Questions and Answers
What are accounting information systems?
Include records, processes and reports.
Which of the following is not a characteristic of useful information?
Which of the following are considered to be mandatory information required by a regulatory body?
What is the correct order of effects in the value chain?
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What designation is most appropriate for professionals possessing IT audit, control, and security skills?
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What designation is for CPAs with a broad range of technology knowledge and experience?
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What does a supply chain refer to?
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A supply chain system includes information about prospective customers.
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What income statement line item is most likely affected by an AIS investment in enterprise systems?
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What income statement line item is most likely affected by an AIS investment in supply chain that would interface with suppliers?
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What are the IT strategic roles of AIS investments classified as?
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How is the transform IT strategic role defined?
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How is the informate-up IT strategic role defined?
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What income statement account is most likely affected by an AIS investment in customer relationship management (CRM)?
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Many hospitals and doctor's offices are beginning to digitize the medical records of their patients. This is an example of the __________ strategic role.
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EBay uses information technology to sell goods on the internet. This would be an example of the __________ strategic role.
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What is the Information Value Chain?
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How is business value defined?
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What is Customer Relationship Management (CRM)?
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Support activities in the value chain include Accounting and Finance.
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The role of accountants in accounting information systems includes all except Operator.
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A simple information system includes reporting.
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What is activity-based costing an example of?
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What is an example of an AIS that primarily addresses internal business processes?
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Bob's manager complains that Bob suffers from 'Analysis Paralysis;' that is, he spends too much time reviewing endless reports and is reluctant to make decisions. Bob most likely suffers from __________.
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Which systems would a company be most likely to employ for the primary purpose of generating additional sales revenue?
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In which activities does the primary transformation of data into information take place?
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Discretionary information is most likely to be used in which activities?
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Which of the following is not a primary activity in the Value Chain?
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What is one of the most important ways that ERPs benefit organizations?
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What best describes the fill rate in supply chain management?
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Investors reward companies most that announce IT initiatives with which type of strategic role?
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What type of strategic role is exemplified by a dental practice that upgraded its AIS to provide daily patient summaries?
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Which statement most accurately describes IFAC's description of accounting and IT?
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What diagram most accurately illustrates an information system?
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What activities must a company's attest auditors be able to perform under the Sarbanes-Oxley Act of 2002?
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For a non-profit organization like Doctors without Borders, what is likely the best measure of business value?
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Effective use of Supply Chain Management software is expected to reduce gross margins.
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What is usually the primary objective for companies when creating mandatory information?
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How does the characteristics of useful information apply to a box score produced after a college football game?
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List and explain three ways AIS affects the income statement and firm's profitability.
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What roles do accountants serve in business analysis to help address business opportunities?
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What are the types of discretionary information that a company like Google would collect from its accounting information system?
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Why is the transform IT strategic role more impactful on stock price than the automate IT strategic role?
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Why is Starbucks' use of customer data through loyalty cards a good example of CRM?
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How does supply chain management software enable precise communication with suppliers and save money?
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How can Amazon.com use customer purchase history to assist in marketing efforts?
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How is a professional designation such as CISA helpful for IT auditors?
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Why do AICPA and IFAC expect accountants to be proficient in AIS and at least one other role?
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Why is accounting now interdependent with IT?
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How does Wal-Mart's Retail Link database benefit suppliers and customers?
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How would a not-for-profit like the International Red Cross define business value?
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Study Notes
Accounting Information Systems
- Comprise records, processes, and reports that facilitate financial data management.
- Characterized by the ability to provide easy-to-understand information.
- Mandatory information required includes financial reports for regulators like the SEC.
Value Chain Concepts
- The correct sequence of effects in the value chain: Inbound Logistics → Operations → Outbound Logistics.
- Primary activities in the value chain exclude Information Technology, which falls under support activities.
Professional Designations in IT and Accounting
- Certified Information Systems Auditors (CISA) focus on IT audit, control, and security.
- Certified Information Technology Professionals (CITP) cover a broad range of technology knowledge for CPAs.
Supply Chain Dynamics
- Defined as the flow of materials, information, payments, and services.
- Prospective customer information is typically excluded from supply chain systems.
AIS Impact on Financial Statements
- Investments in AIS primarily affect Selling, General and Administrative Expenses and Cost of Goods Sold.
- Effective AIS can lower expenses and track financial metrics, contributing to increased revenues.
IT Strategic Roles
- Classified into three categories: Automate (digitization tasks), Informate (provide business insights), Transform (redefine processes).
- Transformational initiatives generally have a more positive impact on stock prices compared to automation.
Information Value Chain
- Represents the transformation of data to inform business decisions.
- Discretionary information aids in management decision-making and is often utilized in financial contexts.
Organizational Benefits and Value Metrics
- Supply Chain Management software enhances operational efficiency and can lead to significant savings.
- Business value reflects items and interactions impacting the financial health of a firm; non-profits may measure value in terms of lives saved or social impact.
Information Systems Complexity
- Basic information systems consist of Storage, Input, Process, and Output.
- Overreliance on reports can lead to analysis paralysis or information overload for decision-makers.
Regulatory Compliance
- The Sarbanes-Oxley Act mandates evaluation of internal controls within AIS by auditors.
Customer Relationship Management (CRM)
- Systems designed to manage interactions with current and potential customers are crucial for driving sales and leveraging data analytics for marketing strategies.
Importance of IT in Accounting
- IT is integrated with accounting, leading organizations to expect accountants to be proficient in both AIS and additional roles like management or system evaluation.
- Keeping up with technological advancements is vital in maintaining relevance within the accounting field.
Case Studies
- Companies like Amazon and Starbucks utilize CRM systems and customer data to improve marketing and customer engagement, demonstrating the effectiveness of technology in driving business success.
- Wal-Mart’s Retail Link exemplifies real-time sales data sharing, optimizing supplier inventory and logistics costs, ultimately benefiting both Wal-Mart and its customers.
Insights on Discretionary Information
- Discretionary information, like budget forecasting or strategic planning resources, enhances managerial decision-making and operational effectiveness, emphasizing its value to companies like Google.
Studying That Suits You
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Description
Test your knowledge on Accounting Information Systems with these flashcards covering key definitions and concepts from Chapter 1. This quiz will help reinforce your understanding of useful information characteristics and regulatory requirements.