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Ch 1 Test bank – 3e Page 1 of 22
Test Bank For Accounting Information
Systems: Controls and Processes, 3rd Edition:
Controls and Processes
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ACCOUNTING INFORMATION SYSTEMS/3e
TURNER / WEICKGENANNT/COPELAND
Test Bank: CHAPTER 1: Introduction to AIS
NOTE: All new or adjusted questions are in red. New questions are identified by the letter A as part of
the question number; adjusted questions are identified by the letter X as part of the question number.
End of Chapter Questions:
1. When a company receives returned goods from a customer, the business process to accept the
return would most likely be a(n):
A. Administrative process
B. Conversion process
C. Expenditure process
D. Revenue process
2. Which of the following is least likely to be an output of the accounting information system?
A. A check
B. A report
C. An invoice
D. A bar code
3. Which of the following is not true of the supply chain?
A. The supply chain includes vendors.
B. The supply chain excludes customers.
C. The supply chain includes information flows.
D. The supply chain includes secondary suppliers.
4. Which of the following is not an objective of IT enablement?
A. Increased accuracy of data
B. Reduced cost
C. Reduced security problems
D. Increased efficiency
5. The correct order of the computer data hierarchy is:

A. Byte, bit, record, field, file, database
B. Bit, byte, record, field, file, database
C. Bit, byte, field, record, file, database
D. Bit, byte, field, record, database, file
6. The process of searching for identifiable patterns in data is called:
A. Sequential processing
B. Data warehousing
C. Data mining
D. Real-time processing

7. An IT enabled system for purchasing that is an “invoice-less” system is called a(n):
A. Automated matching system
B. Evaluated receipt settlement
C. E-payables
D. Point of sale system
8. The COSO report written for the purpose of assisting managers in the challenge of managing risk
in their organization is entitled:
A. Internal Control – Integrated Framework
B. Enterprise Risk Management – Integrated Framework
C. Corporate Governance Guidance
D. IT Governance Guidance
9. Accountants have some form of use of the AIS in all but which role?
A. User
B. Programmer
C. Auditor
D. Designer
10. Which of the following is not true of unethical behavior?
A. The only category of unethical behavior for accountants is inflating revenue.
B. Accountants are often pressured to help commit or cover up unethical behavior.
C. Hacking is an unethical behavior that accountants should be concerned about.
D. An accounting information system can be used to cover up unethical behavior.
TEST BANK – CHAPTER 1 – MULTIPLE CHOICE
1. A prescribed sequence of work steps preformed in order to produce a desired result for the
organization is called a(n):
A. Accounting Information System
B. Business Process
C. Financial Transaction
D. Capital Transaction Process
2. The process that must identify the transactions to be recorded, capture all the important details
of the transactions, properly process the transaction details, and provide reports is termed the:
A. Revenue Process
B. Expenditure Process
C. Accounting Information System
D. Business Process
3. An accounting information system serves many functions - which of the following is NOT one of
those functions?
A. Capture the details of a transaction
B. Implement the start of a transaction
C. Provide reports of transactions
D. Process the transactions details into appropriate accounts

4. The proper order of activity in an accounting information system would be as follows:
A. Capture, Record, Process, Report
B. Process, Record, Capture, Report
C. Capture, Process, Report, Record
D. Record, Capture, Process, Report
5. Which of the following is not one of the general types of business processes identified by the
textbook?
A. Revenue Processes
B. Expenditure Processes
C. Conversion Processes
D. Human Resource Processes
6. A company’s ____________ encompasses the tone of an organization and sets the basis for how
risk is viewed and addressed by an entity’s people.
A. Internal Environment
B. Internal Controls Framework
C. Code of Ethics
D. IT Governance Structure
7. Which of the following statements, related to business processes, is false?
A. Each business process has a direct effect on the financial status of the organization.
B. A business process is initiated by a particular kind of event.
C. A business process has a well-defined beginning and end.
D. Each business process is usually completed in a relatively short period.
8. Which of the following is least likely to be part of an accounting information system function?
A. Record the accounting data in the appropriate records.
B. Generation of data to be part of the information system.
C. Process the detailed accounting data.
D. Report the summarized accounting data.
9. Work steps that are internal controls within the business process would include:
A. Using an electronic register to record all sales transactions.
B. Combining both manual and computer based records.
C. Reconciling a cash register at the end of each day.
D. Preparation of internal reports to monitor the performance of a specific department.
10. Five different components of the accounting information system were presented in the
textbook. Which of the following is not one of those components?
A. Work steps within a business process intended to capture accounting data as the business
process occurs.
B. Work steps that are internal controls within the business process to safeguard assets and to
ensure the accuracy and completeness of the data.
C. Work steps that generate both internal and external reports.
D. Work steps to assure that all business processes are recorded using computer-based
procedures.

11. Output from an accounting information system would NOT include:
A. Checks to vendors
B. Invoices from vendors
C. Customer statements
D. Purchase orders
12. The entities, processes, and information flows that involve the movement of materials, funds,
and related information through the full logistics process, from the acquisition of raw materials
to the delivery of the finished products to the end use is a set of linked activities referred to as:
A. Management Information System
B. Supply Chain
C. Accounting Information System
D. Logistics Management
13. The organization and control of all materials, funds, and related information in the logistics
process, from the acquisition of raw materials to the delivery of finished products to the end
user is referred to as:
A. Supply Chain Management
B. Management Information System
C. Logistics Management
D. IT Enablement
14. When discussing the supply chain:
A. Any concern about vendors would relate only to those vendors with which a company has
direct contact.
B. Service providers would not be part of the supply chain.
C. Concern would not extend beyond the point where the product is shipped to a customer.
D. An entity may not be able to directly control all of the interrelated activities within the
supply chain.
15. Using IT systems to enhance efficiency and effectiveness of internal or supply chain processes is
called:
A. Information Technology Enablement
B. Information Systems Control
C. Information Technology Process Engineering
D. Information Technology Business Processes
16. The purposeful and organized changing of business processes to make them more efficient is
referred to as:
A. Information Technology Engineering
B. Information Systems Management
C. Business Process Reengineering
D. Business Process Supply Chain

17. The use of BPR (Business Process Reengineering) is a two-fold: (1) Aligns business processes with
the IT systems used to recorded processes and, (2):
A. Improves the efficiency and effectiveness of these processes.
B. Reduces the cost of these processes.
C. Enhances the usefulness of these processes.
D. Increases the accuracy of the process.
18. The smallest unit of information in a computer system can have only one of two values, zero or
one, and is referred to as a(n):
A. Field
B. Record
C. Byte
D. Bit
19. A unit of storage that represents one character is referred to as a:
A. Byte
B. Bit
C. Bat
D. Field
20. IT Controls can be divided into two categories, general controls and application controls. Which
of the following is an example of a general control?
A. The alignment of a company’s IT strategy with its business strategy
B. The use of passwords to allow only authorized users to log into an IT-based accounting
system
C. The use of an elaborate set of checks and balances whereby a company’s leadership is held
accountable for building shareholder value
D. A company performing background checks on employees of its IT department
21. A set of related fields is referred to as a:
A. File
B. Record
C. Byte
D. Binary Digit
22. Each record is made up of related:
A. Files
B. Bytes
C. Name
D. Fields
23. A collection of data stored on a computer in a form that allows the data to be easily accessed,
retrieved, manipulated, and stored is referred to as a(n):
A. Accounting Information System
B. Information Technology
C. Database
D. Master File

24. A collection of data stored in several small two-dimensional tables that can be joined together in
many varying ways to represent many different kinds of relationships among the data is referred
to as a(n):
A. Database
B. Master File
C. Relational Database
D. Relation Based Accounting Software
25. Accounting software traditionally uses two different types of files. The file type that is relatively
permanent and used to maintain the detailed data for each major process is a(n):
A. General Ledger
B. Master File
C. Transaction File
D. Subsidiary File
26. Accounting software traditionally uses two different types of files. The file type that is the set of
relatively temporary records that will be process to update the permanent file is referred to as
a(n):
A. Master File
B. General File
C. Transaction File
D. Subsidiary File
27. The chart of accounts would be a good example of a:
A. Transaction File
B. Master File
C. Field
D. Record
28. The organization of files in a computer system normally uses one of two different access
methods. The access method where the files store records in sequence, with one record stored
immediately after another, is referred to as:
A. Chronological Access
B. Sequential Access
C. Random Access
D. Numerical Access
29. The organization of files in a computer system normally uses one of two different access
methods. The access method where the files are not stored in sequence, one record not stored
immediately after another, is referred to as:
A. Indexed Access
B. Batch Access
C. Sequential Access
D. Random Access

30. There are two modes of processing transactions in accounting systems. The mode that requires
all similar transactions be grouped together and be processed at the same time, is referred to
as:
A. Batch Processing
B. Online Processing
C. Real-time Processing
D. Sequential Processing
31. There are two modes of processing transactions in accounting systems. The mode that will
record transactions, one at a time, is referred to as:
A. Batch Processing
B. Online Processing
C. Real-Time Processing
D. Sequential Processing
32. A type of online processing where a transaction is processed immediately so that the output is
available immediately is termed:
A. Virtual Processing
B. Sequential Processing
C. Real-Time Processing
D. Batch Processing
33. An integrated collection of enterprise-wide data that includes five to ten fiscal years of non-
volatile data, used to support management in decision making and planning is referred to as:
A. Operational Database
B. Relational Database
C. Data Storage
D. Data Warehouse
34. This type of database contains the data that are continually updated as transactions are
processed and includes data for the current fiscal year and supports day-to-day operations is
referred to as a(n):
A. Data Warehouse
B. Data Storage
C. Relational Database
D. Operational Database
35. The data in the data warehouse are said to be enterprise-wide because:
A. The data relate to all areas of the business.
B. The data are pulled from each of the operational databases and maintained in the data
warehouse for many fiscal periods.
C. All areas of the business are able to access the data warehouse.
D. All transactions across the all areas of the business are recorded in the data warehouse.

36. The process of searching data within the data warehouse for identifiable patterns that can be
used to predict future behavior is referred to as:
A. Data mining
B. Data digging
C. Data housing
D. Data querying
37. Two or more computers linked together to share information and / or resources is referred to as
a(n):
A. Computer Intranet
B. Computer Internet
C. Computer System
D. Computer Network
38. This type of computer network is one that spans a relatively small area - often confined to a
single building or group of buildings, and are intended to connect computers within an
organization.
A. Local Area Network
B. Land Arena Network
C. Extranet
D. Internet
39. The global computer network, or “information super highway”, is the:
A. WAN
B. Intranet
C. Internet
D. LAN
40. A company’s private network, accessible only to the employees of that company is the:
A. WAN
B. Intranet
C. Internet
D. LAN
41. This computer network is similar to a company’s intranet except that it does allow access to
selected outsiders, such as buyers, suppliers, distributors, and wholesalers.
A. Ultranet
B. Internet
C. Extranet
D. LAN
42. A contemporary type of computer infrastructure that is used by an increasing number of
companies involves the use of shared services, software, and / or data stored on servers at a
remote location, which are accessible over a network, is referred to as:
A. Database
B. Cloud Computing
C. Internet
D. Relational Internet

43. The use of electronic means to enhance business processes is termed:
A. E-business
B. Electronic data interchange
C. Point of sale system
D. E-commerce
44. The intercompany, computer-to-computer transfer of business documents in a standard
business format is called:
A. E-business
B. E-commerce
C. Local area network
D. Electronic data interchange
45. Which of the following is NOT an objective of IT usage to support business processes?
A. Increased efficiency of business processes
B. Increased data to use in the data analytics process
C. Reduced cost of business processes
D. Increased accuracy of the data related to business processes
46. Which of the following is NOT one of the three components of electronic data interchange?
A. Commerce - encompasses all forms of electronic trading.
B. Intercompany - two or more companies conducting business electronically.
C. Standard business format - necessary so that the various companies can interact and trade
electronically.
D. Computer to computer - indicates that each company’s computers are connected via a
network.
47. This term refers to a system of hardware and software that captures retail sales transactions by
standard bar coding.
A. E-business
C. Point of sale system
D. E-commerce
48. When a point of sale system is used and a customer checks out through a cash register, which of
the following processes occurs?
A. Net income is computed.
B. Inventory values are updated.
C. Accounts payable balances are updated.
D. Replacement inventory is purchased.
49. A system of computer hardware and software in which the software matches an invoice to its
related purchase order and receiving report is called:
A. Point of sale system
C. Automated matching
D. Evaluated receipt settlement

50. An invoice-less system in which computer hardware and software complete an invoice-less
match that is a comparison of the purchase order with the goods received is termed:
A. Evaluated receipt settlement
B. Automated matching
C. Electronic invoice presentation and payment
D. Enterprise resource planning
51. This system enables a vendor to present an invoice to its trading partner via the internet,
eliminating the paper, printing, and postage costs of traditional paper invoicing.
A. Evaluated receipt settlement
B. Electronic invoice presentation and payment
C. Automated matching
D. Electronic data interchange
52. A multi-module software system designed to manage all aspects of an enterprise usually broken
down into modules such as financials, sales, human resources, and manufacturing, is referred to
as a(n):
A. Electronic data system
C. Enterprise resource planning
D. Electronic resource program
53. Management has the responsibility, and the ability, to take action to reduce risks or to lessen
the impact al nearly all risks an organization faces. The steps taken by management to lessen
the risk or reduce the impact of the risk, are referred to as:
A. Programs
B. Risk assessment
C. Information evaluation
D. Controls
54. IT Controls can be divided into two categories, general controls and application controls. Which
of the following is an example of a general control?
A. The alignment of a company’s IT strategy with its business strategy.
B. The use of passwords to allow only authorized users to log into an IT-based accounting
system.
C. The use of an elaborate set of checks and balances whereby a company’s leadership is held
accountable for building shareholder value.
D. A company performing background checks on employees of its IT department.
55. Which of the following groups of professionals within an organization have a history of designing
and implementing the controls to lessen risks?
A. Management
B. Accountants
C. Human Resources
D. Lawyers

56. Which of the following is not one of broad categories of controls?
A. The risk that assets will be stolen or misused.
B. The risk of errors in accounting data or information.
C. The risk of loss due to a natural disaster.
D. The risk of fraudulent activity by employees.
57. Which of the following is not a risk inherent in an IT system?
A. Computer security breaches.
B. Computers being stolen.
C. Erroneous input of data.
D. Hardware or software failure.
58. A comprehensive report on enterprise risk management was issued by this organization.
A. American Accounting Association
B. New York Stock Exchange
C. Institute of Internal Auditors
D. Committee on Sponsoring Organizations
59. A process, effected by an entity’s board of directors, management and other personnel, applied
in strategy setting and across the enterprise, designed to identify potential events that may
affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance
regarding the achievement of entity objectives is referred to as:
A. Enterprise resource planning
B. Enterprise risk management
C. IT system control structure
D. Corporate governance structure
60. In order to achieve the objective of managing risk, management should establish control
structures that include, at a minimum:
A. Accounting internal controls.
B. Accounting internal controls, IT controls, corporate governance, enterprise risk
management, and IT governance.
C. IT controls, IT governance, corporate governance, and accounting internal controls.
D. IT controls and accounting internal controls.
61. The company’s development and adherence to this should reduce the opportunities for
managements or employees to conduct fraud.
A. Code of ethics
B. Internal control structure
C. Application controls
D. Corporate governance
62. The COSO report, Internal Controls – Integrated Framework, identified interrelated components
of internal control. Which of the following is not one of those components?
A. Monitoring
B. Risk assessment
C. Control activities
D. Enterprise risk management

63. IT controls can be divided into two categories. Which of the following is a correct statement of
one of those categories?
A. Application controls apply overall to the IT accounting system.
B. Application controls apply to the prevention of erroneous or incomplete input or processing
of data.
C. Application controls are used specifically in accounting applications to control inputs,
processing, and output.
D. Application controls are used to prohibit fraudulent financial reporting.
64. ________ is accomplished through ongoing management activities, separate evaluations, or
both.
A. Control activities
B. Risk Assessment
C. Risk Response
D. Monitoring
65. An elaborate system of checks and balances, whereby a company’s leadership is held
accountable for building shareholder value and creating confidence in the financial reporting
processes, is referred to as:
A. Enterprise risk management
B. Corporate governance
C. Application controls
D. Internal control structure
66. The purpose of this 2002 act was to improve financial reporting and reinforce the importance of
corporate ethics.
A. Foreign Corrupt Practices Act
B. Sarbanes-Oxley Act
C. Securities and Exchange Act
D. Treadway Act
67. Which of the following is not one of the corporate functions interrelated within the corporate
governance system?
A. Management Oversight
B. Ethical Conduct
C. Risk Assessment
D. Financial Stewardship
68. The proper management, control, and use of IT systems are known as:
A. IT Governance
B. IT Controls
C. IT Risk Management
D. IT Code of Ethics

69. Accountants have several possible roles related to accounting information systems. Which of
the following is not normally one of those roles?
A. Auditor of an AIS
B. User of the AIS
C. Programmer of the AIS
D. Design of the AIS
70. Which of the following is not a part of risk analysis?
A. Risk management
B. Event Identification
C. Risk Response
D. Risk Assessment
71. There are many reasons for accountants to become aware of potential unethical behaviors.
Which of the following is not one of the reasons identified by the authors?
A. Accountants are responsible for identifying unethical and illegal activities.
B. Accounts assist in developing and implementing internal control structures that should
decrease the chance of unethical actions.
C. Accountants are often pressured to assist in, or cover up, unethical actions.
D. Accountants deal with assets or records that could easily tempt accountants to engage in
unethical behavior.
TEST BANK – CHAPTER 1 – TRUE/FALSE:
1. A business process has a well-defined beginning and end.
TRUE
2. Each business process has a direct effect on the financial status of an organization.
FALSE: The process could have an indirect effect.
3. Few accounting information systems rely on computer hardware and software to track business
processes.
FALSE: Most accounting information systems rely on computer hardware and software.
4. The rethinking and redesigning that occur during business process reengineering are aided by
the use of information technology.
TRUE
5. There are very few business processes that have the potential to be improved by IT enablement.
FALSE
6. Business process reengineering should leverage the capabilities of information technology to
improve the efficiency of business processes.
TRUE
7. It is important for accountants to have some understanding of basic computer terminology.
TRUE

8. When files are organized as sequential access, and the user needs to access record number 250,
the previous 249 records will be read by the computer before reading record number 250.
TRUE
9. When files are organized as sequential access, the sequence is normally based on one key
record in each file.
FALSE: the key is a field – not a record
10. Batch processing is best suited to applications that have large volumes of similar transactions
that can be processed as regular intervals.
TRUE
11. Online processing is the opposite of real-time processing.
FALSE: Online processing is the opposite of batch processing.
12. Batch processing is best suited to sequential access files.
TRUE
13. Online processing is best suited to sequential access files.
FALSE: random access files, not sequential access files.
14. Online processing is best suited to situations where there is a large volume of records but only a
few records are needed to process any individual transaction.
TRUE
15. Each time a new transaction is completed, parts of the data warehouse must be updated.
FALSE: parts of the operational database must be updated.
16. Data in the data warehouse are called nonvolatile because they do not change rapidly in the
same way that operational data change.
TRUE
17. A system of local area networks connected over any distance via other net work connections is
called a WAN, or wide area network.
TRUE
18. E-business is a type of e-commerce.
FALSE: e-commerce is a type of e-business
19. The “intercompany” component of electronic data interchange means that two or more
companies are conducting business electronically.
TRUE
20. In order to have an automated matching system it is necessary to have access to paper copies of
purchase orders and invoices.
FALSE: All of the related files need to be online.

21. When automated matching is used, the system will not approve an invoice for payment unless
the items and quantities match with the packing slip and the prices match the purchase order
prices.
TRUE
22. The evaluated receipt settlement system is an IT enabled system that reduces the time and cost
of processing customer payments.
FALSE: processing vendor payments.
23. ERP systems are based on a relational database system.
TRUE
24. Traditional accounting software is much more comprehensive and encompassing that ERP
software.
FALSE
25. Before ERP software systems, modules such as human resources were in separate software but
well integrated with the accounting software.
FALSE: were NOT well integrated.
26. Although accountants are heavily involved in the creation, implementation, and monitoring of
the control structure, management has the ultimate responsibility to establish a control
environment.
TRUE
27. Once a company has decided on the control processes needed, it is not necessary to have an
ongoing assessment of risks.
FALSE: it is necessary to have an ongoing assessment of risks.
28. A code of ethics should reduce opportunities for employees to conduct fraud if management
emphasizes the cost and disciplines or discharges those who violate it.
TRUE
29. IT systems are to be chosen and implemented to support the attainment of strategies and
objectives.
TRUE
30. It is likely that an accountant will select a career path, within accounting, that will not in some
way, involve the use of an accounting information system.
FALSE
31. An auditor cannot make informed decisions necessary to complete the audit without an
understanding of the accounting information system.
TRUE
32. The accounting information system is often the tool used to commit or cover up unethical
behavior.
TRUE

Question 1. SO 1 Types of business processes
Describe the four general types of business processes typical in organizations that were
discussed in chapter 1 of the text. Describe two transaction types or transaction processes
included in each business process.
Answer:
1. Revenue processes (Discussed in detail in chapter 8)
a. Sales processes
b. Sales return processes
c. Cash collection processes
2. Expenditure processes (Discussed in detail in chapters 9 and 10)
a. Purchasing processes
b. Purchase return processes
c. Cash disbursement processes
d. Payroll processes
e. Fixed asset processes
3. Conversion processes (Discussed in detail in chapter 11)
a. Planning processes
b. Resource management processes
c. Logistics processes
4. Administrative processes (Discussed in detail in chapter 12)
a. Capital processes
b. Investment processes
c. General ledger processes
Question 2. SO2 Overview of Accounting Information Systems - Real World Example
One of the real word examples in chapter 1 discussed a recent trend in the fast food restaurant
industry where remote order-taking is completed at a drive-through window. In the case of
McDonald’s, an experimental order-taking center takes drive-through orders for several
different McDonald’s locations.
Describe how this real world example relates to each of the components of an accounting
information system.
Answer: Answers will vary. The following was discussed in the chapter.
Accounting information system comprises the processes, procedures, and systems that capture
accounting data from business processes; record the accounting data in the appropriate
records; process the detailed accounting data by classifying, summarizing, and consolidating;
and report the summarized accounting data to internal and external users.
The accounting information system has several components. The following example from
McDonalds lists each component of the accounting information system.
1) Work steps within a business process intended to capture accounting data as that
business process occurs.

• When McDonald’s employees greet a customer at the cash register, they have
several work steps to complete a sale, some of which are accounting related
and some of which are not. Greeting the customer with a smile may be an
important step, but it has no impact on accounting records. However, using the
touch screen at the cash register to conduct the sale does have an accounting
effect: sales amounts in the sales records should be increased and cash amounts
in cash records should be increased.
2) The manual or computer-based records to record the accounting data from business
processes
• As is true of most companies, McDonald’s has a system of computers and
computer processes to record the appropriate data from the sale process. These
systems usually have a combination of manual and computerized steps. For
McDonald’s, the manual process is that a person must operate the cash register.
The remainder of the McDonald’s system is computer-based, and the computer
records the sale and all related data.
3) Work steps that are internal controls within the business process to safeguard assets
and to ensure accuracy and completeness of the data
• As mentioned before, the requirement that a manager closes and reconciles the
cash register at the end of the day is an example of an internal control within
the sales processes.
4) Work steps to process, classify, summarize, and consolidate the raw accounting data
• For example, sales at each McDonald’s franchise must be summarized and
consolidated into a single total of sales revenue to be reported on the income
statement. At McDonald’s, these steps are accomplished by the computer
system and the accounting software. In some companies, there may be manual
or handwritten accounting records, although currently most organizations use IT
systems to conduct some or all of the accounting recording and summarizing
processes.
5) Work steps that generate both internal and external reports.
• McDonald’s needs many types of internal reports to monitor the performance
of individual franchise locations and regions. In addition, year-end external
financial statements such as the income statement, balance sheet, and
statement of cash flows must be prepared for external users.
These five components are part of any accounting information system but are likely to
be applied differently in different business organizations. Exhibit 1-1 provided an
overview of an accounting information system:

Question 3. SO3 Supply Chain
Explain the term supply chain and identify the organizations or individuals that would be part of
a supply chain for a company that produces products for sale.
Answer: Supply Chain - processes and information flows that involve the movement of
materials, funds, and related information through the full logistics process, from the acquisition
of raw materials to the delivery of finished products to the customer or end user.
The supply chain includes all:
• Vendors
• Service providers
• Customers
• Intermediaries
Question 4. SO4 IT Enablement
Explain the term IT enablement and identify three objectives of adding IT enablement to an
organization.
Answer: IT ENABLEMENT OF BUSINESS PROCESSES: Information technology is defined as the
computers, ancillary equipment, software, services, and related resources as applied to support
business processes.
IT enablement to support business processes accomplishes one or more of the following
objectives:
1. Increased efficiency of business processes
2. Reduced cost of business processes
3. Increased accuracy of the data related to business processes
Any business process has the potential to be improved by IT enablement. In many cases, using IT
to enable processes leads to a completely different approach to those processes. Applying IT to
business processes is an opportunity to “think outside the box” and consider completely
different methods for business processes. This concept of revising processes as IT enabling
occurs is called business process reengineering.
Question 5. SO4 IT Enablement and Business Process Reengineering
Explain the term Business Process Reengineering (BPR) and identify BPR’s relationship to IT
enablement at an organization.
Answer: Business process reengineering (BPR) is the purposeful and organized changing of
business processes to make them more efficient. BPR not only aligns business processes with
the IT systems used to record processes, it also improves efficiency and effectiveness of these
processes

Question 6. SO5 IT Enablement and Business Process Reengineering
Explain the following data structure terms and the interrelationship of the terms in an
accounting information system.
Bit, or binary digit
Byte
Field
Record
File
Database
Answer:
Accounting data is stored in computer files, and an accountant should have some understanding
of data structures in IT systems. Data is explained and organized in a data hierarchy in computer
systems, as follows:
(1) Bit, or binary digit
a. Smallest unit of information in a computer system
b. Can only have one of two values: zero or one
(2) Byte
a. Unit of storage represents one character
b. One byte is made up of eight bits
(3) Field
a. One item within a record
(4) Record
a. Set of related fields for the same entity
(5) File
a. Entire set of related records
(6) Database
a. Collection of data stored on the computer in a form that allows data to be easily
accessed, retrieved, manipulated, and stored
Question 7. SO5 Batch verses online or real time processing
Explain the two modes of processing transactions, batch processing and online or real time
processing.
Answer:
Two modes of processing transactions:
(1) Batch processing
a. Requires that all similar transactions be grouped together for a specified time; then this
group of transactions is processed as a batch
(2) Online processing
a. Opposite of batch processing
b. Transactions are not grouped into batches, but each transactions is entered and
processed one at a time

c. Some online processing systems are also real-time processing systems, meaning that the
transaction is processed immediately, and in real time, so that the output is available
immediately
Question 8. SO6 IT Enablement
Identify and explain three examples of IT systems that use IT enabled business processes.
Answer:
Examples of systems applied by companies today that use IT-enabled business processes:
• E-Business
o the use of electronic means to enhance business processes
o encompasses all forms of online electronic trading—consumer- based e-
commerce and business-to-business transactions, as well as the use of IT for process
integration inside organizations
• Electronic Data Interchange (EDI)
o the intercompany, computer-to-computer transfer of business documents in a
standard business format
• Point of Sales system
o a system of hardware and software that captures retail sales transactions by
standard bar coding. Nearly all large retail and grocery stores use POS systems that
are integrated into the cash register
• Automated Matching
o a computer hardware and software system in which the software matches an
invoice to its related purchase order and receiving report. Traditional systems rely
on a person to do this matching, whereas an automated matching system does
not.
• Evaluated receipt Settlement
o is an invoice-less system in which computer hardware and software complete an
invoice-less match comparing the purchase order with the goods received
• E-Payables and Electronic Invoice Presentment and Payment
o are both terms that refer to Web-enabled receipt and payment of vendor invoices.
EIPP enables a vendor to present an invoice to its trading partner via the Internet,
eliminating the paper, printing, and postage costs of traditional paper invoicing.
• Enterprise Resource Planning Systems
o is a multi-module software system designed to manage all aspects of an enterprise
o ERP software system is much more comprehensive and encompassing than
traditional accounting software. ERP systems include modules to handle accounting
functions, but, as previously mentioned, they also incorporate modules for
manufacturing, marketing, logistics, and human resources
Question 9. SO 7 IT Controls and Organizational Risks Addressed
Accountants have a long history of being the professionals within the organization who help
design and implement controls to lessen risks that have an impact on the financial standing of

the organization. List the four broad categories of risks described in the text that accountants
design controls to mitigate.
Answer:
1. The risk that assets will be stolen or misused
2. The risk of errors in accounting data or information
3. The risk of fraudulent activity by employees, managers, customers, or vendors
4. The risks inherent in IT systems, such as
Question 10. SO 7 IT Controls and Organizational Risks Addressed
List four control risks that are inherent in an IT system
Answer:
a. Erroneous input of data
b. Erroneous processing of data
c. Computer fraud
d. Computer security breaches
e. Hardware or software failure
f. Natural disasters that can interrupt computer system operations

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Test Bank For Accounting Information Systems: Controls and Processes, 3rd Edition: Controls and Processes

I.—THE ATTACK ON THE SALIENT
OF ALBERT-MONTDIDIER-
LASSIGNY.
August 8-13, 1918.
Preliminary Operations of July.
Throughout July, the Allies carried out different local operations, in
order to improve their positions and prepare for the coming
offensive.
As early as July 4, Australians supported by Americans, had begun to
advance between Villers-Bretonneux and the Somme, by capturing
the village and wood of Hamel.
On July 9, after a brilliant attack between Castel and the north of
Mailly-Raineval, the French captured Castel, and on the 23rd, Mailly-
Raineval, which brought them nearer the Avre.
These different actions, and the flattening of the Cantigny salient by
the American 1st Div. on May 28, had warned the enemy.
On August 2, the Germans fell back on the Ancre, and on the 3rd to
the Avre. The bulk of their forces were withdrawn east of these
rivers, leaving only light forces on the west bank.
On the Marne, Ludendorff had just suffered a severe defeat. From
July 18 to August 4, his armies had been driven back from the Marne
to the Vesle, where they organized new positions. (See the Guide:
The Second Battle of the Marne.) In the belief that this effort
had temporarily exhausted the Allies, Ludendorff was planning new
operations in Flanders, when he was surprised by a new and
powerful Allied Offensive. From that point, the initiative remained
with Foch.

The Front Line and the Opposing Forces.
The Front Line on August 8, and the Opposing
Forces.
On August 8, the front line passed west of Albert, east of Villers-
Bretonneux, then followed the left bank of the Avre, and the Doms
stream, west of Montdidier, running thence towards the Matz and
the Oise, via Assainvillers, west of Cuvilly and Chevincourt.

From north to south, the enemy front was held by the IInd Army
(von Marwitz) (10 Divns. in line from Albert to Moreuil), and by the
XVIIIth Army (von Hutier) (11 Divns. from Moreuil to the Oise).
These two armies, with 21 divisions in line, engaged 17 other
divisions during the course of the battle, i. e. 38 divisions in all.
The Americans attacking Cantigny (May 28, 1918).
Photographed from, an accompanying aeroplane. At the top
of photo:
Cantigny village. At bottom of photo: Tank tracks. The white
dots and

dashes spread over the photo are the American Infantry.
Two larger
dashes about three-quarters of an inch below Cantigny, on
the right,
are tanks.
The undermentioned forces were grouped under the command of
Field-Marshal Haig:
The British 4th Army (Rawlinson), comprising the 3rd Corps (3
divisions), the Australian Corps (4 divisions), the Canadian Corps (4
divisions), and 3 divisions of British Cavalry, 2 brigades of armoured
cars and 1 battalion of Canadian Cyclists in reserve.
The French 1st Army (Debeney), comprising the 31st Corps (4
divisions), 9th Corps (2 divisions), 10th Corps (3 divisions), 35th
Corps (4 divisions), and the 2nd Cavalry Corps in reserve.
The Franco-British Attack of August 8, 1918.
These armies attacked on August 8, along a 15-mile front, from the
Ancre to the Avre.
"At 4.20 a.m., after three formidable cannon-shots,—the signal for
the opening of the attack,—the rolling barrage broke out before the
Australian and Canadian troops, who immediately dashed forward.
At the same time, the heavy and light tanks, armoured cars and
motor-lorries, loaded with supplies and ammunition, set out. At
certain points, the cavalry, followed by the artillery and the
aeroplanes, guarded or speeded up the advance. The enemy were
taken completely by surprise. The troops and staffs were taken
prisoners before they realized what had happened. One after
another, the villages were surrounded and captured. Forging ahead
of the infantry, the cavalry and tanks spread panic everywhere."

The British advanced rapidly in the direction of Rosières, along both
sides of the Amiens-Chaulnes railway.
Towards evening, the advanced line passed through Mézières, Caix
and Cerisy. Everywhere, except at Morlancourt, north of the Somme,
where the enemy resisted desperately, the Germans were routed.
More than 13,000 prisoners, a general and the staff of an army
corps, and 300 guns had fallen into the hands of the British by 9
a.m.
August 8.
Along the front of Debeney's Army, the artillery preparation was
short but violent, (45 minutes). The infantry attacked about five
o'clock i.e. after the British. The ground, divided for the greater part
by the valley of the Avre, was more difficult, and General Debeney
counted rather on manœuvering, than on surprise.

The attack began on a front of 2½ miles, south of the Amiens-Roye
road, debouching from the valley of the Luce towards ground
suitable for the tanks, the troops being gradually engaged on their
right, along the Avre.
At 8 a.m., two divisions turned Moreuil Wood, from the north-east
and south-west. On the Avre, another division captured Morisel,
whilst to the south of Moreuil a battalion crossed the river. Moreuil,
turned from the north and south, fell. South of Moreuil, two fresh
divisions crossed the Avre, opposite Braches, opening up a way for
the troops who had to fight on the plateaux.
At the end of the day, after an advance of about five miles, the
French reached the line Braches, La Neuville-Sire-Bernard, and
joined hands with the British near Mézières. 3,300 prisoners,
including three regimental commandants, were taken.
German battery captured by the British, who
immediately turned it on the Enemy.
The third gun is still pointing towards the Allies' lines.
(Photo Imp. War Museum).

"It was a black day for the German Army" wrote Ludendorff, "the
blackest of all the war, except September 15, which saw the
defection of Bulgaria, and sealed the destinies of the Quadruple
Alliance".
German Artillery Position in Sunken Road.
From August 9 to 12.
On August 9-10, the British thrust and the French manœuvre
developed.

The British Advance.
Between Albert and the Amiens-Roye road, the Canadians and
Australians harassed the enemy without respite, and advanced
several kilometres, capturing Bouchoir, Méharicourt, Rosières, Lihons
and Proyart.
North of the Somme, in co-operation with American troops, they
captured Morlancourt village and plateau to the south-east, where
the enemy resisted desperately.
On the 11th, in spite of stubborn resistance, the British reached the
Dernancourt crossroads, about a mile west of Bray, Chilly,
Fouquescourt and the western suburbs of Villers-les-Roye.
On the 12th, they drove the enemy for good out of Proyart. On the
13th, they reached the suburbs of Bray-sur-Somme and the
crossroads of Chuignolles. The front now ran along the old German
lines of the Somme Battlefield of 1916, where the enemy, thanks to
a number of strong points of support, succeeded in staying the
advance. In five days, the British had scored a fine victory, their
forces (13 infantry divisions, one regiment of the American 33rd
Division, 3 divisions of cavalry, and 400 tanks) defeating 20 German
divisions, advancing 12 miles, and capturing 22,000 prisoners and
400 guns.

The Allies Advance from the morning of August 8
(dash line) to the evening of the same day (dot-and-dash
line). The thick full line shows the front
on August 12.
The French Manœuvre. Liberating Montdidier.

Meanwhile, General Debeney, by a series of turning movements,
brought about the fall of important sections of the German front,
without frontal attacks.
Constantly extending his attacks along the Avre, the approaches to
the river on the north and north-east, as far as the confluence with
the Doms stream, were cleared, whilst his hold on Montdidier, from
the north-east, gradually tightened.
British Cavalry near Albert. (Photo Imperial War Museum).
On August 9, the French line was advanced as far as the station of
Hangest-en-Santerre, on the Albert-Rosières-Montdidier railway.
In order to force the enemy to abandon Montdidier, without a frontal
attack, General Debeney began a turning movement at about 4 p.m.
A secondary attack was launched in the direction of Roye, between

Domelieu and Le Ployron. The station of Montdidier and Faverolles
Village on the Montdidier-Roye line, were reached that evening.
Throughout the day, the French airmen bombed Roye undisturbed
by the enemy's planes or air-defence guns.
By evening, the 1st Army had taken 5,000 prisoners. From
Faverolles, they threatened to join up with the men who had
advanced north, via Davenescourt, and to cut off the Germans in
Montdidier.
The latter was evacuated in great disorder the same night and on
the following morning, only a few machine-gunners being left behind
to retard the French advance as long as possible.
On August 10, at noon, the French entered the ruined town, and
advanced rapidly eastward, beyond Fescamps, on both sides of the
road to Roye. In the evening, they reached the line Villers-les-Roye
(where they joined hands with the British) and Grivillers.
On the 11th, they captured the park and village of Tilloloy. By the
evening of the 12th, the 1st Army had taken 8,500 prisoners
(including 181 officers), 250 guns, numerous minenwerfer, 1,600
machines-guns, and huge quantities of stores.

Photos, p. 44:
(1) Australian Sergeant examining a German Machine-gun
captured by the 15th Brigade.
(2) Near Warfusée-Abancourt, August 8. Infantry of the
Australian 1st Division advancing on Harbonnières, after a tank
had cleaned up a line of German Machine-guns which was
holding them.

(3) The Shelters of the above line of machine-guns— light
constructions compared with the powerful trench organisations,
yet strong enough to require tank treatment.

Photos above:
(1) Australians in German trench, with field-guns just captured
(August 1918).
(2) British lorries in Villers-Bretonneux (August 17, 1918).

II.—THE BRITISH OFFENSIVE
NORTH OF THE SOMME AND
THE FRENCH OFFENSIVE BETWEEN
THE OISE AND AISNE.
August 18-29.
The first phase of the Battle of Picardy was ended, but a great new
effort, between the Somme and the Scarpe, was being prepared.
Between the Aisne and the Oise, Mangin's Army attacked the
plateaux on August 18th, advancing to the Ailette on the 23rd.
(Sketch above).

The Attack between the Oise and Aisne
by the Armies of Generals Mangin
and Humbert, August 18-23.
Following up this advance, Humbert's Army continued its offensive
vigorously on the 21st, conquered the northern slopes of Le
Plémont, crossed the Divette, and occupied Lassigny. (Sketch
above).
By their advance, these two armies threatened the right of the
German XVIIIth Army, established on the Chaulnes-Roye line.
At the same time, Byng's Army attacked between the Ancre and
Croisilles, whilst Rawlinson's left attacked north of the Somme.
(Sketch above).

The Attack between the Somme and Scarpe
by Byng and Rawlinson, August 21-29.

At dawn, on August 21, the 4th and 6th Corps of Byng's Army
attacked between Miraumont and Moyenneville.
Supported by tanks, they captured the advance defences in brilliant
style.
The fighting was particularly severe around Achiet-le-Grand and
Logeast Wood, where, however, the advance continued steadily. The
Arras-Albert railway which was the enemy's principal line of defence,
was reached, 2,000 prisoners being taken.
After this preparatory attack, the offensive was launched on August
22, along a thirty-two mile front, between Lihons and Mercatel.
South of the Somme, the Australians captured Herleville and
Chuignes, with 2,000 prisoners. Rawlinson's left crossed the Ancre,
took Albert, and advanced its front to the hills east of the Albert-
Braye road, capturing 2,400 prisoners.

But the hardest blow was struck further north by Byng's Army.
Advancing beyond the principal line of defence (the Arras-Albert
railway), the 4th and 6th Corps took Gomiécourt, Ervillers, Boyelles,
many guns, and more than 5,000 prisoners, then pushed on towards
Bapaume and Croisilles. The 6th Corps, astride the Arras-Bapaume
road, marched on Bapaume, threatening to cut off the Germans who
were hanging on to the Heights of Thiepval. The latter, attacked at
the same time further south, fell. Bray-sur-Somme was also
captured.

The battle continued from the 25th to the 29th, the enemy's
resistance stiffening steadily.
Counter-attacking, the Germans defended this old battlefield of
1916, strewn with obstacles, with great desperation.
On the 29th, Bapaume fell, and the Germans retreated from the
north of that town to the Somme, on the line Cléry, Combles,
Frémicourt, Bullecourt, and Heudecourt.

The German Retreat, south of the Somme,
under the double menace of the British
and French Advance.
Threatened by the British to the north of the Somme, and by the
French on the banks of the Oise, the Germans began their retreat in
the bend of the Somme. Closely pursued by the British 4th Army and
the French 1st and 3rd Armies, they withdrew to the river, from
Péronne to Ham.
Chaulnes and Nesle were occupied by the Allies.
"On the same ground which had seen their stubborn defence, the
British troops went up to the attack with untiring vigour and
unshakeable determination, which neither the difficulty of the
ground, nor the obstinate resistance of the enemy could break or
diminish." (Haig).
German long-range Gun captured by the Australians at Proyart.

Photo Imperial War Museum.
PHOTOS, p. 48:
(1) The 2nd German line near Albert, occupied by the British.
(2) The Railway Station at Albert, a few minutes after the German
retreat.
(3) Railway destroyed by the British artillery, during the advance on
Bapaume.

Photo Imperial War Museum.
Photo above:
Albert, seen from the interior of the Church, the day the town was
liberated

III.—THE OFFENSIVES ON THE
SCARPE AND AILETTE.
August 25-September 8, 1918.
Pursuing his plan of offensive, Foch extended the field of operations.
Writing to Field-Marshal Haig, he said: Continue your operations,
leaving the enemy no respite, and developing the scope of your
actions. It is this increasing breadth of the offensive, fed from the
rear and strongly pressed in front, without limitation of objective,
without consideration for the alignment and too close liaison, which
will give us the greatest results with the least losses.... The armies
of General Pétain are going forward again in the same manner.

At the time Mangin's Army was preparing to crush the enemy's front
between the Aisne and St. Gobain, Horne's Army, on the Scarpe,
attacked the salient east of Arras.
On August 25, the Canadians, astride the Scarpe, and the left of
Byng's Army captured the difficult positions of Monchy-le-Preux,
Guémappe and Rœux, bringing their line into contact with the
redoubtable position of Quéant-Drocourt, a ramification of the
Hindenburg Line.

On September 2, the Canadians attacked, progressing rapidly
along the Arras-Cambrai road. Penetrating the German lines to a
depth of 6 miles, they reached Buissy.
On the night of August 30, the Australians, in the centre, furiously
attacked and captured the formidable bastion of Mont-St-Quentin.
On September 1, they entered Péronne, after desperate fighting.
To flank this attack on the north, Bouchavesnes and Frégicourt were
captured.

Further south, on the Oise, Humbert's Army, in spite of the enemy's
resistance, took Noyon and the high ground dominating the town.
Advancing from the Ailette, towards Chauny, Mangin's left reached
the outskirts of St. Gobain Forest, in the old lines of March 1918.
Outflanked on the north, towards Cambrai, and on the south along
the Oise, in the direction of La Fère, and violently attacked at the
same time in the centre at Péronne, the Germans retreated towards
the Hindenburg positions. The British and French forces drove back
the enemy rear-guards, which were unable to hold the line of the
Tortille and the Canal du Nord.
On Sept. 8, the Allied front ran west of Arleux and Marquion,
through Havrincourt, Épéhy and Vermand, then followed the Crozat
Canal.

IV.—THE OFFENSIVES AGAINST THE
OUTWORKS OF THE HINDENBURG
LINE.
September 10-25.
The Germans had reached the advanced defences of their famous
Hindenburg Line, consisting of the old British lines lost in March.
These formidable positions protected the ramparts of the
Hindenburg Line, said to be impregnable.
On September 10, the British 3rd and 4th Armies (Byng and
Rawlinson) attacked between Havrincourt and Holnon.

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