Chapter 4 b.

data input preparation, database design, and

database operation.
1. The database approach has several unique c. database design, database operation, and
characteristics not found in traditional (flat-file) equipment operations.
systems, specifically file-oriented systems. Which d. database design, database
one of the following statements does not apply to implementation, and database planning.
the database model? e. database operations, database maintenance,
a. Database systems have data and data input preparation.
independence; that is, the data and the
programs are maintained separately, 6. The data attributes that a particular user has
except during processing. permission to access are defined by the
b. Database systems contain a data a. operating system view.
definition language that helps describe b. systems design view.
each schema and subschema. c. database schema.
c. The database administrator is the part d. user view.
of the software package that instructs e. application program.
the operating aspects of the program
when data are retrieved. 7. An inventory table in a relational database system
d. A primary goal of database systems is to contains values for items such as part number,
minimize data redundancy. part name, description, color, and quantity. These
e. Database systems increase user interface individual items are called
with the system through increased a. Attributes.
accessibility and flexibility. b. Record types.
c. Bytes.
2. One of the first steps in the creation of a relational d. Occurrences.
database is to
a. Integrate accounting and nonfinancial 8. Which of the following is a characteristic of a
data relational database system?
b. Plan for increased secondary storage a. Tables are linked to other related table
capacity. through pointers.
c. Order data-mining software that will b. A parent table may be related to many
facilitate data retrieval. child tables, but a child table may have
d. Create a data model of the key entities only one parent.
in the system. c. Each table must contain an attribute
e. Construct the physical user view using whose value is unique.
SQL. d. Tables in 1:M associations are linked by
embedding the primary key of the M side
3. Which of the following is a characteristic of a tables into the 1 side table as a foreign
relational database system? key.
a. All data within the system are shared by
all users to facilitate integration. 9. A database system that has several remote users
b. Database processing follows explicit links networked together, but each user site stores a
that are contained within the records. unique portion of the database is called
c. User views limit access to the a. Replicated data processing network.
database. b. Partitioned database.
d. Transaction processing and data c. Recentralized network.
warehousing systems share a common d. Multi drop data network.
database. e. Hybrid system.

4. Partitioned databases are most effective when 10. For those instances where individual users may
a. Users in the system need to share be granted summary and statistical query access
common data. to confidential data to which they normally are
b. Primary users of the data are clearly denied access, which type of control is most
identifiable. suitable?
c. Read-only access is needed at each site. a. User-defined procedures
d. All of the above. b. Data encryption
c. Inference controls
5. The functions of a database administrator are d. Biometric devices
a. database planning, data input preparation,
and database design.
 consultants that the use of a computer
11. Where are database access permission defined? system appeared justified.
a. Operating system d. Include a report by the internal audit
b. Database authority table department that evaluated internal
c. Database schema control features for each planned
d. Systems manual application.
e. Application programs
4. Which of the following is the most important factor
12. Database currency is achieved by in planning for a system change?
a. Implementing partitioned databases at a. Having an auditor as a member of the
remote sites. design team.
b. Employing data-cleansing techniques. b. Using state-of-the-art techniques.
c. Ensuring that the database is secure from c. Concentrating on software rather than
accidental entry. hardware.
d. An external auditor’s reconciliation of d. Involving top management and
reports from multiple sites. people who use the system.
e. a database lockout that prevents e. Selecting a user to lead the design
multiple simultaneous access team.

Chapter 5 5. In the context of the TELOS acronym, technical

feasibility refers to whether
1. All of the following individuals would likely be a. A proposed system is attainable given the
SDLC participants EXCEPT existing technology
a. accountants b. the systems manager can coordinate and
b. shareholders control the activities of the systems
c. management department.
d. programmers c. an adequate computer site exists for the
e. all of the above proposed system.
d. the proposed system will produce economic
2. Which of the following represents the correct benefits exceeding its costs.
order in problem resolution? e. the system will be used effectively within the
a. Define the problem, recognize the operating environment of an organization.
problem, perform feasibility studies,
specify system objectives, and 6. Which of the following steps is NOT considered
prepare a project proposal. to be part of this systems survey?
b. Recognize the problem, define the a. Interviews are conducted with operating
problem, perform feasibility studies, people and managers.
specify system objectives, and b. The complete documentation of the system is
prepare a project proposal. obtained and reviewed.
c. Define the problem, recognize the c. Measures of processing volume are obtained
problem, specify system objectives, for each operation.
perform feasibility studies, and d. equipment sold by various computer
prepare a project proposal. manufacturers is reviewed in terms of
d. Recognize the problem, define the capability cost, and availability
problem, specify system e. Work measurement studies are conducted to
objectives, perform feasibility determine the time required to complete
studies, and prepare a project various tasks or jobs.
proposal.
7. A systems development approach that starts with
3. A feasibility study for a new computer system broad organizational goals and the types of
should decisions organizational executives make is
a. consider costs, savings, controls, called
profit improvement, and other a. bottom-up.
benefits analyzed by application b. network.
area. c. top-down
b. provide the preliminary plan for d. strategic.
converting existing manual systems e. sequential.
and clerical operations.
c. provide management with assurance
from qualified, independent
8. The TELOS study that determines whether a d. Data conversion
project can be completed in an acceptable time
frame is 15. Which of the following is NOT an advantage of
a. a schedule feasibility study commercial software?
b. a time frame feasibility study. a. Independence
c. an on-time feasibility study. b. Cost
d. an economic completion feasibility study. c. Reliability
e. a length of contract feasibility study. d. Implementation time
e. Systems design.
9. Which of the following is least likely to be an
accountant’s role in the SDLC? 16. The technique that recognizes the time value of
a. User money by discounting the after-tax cash flows for
b. Consultant a project over its life to time period zero using the
c. Auditor company’s minimum desired rate of return is
d. programmer called the
e. All of these are likely roles a. Net present value method.
b. Capital rationing method.
10. The TELOS acronym is often used for c. Payback method.
determining the need for system changes. Which d. Average rate of return method.
of the following types of feasibility studies are e. Accounting rate of return method.
elements of TELOS?
a. Legal, environmental, and economic 17. Fitzgerald Company is planning to acquire a
b. Environmental, operational, and $250,000 computer that will provide increased
economic efficiencies, thereby reducing annual operating costs by
c. Technical, economic, legal, and practical $80,000. The computer will be depreciated by the
d. Practical, technical, and operational straight-line method over a 5-year life with no salvage
e. Technical, operational, and economic value at the end of 5 years. Assuming a 40 percent
income tax rate, the machine’s payback period is
11. What name is given to the time value of money a. 3.13 years.
technique that discounts the after-tax cash flows b. 3.21 years.
for a project over its life to time period zero using c. 3.68 years.
the company’s minimum desired rate of return? d. 4.81 years.
a. Net present value method e. 5.21 years.
b. Capital rationing method
c. Payback method 18. In conducting a cost–benefit analysis, the estimated
d. Average rate of return method category that ordinarily would have the greatest
e. Accounting rate of return method uncertainty as to its precise value is
a. The tangible costs.
12. One-time costs of system development include all b. The intangible costs.
of the following EXCEPT c. The tangible benefits.
a. Site preparation. d. The intangible benefits.
b. Hardware maintenance. e. None of the above because they are equally
c. Programming. precise.
d. Hardware acquisition. 19. At which phase in the SDLC are errors are most
e. Data conversion. costly to correct?
a. Programming
13. Which of the following aspects of a cost-benefit b. Conceptual design
study would have the greatest uncertainty as to c. Analysis
its precise value? d. Detailed design
a. The tangible costs e. Implementation
b. The intangible costs 20. User test and acceptance is part of which phase of
c. The tangible benefits the system development life cycle?
d. The intangible benefits a. Implementation
e. None of the above because they are b. General systems design
equally precise c. Program specification and implementation
planning
14. Which of the following is NOT a one-time cost? d. Detailed systems design
a. Site preparation
b. Insurance
c. Software acquisition
 Chapter 6 8. Which of the following is NOT true of a turnaround
document?
1. Which statement is not true? a. They may reduce the number of errors made
a. Business activities begin with the acquisition by external parties.
of materials, property, and labor in exchange b. They are commonly used by utility companies
for cash. (gas, power, water).
b. The conversion cycle includes the task of c. They are documents used by internal
determining raw materials requirements. parties only.
c. Manufacturing firms have a conversion d. They are both input and output documents.
cycle but retail firms do not.
d. A payroll check is an example of a product 9. Which of the following is NOT a true statement?
document of the payroll system. a. Transactions are recorded on source
e. A journal voucher is actually a special source documents and are posted to journals.
document. b. Transactions are recorded in journals and are
posted to ledgers.
2. A documentation tool that depicts the physical c. Infrequent transactions are recorded in the
flow of information relating to a particular general journal.
transaction through an organization is a d. Frequent transactions are recorded in special
a. System flowchart. journals.
b. Program flowchart.
c. Decision table. 10. Which of the following is true of the relationship
d. Work distribution analysis. between subsidiary ledgers and general ledger
e. Systems survey. accounts?
a. The two contain different and unrelated data.
3. Sequential file processing will not permit b. All general ledger accounts have
a. Data to be edited on a separate computer run. subsidiaries.
b. The use of a database structure. c. The relationship between the two provides
c. Data to be edited in an offline mode. an audit trail from the financial statements
d. Batch processing to be initiated from a to the source documents.
terminal. d. The total of subsidiary ledger accounts
e. Data to be edited on a real-time basis. usually exceeds the total in the related
general ledger account.
4. The production subsystem of the conversion
cycle includes all of the following EXCEPT
a. Determining raw materials requirements. 11. Real-time systems might be appropriate for all of
b. Make or buy decisions on component the following EXCEPT
parts. a. Airline reservations.
c. Release of raw materials into production. b. Payroll.
d. Scheduling the goods to be produced. c. Point-of-sale transactions.
d. Air traffic control systems
5. Which of the following files is a temporary file? e. All of these applications typically utilize real-
a. Transaction file time processing.
b. Master file
c. Reference file 12. Is the system flowchart symbol for:
d. None of the above a. On-page connector.
b. Off-page connector.
6. A documentation tool used to represent the c. Home base.
logical elements of a system is a(n) d. Manual operation.
a. Programming flowchart. e. Document.
b. Entity relationship diagram.
c. System flowchart. 13. A chart of accounts would best be coded using a
d. Data flow diagram. (n) ______________ coding scheme.
a. Alphabetic
7. Which of the following is NOT an advantage of b. Mnemonic
real-time processing files over batch processing? c. Block
a. Shorter transaction processing time d. Sequential
b. Reduction of inventory stocks
c. Improved customer service
d. All are advantages 14. Which of the following statements is NOT true?
 a. Sorting records that are coded alphabetically a. Most firms derive little additional benefit
tends to be more difficult for users than from a real-time FRS.
sorting numeric sequences. b. Batch processing is typically not appropriate
b. Mnemonic coding requires the user to for transaction processing of GLS.
memorize codes. c. The sequential file approach is an inefficient
c. Sequential codes carry no information use of technology.
content beyond their order in the sequence. d. A batch system with direct access files
d. Mnemonic codes are limited in their ability to recreates the entire database each time the
represent items within a class. file is updated.

15. A coding scheme in the form of acronyms and 20. Which of the following is NOT a potential
their combinations that convey meaning is a(n) exposure of the FRS?
a. Sequential code. a. A defective audit trail
b. Block code. b. General ledger accounts that are out of
c. Alphabetic code. balance with subsidiary accounts
d. Mnemonic code. c. Unauthorized access to the check register
d. Unauthorized access to the general ledger
16. Sequential access means that
a. Data are stored on magnetic tape. 21. Which task should the general ledger perform?
b. The address of the location of data is found a. Update the general ledger
through the use of either an algorithm or an b. Prepare journal vouchers
index. c. Have custody of physical assets
c. To read any record on the file, all of the d. Have record-keeping responsibility for special
preceding records must first be read. journals of subsidiary ledgers
d. Each record can be accessed in the same
amount of time. Chapter 7

17. Which file has as its primary purpose to provide 1. CMA 685 5-28 routines that use the computer to
historical financial data for comparative financial check the validity and accuracy of transaction
reports? data during input are called
a. Journal voucher history file a. Operating systems.
b. Budget master file b. Edit programs.
c. Responsibility file c. Compiler programs.
d. General ledger history file d. Integrated test facilities.
e. Compatibility tests.

18. Which of the following statements is true?

a. Journal vouchers detailing transaction activity 2. CMA 686 5-10 an edit of individual transactions
flow from various operational departments in a direct access file processing system usually
into the GLS, where they are independently a. Takes place in a separate computer run.
reconciled and posted o the journal voucher b. Takes place in an online mode as
history file. transactions are entered.
b. Journal vouchers summarizing transaction c. Takes place during a backup procedure.
activity flow from the accounting department d. Is not performed due to time constraints.
into the GLS, where they are independently e. Is not necessary.
reconciled and posted to the general ledger
accounts. 3. CMA Adapted 686 5-13 An example of an input
c. Journal vouchers summarizing control is
transaction activity flow from various a. Making sure that output is distributed to
operational departments into the GLS, the proper people.
where they are independently reconciled b. Monitoring the work of programmers.
and posted to the general ledger accounts. c. Collecting accurate statistics of historical
d. Journal vouchers summarizing transaction transactions while gathering data.
activity flow from various operational d. Recalculating an amount to ensure its
departments into the GLS, where they are accuracy.
independently reconciled and posted to the e. Having another person review the design
journal voucher history file. of a business form.

19. Which of the following statements best describes 4. A control designed to validate a transaction at the
a computer-based GL/FRS? point of data entry is
 a. Recalculation of a batch total. requires publicly owned U.S. corporations to
b. A record count. maintain systems of internal control that meet
c. A check digit. certain minimum standards. Preventive controls
d. Checkpoints. are an integral part of virtually all accounting
e. Recalculation of a hash total. processing systems, and much of the information
generated by the accounting system is used for
5. CMA 687 5-8 in a manual system, records of preventive control purposes. Which one of the
current activity are posted from a journal to a following is not an essential element of a sound
ledger. In a computer system, current records preventive control system?
from a(n) a. of responsibilities for the recording,
a. Table file are updated to a transaction file. custodial, and authorization functions
b. Index file are updated to a master file. b. Sound personnel practices
c. Transaction file are updated to a c. Documentation of policies and
master file. procedures
d. Master file are updated to a year-to-date d. Implementation of state-of-the-art
file. software and hardware
e. Current balance file are updated to an e. Physical protection of assets
index file.
10. Which of the following is not a test for identifying
6. CMA 1287 5-1 the primary functions of a application errors?
computerized information system include a. Reconciling the source code
a. Input, processing, and output. b. Reviewing test results
b. Input, processing, output, and storage. c. Retesting the program
c. Input, processing, output, and control. d. Testing the authority table
d. Input, processing, output, storage, and
control. 11. Which of the following is not a common type of
e. Collecting, sorting, summarizing, and white-box test of controls?
reporting. a. Completeness tests
b. Redundancy tests
7. CMA 1287 5-16 An employee in the receiving c. Inference tests
department keyed in a shipment from a remote d. Authenticity tests
terminal and inadvertently omitted the purchase
order number. The best systems control to detect 12. All of the following are examples of source
this error would be a document control except
a. Batch total. a. Pre-numbering source documents.
b. Completeness test. b. Limiting access to source documents.
c. Sequence check. c. Supervising the bursting of source
d. Reasonableness test. documents.
e. Compatibility test. d. Checking the sequence of numbers to identify
missing documents.
8. CMA 1287 5-15 In an automated payroll
processing environment, a department manager 13. The correct purchase order number, 123456, was
substituted the time card for a terminated incorrectly recorded as shown in the solutions. All
employee with a time card for a fictitious of the following are transcription errors except
employee. The fictitious employee had the same a. 1234567
pay rate and hours worked as the terminated b. 12345
employee. The best control technique to detect c. 124356
this action using employee identification numbers d. 123457
would be a
a. Batch total. 14. Which of the following is correct?
b. Record count. a. Check digits should be used for all data
c. Hash total. codes.
d. Subsequent check. b. Check digits are always placed at the end
e. Financial total. of data codes.
c. Check digits do not affect processing
9. CMA 1287 5-17 the reporting of accounting efficiency.
information plays a central role in the regulation d. Check digits are designed to detect
of business operations. The importance of sound e. transcription errors.
internal control practices is underscored by the
Foreign Corrupt Practices Act of 1977, which
15. Which statement is NOT correct? The goal of
batch controls is to ensure that during processing 23. A specific inventory record indicates that there
a. Transactions are not omitted. are twelve items on hand and a customer
b. Transactions are not added. purchased two of the items. When recording the
c. Transactions are processed more than order, the data entry clerk mistakenly entered
once. twenty items sold. Which check would detect this
d. An audit trail is created. error?
a. numeric/alphabetic data check
16. The data control clerk performs all of the following b. sign check
duties except c. sequence check
a. Maintaining the batch control log. d. range check
b. Computing (or recomputing) batch control
data. 24. Which check is not a file interrogation?
c. Reconciling the output results to the batch a. header label
control log. b. expiration date check
d. Destroying batch control logs when c. sequence check
reconciled. d. version check

17. An example of a hash total is 25. Which statement is not correct?

a. Total payroll checks—$12,315. a. The purpose of file interrogation is to ensure
b. Total number of employees—10. that the correct file is being processed by the
c. Sum of the social security numbers --- system.
12,555,437,251. b. File interrogation checks are particularly
d. None of the above. important for master files.
c. Header labels are prepared manually and
18. Which statement is NOT true? A batch control log affixed to the outside of the tape or disk.
a. Is prepared by the user department. d. An expiration date check prevents a file from
b. Records the record count. being deleted before it expires.
c. Indicates any error codes.
d. Is maintained as a part of the audit trail. 26. A computer operator was in a hurry and accidentally
used the wrong master file to process a transaction file.
19. Which of the following is an example of a field As a result, the accounts receivable master file was
interrogation? erased. Which control would prevent this from
a. Reasonableness check happening?
b. Sign check a. header label check
c. Sequence check b. expiration date check
d. Numeric/alphabetic check c. version check
d. validity check
20. Which of the following is an example of record
interrogation? 27. Which of the following is NOT a component of the
a. Sequence check generalized data input system?
b. Zero value check a. generalized validation module
c. Limit check b. validated data file
d. Range check c. updated master file
d. error file

21. Which input validation check would detect a

payment made to a nonexistent vendor? 28. Advantages of the generalized data input system
a. Missing data check include all of the following except
b. Numeric/alphabetic check a. control over quality of data input.
c. Range check b. automatic calculation of run-to-run totals.
d. Validity check c. company-wide standards for data validation.
d. development of a reusable module for data
22. The employee entered “40” in the “hours worked validation.
per day” field. Which check would detect this
unintentional error? 29. Run-to-run control totals can be used for all of the
a. Numeric/ alphabetic check following except
b. Sign check a. to ensure that all data input is validated.
c. Limit check b. to ensure that only transactions of a similar
d. Missing data check type are being processed.
 c. to ensure the records are in sequence and are
not missing.
d. to ensure that no transaction is omitted.

30. Methods used to maintain an audit trail in a

computerized environment include all of the following
except
a. transaction logs.
b. unique transaction identifiers.
c. data encryption.
d. log of automatic transactions.

31. Risk exposures associated with creating an output

file as an intermediate step in the printing process
(spooling) include all of the following actions by a
computer criminal except
a. gaining access to the output file and changing
critical data values.
b. using a remote printer and incurring
operating inefficiencies.
c. making a copy of the output file and using the
copy to produce illegal output reports.
d. printing an extra hard copy of the output file.

32. Which statement is NOT correct?

a. Only successful transactions are recorded on
a transaction log.
b. Unsuccessful transactions are recorded in an
error file.
c. A transaction log is a temporary file.
d. A hard copy transaction listing is provided to
users.