product Expansion Or Cost-Saving Measures. For Instance,
Using Sales Data, An Accountant Could Identify Which Menu Items Are
Underperforming And Recommend Adjustments To The Pricing Or Promotion Strategy.
4) Explain The Types Of Discretionary Information A Company Like Google Would
Collect From Its Accounting Information System.
(Answer May Vary)
,ANSWER: Discretionary Information Refers To Non-Mandatory Data Collected Beyond
Regulatory Requirements. For Google, This May Include Detailed Customer
Segmentation Data, Such As Browsing Habits, Advertising Clicks, And Engagement
Rates With Various Google Services. They Might Also Track Advertising Revenue Per
User And Monitor Trends In Specific User Demographics. This Information Can Be
Used For Targeted Advertising, Improving User Experience, And Strategic Decision-
Making, Such As Exploring New Market Segments Or Adjusting Ad Pricing Models.
5) Why Would The Transform IT Strategic Role Be More Impactful On Stock Price Than
The Automate IT Strategic Role?
(Answer May Vary)
ANSWER: The Transform IT Strategic Role Has A Higher Potential To Impact Stock
Prices Because It Drives Innovation, Creates New Business Models, And Enhances
Customer Experiences. For Example, Transforming How A Company Operates By
Leveraging Cutting-Edge Technologies Can Differentiate It In The Marketplace,
Increasing Revenue Potential. On The Other Hand, The Automate IT Strategic Role
Focuses On Efficiency Gains By Automating Processes, Which May Reduce Costs But
Does Not Necessarily Drive Revenue Growth Or Innovation, Thus Having A Less Direct
Impact On Stock Price.
6) Stephen Gillett, Starbucks CIO, Argues That His Most Crucial Duty Is To Enhance
Starbucks’ Ability To Mine Its Customer Data To Help “Reignite Our Passion With Our
Customers.” Starbucks Used Loyalty Cards (Starbucks’ Reward Cards) And Surveys To
Track Its Customers’ Purchases And Build Profiles Of Their Customers As Mentioned In
The Opening Chapter Vignette. Why Is This A Good Example Of Customer Relationship
Management (CRM)?
(Answer May Vary)
ANSWER: This Is A Good Example Of CRM Because Starbucks Is Using Customer
Data (From Loyalty Cards And Surveys) To Build Detailed Profiles Of Its Customers
,And Tailor Their Experiences Accordingly. By Analyzing Purchase Behavior And
Preferences, Starbucks Can Offer Personalized Rewards, Promotions, And Marketing,
Which Fosters Deeper Customer Loyalty And Satisfaction. This Strategy Also Enables
Starbucks To Better Understand Customer Needs And Improve Its Offerings, Which Is
Central To CRM.
7) Michael Dell Of Dell Computer Explained: "We Tell Our Suppliers Exactly What Our
Daily Production Requirements Are So It Is Not, "Well, Every Two Weeks Deliver 5,000
To This Warehouse, And We'll Put Them On The Shelf, And Then We'll Take Them Off
The Shelf." It Is, "Tomorrow Morning We Need 8,562, And Deliver Them To Door
Number Seven By 7 Am." How Does The Supply Chain Management Software Allow
This To Happen? And How Does It Save Dell Money?
(Answer May Vary)
ANSWER: The Supply Chain Management Software Enables Dell To Communicate
Real-Time, Accurate, And Precise Demand Forecasts To Suppliers, Which Helps Ensure
Timely Delivery Of Components As Needed. By Eliminating Excess Inventory And
Ensuring That Parts Are Delivered Just In Time, Dell Reduces Warehousing Costs And
The Risk Of Obsolete Inventory. This Results In Cost Savings And Efficient Cash Flow
Management, Contributing To Improved Profitability.
8) Amazon.Com Is One Of The Best At Fostering Its Interaction With Their Customers
By Keeping A Record Of Their Past Purchases And Product Searches And Using That
Information To Recommend Other Similar Products For The Customer To Consider.
How Can They Use That Information To Help Them In Their Marketing Efforts?
(Answer May Vary)
ANSWER: Amazon Uses Past Purchase And Search Data To Segment Customers And
Personalize Marketing Efforts. By Recommending Products Based On Customer History,
Amazon Increases The Likelihood Of A Purchase. This Data-Driven Approach Helps
Improve Conversion Rates, Enhances Customer Satisfaction, And Encourages Repeat
,Business. It Also Allows Amazon To Target Specific Advertisements, Promotions, And
Even Seasonal Discounts To Increase Sales And Customer Loyalty.
9) The Certified Information Systems Auditors (CISA) Designation Identifies Those
Professionals Possessing IT Audit, Control, And Security Skills. How Do You Think A
Professional Designation Is Helpful For IT Auditors?
(Answer May Vary)
ANSWER: The CISA Designation Ensures That IT Auditors Possess The Necessary
Expertise In Auditing Information Systems, Controls, And Security. It Provides
Assurance To Organizations That The Auditor Has The Skills To Identify Risks, Ensure
Compliance With Regulations, And Evaluate The Integrity Of IT Systems. This Is
Crucial In Protecting Sensitive Data, Maintaining System Reliability, And Minimizing
Cybersecurity Threats, Which Ultimately Helps Organizations Build Trust With Clients
And Stakeholders.
10) The American Institute Of Certified Public Accountants (AICPA) And International
Federation Of Accountants (IFAC) Assume That, At A Minimum, All Accountants Will
Be Proficient In The AIS User Role And At Least One Other Role Listed Above
(Manager Or Designer Or Evaluator). Why Would The AICPA And IFAC Expect This
Proficiency?
(Answer May Vary)
ANSWER: The AICPA And IFAC Expect Proficiency In These Areas Because
Accounting Is Increasingly Intertwined With Technology, And Accountants Need To
Understand Not Just How To Use AIS, But How To Manage, Design, Or Evaluate It To
Ensure Its Effectiveness. This Proficiency Enables Accountants To Make Informed
Decisions, Improve Internal Controls, Enhance Data Integrity, And Better Serve Their
Organizations By Leveraging AIS For Strategic Decision-Making.
,11) The International Federation Of Accountants Says: “IT Has Grown (And Will
Continue To Grow) In Importance At Such A Rapid Pace And With Such Far-Reaching
Effects That It Can No Longer Be Considered A Discipline Peripheral To Accounting.
Rather, Professional Accounting Has Merged And Developed With IT To Such An
Extent That One Can Hardly Conceive Of Accounting Independent From IT.” In Your
Opinion, Why Is Accounting Now Interdependent With IT?
(Answer May Vary)
ANSWER: Accounting And IT Have Become Interdependent Because Technology
Drives Efficiency, Accuracy, And The Ability To Analyze Large Volumes Of Data. IT
Systems Enable Real-Time Financial Reporting, Automate Routine Tasks, And Provide
Better Insights Into Business Performance. As Financial Data Becomes More Complex
And Organizations Grow, IT Systems Are Integral To Managing, Storing, And Analyzing
That Data. Without IT, Modern Accounting Would Be Slow, Error-Prone, And Less
Effective In Supporting Decision-Making.
12) Wal-Mart’s Retail Link Database Is One Of The World’s Largest Databases And
Allows Many Of Their Suppliers To View Real-Time Sales Data Of Their Products For
Each Store. This Allows Suppliers To Assess The Demand For Their Products And To
Optimize Their Own Level Of Inventory And Related Logistics Costs. How Is This Cost
Savings Ultimately Passed On To Wal-Mart And Its Customers?
(Answer May Vary)
ANSWER: By Giving Suppliers Real-Time Sales Data, Wal-Mart Allows Them To
Optimize Their Inventory And Reduce Costs Related To Overstocking Or Understocking.
This Reduces Wal-Mart’s Supply Chain Costs And Allows Them To Negotiate Better
Pricing With Suppliers. These Cost Savings Are Passed On To Customers In The Form
Of Lower Prices, Which Strengthens Wal-Mart's Competitive Advantage.
13) Business Value Is Defined As All Items, Events, And Interactions That Determine
The Financial Health And Well-Being Of The Firm. This Value May Come From
,Suppliers, Customers, Or Employees Or Even Information Systems. How Would A Not-
For-Profit Group Like The International Red Cross Define Business Value For Its Group?
(Answer May Vary)
ANSWER: For A Not-For-Profit Like The International Red Cross, Business Value
Would Be Defined In Terms Of Its Impact And Effectiveness In Fulfilling Its Mission,
Such As Delivering Aid, Reducing Disaster Relief Costs, Or Increasing Donor
Engagement. The Value Would Not Be Measured Solely By Financial Profit But By How
Efficiently And Effectively It Serves Its Beneficiaries, Maintains Financial Sustainability,
And Fosters Trust With Donors And The Public.
14) Google Is Known For Gathering Large Quantities Of Data On Its Users. Describe
What Types Of Data May Be Gathered On A User And How That Data Is Transformed
Into Useful Information. Include In Your Answer Why The Information May Be Useful
To Google.
(Answer May Vary)
ANSWER: Google Collects Data Such As Search History, Location, Browsing
Behavior, Device Usage, And Interactions With Advertisements. This Data Is Processed
And Analyzed To Create User Profiles And Identify Patterns In Behavior. The
Information Is Useful For Google To Serve Personalized Ads, Improve Search
Algorithms, And Optimize User Experience Across Its Products. By Understanding
Users' Preferences, Google Can Increase User Engagement, Enhance Ad Targeting, And
Maximize Revenue From Advertisers.
15) Accounting Information Systems:
A) Are Always Computerized.
B) Report Only Accounting Information.
C) Include Records, Processes, And Reports.
D) Are For Computer Games.
, ANSWER: C
Accounting Information Systems (AIS) Are Comprehensive Systems That Include Not
Only Computerized Records But Also Processes And Reports That Assist In Accounting
Functions. They Capture Financial Data, Process It, And Provide Relevant Reports To
Stakeholders. They Are Not Limited To Accounting Information Only Nor Are They
Related To Computer Games.
16) Which Of The Following Is Not An Attribute Of Useful Information?
A) Bias.
B) Feedback Value.
C) Predictive Value.
D) Verifiability.
ANSWER: A
Bias Is Not An Attribute Of Useful Information. In Fact, Useful Information Must Be
Objective And Free From Bias To Ensure That Decisions Made Based On That
Information Are Sound. The Other Options—Feedback Value, Predictive Value, And
Verifiability—Are Characteristics That Make Information Useful In Decision-Making.
17) 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.
ANSWER: A
