22- Information that is gathered by management only if the benefits derived from the information outweigh the costs of gathering it is called: L01-2 a. Mandatory information b. Discretionary information C. Relevant information Page 2 of 8 d. Financial information 23. Information that is required to be reported to an external party to comply with external laws, regulations, agreements, etc. is called: L01-2 a. Mandatory information b. Discretionary information c. Relevant information d. Financial information 24. Which of the following is considered to be mandatory information? L01-2 A. U.S. tax return. B. Segment Margin Income Statement. C. Production Report. D. Financial Statements. 25. Which of the following is considered to be discretionary information? L01-2 A Annual Financial Statements. B. Form 10-K Annual Report filed with the SEC. C. Segment Margin Income Statement sent to the bank monthly. D. Production Report sent to management daily. CIA (CIA) 27. What designation identifies the professionals possessing IT audit, control, and security skills? LO 1-3 A. CIA-Certified Internal Auditor B. CPA - Certified Public Accountant C. CITP - Certified Information Technology Professional D. CISA - Certified Information Systems Auditor 28. What designation identifies accountants (CPAs) with a broad range of technology knowledge and experience? LO 1-3 A. CIA - Certified Internal Auditor B. CPA - Certified Public Accountant C. CITP - Certified Information Technology Professional D. CISA - Certified Information Systems Auditor 29. What designation is the only globally accepted certification for internal auditors and is the standard to demonstrate their competency and professionalism in the internal auditing field? LO 1-3 A CIA - Certified Internal Auditor Page 3 of 8 # cmd ACCOUNTING INFORMATION SYSTEMS AND CONTROLS (ACTY 3130) STUDY GUIDE QUESTIONS CHAPTER 1 - ACOUNTING INFORMATION SYSTEMS AND FIRM VALUE B. CPA - Certified Public Accountant C. CITP - Certified Information Technology Professional D. CISA - Certified Information Systems Auditor 30- What does "business value" mean? L01-4 31- Where does business value come from and how is it created? L01-4 moh hurinore process a firm can use Michael Porter's 35- This category of activities provides value to the customer. 101-4 a. Primary activities b. Secondary activities c. Support activities d. Control activities 36. This category of activities provide the support necessary for primary activities to be performed: 101-4 a. Primary activities b. Secondary activities C. Support activities d. Control activities 37. How can an AIS can add value to a firm's primary activities? LO 1-5 38. How can an AIS can add value to a firm's support activities? LO 1-5 Page 4 of 8 41- An enterprise resource planning (ERP) system is considered to be: L01-6 A. an internal business process. B. an external business process. C. supply chain management software. customer relationship management software. ACCOUNTING INFORMATION SYSTEMS AND CONTROLS (ACTY 3130) STUDY GUIDE QUESTIONS CHAPTER 1 - ACOUNTING INFORMATION SYSTEMS AND FIRM VALUE 46- Customer relationship management software does not include information about: 101-7 A. current customers. B. prospective customers. C. former customers. D. current suppliers. 47- One way to consider how AIS creates value is to look at this financial statement: _. LO 1-8 48- In an academic study, a positive association was found between the level of the firm's annual IT investment and its subsequent accounting earnings (as measured by return on assets and return on sales), suggesting that IT investment does create .LO 1-8 49- For each of the income statement items below, describe the effect an accounting information system would have? LO1-8 Income Statement Revenues Effect of AIS on Income Statement CRM techniques could attract new customers, generating additional sales revenue. Less: Interest Expense SCM software allows the firm to carry less inventory. Less inventory leaves less assets to finance and may possibly reduce debt and its related interest all combined, a well-designed and well-functioning AIS with investments in ERP, SCM, and/or CRM may be expected to improve net income. Net Income 50- The income statement item most likely affected by an AIS investment in supply chain management software would be: L01-8 A. Revenue B. Cost of goods sold C. Selling, general and administrative expense D. Unearned revenue 51- The balance sheet account most likely affected by an AIS investment in supply chain management software would be: L01-8 A. Cash B. Inventory Page 6 of 8 ACCOUNTING INFORMATION SYSTEMS AND CONTROLS (ACTY 3130) STUDY GUIDE QUESTIONS CHAPTER 1 - ACOUNTING INFORMATION SYSTEMS AND FIRM VALUE C. Selling, general and administrative expense. D. Property, plant and equipment. 52- The income statement item most likely affected by an AIS investment in customer relationship management software would be: L01-8 A. Revenue B. Cost of goods sold C. Selling, general and administrative expense D. Interest expense 53- If your company is considering investing in an accounting information system, what type of software would you recommend be implemented to improve revenues? 54- If your company is considering investing in an accounting information system, what type of software would you recommend be implemented to improve cost of goods sold expense? 55. In general, if the stock market participants believe that future cash flows will increase after a company invests in and implements an accounting information system, what is expected to happen to a company's stock price? L01-8 If the stock markets participants believe the future cash flows from the investment will increase for the firm, the stock price of that firm is expected to increase