CHAPTER 4 QUESTIONS

1. Direct access file backup produces many versions of files as a result of changes in data
values. Answer: FALSE
2. It is when the database management system is in a quiet state. Answer: C.
A. Transaction Log
B. Database Backup
C. Checkpoints
D. Recovery Module
3. A database system that has several remote users networked together, but each user site
stores a unique portion of the database is called a __________. Answer: B
A. Replicated Data Processing
B. Partitioned Database
C. Recentralized Network
D. Multi-drop Data Network
E. Hybrid System
4. Replicated Databases are most effective when____________. Answer: C.
A. Users in the system do not share common data
B. Primary users of data are clearly identifiable
C. Read-only access is needed at each site
D. All of the above
5. User view or subschema is able to represent the complete user access privileges and
define task privileges such as read, delete, or white. Answer: FALSE.
6. Evaluating the costs and benefits of biometric controls would be most appropriate where
highly sensitive data are accessed by a very limited number of users. Answer: TRUE.
7. The following are typical features of Database Management Systems except
_________. Answer: B
A. Database Usage Reporting
B. Database Security
C. Database Access
D. All are typical features of DBMS
8. External Database View is also known as Schema, and the Internal Database View is
also known as Subschema. Answer: FALSE.
9. Entities are those that are physical and emotional, such as relationships with employees.
Answer: FALSE.
10. In order to access the information such as a specific item of a customer order, you first
need to access the “parent” which is the sales invoice. Answer: TRUE.
Chapter 5
Questions:
1. It is where an organization’s total information needs are identified, analyzed,
prioritized and arranged.
A. Systems Planning
B. Strategic System Planning
C. Systems Analysis
D. None of the above

2. It represents the survey findings, the problems identified with the current
systems, the user’s needs and the requirements of the new system.
A. Project Proposal
B. Project Schedule
C. Strategic Systems Planning Report
D. Systems Analysis Report

3. Regarding the possible classification schemes of users’ skill level under user
documentation, which among the ff. is more likely to forget commands and
procedures?
A. A novice
B. A frequent light user
C. A less experienced user
D. An occasional user

4. The following precautions should be taken in converting databases except for:

A. Reconciliation
B. Backup
C. Completion
D. Validation
5. It identifies any conflicts between the conceptual system and the company's ability
to discharge its legal responsibilities?

A. Schedule feasibility
B. Operational feasibility
C. Technical feasibility
D. Legal feasibility

6. The following are true about Structured Design Approach except:

A. Designs system from the top-down by starting with “big picture”.

B. Gradually decomposing system into more detail until fully understood.
C. Designs should identify all inputs, outputs, processes and special features.
D. Concept of reusability is central as standard modules can be used in other
systems.

7. Which of the following is not considered as part of the basic group of commercial
software packages?

A. Backbone Systems
B. Turnkey Systems
C. Special Purpose Systems
D. None of the above

8. Which is true about end-user?

A. Individuals who have an interest in the system

B. They actually build the system
C. The system is built for them
D. All of the above

9. Internal Auditors are involved with Systems __________

A. Authorization
B. Maintenance
C. Design
D. All of the above

10.What does SPL mean?

A. Systems Program Language

B. Source Project Library
C. Source Program Library
D. Systems Project Language

1. STATEMENT 1: The database management system includes storing programs on the SPL,
retrieving programs for maintenance purposes, detecting obsolete programs and documenting
program changes.
STATEMENT 2: Documentation is a CONTROL.
STATEMENT 3: The minimum controls in systems development are formal authorization,
technical specifications, updating the documentation, and retesting only.

a. Only statement 3 is correct

b. Only statement 1 is correct
c. Only statement 2 is correct
d. All statements are correct
e. Only statements 2 and 3 are correct
Answer: e

2. Checklists, Systems Development methodology, and staff hiring are examples of what type of
controls?
a. Detective
b. Preventive
c. Subjective
d. Corrective

Answer: b

3. Eli’s Corp. has changed from a system of recording time worked on time cards to a computerized
payroll system in which employees record time in and out with magnetic cards. The IT system
automatically updates all payroll records for the time worked. Because of this change,
a. Generalized audit software must be used
b. Part of the audit trail is altered
c. The potential for payroll-related fraud is diminished
d. Transactions must be processed in batches.

Answer: b

4. STATEMENT 1: The SPLMS includes storing programs on the SPL, retrieving programs for
maintenance purposes, detecting obsolete programs and documenting program changes.
STATEMENT 2: Documentation is a CONTROL.
STATEMENT 3: The minimum controls in systems development are formal authorization,
technical specifications, updating the documentation, and retesting only.

Which of the following are not incorrect?

a. The auditor should be involved in the systems design to make sure that the technological
characteristics are qualified as integrated audit tools.
b. The auditor should review only the planning process to verify that the systems produced are
consistent with the organization’s goals and objectives.
c. The auditor will verify that SDLC activities are applied consistently and in accordance with
the management’s policy
d. Documentation is evidence of controls.
e. All the statements are not incorrect.

Answer: e

5. A detailed analysis covers all of these EXCEPT

a. The user's needs and requirements
 b. The deficiencies of the old system
c. Acquire hardware and software
d. A recommendation of a solution

Answer: c

6. User manuals and how-to documentation is produced in which phase(s) of the SDLC?
a. In the Analysis, Development and Implementation phase only
b. In the Preliminary Analysis and Analysis phase only
c. In the Implementation phase only
d. In the Implementation and Evaluation phase only
e. In the Analysis, Development phase only

Answer: d

7. What type of software design and development methodology does Microsoft Corporation
employ?

a. Rapid application development

b. Extreme programming
c. Speed programming
d. Express development

Answer: b
8. STATEMENT 1: The iterative SDM allows for the stages of the SDLC to be completed in any
order.
STATEMENT 2: For a large, multi-user system dealing with sensitive data, generally the best SDM
will be waterfall
STATEMENT 3: The iterative model allowed database administrator to move smoothly in
between design, development and implementation - and back again.
STATEMENT 4: The iterative model gives the end user more say in the final appearance and
functionality of the system.
a. All are true
b. All are false
c. Only Statement 1 and 3 is true
d. Only Statement 3 and 4 is false
e. Only Statement 2 and 4 is true

Answer: e

9. These factors strongly influence which SDM is chosen, EXCEPT:

a. Personnel
b. Time constraints
c. Budget constraints
d. Size of the project

Answer: d

10. In which phase of the software design and development project would you fix errors in the
new built and operational system?
 a. Maintenance phase
b. Development phase
c. Implementation phase
d. Execution phase

Answer: a

MCQ -CHAPTER 7
1. This validates the entire record by examining the interrelationship of its field values.
A. File interrogation
B. Output controls
C. Processing controls
D. Validity check
E. Record interrogation
2. This is an error where two adjacent digits are reversed.
A. Multiple transposition errors
B. Substitution errors
C. Truncation errors
D. Single transposition errors
E. Addition errors
3. Output spooling directs output to a ________rather than to the printer.
A. container
B. floppy disk
C. magnetic disk
D. micro sd card
4. For highly sensitive reports, the following distribution techniques can be used:
A. Reports may be placed in a secured mailbox to which only the user has the
key.
B. User may be required to appear in person at the distribution center and sign
for the report.
C. A security officer or special courier may deliver the report to the user.
D. All of the choices above can be used for highly sensitive reports.
5. S1: To perform the test data technique, the auditor must obtain a copy of the previous
version of the application.
S2: When the set of test data in use is comprehensive, the technique is called the
Internal Test Facility (ITF).
A. S1 is true
B. S2 is true
C. both statements are true
D. both statements are false

6. Tracing is the type of test data technique that

A. requires the auditor to write a program that stimulates key features
B. enables the auditor to test an application's logic and controls during its normal
operation
C. performs an electronic walk-through of the application's internal logic
D. none of the above
7. Black-box approach requires
A. a detailed knowledge of the application’s internal logic
B. flowcharts and interview knowledgeable personnel in the organization
C. flowcharts and financial ratios
D. flowcharts and interview knowledgeable past personnel of the organization.
8. Salami fraud is
A. technique by which cyber-criminals steal money or resources a bit at a time so
that there’s no noticeable difference in overall size.
B. when scammers trick you into giving out personal information such as your
bank account numbers, passwords and credit card numbers.
C. a networks of compromised computers, controlled by remote attackers in
order to perform such illicit tasks as sending spam or attacking other computers.
D. when a person purports to be some other person, with a view to creating a
fraud for financial gains
9. Verification that the total in a batch agrees with the total calculated by the system is
an example of?
A.record count
B. Control total
C. Hash total
D. Financial total
10. Transaction log contains both unsuccessful and successful transactions.
A. True
B. False

CHAPTER 8
1. Sequential Data Structure is least efficient on what file processing operation?
a. Read a complete file of records.
b. Update a record in the file.
c. Retrieve a record from the file based on its primary key.
d. Find the next record in the file.
2. Data collision is most prominent in what kind of data structure?
a. Sequential Data Structure
b. Indexed Random File Structure
c. Pointer Structure
d. Hashing Structure
3. Which file relationship is susceptible to error and destruction of audit trail if not
bridged and defined clearly?
a. Many-to-one
b. One-to-one
c. One-to-Many
d. Many-to-Many
4. How many statements are True
i. Multiple indexes can be used to create inverted lists.
ii. A data model is used as a basis for the actual database.
 iii. Attributes are data elements that define an occurrence.
iv. “Project” algebra function is used to build a new table out of two
separate tables.
a. 1 only
b. 2 statements
c. 3 statements
d. All are false statements
5. Which level of normalization is accepted as the lowest safe level against
database anomalies?
a. 1st normal form
b. 3rd normal form
c. 5th normal form
d. 7th normal form
6. Which of the following anomalies is most susceptible to fraud, since the act itself
is very hard to detect and is non-pervasive.
a. Update anomaly
b. Insert anomaly
c. Delete anomaly
d. None of these
7. Which of the following is the least accepted advantage of normalization of
databases? Choose the BEST answer.
a. Data integrity
b. Mitigation of database anomalies
c. Restrict database access and control.
d. Data independence
8. Which is not a phase of relational database design?
a. Construct data model showing entity associations
b. Add primary key and attributes to the model
c. Identify entities.
d. Delete a record from the file.
9. What is not a disadvantage of using embedded audit module?
a. Operational efficiency
b. Module integrity
c. Both A and B
d. None of the above.
10. The following are examples of uses of General Audit Software except one.
Choose the BEST answer.
a. . Selecting stratified statistical samples from data models.
b. Formatting results of tests into reports
c. Recalculation of data fields.
d. Footing and balancing entire files or a fractions of it.
MULTIPLE CHOICE QUESTIONS AND ANSWERS-CHAPTER 9
1. Which of the following documents triggers the revenue cycle?
a. Sales Invoice
b. Sales Order
 c. Customer Purchase Order
d. Journal Voucher
2. The following are process controls EXCEPT:
a. File update control
b. Batch controls
c. Access controls
d. Physical controls
3. All of the following are examples of specific issues that give rise to revenue cycle
risks EXCEPT:
a. Recognizing revenues from sales transactions that did not occur
b. Recognizing sales revenues after they are realized
c. Failing to recognize period-end cutoff points
d. Underestimating the allowance for doubtful accounts
4. Captures sales transaction data for the period
a. Sales Invoice File
b. Line Item File
c. Inventory File
d. Shipping Log File
5. The stock release copy of the sales order is not used to?
a. Record every product purchased and sold
b. Record any out-of-stock items
c. Authorize the warehouse clerk to release custody of the inventory to shipping
d. Locate and pick the items from the warehouse shelves
6. This document identifies the items of inventory that must be located and picked
from the warehouse shelves.
a. Bill of Lading
b. Stock Release
c. Shipping notice
d. File copy
e. None of the above
7. This action is an important control because it is the last opportunity to detect
errors before shipment.
a. Supervision
b. Verification
c. Reconciliation
d. Authorization
e. Checkpoint
8. The objective of this control is to reconcile output produced by the system with
the input originally entered into the system.
a. Input controls
b. Validation controls
c. Batch Controls
d. Process controls
e. Output controls
9. Which situation indicates a weak internal control structure?
a. The mailroom clerk authorizes credit memos
 b. The record keeping clerk maintains both accounts receivable and accounts
payable subsidiary ledgers
c. The warehouse clerk obtains a signature before releasing goods for shipment
d. The accounts receivable clerk prepares customer statements every month
10. Usually specific authorization is required for all of the following EXCEPT?
a. Sales on account which exceed the credit limit
b. Sales of goods at the list price
c. A cash refund for goods returned without a receipt
d. Write off of an uncollectible account receivable
Chapter 10 - Questions

1. The personnel department prepares the

a. Pay rate and hours-worked data
b. Pay rate and withholding data
c. Pay rate data only
d. Hours-worked data only

2. A ____ is an individual independent of the payroll process who is tasked todistribute

paychecks to employees.
a. Checkmaster
b. Payroll Clerk
c. Paymaster
d. Accounts Payable Clerk

3. The document that captures the total amount of time that individual workers spend on
each production job is called a
a. Time Card
b. Job Ticket
c. Personnel Action Form
d. Labor Distribution Form

4. Which document typically triggers the process of recording a liability?

a. Purchase Requisition
b. Purchase Order
c. Receiving Report
d. Supplier's Invoice

5. Which documents would an auditor most likely choose to examine closely to

ascertain that all expenditures incurred during the accounting period have been
recorded as a liability?
a. Invoices
b. Purchase Orders
c. Purchase Requisitions
d. Receiving Reports

6. Which of the following tasks should the cash disbursement clerk NOT perform?
a. Review the supporting documents for completeness and accuracy
b. Prepare checks
c. Approve the liability
d. Mark the supporting documents paid
7. Which document helps to ensure that the receiving clerks actually count the number
of goods received?
a. Packing List
b. Blind Copy of Purchase Order
c. Shipping Notice
d. Invoice

8. Which one of the following departments does not have a copy of the purchase order?
a. The Purchasing Department
b. The Receiving Department
c. Accounts Payable Department
d. General Ledger Department

9. When the goods are received and the receiving report has been prepared, which
ledger may be updated?
a. Standard Cost Inventory Ledger
b. Inventory Subsidiary Ledger
c. General Ledger
d. Accounts Payable Subsidiary Ledger

10. Which statement is NOT correct for an expenditure system with proper internal
controls?
a. Cash disbursements maintain the check register.
b. Accounts payable maintains the accounts pay-able subsidiary ledger.
c. Accounts payable is responsible for paying invoices.
d. Accounts payable is responsible for authorizing invoices.
CHAPTER 11-ERP: MULTIPLE CHOICE QUESTIONS
1. Which statement is not true?
a. Big Bang method is more ambitious and risky than Phased-in approach.
b. Some systems can be scaled to provide more efficient access to large
databases when business growth demands it.
c. The reengineering of business processes that often accompanies ERP
implementation is the most attributed cause of performance problems.
d. Implementing an ERP system has more to do with technology than it
does with changing the way an organization does business.
e. None of the above are incorrect.

2. Which of the following is not a function of an outside consulting firm?

a. Helps the organization to identify its business needs
b. Manages cutover
c. Help the company negotiate with the vendor on the purchase of the software
d. Selects the ERP package
e. All are functions of an outside consulting firm.

3. Data transformation includes which of the following?

a. A process to change data from a detailed level to a summary level
b. Joining data from one source into various sources of data
c. Separating data from one source into various sources of data.
d. A process to change data from a summary level to a detailed level

4. Statement 1: Data warehouse is mostly used for reporting and data analysis.
Statement 2: In stage 5 of data warehousing process, data warehouse is not
separated from operational database.
a. Only Statement 1 is incorrect
b. Only Statement 2 is incorrect
c. Both statements are correct
d. Both statements are incorrect

5. Which of the following is not a function of an outside consulting firm?

a. Helps the organization to identify its business needs
b. Manages cutover
c. Help the company negotiate with the vendor on the purchase of the software
d. Selects the ERP package
e. All are functions of an outside consulting firm.

6. Statement 1: Managers do not have significant discretion in creating new roles

for individuals.
Statement 2: access privileges should be granted on a need-to-know basis only.
a. Both statements are correct
b. Both statements are incorrect
 c. Statement 1 is correct
d. Statement 2 is correct

7. This links all the functional areas in an organization where in one data update will
update all other departments and different reports can be generated through it.
a. Closed database architecture
b. Database flat-file approach
c. Enterprise Resource Planning System
d. Enterprise Resource Processing System

8. A function of Online Transaction Processing (OLTP) which is responsible in

checking on the availability of product to ensure timely delivery and verifying
customer credit limits.
a. Sales and Accounts Payable
b. Receivable and Distribution
c. Distribution and Inventory Control
d. Sales and Distribution

9. Statement 1: A server can be a machine or a program that we use to make a

request.
Statement 2: Consolidation allows the user to see the data in selectively
increasing levels of detail.
a. Both statements are correct
b. Both statements are incorrect
c. Statement 1 is correct
d. Statement 2 is correct

10. Which is not the characteristic of OLAP?

a. Involves historical processing of information.
b. Useful in analyzing the business.
c. Support management-critical tasks through analytical investigation of complex
data
d. Support mission-critical task through simple queries of operational
databases.

Multiple-Choice Questions Chapter 12

1. It is the act of using a computer to take or alter electronic data, or to gain unlawful
use of a computer or system.
a) Intentional Acts
b) Misappropriation of Assets
c) Natural and Political Disasters
d) Computer Fraud

2. It requires a false supplier with fraudster submitting false documents and receiving
payments.
 a) Shell company fraud
b) Masquerading
c) Piggybacking
d) Expense reimbursement fraud

3. This includes personal or job related stress that could coerce an individual to
commit fraud.
a) Situational pressure
b) Fraud triangle
c) Opportunity
d) Ethics

4. Auditors often use this checklist questionnaire to observe and analyze the fraud.
a) Black-flag checklist
b) White-flag checklist
c) Red-flag checklist
d) Green-flag checklist

5. Where risk factors are identified, the documentation should include

a) Hose risk factors identified
b) The auditor’s response to the risk factors
c) Both a and b
d) None of the above

6. This feature is used to link the payroll and employee files using Employee Number
as the common attribute.
a) ACL’s Expression Builder
b) ACL’s Join
c) ACL’s Duplicates
d) ACL’s Link

7. Statement 1: Making Ethical Decision is a manager’s ethical responsibility.

Statement 2: Genuine intelligence is the replacement of experts as a decision
maker.
a) Both statements are true
b) Both statements are false
c) Only statement 1 is true
d) Only statement 2 is true

8. The written code of ethics should address the following issues, except:
a) Full and Fair Disclosures
b) Ownership of Property
c) Legal Compliance
 d) Accountability

9. Statement 1: Business ethics is the analysis of the nature and social impact of
computer technology and the corresponding formulation and justification of
policies for ethical use of such technology.
Statement 2: Section 406 of SOX requires public companies to disclose to the SEC
whether they have adopted a code of ethics that applies to the organization's CEO,
CFO, controller, or persons performing similar functions.
a) Both statements are true
b) Both statements are false
c) Only statement 1 is true
d) Only statement 2 is true

10. It involves stealing cash before it is recorded.

a) Cash Larceny
b) Check Tampering
c) Payroll Fraud
d) Skimming