Accounting Information System (James Hall) TEST BANK

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Chapter 1—The Information System: An Accountant’s Perspective TRUE/FALSE 1. Information is a business resource. ANS: T 2. An information system is an example of a natural system. ... ANS: F 3. Transaction processing systems convert non-financial transactions into financial transactions. ANS: F 4. Information lacking reliability may still have value. ANS: F 5. A balance sheet prepared in conformity with GAAP is an example of discretionary reporting. ANS: F 6. The Management Reporting System provides the internal financial information needed to manage a business. ANS: T 7. Most of the inputs to the General Ledger System come from the Financial Reporting System. ANS: F 8. When preparing discretionary reports, organizations can choose what information to report and how to present it. ANS: T 9. Retrieval is the task of permanently removing obsolete or redundant records from the database. ANS: F 10. Systems development represents 80 to 90 percent of the total cost of a computer system. ANS: F 11. The database administrator is responsible for the security and integrity of the database. ANS: T 12. A backbone system is completely finished, tested, and ready for implementation. ANS: F 13. The internal auditor represents the interests of third-party outsiders. ANS: F 14. Information Technology (IT) audits can be performed by both internal and external auditors. ANS: T 15. The single largest user of computer services is the personnel function. ANS: F 16. Increased control is one of the key advantages of distributed data processing. ANS: F 17. The flat-file approach is most often associated with so-called legacy systems. ANS: T 18. In a flat-file system, files are easily shared by users. ANS: F 19. Legacy systems were eliminated in the effort to make systems Y2K compliant. ANS: F 20. One of the greatest disadvantages of database systems is that all data is always available to all users. ANS: F 21. Under SOX legislation auditors are no longer allowed to provide consulting services to audit clients. ANS: T 22. Under SOX legislation auditors are no loger allowed to provide consulting services to their clients. ANS: F They cannot provide such services to audit clients but may still provide them to non-audit clients [Show More]

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