Describe how a procurement card improves the efficiency of purchasing supplies.
> What are the advantages of the scattergraph method over the high-low method? The high-low method over the scattergraph method?
> Consider each of the following situations. Is there a potential problem? Which part of the fraud triangle is involved, if any? A. Susan is an accounts payable clerk. She sets up creditors in a financial database and pays invoices as they come in. Last ye
> A Box Scorecard was prepared for a value stream: Required: 1. How many nonfinancial measures are used to evaluate performance? Why are nonfinancial measures used? 2. Classify the operational measures as time-based, quality-based, or efficiency-based. D
> A value stream has three activities and two products. The units produced and shipped per week are 50 of the limited model (Model K), characterized by special additional features, and 150 of the regular model (Model R), with only basic features. The conve
> Erba Inc. has the following departmental layout for producing an herbal supplement: After a detailed study, the head of the plant’s industrial engineering department recommended that the following cellular manufacturing layout replace
> The controller of Emery, Inc. has computed quality costs as a percentage of sales for the past 5 years (20X1 was the first year the company implemented a quality improvement program). This information is as follows: Required: 1. Prepare a trend graph f
> Bradshaw Company reported sales of $5,000,000 in 20X1. At the end of the fiscal year (June 30, 20X1), the following quality costs were reported: Vendor certification ……………………………..$ 43,500 Warranty ……………………………………………….100,000 Rework ………………………………………………….1
> Classify the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs: 1. Scrap (created by defective units) 2. Certifying a vendor to ensure that quality parts are provided 3. Stopping work to contr
> Budgeted amounts for the year: Materials ……………………2 leather strips @ $7.00 Labor …………………………………….1.5 hr. @ $18.00 VOH ……………………………………….1.5 hr. @ $1.20 FOH ……………………………………………………$6,800 Required: 1. Prepare a flexible budget for 3,500, 4,000, and 4,500 unit
> Princeville Paradise Ice Cream Shoppe manufactures and sells premium ice cream in a unique Hawaiian environment. Princeville Paradise’s management performed a stakeholder engagement exercise to identify its most important stakeholders, given its strategy
> Apple Inc. is a multinational technology company that designs, develops, manufactures, and sells innovative consumer electronics products and services around the globe. Its products include laptop (e.g., MacBook) and desktop (e.g., iMac) computers, mobil
> How do international issues affect the role of the management accountant?
> Jack’s Apps Company researches, develops, and sells traditional applications (i.e., apps) for middle-aged mobile phone device users. In an attempt to tap into the large young adult app market to boost sales and advertising revenues, Jack’s CFO, Daniel, i
> At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products: Direct materials (5 lbs. @ $4.00) …………………$20.00 Direct labor (2 hrs. @ $15.00) ………………………..30.00 Standard prime cost per unit …………………………$50
> Lake McDonald Gift Shop has decided to price the National Parks Memory Card Game that it sells at cost plus 65%. The National Parks Memory Card Game costs $20 each, and another one, the Guess This Animal Track Game, costs $40 each. Required: 1. What pr
> Susan Lewis, owner of a florist shop, is interested in predicting the cost of delivering floral arrangements. She collected monthly data on the number of deliveries and the total monthly delivery cost (depreciation on the van, wages of the driver, and fu
> The controller for Beckham Company believes that the number of direct labor hours is associated with overhead cost. He collected the following data on the number of direct labor hours and associated factory overhead cost for the months of January through
> Knitline Inc. produces high-end sweaters and jackets in a single factory. The following information was provided for the coming year. A sales commission of 5% of sales is paid for each of the two product lines. Direct fixed selling and administrative
> Refer to the information for Smooth Move Company on the previous page. Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000.
> Waterfun Technology produces engines for recreational boats. Because of competitive pressures, the company was making an effort to reduce costs. As part of this effort, management implemented an activity-based management system and began focusing its att
> Refer to the information for Smooth Move Company on the previous page. If Smooth Move accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. Required: 1. What are the alternatives for Smooth Mo
> Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 20,000 portable grills, 50,000 stationary gri
> When will the average unit cost be used for value streams?
> What is the most important reason for an organization to use enterprise risk management?
> Using the Internet or other research tool, search “cloud computing” and create a list of at least 10 companies that provide cloud computing services. List the names of the companies and a brief description of the cloud computing services provided by each
> Refer to the notes payable audit program excerpt presented in Exhibit 7‑3. If an auditor had a copy of this client’s data file for its notes receivable, how could a general audit software or data analysis software package be used to assist with these aud
> Identify whether each of the following audit tests is used to evaluate internal access controls (I), external access controls (E), or both (B): • Authenticity tests • Penetration tests • Vulnerability assessments • Review of access logs • Review of p
> Suppose a company has 1,000 units of a raw material part on hand. If 750 of these units are routed into production, should the company place an order to stock up on more of these parts? In order to answer this question, determine the economic order quant
> Identify whether each of the following activities represents preventive controls, detective controls, or corrective controls: • Job rotation • Preparation of a bank reconciliation • Segregation of duties • Recalculating totals on computer reports •
> Explain how control totals such as record counts, batch totals, and hash totals serve as input controls, processing controls, and output controls.
> Describe the differences in the following three types of processing: a. batch processing b. online processing c. real‐time processing
> For each report shown in the table below, indicate in the appropriate column whether the report is likely to be for internal or external users (some reports may be both), and whether data would come exclusively from the general ledger. Report Name I
> Locate the stock tables for the two major stock exchanges in any issue of the Wall Street Journal. Beginning from any point within the table, prepare a list of the first digits of the daily volume for 100 stocks. Determine whether the listed numbers con
> Visit the AICPA website at www.aicpa.org and select the tab for Career Paths. Click on “This Way to CPA” to locate information on audit careers.
> Categorize each of the following as either a general control or an application control: a. Validity check b. Encryption c. Security token d. Batch total e. Output distribution f. Vulnerability assessment g. Firewall h. Antivirus software
> Describe the purpose of each of the following cost accounting records or reports: • Work‐in‐process and finished goods inventory accounts • Bill of materials • Variance reports • Routing slips
> For the following activities within the conversion process, place them in sequence that indicates the order in which they would normally be performed: • Inspection of goods • Materials issuance • Preparation of time sheets • Preparation of a bill of
> Some companies use the same facility for both inventory stores and warehousing. Describe the difference between these two inventory control activities, and how the respective areas might be distinguished within the facility.
> List and describe each activity within the planning component of the logistics function.
> Give some examples of manufacturing processes that would fit into each of the three different types of production processes: continuous processing, batch processing, and custom made‐to‐order.
> Consider a company that is in the business of producing canned fruits for grocery stores. (It is not in the business of growing the fruit.) List the items that would likely be included as this company’s direct materials, direct labor, indirect materials,
> Explain the types of unethical behavior that may occur in the fixed assets area.
> The authorization to purchase should include investment analysis. Explain the two parts of investment analysis.
> Explain the ways in which electronic transfer of funds can improve payroll processes.
> Explain the various reconciliation procedures that should occur in payroll.
> Why is it true that the accounting software in and of itself is not the entire accounting information system?
> Explain how duties are segregated in payroll. Specifically, who or which departments conduct the authorization, timekeeping, recording, and custody functions?
> The calculation of gross and net pay can be a complicated process. Explain the items that complicate payroll calculations.
> Describe the type of information that a human resources department should maintain for each employee.
> Describe how an ERS system could improve the efficiency of expenditures processes.
> Describe how the matching of key information on supporting documents can help a company determine whether purchase transactions have been properly executed.
> Expenditures systems are crucial in the automobile manufacturing industry, where hundreds or thousands of parts must be purchased to manufacture cars. Briefly describe how EDI would be beneficial in this industry.
> Describe what is likely to occur if company personnel erroneously recorded a purchase transaction for the wrong vendor. What if a cash disbursement were posted to the wrong vendor? Identify internal controls that would detect or prevent this from occurri
> Briefly describe an example from your personal experience where you purchased something from a company that uses a POS system. How might your experience have been different if the POS system did not exist in the experience you described?
> Describe how a POS system could be useful to a company’s marketing managers. How could it be useful to purchasing agents?
> Why would the training of employees be an impediment to updating legacy systems?
> Describe how the use of prenumbered forms for receiving reports and credit memos can help a company determine that sales return transactions have not been omitted from the accounting records.
> Use the process maps in this chapter to answer the following questions: a. What would a credit manager do if a sales order received caused a customer to exceed its credit limit? b. What happens after the shipping department verifies that the quantities
> Revenue systems are crucial in the health care industry, where hundreds of billions of dollars are spent annually reconciling revenues and billing data from the perspectives of providers (doctors and clinics, etc.) and payers (insurance companies). Brief
> Debate the logic used in the following statement: The person responsible for handling cash receipts should also prepare the bank reconciliation because he is most familiar with the deposits that have been made to the bank account.
> Describe what is likely to occur if company personnel erroneously recorded a sales transaction for the wrong customer. What if a cash receipt were applied to the wrong customer? Identify internal controls that would detect or prevent this from occurring.
> Distinguish between the various service organization controls (SOC) reporting options available to auditors who evaluate cloud computing service providers.
> Explain why continuous auditing is growing in popularity. Identify and describe a computer assisted audit technique useful for continuous auditing.
> How is it possible that a review of computer logs can be used to test for both internal access controls and external access controls? Other than reviewing the computer logs, identify and describe two types of audit procedures performed to test internal a
> One of the most important tasks of the planning phase is for the auditor to gain an understanding of internal controls. How does this differ from the tasks performed during the tests of controls phase?
> Kim and Kresiki are assigned to perform the audit of Ying & Yang’s Yoga Company. During the audit, it was discovered that the amount of sales reported on Ying & Yang’s income statement was understated because one week’s purchasing transactions were not r
> What are some examples of turnaround documents that you have seen?
> From an internal control perspective, discuss the advantages and disadvantages of using IT‐based accounting systems.
> Why is it necessary for a CPA to be prohibited from having financial or personal connections with a client? Provide an example of how a financial connection to a company would impair an auditor’s objectivity. Provide an example of how a personal relation
> Explain how an ERP system can enhance internal controls. Specifically, how can it facilitate the separation of duties?
> Name the AICPA Trust Services Principles’ five operations risks. Why are these risks greater for ERP systems than for other IT systems?
> What are Shang and Seddon’s five dimensions of ERP benefits?
> What are the primary benefits of an ERP system? What are the primary risks?
> Discuss the potential advantages and disadvantages that exist with respect to engaging a consultant for an ERP implementation.
> Match the ERP modules on the left with their purpose of the related processes on the right: I. Financials a. Taking customer orders and preparing for the impending revenue and cash collection II. Human Resources b. Maintaining of the general ledger
> Refer to the Ethical Dilemma: Mail Order Case presented in Chapter 3. What term introduced in this chapter applies to the type of mail order deceit? What could the mail order company do to avoid a loss resulting from an event, assuming that it uses an e‐
> Two of the most common ways that employees commit fraud against their employers is the misstatement of reimbursable expense accounts and the misuse of office supplies for personal purposes. Although these schemes are usually not individually significant,
> What are some benefits and outcomes that can result from examining Big Data with regard to a firm’s purchasing transaction processing?
> What are some benefits and outcomes that can result from examining Big Data with regard to a firm’s revenue transaction processing?
> Keller Company is a small company with four people working in the revenue processes. One of the four employees supervises the other three. Some tasks that must be accomplished within the revenue processes are the following: a. Accounts receivable record
> Look at Exhibit 2‑4 and pick one accounting software product from the midmarket segment and one software product from the tier 1 ERP segment. Using those brand names of software, search the Internet for information about those products. Based on your inv
> What are the five most common reasons for increased spending on ERP systems in the early 2000s? Which of these reasons was the impetus for Viper’s ERP implementation in 2003?
> What are the advantages of purchased software when compared with software developed in house?
> During the systems analysis phase, which two data collection methods help determine user requirements?
> What is the advantage of studying the current system during the systems analysis phase?
> How does the analysis of feasibilities in the systems planning phase help to prioritize system changes?
> What is the difference between technical feasibility and operational feasibility?
> Why would IT governance include measuring the performance of IT systems?
> Near the beginning of Chapter 5, the real‐world example of Allstate’s IT expenditure is mentioned. Prior to the implementation of its IT governance committee, “whoever spoke the loudest or whoever had the biggest checkbook” got to select IT projects. Wha
> What dangers exist related to computer output such as reports?
> Why is a private cloud less risky than a public cloud?
> How can a redundant array of independent disks (RAID) help protect the data of an organization?
> Why was there so much growth in the sales of ERP systems in the late 1990s?
> Describe how sales data is captured and recorded at a restaurant such as Applebee’s.
> Describe some recent news stories you have seen or heard regarding computer viruses.
> What is two factor authentication with regard to smart cards or security tokens?
> What are the factors that limit the effectiveness of internal controls?
> Provide examples of continuous monitoring and periodic monitoring.
> Many companies have mandatory vacation and periodic job rotation policies. Discuss how these practices can be useful in strengthening internal controls.
> Due to cost/benefit considerations, many business organizations are unable to achieve complete segregation of duties. What else could they do to minimize risks?
