Set 1

END–OF-SEMESTER EXAMINATION
SEMESTER I, 2008/2009 SESSION

KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES

Programme : Bachelor of Accounting Level of Study : Undergraduate

Time : 9:00am – 12:00noon Date : 4.11.2008

Duration : 3Hr(s) 0 Min(s)

Course Code : ACC 4071 Section : 1-4

Course Title : Analysis & Design of Accounting Information Systems

(This Question Paper Consists of 8 Printed Pages with 2 Sections)

INSTRUCTION(S) TO CANDIDATES

DO NOT OPEN UNTIL YOU ARE ASKED TO DO SO

ANSWER ALL QUESTIONS

ANY FORM OF CHEATING OR ATTEMPT TO CHEAT IS A SERIOUS OFFENCE WHICH

MAY LEAD TO DISMISSAL

APPROVED BY:
 Set 1

SECTION A: MULTIPLE CHOICE QUESTIONS

1. Which of the following is NOT part of business operation for an accounting information
system?
a. accountability for the assets/liabilities of the enterprise
b. personal motivation in managing business operation
c. the determination of the results of operations that ultimately leads to the
computation of comprehensive income, and
d. the financial reporting aspects of business operations

2. The coding system that is most understandable by human information processors is:
a. serial coding
b. hierarchical coding
c. block coding
d. mnemonic coding

3. “The accountant’s effectiveness depends on how well he or she knows the Accounting
Information System (AIS) and the technology used to implement the AIS”. This statement
best describe an account role as a(n) ____________ .
a. Designer.
b. Analyzer.
c. User.
d. Auditor.

4. The principal difference between an executive information system (EIS) and a decision
support system (DSS) is that an EIS:
a. suggests to the user the best choice from among alternative courses of action
whereas the DSS merely provides information that could assist in making the
decision
b. requires less computer knowledge on the part of the user than does a DSS
c. uses both external and internal data whereas a DSS does not
d. employs decision models whereas a DSS does not

5. A relation is in second normal form (2NF) if it is in first normal form (1NF) and:
a. if the only determinants it contains are candidate keys.
b. no non-key attribute is dependent on only a portion of the primary key.
c. it does not contain any repeating groups.
d. computed fields are eliminated.

6. Which diagram is a graphical representation of information processes and operations

processes?
a. entity relationship diagram
b. logical data flow diagram
c. physical data flow diagram
d. systems flowchart

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 Set 1

7. In a logical DFD for a cash receipts system, each of the following labels might appear in a
bubble except:
a. cashier
b. capture cash receipts
c. update master checks
d. endorse checks

8. Personnel development control plans consist of each of the following except:

a. checking employment references
b. providing sufficient and timely training
c. supporting employee educational interests and pursuits
d. performing scheduled evaluations

9. Which of the following statements is FALSE?

a. One of the advantages of DBMS is allowing non-technical users to bypass the
programmer and to access the database directly.
b. DBMS contains a number of security controls to protect the data from access
by unauthorized users or alteration.
c. DBMS is easy and cheap to implement in organization.
d. DBMS include software that allows data to be shared by multiple users.

10. Events or situations that subject an organization to the possibility of harm, loss, or
danger cause:
a. risks
b. fraud
c. controls
d. embezzlement

11. Which of the following personnel security control plans is corrective in nature as
opposed to being a preventive or detective control plan?
a. rotation of duties
b. fidelity bonding
c. forced vacations
d. performing scheduled evaluations

12. The items in the following jumbled list are systems selection tasks covered in the text:

I. Design forms and reports

II. Design interfaces and conversions
III. Design databases
IV. Complete the software plan

As shown in the text, the correct sequence of steps is:

a. III, II, I, IV
b. III, I, II, IV
c. II, III, I, IV
d. I, IV, III, II

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 Set 1

13. Which of the following statements related to associations between entities is FALSE?
a. Entities must be logically linked to show the relationships between them.
b. Entity is collection of classes.
c. Relationships between entities map and define how data can be extracted from
the database.
d. Clearly labeled with active verbs.

14. Which backup approach is the one that involves running two processing sites that
contain the application programs and updated master data throughout normal processing
activities?
a. mirror site
b. electronic vaulting
c. continuous data protection (CDP)
d. dumping

15. A written approval in the form of a signature or initials on a document indicating that a
person has authorized the event achieves the control goal of:
a. ensure input validity
b. ensure input completeness
c. ensure input accuracy
d. ensure update accuracy

16. Which of the following control plans is designed both to authenticate a system user's
identity and to verify the integrity of a message transmitted by that user?
a. coding schemes
b. digital signature
c. preformatted screens
d. check digit verification

17. A sales representative enters the customer's account number and the system retrieves
certain data about the customer from master data. This control plan addresses all of the
control goals EXCEPT:
a. ensure efficient employment of resources
b. ensure effectiveness of operations (timeliness)
c. ensure input accuracy
d. ensure update completeness

18. __________ provide assurance that all modifications to programs are authorized, and
ensure that the changes are completed, tested, and properly implemented
a. Program maintenance control
b. Program change control
c. Program monitor control
d. Program upgrade control

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 Set 1

19. The major reasons for exercising control of the organization’s business processes
include:
a. Provide reasonable assurance that the goals of the business are being achieved
b. To mitigate risks of fraud and other intentional and unintentional acts
c. To provide reasonable assurance that the company is in compliance with
applicable legal and regulatory obligations
d. All of the above

20. A tool designed to assist you in evaluating the potential effectiveness of controls in a
business process by matching control goals with relevant control plans is:
a. ERM
b. control plans
c. control matrix
d. internal controls

21. Systems analysis is best conducted by a team because:

a. personnel utilization is optimized because team members might otherwise be
idle in their normal job functions
b. the work requires a variety of skills seldom possessed by one individual
c. a team is better able to utilize structured development
d. planning and budgeting is easier with a team

22. User training should begin

a. shortly before the system is implemented
b. while the system is implemented
c. after the system is implemented
d. well in advance of system implementation

23. The determination of user requirements in the analysis step of the systems development
life cycle is more difficult in an E-Business implementation because:
a. you must determine user requirements inside and outside the organization
b. users are more resistant to changing to an E-Business implementation
c. E-Business software is inherently more complex
d. users fear E-Business implementations will negatively impact their
employment

24. COBIT organizes IT internal control into domains and process. Which of the following
is NOT one of COBIT’s four broad IT control domains?
a. Planning and organization
b. Acquisition and implementation
c. Monitor
d. Integration and maintenance

25. Making repairs and modifications to the system is known as:

a. systems implementation
b. systems maintenance
c. post-implementation review
d. systems operation

[Total: 25 marks]

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 Set 1

SECTION B: SHORT QUESTIONS / PROBLEMS

Question 1

a. Describe segregation of duties control plan. Identify some compensating controls that can
be used when it is not possible to implement the segregation of duties control plan in
small companies.
[8 marks]

b. Discuss the independence issue when audit firms also provide consulting input into the
development and selection of new systems.
[7 marks]

[Total: 15 marks]

Question 2

A company is computerizing its sales order entry process. Approximately 60 percent of all
orders are received over the telephone, with the remainder received either by mail or fax. The
company wants the phone orders to be input as they received. The mail and fax orders can be
batched together in groups of 50 and submitted for keypunching as they become ready. The
following information is collected for each order:

ƒ Customer number (if customer does not have one, one needs to be assigned).
ƒ Customer name
ƒ Address
ƒ Payment method (credit card or money order)
ƒ Credit card number and expiration date (if necessary)
ƒ Items ordered and quantity
ƒ Unit price

Required:

a. Determine control techniques to make sure that all orders are entered accurately into
the system. Briefly explain each control technique.
[10 marks]

b. Suggest control techniques for the company’s batch processing (applying to the mail
and fax orders).
[5 marks]

[Total: 15 marks]

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 Set 1

Question 3

a. Razif, a manager of the credit collections department for CMS Building Suppliers, is
extremely unhappy with a new system that was installed three months ago. His complaint
is that the data flows from billing and AR departments are not occurring in the manner
originally requested. Further, the updates to the database files are not occurring as
frequently as he had envisioned. Thus, the hope that the new system would provide more
current and timely information has not materialized. He claims that the system analysts
spent two days interviewing him and other workers. During that time, he and the other
workers thought that they had clearly conveyed their needs. He feels as if their needs
were ignored and their time wasted.

What do you think went wrong during the systems development process? What
suggestions would you make for future projects?
[8 marks]

b. Many organization plans to purchase a commercial off-the-shelf (COTS) software

package instead of design and build its own. Give advantages and disadvantages of using
off-the-shelf application.
[7 marks]

[Total: 15 marks]

Question 4 – Short Case

Evergreen Nurseries offers a wide range of lawn and garden products to its customers.
Evergreen Nurseries conducts wholesale and retail operations. Although the company serves
as a wholesaler to nurseries all over the country, the company's founder and president has
restricted its retail operation to Selangor, the company's home state. The company is situated
on 150 acres and wholesales its bulbs, perennials, roses, trees, shrubs and Evergreen
Accessory products. Evergreen Accessory products include a variety of fertilizers, plant
foods, pesticides and gardening supplies.

In the past 5 years, the company has several phenomenal sales growths. Unfortunately, its
information systems have been left behind. Although many of Evergreen Nurseries'
processing activities are computerized, these activities require reengineering. You are part of
the project team hired by the company's president to renovate its wholesale division. Your
project team was hired to renovate the billing, order taking and inventory control systems.

From requirements determination, you discovered the following: An Evergreen Nurseries

customer places a call to the nursery. A sales representative takes the order, verifies the
customer's credit standing, and determines whether the items are in stock, notifies the
customer of the product's status, informs the customer if any special discounts are in effect
and communicates the total payment due. Once an order is entered into the system, the
customer's account is updated, product inventory is adjusted and ordered items are pulled
from stock. Ordered items are then packed and shipped to the customer. Once each month, a
billing statement is generated and sent to the customer. The customer has 30 days to remit
payment in full; otherwise, a 15 percent penalty is applied to the customer's account.

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 Set 1

Case Requirements:

a. Identify the functional requirements (process and information) for the above system.

[10 marks]

b. Construct a UML Use Case Diagram to model the situation above.

[10 marks]

c. Draw an Entity Relationship Diagram (E-RD) for the above system. Your diagram
should include Primary Key(s) and attributes for each entity where appropriate.

[10 marks]

[Total: 30 marks]

END OF QUESTION PAPER