The Information System: An Accountant’s Perspective

15. Do you agree with the statement, “The term IT auditor should be considered obsolete because it implies a distinction between regular auditors and auditors who examine computerized AIS”? Why or why not? 16. What are

the primary reasons for segmenting organizations? 17. Why is it important to organizationally separate the accounting function from other functions of the organization? 18. What is the most likely system acquisition method—in-

house, turnkey, backbone, or vendor-supported—for each of the following situations? • A plumbing supply company with 12 employees that sells standard products to wholesale customers in a local community needs a system to

manage its affairs.

• A major oil company with diverse holdings, complex oil leases, and esoteric accounting practices needs a system that can coordinate its many enterprises. • A municipal government needs a system that complies with standard

government accounting practices but can be integrated with other existing systems. 19. The REA model is based on the premise that “business data must not be preformatted or artificially constrained and must reflect all relevant

aspects of the underlying economic events.” What does this mean and how is it applied? 20. ERP systems are composed of a highly integrated set of standardized modules. Discuss the advantages and potential disadvantages of

this approach.

Multiple-Choice Questions
1. Which of the following is NOT a financial transaction? a. purchase of products b. cash receipts c. update valid vendor file d. sale of inventory 2. The following are subsystems of the Accounting Information System, EXCEPT

a. Transaction Processing System. b. Human Resources System. c. General Ledger/Financial Reporting System. d. Management Reporting System. 3. Which of the following is NOT a purpose of the Transaction Processing

System? a. managing and reporting on the status of financial investments b. converting economic events into financial transactions c. distributing essential information to operations personnel to support their daily operations d.

recording financial transactions in the accounting records 4. The objectives of the data collection activity of the general model for AIS are to collect data that are a. relevant and redundant. b. efficient and objective. c. efficient

and redundant. d. efficient and relevant. 5. Which of the following is NOT a characteristic of effective information? a. relevance b. accuracy c. summarization d. precision 6. Which of the following is NOT a database

management task? a. retrieval b. storage c. summarization d. deletion