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Chapter 1: Systems fundamentals – Introduction
Multiple-choice questions
1
...

b
...

d
...

computer systems have emerged to handle the classification and recording
tasks traditionally associated with the accounting function
...

knowledge workers have increasingly replaced accountants in the performance
of recording and classification tasks
...
1 – critically evaluate accounting practices, reflecting on how
accounting information systems enrich and extend the role of the accountant
...


As computer systems have been developed to perform the recording and classification
tasks associated with business activities, the nature of accounting and the work of the
accountant have also been pushed in a new direction
...

b
...

d
...

ensure that businesses invest in new software
...

outsource accounting work to bookkeepers
...
1 – critically evaluate accounting practices, reflecting on how
accounting information systems enrich and extend the role of the accountant
...


The ICAA requires that its members should bring their analytic expertise to several
fields
...

b
...

d
...

Market analysis and compliance
...

Human resource management
...
1 – critically evaluate accounting practices, reflecting on how
accounting information systems enrich and extend the role of the accountant
...


What does ERP stand for?

Chapter 1: Systems fundamentals - Introduction

a
...

c
...


Enterprise Resource Planning
...

Electronic Resource Planning
...


Correct answer: a
Learning objective 1
...

5
...

b
...

d
...

Accountants are increasingly exposed to and working with technology and
information systems
...

Accountants need to lead and oversee the design of an accounting information
system
...
1 – critically evaluate accounting practices, reflecting on how
accounting information systems enrich and extend the role of the accountant
...


Information is:
a
...

c
...


the same as data
...

less useful than data
...


Correct answer: b
Learning objective 1
...


1
...


7
...

b
...

d
...

The situation where an individual has more information than is needed or is
able to be processed in a meaningful way when working through a decision
...

The situation where the amount of information exceeds the storage capacity of
the brain of a human being
...
2 – compare and contrast data and information
...


Which of the following statements best indicates the difference between data and
information:
a
...

c
...


information and data are the same
...

information is always useful whereas data is only sometimes useful
...
2 – compare and contrast data and information
...


The following message box appears when entering a customer order into a sales
system:

This is an example of:
a
...

c
...


input
...

output
...


Correct answer: d
Learning objective 1
...

10
...
2

Chapter 1: Systems fundamentals - Introduction

a
...

c
...


activities that are performed on inputs
...

any process that an accountant is involved in
...


Correct answer: d
Learning objective 1
...

11
...

b
...

d
...

data as well as other resources, that are the starting point for the system
...

computer reports that are analysed by accountants
...
3 – critique and synthesise system concepts, giving examples
...


A large company that provides supplies to the defence forces has just established a
new accounting system
...

b
...

d
...

the directive from the finance director about the system’s operation capacity
...

the accounting standards governing large companies
...
3 – critique and synthesise system concepts, giving examples
...


MICR is an input technology used:
a
...

c
...


on receipts and invoices that are given to customers
...

in the processing of ATM receipts
...


Correct answer: b
Learning objective 1
...


1
...


14
...

b
...

d
...

information systems gain an increased role as the emphasis shifted from
accounting to information systems
...

both accounting and information systems become part of a wider
organisational IT function
...
4 – explain ‘accounting information systems’ and discuss their
evolution
...


“Charlie & Dave’s Computer Store” is considering the best way to enter data about
new customers that sign up as part of a new marketing campaign
...
The best
method for capturing this data would be:
a
...

c
...


scanning through barcode technology
...

manual keying
...


Correct answer: c
Learning objective 1
...

16
...

b
...

d
...

the application of technology to the capturing, storing, sorting and reporting of
information
...

the application of technology to the capturing, verifying, storing, sorting and
reporting of financial data relating to an organisation’s activities
...
4 – explain ‘accounting information systems’ and discuss their
evolution
...


Which of the following is unlikely to be the accounting’s role to an organisation?

1
...

b
...

d
...

Provide a means for business data storage and processing
...

Exercise strategic decision-making according to accounting information
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


An accounting information system is unlikely to help a firm to:
a
...

c
...


determine whether to approve a credit sale
...

determine the provision for bad debts
...


Correct answer: d
Learning objective 1
...

19
...
An accounting clerk
enters these data into an accounting program hosted in a computer
...

In this scenario, the accounting information system consists of:
a
...

c
...


the accounting program
...

source document, the accounting program, and the computer
...


Correct answer: d
Learning objective 1
...

20
...

b
...

d
...

the screen for selecting what report to produce
...

the screen for entering file saving locations
...
3 – critique and synthesise system concepts, giving examples
...
5

Testbank to accompany: Accounting information systems 5e by Parkes et al
...


Feedback:
a
...

c
...


always includes an error message
...

never includes an error message
...


Correct answer: d
Learning objective 1
...

22
...

b
...

d
...

computer systems have emerged to handle the classification and recording
tasks traditionally associated with the accounting function
...

knowledge workers have increasingly replaced accountants in the performance
of recording and classification tasks
...
1 – critically evaluate accounting practices, reflecting on how
accounting information systems enrich and extend the role of the accountant
...


Which of the following statements concerning working professionals is correct?
a
...

c
...


A working professional in the accounting domain will not be involved in
system development
...

A working professional in a domain extended beyond accounting is less likely
to be involved in system development than their counterparts in the accounting
domain
...


Correct answer: d
Learning objective 1
...


24
...
6

Chapter 1: Systems fundamentals - Introduction

a
...

c
...


a technology that is used by large multinational resource companies such as
BHP, Rio Tinto and Xstrata
...

a technology that analyses small pools of internally generated data and
identifies possible cost savings
...


Correct answer: d
Learning objective 1
...

25
...

(ii) Professional requirements
...

(iv) Unique characteristics of the individual client
...

b
...

d
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which of the following statements concerning ethics is correct?
a
...

c
...


Ethics is concerned with how we act and how we make decisions
...

Professional bodies, such as CPA and ICAA, are placing less reliance on
ethics and more on legal compliance
...


Correct answer: a
Learning objective 1
...


1
...


27
...

b
...

d
...

Business processes represent the series of discrete activities that deliver
something of value to both internal and external customers
...

Business processes represent the series of interlocking activities that deliver
something of value to both internal and external customers
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Relational database approach:
a
...

c
...


looks for relationships between different business processes of logically
connecting the different pieces of data
...

looks for relationships between different transactions as a means of logically
connecting the different pieces of data
...


Correct answer: b
Learning objective 1
...

29
...

b
...

d
...

ensures all the higher-level operational aspects are also included, as
normalisation starts with the tables, forms and data of the organisation
...

minimises potential anomalies that can emerge in a data management system
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


An ER diagram shows:

1
...

b
...

d
...

the physical design of the database from a top-down perspective
...

the physical design of the database from a bottom-up perspective
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


When it comes to capturing the underlying design and structure of a database, the
term “ER diagram” refers to:
a
...

c
...


Enterprise Resource diagram
...

Enterprise Relationship diagram
...


Correct answer: b
Learning objective 1
...

32
...

b
...

d
...

the culmination of hardware, software and data
...

the culmination of people, procedures, hardware, software and data
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which of the following description of XBRL is true?
a
...

c
...


XBRL is a new technology that yet to be made a practical reality
...

XBRL is fundamentally different from HTML
...


Correct answer: b
Learning objective 1
...


1
...


34
...

b
...

d
...

the data that moves through the processes
...

all internal control mechanisms
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which of the following statements regarding system documentation is correct?
a
...

c
...


Systems documentation is only useful for internal staff
...

Systems documentation is crucial for systems development and systems
review
...


Correct answer: c
Learning objective 1
...

36
...

b
...

d
...

Theft of business data
...

Errors in data
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Internal controls cannot:
a
...

c
...


prevent anomalous and undesirable occurrences
...

correct anomalous and undesirable occurrences
...


Correct answer: d
Learning objective 1
...

38
...
10

Chapter 1: Systems fundamentals - Introduction

a
...

c
...


Internal controls provide a degree of assurance that the organisation and its
systems are running normally
...

Internal controls do not concern about natural disasters and other catastrophic
disruptions
...


Correct answer: a
Learning objective 1
...

39
...

b
...

d
...

information resources in an organisation
...

business process efficiencies in an organisation
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which of the following activities is not part of the revenue cycle?
a
...

c
...


Receiving customer orders
...

Packing and shipping goods to customers
...


Correct answer: d
Learning objective 1
...

41
...

b
...

d
...

Updating the accounts payable
...

Producing goods
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...
11

Testbank to accompany: Accounting information systems 5e by Parkes et al
...


Which of the following activities is not part of the production cycle?
a
...

c
...


Managing raw materials
...

Keeping the finished goods
...


Correct answer: c
Learning objective 1
...

43
...

b
...

d
...

The cycle involves managing and paying employees
...

Decisions about who to hire will not impact upon the way the other processes
are executed
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which of the following activities is NOT part of the general ledger and financial
reporting cycle?
a
...

c
...


Preparing and updating journals and ledger accounts
...

Preparing trial balances and producing financial reports
...


Correct answer: d
Learning objective 1
...


1
...


Which of the following statements regarding the auditing of accounting information
systems is NOT true?
a
...

c
...


When conducting an audit, the auditors should consider legislative
requirements
...

When conducting an audit, the auditors should consider prescriptions of
various accounting standards
...


Correct answer: d
Learning objective 1
...

46
...

b
...

d
...

Accountants are bound by professional ethics
...

A casual bookkeeping employee, who is not a member of any professional
association, need not adhere to professional accounting ethics
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Systems development is unlikely to be driven by:
a
...

c
...


a change in the regulatory environment
...

a business need from within the organisation
...


Correct answer: d
Learning objective 1
...


1
...


48
...

b
...

d
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...


Which process drives value throughout an organisation by enabling the alignment of
information to best address business needs?
a
...

c
...


Data categorisation
...

Data classification
...


Correct answer: c
Learning objective 1
...

50
...

b
...

d
...

database
...

IPO model
...
3 – critique and synthesise system concepts, giving examples
...
14

Chapter 1: Systems fundamentals - Introduction

Short answer questions
1
...
Has
this role changed? Why or why not?
Answer:
The accountant’s role has extended beyond the task of capturing and recording financial
information about an organisation to being more of a knowledge worker: someone who
provides information and solves problems for an organisation
...
The career paths of an accountant,
however, still rely on the knowledge of accounting
...

Learning objective 1
...

2
...
Data become useful when they are
subject to the application of rules or knowledge, which enables us to convert data into
information
...

Learning objective 1
...

3
...

Commonly in large organisations, people will request reports for a specific problem
...
In many cases these
reports will then just be filed away because “that’s what has always been done”
...
For the person receiving the irrelevant information, there
is a potential risk of information overload, which happens when an individual has more
information than he or she needs and can process meaningfully when working through a
decision
...

Learning objective 1
...


1
...


4
...

Answer:
Inputs can include data, as well as other resources, that are the starting point for a system
...
Outputs
refer to what is obtained from a system, or the result of what the system does
...
As such, for any process, there must be at least one input and one output associated
with it
...
3 – critique and synthesise system concepts, giving examples
...
What is feedback and how does it interact with the system?
Answer:
Interacting with the inputs, processes and output will be the provision of feedback, which is
the method for ensuring that the system is running as normal and that there are no problems
or exceptional circumstances
...
If the system finds an error in the customer
number (e
...
it has been entered as alpha-numeric when it should be numeric), then it will
alert the data entry person responsible and prompt them to re-enter the customer number in
the correct format
...
3 – critique and synthesise system concepts, giving examples
...
What is the relationship between system scope and the external environment?
Answer:
A system will also have a defined task or domain to which it is applied - one system cannot
do everything
...
Systems
also operate within a particular external environment or context, which will affect the
operation of the system
...
Collectively, the things belong to the external
environment are factors or pressures outside a system that influence its design and operation
...
3 – critique and synthesise system concepts, giving examples
...
16

Chapter 1: Systems fundamentals - Introduction

7
...
Explain how this definition is arrived
...

“Capturing, verifying, storing, sorting and reporting” describes the functions of accounting
within an organisation, whereas “data relating to an organisation’s activities” is relevant to
the definition of information
...

Learning objective 1
...

8
...
What happened afterwards as technology continued to develop?
Answer:
As technology continued to develop, including management information systems, database
technology and electronic data processing technologies, and with the emergence of the
microcomputer, organisations began to see that the technology of the computer could be
applied beyond the domain of the accounting function
...
As these new
techniques emerged, the accounting function’s reliance on the information systems function
increased
...
Such developments meant that information systems technologies were being
incorporated into other functional areas of the organisation apart from accounting
...

Learning objective 1
...


1
...


9
...
For
example, typical accounting statements that are produced by an accounting information
system include the income statement (or statement of comprehensive income), the statement
of financial position (or balance sheet) and the statement of cash flows
...
Such information is used by providers of economic
resources in making decisions about whether to invest in a company, as well as for evaluating
company performance at the end of the financial year
...
The general purpose financial
statements are used by shareholders and potential shareholders, creditors and debtors alike to
assess the above dimensions
...
Within an organisation, employees will
have access to the data that are stored and can query and manipulate them in various ways to
answer questions that may arise in the day-to-day running of the organisation
...
g
...

Learning objective 1
...

10
...

Answer:
i
...
determining a customer's creditworthiness
iii
...
determining the financial performance of the firm, a department, or even a team
v
...
5 – justify and communicate the role of accounting information in
supporting decision makers
...
18



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