Sample Questions and Answers
In an AIS, “audit trails” are primarily used to:
A) Ensure that financial data is stored securely
B) Track and record all user actions for security and compliance purposes
C) Generate real-time financial reports
D) Prevent unauthorized changes to system data
Answer: B
What does “data integrity” ensure in an AIS?
A) That data entered into the system is accurate, consistent, and reliable
B) That financial data is processed in real-time
C) That users cannot access unauthorized data
D) That backup copies of data are stored securely
Answer: A
The “authorization process” in an AIS typically involves:
A) Encrypting financial data during storage
B) Granting users permission to access and perform specific actions based on their roles
C) Automatically generating audit logs of system activity
D) Automatically reconciling financial transactions
Answer: B
What is the role of “internal controls” in an AIS?
A) To ensure the accuracy, reliability, and security of financial data processed by the system
B) To provide real-time financial reports
C) To automate the data entry process
D) To track and monitor user activity within the system
Answer: A
What is the benefit of using “business intelligence” (BI) tools in an AIS?
A) To create automated backup copies of financial data
B) To analyze and visualize financial data, helping management make informed decisions
C) To prevent unauthorized access to sensitive data
D) To process transactions in real-time
Answer: B
What is the role of “change management” in an AIS?
A) To track user activities within the system
B) To ensure smooth implementation of system updates and minimize disruptions to business operations
C) To encrypt all sensitive financial data
D) To generate audit logs for system updates
Answer: B
In an AIS, “audit evidence” refers to:
A) The collected data that supports the system’s accuracy and compliance with accounting standards
B) Reports generated for management review
C) User activity logs
D) Financial data stored in a backup server
Answer: A
The purpose of “data masking” in an AIS is to:
A) Encrypt sensitive data before storing it
B) Replace sensitive data with fictitious or scrambled data for testing or training without compromising privacy
C) Track and monitor all user actions
D) Reconcile discrepancies in financial data
Answer: B
Which of the following is a major goal of “financial statement fraud prevention” within an AIS?
A) To ensure that all financial data is processed in real-time
B) To detect and prevent the manipulation or misstatement of financial data
C) To automatically reconcile discrepancies in financial records
D) To provide access to financial data only for authorized users
Answer: B
What is the main objective of “data redundancy elimination” in an AIS?
A) To store duplicate copies of data across multiple servers for increased availability
B) To reduce the storage needs and improve data consistency by removing unnecessary duplicate data
C) To encrypt data during transmission
D) To automatically generate real-time financial reports
Answer: B
What is the function of “dual control” in an AIS?
A) To ensure that two or more individuals must approve certain transactions or activities before they are executed
B) To monitor user activity for suspicious behavior
C) To encrypt sensitive data in the system
D) To automatically back up system data every 24 hours
Answer: A
In an AIS, what is the purpose of “data normalization”?
A) To combine data from different sources into a single, standard format
B) To encrypt sensitive financial data
C) To back up all system data automatically
D) To monitor user activity for compliance with system rules
Answer: A
Which of the following best describes “data-driven decision making” in an AIS?
A) Relying on personal intuition to make business decisions
B) Using historical data and real-time information processed by the system to inform business decisions
C) Preventing unauthorized access to system data
D) Encrypting data for secure storage and transmission
Answer: B
The role of “encryption” in an AIS is to:
A) Compress large data files to save storage space
B) Convert sensitive financial data into an unreadable format to protect it from unauthorized access
C) Ensure that financial data is processed in real-time
D) Automatically reconcile discrepancies in financial records
Answer: B
What does the “integrated accounting system” allow organizations to do?
A) Store data in separate silos for each business function
B) Collect and process financial data from multiple business areas in one unified system, improving efficiency and accuracy
C) Encrypt sensitive data automatically
D) Restrict access to system reports based on user roles
Answer: B
In an AIS, “continuous auditing” refers to:
A) Performing manual audits once a year
B) Conducting audits in real-time as transactions are processed to detect errors or fraud immediately
C) Encrypting all sensitive data after each transaction
D) Storing audit logs in a secure offline location
Answer: B
Which of the following is an example of “computer-assisted audit techniques” (CAATs) in AIS?
A) Encrypting all system data
B) Using software to perform data analysis, validate transaction accuracy, and detect fraud during audits
C) Manually reviewing each transaction for discrepancies
D) Generating financial statements for management
Answer: B
What is the primary benefit of “data warehousing” in an AIS?
A) To create backup copies of financial data
B) To store large volumes of historical and transactional data for analysis and reporting
C) To reduce the need for real-time processing
D) To monitor user activities within the system
Answer: B
Which of the following is a key feature of “cloud-based AIS solutions”?
A) Limited scalability and higher maintenance costs
B) Data can be accessed remotely, and the infrastructure is managed by a third-party provider, offering flexibility and cost savings
C) Data is stored only on local servers
D) They do not require any backup processes
Answer: B
What does “data encryption” primarily protect in an AIS?
A) The speed of data processing
B) The privacy and security of sensitive data during storage or transmission
C) The accuracy of data entries
D) The generation of system reports
Answer: B
What is “access control” in an AIS designed to prevent?
A) Unauthorized users from accessing sensitive financial data or modifying system settings
B) The automatic generation of financial statements
C) Reconciliation of financial discrepancies
D) The storing of backup data in secure locations
Answer: A
In an AIS, the term “user authentication” refers to:
A) Generating real-time reports of user activity
B) Verifying the identity of a user before granting access to the system based on credentials like passwords or biometrics
C) Encrypting data stored within the system
D) Tracking changes to financial data
Answer: B
What is “Segregation of Duties” (SoD) in an AIS meant to prevent?
A) Unauthorized access to financial data
B) Fraud or errors by ensuring that no single individual has control over the entire financial transaction process
C) The automatic creation of audit trails
D) Unnecessary duplication of financial records
Answer: B
In the context of AIS, what does “data governance” refer to?
A) Encrypting all sensitive financial data
B) Establishing policies and procedures for managing the availability, usability, integrity, and security of data across an organization
C) Generating real-time system reports for management
D) Ensuring that data is stored in separate silos across departments
Answer: B
What does the “compliance framework” in an AIS focus on?
A) Reconciliation of discrepancies in financial records
B) Ensuring the system adheres to legal, regulatory, and organizational standards, such as Sarbanes-Oxley
C) Automatically processing financial transactions
D) Encrypting sensitive data for storage
Answer: B
What is the purpose of “backup systems” in an AIS?
A) To improve the performance of the system by reducing load times
B) To store copies of critical financial data to ensure its availability in case of system failure or disaster
C) To monitor system security in real-time
D) To restrict access to sensitive data
Answer: B
What is an example of an “end-user computing” (EUC) tool in an AIS?
A) Custom financial reports generated by the system for management
B) Software applications that allow business users to create and manipulate their own data analysis and reports without IT support
C) System-generated audit logs
D) Cloud-based backup solutions
Answer: B
What is “log management” in an AIS?
A) Encrypting sensitive user data stored in system logs
B) Monitoring and storing system log data, which records user activity and system events for security and auditing purposes
C) Automatically reconciling data discrepancies
D) Generating real-time reports for management
Answer: B
What is “data archiving” in an AIS?
A) The process of storing active data on local servers
B) The long-term storage of inactive or historical data in a way that preserves its integrity and makes it available for retrieval if needed
C) Automatically generating real-time system reports
D) Encrypting sensitive financial data
Answer: B
Which of the following is an example of a “security measure” for protecting data in an AIS?
A) Restricting access to financial reports to authorized users
B) Encrypting all communication channels within the system
C) Requiring multi-factor authentication for system logins
D) All of the above
Answer: D
What is the purpose of a “disaster recovery plan” in an AIS?
A) To enhance system performance during regular operations
B) To ensure that critical system functions, including accounting processes, can continue or be restored quickly after a disaster or system failure
C) To monitor and audit user activity
D) To restrict unauthorized access to system data
Answer: B
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