Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
7) Identify the components of an accounting information system.
Answer: A well-designed AIS consists of people, procedures and instructions, data, software, information technology infrastructures, and internal controls and security measures.
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
8) Explain what an AIS is, describe the basic tasks it performs in an organization, and give some examples of the types of accounting transactions it processes.
Answer: An AIS consists of six components: people, procedures and instructions, data, software, information technology infrastructures, and internal controls and security measures. The AIS performs three major functions: 1) it collects and stores data about activities and transactions so that the organization's management, employees, and interested outsiders can review what has happened; 2) the AIS processes data (that is, facts that have been collected and stored) into information that is useful for making decisions, and is of value to the organization; and 3) the AIS provides adequate controls designed to safeguard the organization's assets, including its data and information. Common examples of accounting transactions that an AIS helps to process and track are the sales of products to customers, cash collections, cash payments, and the recording and payment of the employees' payroll.
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
9) Why have accounting software packages been designed with separate transaction modules?
Answer: Since every organization does not necessarily use all of the transaction cycles in its operations, it is to the advantage of the organization to be able to "pick and choose" from among various software modules that track and record different transaction cycles. For example, a law firm would have no need to implement a production cycle module. Also, the nature of a transaction cycle varies across the broad spectrum of business organizations. Again, a law firm would have a revenue cycle, but it would not involve the purchase, receipt, and payment for products or merchandise; likewise, a retail store chain may not sell any consulting services to its customers.
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
10) An accounting information system requires at least one computer.
Answer: FALSE
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
11) The American Institute of Certified Public Accountants (AICPA) has recognized the importance of AIS and the major impact information technology has on the area of accounting. To recognize individual CPAs who have met educational and experiential requirements in this area, the group formally created the designation known as
A) the Certified Information Auditor.
B) the Certified Internal Auditor.
C) the Certified Information Technology Professional.
D) the Certified Data Processing Professional.
Answer: C
Concept: The value of accounting information systems
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
12) The AIS must include controls to ensure
A) safety and availability of data.
B) marketing initiatives match corporate goals.
C) information produced from data is accurate.
D) both A and C
Answer: D
Concept: The value of accounting information systems