AUDITING IN AN IT ENVIRONMENT
Multiple Choice. Identify the letter of the choice that best completes the statement or answers the question.
1. The file created yesterday is called the [A] “Son”
file. [B] “Father” file. [C] “Mother” file. [D]
“Grandfather” file.
2. Which of the following is not a business resource?
[A] Raw material. [B] Labor. [C] Information. [D] All
are business resources.
3. Which level of management is responsible for short-
term planning and coordination of activities
necessary to accomplish organizational objectives?
[A] Operations management. [B] Middle
management. [C] Top management. [D] Line
management.
4. Which level of management is responsible for
controlling day-to-day operations? [A] Top
management. [B] Middle management. [C]
Operations management. [D] Executive
management.
5. The ability to achieve the goals of a system depends
upon the effective functioning and harmonious
interaction between its subsystems. This is called
[A] System decomposition. [C] System redundancy.
[C] Backup system. [D] Subsystem interdependency.
6. The value of information for users is determined by
all of the following but [A] Reliability. [B] Relevance.
[C] Convenience. [D] Completeness.
7. An example of a nonfinancial transaction is [A] Sale
of products. [B] Cash disbursement. [C] Log of
customer calls. [D] Purchase of inventory.
8. An example of a financial transaction is [A] The
purchase of computer. [B] A supplier's price list. [C]
A delivery schedule. [D] An employee benefit
brochure.
9. Which subsystem is not part of the Accounting
Information System? [A] Transaction Processing
System. [B] Expert System. [C] General
Ledger/Financial Reporting System. [D]
Management Reporting System.
10. The major difference between the Financial
Reporting System (FRS) and the Management
Reporting System (MRS) is the [A] FRS provides
information to internal and external users; the MRS
provides information to internal users. [B] FRS
provides discretionary information; the MRS
provides nondiscretionary information. [C] FRS
reports are prepared using information provided by
the General Ledger System; the MRS provides
information to the General Ledger System. [D] FRS
reports are prepared in flexible, nonstandardized
January 2020
formats; the MRS reports are prepared in
standardized, formal formats.
11. Hardware refers to the ____ components of a
computer that perform the input, processing,
storage, and output activities of the computer. [A]
Actual. [B] Mechanical. [C] Logical. [D] Physical.
12. Choosing the right computer hardware requires
understanding its relationship to the information
system and ____ of the organization. [A] Growth.
[C] Structure. [C] Business plan. [D] Needs.
13. Each central processing unit consists of three
primary elements: the arithmetic/logic unit,
registers, and the ____ unit. [A] Memory. [B]
Control. [C] Input/output. [D] ALU.
14. The CPU and memory of a computer are housed in
the same box call the ____ unit. [A] Processing unit.
[B] Chip set. [C] Motherboard. [D] System.
15. ____ is a measure of processing speed. [A] Clock
speed. [A] Megabytes. [C] Memory capacity. [D]
Access time.
16. In computers, usually ____ bits together form a
byte of data or a single character. [A] 2. [B] 8. [C] 4.
[D] 10.
17. A type of memory whose contents are not lost if the
power is turned off is said to be ____. [A] Multicore.
[B] RAM. [C] Nonvolatile. [D] None of the above.
18. ____ is the use of a collection of computers, often
owned by many people or different organizations,
to work in a coordinated manner to solve a
common problem. [A] Cloud computing. [C] Parallel
computing. [C] Grid computing. [D] None of the
above.
19. Secondary storage is also called ____. [A]
Permanent storage. [B] Main memory. [C] Primary
storage. [D] Volatile memory.
20. Secondary storage is ____ than main memory. [A]
More expensive. [B] More volatile. [C] Slower. [D]
One of the above.
21. ____ means that data must be accessed in the order
in which it is stored. [A] Direct access. [B] Sequential
access. [C] Indirect access. [D] Volatile access.
22. RAID storage devices provide organizations with
data storage that is ____. [A] Fault tolerant. [B]
Extremely low cost. [C] Exceedingly fast. [D]
Unlimited in storage capacity.
23. ____ is a storage method for less frequently needed
data that makes it appear to be stored entirely on
tape cartridges, although some parts may be stored
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 on faster hard disks. [A] Magnetic dick. [B] Virtual
tape. [C] CD-ROM. [D] SAN.
24. A(n) ____ offloads the network traffic associated
with storage onto a separate network. [A] Digital
video disk. [B] Storage area network. [C] Virtual
tape. [D] RAID storage device.
25. As with other computer system components, an
organization should keep its business ____ in mind
when selecting input and output devices. [A]
Customers. [B] Goals. [C] Partners. [D] Units.
26. Speech recognition technology ____. [A] Has so far
proven to be impractical. [B] Works for a very
limited vocabulary of words. [C] Is available in a
wide range of capabilities. [D] None of the above.
27. ____ are frequently used to capture input in
standardized tests such as the SAT and GMAT. [A]
MICR readers. [B] Speech recognition devices. [C]
OMR readers. [D] OCR readers.
28. An RFID tag on an inventory item might contain
____. [A] Product information. [B] Details about the
item tagged. [C] Location data. [D] All of the above.
29. ____ displays are flat displays that use liquid
crystals to form characters and graphic images on a
backlit screen. [A] CRT. [B] OLED. [C] Plasma. [D]
LCD.
30. The ____ display monitor uses the least amount of
power. [A] OLED. [B] Plasma. [C] LCD. [D] CRT.
31. The ____ is a single user, nonportable computer
designed to perform engineering, CAD, and
software development work. [A] Desktop. [B]
Workstation. [C] Netbook. [D] Notebook.
32. ____ computers are low-cost, centrally managed
computers with no extra drives or expansion slots
and limited capabilities. [A] Netbook. [B] Thin client.
[C] Laptop. [D] Desktop.
33. ____ are the most powerful computers with the
fastest processing speed and highest performance.
[A] Blade servers. [B] Mainframe computers. [C]
Workstations. [D] Supercomputers.
34. Green computing is focused at the efficient and
environmentally responsible ____ of IS related
products. [A] Design and manufacture. [B] Disposal.
[C] Operation. [D] All of the above.
35. Data has to be _____ before it can be converted
into information. [A] Transformed. [B] Processed.
[C] Changed. [D] Engineered. [E] None of the above.
36. A device is said to be _____ when it is accessible to,
or under the control of, the processor [A] People.
[B] Icons. [C] Information system. [D] On-line. [E]
None of the above.
37. The computer is a part of the firm's [A] Physical
system. [B] Conceptual system. [D] Both A and B.
[D] Neither A nor B. [E] None of the above.
38. ____ is an important component of every
information system that helps organizations to
achieve their goals. [A] Hardware. [B] Feedback
mechanism. [C] Software. [D] Data.
39. The value of information is directly linked to how it
helps decision makers achieve their organization’s
____. [A] Profits. [B] Cost reduction initiatives. [C]
Goals. [D] Quality improvement measures.
40. In information systems, ____ is used to make
changes to input or processing activities. [A]
Forecasting. [B] Output [C] Feedback. [D]
Processing.
41. _____ consists of computer equipment used to
perform input, processing, and output activities. [A]
Information technology. [B] Telecommunications.
[C] Technology infrastructure. [D] Hardware.
42. Keyboards, automatic scanning devices, and
equipment that can read magnetic ink characters
are examples of ____ hardware. [A] Storage. [B]
Output. [C] Processing. [D] Input.
43. ____ consists of computer programs that govern
the operation of the computer. [A] Hardware. [B]
Applications. [C] Software. [D] Telecommunications.
44. ____ is an example of application software that
allows you to accomplish specific tasks such as word
processing or tabulating numbers. [A] Systems
software. [B] Microsoft Office 2019. [C] Windows
10. [D] Windows Vista.
45. ____ connect computers and equipment in a
building, around the country, or around the world
to enable electronic communications. [A]
Telecommunications. [B] Networks. [C]
Telecommuting. [D] Databases.
46. People can send short messages of up to ____ using
Twitter. [A] 10 words. [B] 140 characters. [C] 100
characters. [D] 140 words.
47. Another name for a Web log is ____. [A] Podcast.
[B] Blog. [C] Web page. [D] WWW.
48. Using ____, you can download audio programs or
music from the Internet to play on computers or
music players. [A] Podcasting. [B] WWW. [C] Web
logs. [D] Cloud computing.
49. An ____ is a network based on Web technologies
that allows only selected outsiders, such as business
partners and customers, to access authorized
resources of a company’s intranet. [A] Internet. [B]
Web 2.0. [C] Blog. [D] Extranet.
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50. ____ is (are) considered to be the most important
element in a computer-based information system.
[A] Hardware. [B] Procedures. [C] Software. [D]
People.
51. People who work with information systems to get
results are called ____. [A] The CIO. [B] IS
personnel. [C] Users. [D] IS managers.
52. ____ include(s) all the people who manage, run,
program, and maintain the system, including the
CIO, who manages the IS department. [A] End users.
[B] Analysts. [C] Hardware operators. [D] IS
personnel.
53. A common type of information system used in
business organizations are those designed for ____.
[A] Electronic and mobile commerce. [B] Decision
support. [C] Transaction processing. [D] All of the
above.
54. ____ involves using information systems and the
Internet to acquire parts and supplies. [A] e-
commerce. [B] mobile commerce. [C] e-business.
[D] e-procurement.
55. The earliest type of business information system
developed in the 1950s was the ____. [A]
Transaction processing system. [B] Decision support
system. [C] Enterprise resource planning system. [D]
e-commerce system.
56. A primary use of decision support system (DSS) is to
simulate an experiment over by using different
parameters and assumptions. What is it called? [A]
Artificial intelligence. [B] What if analysis. [C]
Exception report. [D] Computer assisted
experimenting.
57. A(n) ____ is an organized collection of people,
procedures, software, databases, and devices that
support problem-specific decision making. [A] TPS.
[B] DSS. [C] CIS. [D] Virtual reality system.
58. ____ involves computers understanding and acting
on verbal or written commands in English, Spanish,
or other human languages. [A] Virtual reality. [B]
Natural language processing. [C] Artificial
intelligence. [D] Learning systems.
59. An CIS provides [A] Past information. [B] Present
information. [C] Future information. [D] All of the
above.
60. _____________ write computer programs that
perform jobs specified by the user. [A] Programmer.
[B] Data entry operator. [C] System analyst. [D]
Computer operator.
61. A system must be composed of more than one [A]
Subsystem. [B] Data entry operator. [C] System
analyst. [D] Computer operator.
62. A system must be composed of more than one [A]
Subsystem. [B] Element. [C] Super system. [D] All of
the above.
63. _____ assist management is answering what-if-
questions. [A] Relevant. [B] Management by
exception. [C] Predictive reports. [D] Control.
64. Most of the flow of physical resources occurs on the
[A] Top management level. [B] Middle management
level. [C] Lower management level. [D] All of the
above.
65. A good IT management suggests that the area of
management planning and control be segmented
into [A] Operational control. [B] Strategic planning.
[C] Management control. [D] All of the above.
66. The receiving data system involves which of the
following files? [A] Vendor. [B] Inventory. [C]
Purchasing. [D] All of the above.
67. Once net requirements have been calculated, the
next step is to [A] Determine the production
schedule. [B] Determine machine and manpower
requirements. [C] Calculate gross requirements. [D]
Start production process.
68. A certain city uses a computer system as part of its
taxation of real estate. Which one of the following
tasks would the computer be least able to do? [A]
Decide how much money should be raised through
real estate taxes. [B] Keep records of tax rates that
apply to different kinds of real estate. [C] Compute
tax due for each property owner each quarter. [D]
Keep records of all assessment.
69. Management is linked to the information processor
by [A] Decisions. [B] Data. [C] Both A and B. [D]
Neither A nor B.
70. How much should an organization spend for
information can be determined by some type of a
[A] Cost analysis. [B] Benefit analysis. [C] Cost-
benefit analysis. [D] Any of the above.
71. As a general rule [A] CIS performance criteria
determine management information needs, and
these needs determine the objectives of the firm.
[B] The firm's objective determines management
information needs, and these needs determine CIS
performance criteria. [C] Management information
needs determine CIS performance criteria, and
these criteria determine the firm’s objectives. [D]
The firm's objectives determine CIS performance
criteria, and these criteria determine management
information needs.
72. The physical system of the firm may be regarded as
a flow of [A] Manpower, machines, material, and
money. [B] Information only. [C] Manpower,
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 machines, material, money, and information. [D]
Manpower, machines, material, money, and data.
73. Which of the following is not a basic configuration
used in a data communication network? [A]
Computer/peripheral-device configuration. [B]
Computer-to-computer communication. [C]
Computer to front-end processor communication.
[D] Communication through a data switch.
74. In the future, users of a computer system may
identify themselves by entering a _____ and a
fingerprint [A] Hard print. [B] Soft print. [C] Voice
print. [D] Digital.
75. Computing systems can provide strategic
information by [A] Making decision analysis
possible. [B] Providing corporate models for long-
range planning. [C] Causing managers to think. [D]
All of the above.
76. An econometric model requires [A] A computer
with large auxiliary storage capacity. [B] A data base
of economic data. [C] A model base of quantitative
analysis programs. [D] All of the above.
77. Benefits from a computerized information system
include [A] Higher returns on short-term
investments. [B] Less frequent and smaller short-
term loans. [C] Lower rates of interest. [D] All of the
above.
78. Functional information subsystems can be classified
into [A] Input and output subsystems. [B]
Processing and output subsystems. [C] Input and
processing subsystems. [D] Input, processing, and
output subsystems.
79. Which is the correct for CIS [A] Communication
process wherein information is recorded, stored,
processed and retrieved for managerial decision-
making. [B] Communication process wherein data is
recorded, stored, processed and retrieved for
managerial decision making. [C] Communication
process wherein data is converted into information.
[D] All of the above.
80. Management uses information for two purposes:
planning and _____ [A] Programmable. [B] Control.
[C] Predictive reports. [D] Relevant.
81. Data collection terminals are used to report the
activity of [A] Material flow. [B] Machine use. [C]
Manpower use. [D] All of the above.
82. There are several careers within data processing
operations, including data-entry operator. [A]
Computer operator. [B] Programmer. [C] System
analyst. [C] System analyst. [D] Key-punch operator.
83. The model base contains programs [A] Written by
the firm's programmers. [B] Provided by the
computer vendor. [C] Purchased from outside firms,
such as software houses. [D] All of the above.
84. Which of the following statements is most correct?
[A] Most analysts agree on the structure and
organization of CIS. [B] Operational planning reports
are a primary informational tool for middle
management. [C] A CIS focuses on managing
information generated with a computer system. [D]
The cross reference of data items is an integral
feature of the simple structure used in database
organization.
85. It is most important that the data produced by a
payment system be [A] Accurate. [B] Authoritative.
[C] Relevant. [D] Newsworthy.
86. _____ is and always has been wealth, and
computers assist us in obtaining this wealth. [A]
Data. [B] Information. [C] Calculation. [D] Network.
87. The selection of the solution technique to be
implemented by a computing system should be
made by [A] An operations research expert. [B] A
computer programmer. [C] System analysts. [D] A
computing systems user.
88. Which of the following is not a requirement to
develop a successful computer-based information
system? [A] A staff of technical specialists with the
skills necessary to develop the computer based
parts of the system. [B] The development of a long-
range goal for the system. [C] A commitment from
management to allocate the personnel and
resources necessary to get the job done. [D] None
of the above.
89. Data collection terminals [A] Track the flow of
materials from one production area to another. [B]
Record employee attendance. [C] Record start and
stop of production steps. [D] All of the above.
90. Computing systems most often facilitate planning
because they [A] Make it possible to take into
account many possibilities in an uncertain situation.
[B] Make it possible to solve complex problems. [C]
Enable an appropriate data processing system to
provide answers quickly. [D] All of the above.
91. Information is produced by processing data from
which of the following sources? [A] Data provided
by higher levels of management. [B] Internally
generated data. [C] Externally generated data. [D]
All of the above.
92. A condition that led to the development of
databases was [A] The proliferation of data files. [B]
An increase in the amount of data handled by
organizations. [C] A demand for more data to
support informational needs. [D] All of the above.
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93. The prime concern of financial control is [A]
Accounting for the liabilities incurred. [B] Meeting
payroll commitments. [C] Providing financial status
information. [D] All of the above.
94. Management has become more complex because
[A] There is less time to react to competitive
actions. [B] The equipment used in many of the
firm's activities has become more complex. [C]
Firms have become larger. [D] All of the above.
95. Accounting data [A] Is oriented to the future. [B] Is
prone to error. [C] Deals only internal activities of
the firm. [D] Must be converted into information to
be of value to the manager.
96. Detected money errors are corrected with [A] Debit
entries. [B] Credit entries. [C] Both A and B. [D]
Neither A nor B.
97. Many large organizations have information _____
where managers can use fourth-generation
languages to retrieve the facts they need from
online data bases, and where staff experts are
available to provide PC hardware/ software
guidance. [A] Expert. [B] Centers. [C] Control. [D]
CIS.