AISStudy1 - AIS480 Chapters 1-3 and 16 Test Your...

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AIS480 Chapters 1 -3 and 16 Test Your Understanding Name: __________________________ Date: _____________ 1. An example of a financial report that would be prepared by a managerial accountant (instead of a financial accountant) is a budget report. A) True B) False 2. The purpose of the assurance services of an accounting firm is to give a company's managers moral support when they are audited by the federal or state government. A) True B) False 3. It is important for today's modern accountant to understand both the capabilities and the limitations of computers. A) True B) False 4. Managerial accounting principally provides decisionmaking information to a company's internal managers. A) True B) False 5. The CPA Vision project was a project designed to define the CPA of the future. A) True B) False 6. As a result of computerized information processing systems in many organizations today, the need for accountants in these organizations has significantly declined. A) True B) False 7. Computers tend to make audit trails easier to follow because everything is computerized. A) True B) False Page 1
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AIS480 Chapters 1 -3 and 16 Test Your Understanding 8. The starting point for an audit trail of a production department might be the purchase of raw materials. A) True B) False 9. The two primary informational components of an AIS are financial accounting and auditing. A) True B) False 10. A company's audit trail is normally easier to follow under a manual data processing system compared to a computerized information processing system. A) True B) False 11. It is best to view an AIS as an accounting system that must be computerized. 12. AISs often create information that is useful to non-accountants. 13. The term “wi-fi” stands for “wild financing”—an act expressly forbidden by the Sarbanes-Oxley Act of 2002. 14. The Sarbanes-Oxley Act prohibits companies from using the same auditing firms for performing both auditing and management consulting services. A) True B) False 15. A major output of financial accounting is the preparation of financial statements such as an income statement. Page 2
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AIS480 Chapters 1 -3 and 16 Test Your Understanding 16. Payroll processing is an example of one of the earliest activities of an AIS. 17. A good audit trail within the financial accounting system should allow a manager or auditor to trace any source document back from a report to the original data entry. A) True B) False
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