MIDTERM EXAMINATION – AUDITING IN CIS ENVIRONMENT

NAME: _______________________________________________ SECTION: ___________________

I. IDENTIFICATION. Write your answer on the space provided.

1. Ability of the system to grow smoothly and economically as user requirements increase.

2. Negative operational symptoms exhibited by improperly normalized tables.

3. Responsible for managing the database resource.

4. A programming language used to define the physical database to the DBMS.

5. This type of view represents the database logically and abstractly, rather than the way it
is physically stored.
6. A type of event that includes control, planning, and management activities that are
related to economic events, but do not directly affect a change in resources.
7. An accounting framework for modeling an organization’s critical resources, events, and
agents and the relationship between them.
8. A dependency that occurs when one or more nonkey attributes are dependent on
(defined by) only part of the primary key, rather than the whole key.
9. Process of selecting, exploring, and modeling large amounts of data to uncover
relationships and global patterns that exist in large databases but are hidden among the
vast amount of facts.
10. Software provided by third party vendors used in conjunction with already purchased
ERP software.

II. MULTIPLE CHOICE. Encircle the letter of the best answer.

1. Separating the data warehouse from the operations databases occurs for all of the following reasons
except
a. to make the management of the databases more economical
b. to increase the efficiency of data mining processes
c. to integrate legacy system data into a form that permits entity-wide analysis
d. to permit the integration of data from diverse sources

2. Extracting data for a data warehouse

a. cannot be done from flat files. c. requires that the files be out of service.
b. should only involve active files. d. follows the cleansing of data.

3. In an REA model, events are described from the perspective of

a. the organization c. the user
b. the designer d. the customer

4. When developing an REA model, events need to be organized in sequence of

a. completion c. ease of analysis
b. length d. occurrence

5. The textbook refers to four interrelated components of the database concept. Which of the following is
not one of the components?
a. the Database Management System c. the physical database
b. the Database Administrator d. the conceptual database

6. Users access the database

a. by direct query
b. by developing operating software
c. by constantly interacting with systems programmers
d. all of the above

7. Which of the following is not a responsibility of the Database Management System?

a. provide an interface between the users and the physical database
b. provide security against a natural disaster

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 c. ensure that the internal schema and external schema are consistent
d. authorize access to portions of the database

8. The Data Definition Language

a. identifies, for the Database Management System, the names and relationships of all data
elements, records, and files that comprise the database
b. inserts database commands into application programs to enable standard programs to
interact with and manipulate the database
c. permits users to process data in the database without the need for conventional programs
d. describes every data element in the database

9. The Data Definition Language

a. identifies, for the Database Management System, the names and relationships of all data
elements, records, and files that comprise the database
b. inserts database commands into application programs to enable standard programs to
interact with and manipulate the database
c. permits users to process data in the database without the need for conventional programs
d. describes every data element in the database

10. Which statement is not correct? A query language like SQL

a. is written in a fourth-generation language c. allows users to retrieve and modify data
b. requires user familiarity with COBOL d. reduces reliance on programmers

11. Which statement is correct?

a. in a normalized database, data about vendors occur in several locations
b. the accountant is responsible for database normalization
c. in a normalized database, deletion of a key record could result in the destruction of the audit trail
d. connections between M:M tables is provided by a link table

12. Which of the following represents the order of the steps in the preparation of an REA model?
a. organize events in order, identify resources and agents, identify links, identify operating events, assign
cardinalities
b. identify operating events, identify resources and agents, identify links, assign cardinalities, organize
events in order
c. identify operating events, organize events in order, identify resources and agents, identify links, assign
cardinalities
d. identify resources and agents, identify operating events, organize events in order, identify links, assign
cardinalities

13. The REA approach leads to more efficient operations in all of the following ways except
a. identifying non-value-added activities
b. storage of both financial and nonfinancial data in the same database
c. storage of detailed data to support a wider range of management decisions
d. standardizing data forms for simplicity

14. Data cleansing involves all of the following except

a. filtering out or repairing invalid data
b. summarizing data for ease of extraction
c. transforming data into standard business terms
d. formatting data from legacy systems

15. Supply chain management software

a. is typically under the control of external partners in the chain.
b. links all of the partners in the chain, including vendors, carriers, third-party firms, and
information systems providers.
c. cannot be integrated into an overall ERP.
d. none of the above

16. Which statement is false?

a. The DBMS is special software that is programmed to know which data elements each user
is authorized to access.
b. User programs send requests for data to the DBMS.
c. During processing, the DBMS periodically makes backup copies of the physical database.
d. The DBMS does not control access to the database.

17. Which of the following is a relational algebra function?

a. restrict c. join
b. project d. all are relational algebra functions
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18. The most serious problem with unnormalized databases is the
a. update anomaly c. deletion anomaly
b. insertion anomaly d. none of the above

19. The deletion anomaly in unnormalized databases

a. is easily detected by users c. complicates adding records to the database
b. may result in the loss of important data d. requires the user to perform excessive updates

20. All of the following are elements of the DBMS which facilitate user access to the database except
a. query language c. data manipulation language
b. data access language d. data definition language

21. Data currency is preserved in a centralized database by

a. partitioning the database c. replicating the database
b. using a lockout procedure d. implementing concurrency controls

22. What control maintains complete, current, and consistent data at all information processing units?
a. deadlock control c. concurrency control
b. replication control d. gateway control

23. Which of the following is not an advantage of using the REA model?
a. greater efficiency c. more relevant and timely information
b. increased productivity d. simpler database creation

24. On-line transaction processing programs

a. are bolt-on programs used with commercially available ERSs.
b. are available in two models–two-tier and three-tier.
c. handle large numbers of relatively simple transactions.
d. allow users to analyze complex data relationships.

25. Auditors of ERP systems

a. need not worry about segregation of duties.
b. may feel that the data warehouse is too clean and free from errors.
c. find independent verification easy.
d. need not worry about system access since the ERP determines it.

26. Which statement about ERP installation is least accurate?

a. For the ERP to be successful, process reengineering must occur.
b. ERP fails because some important business process is not supported.
c. When a business is diversified, little is gained from ERP installation.
d. The phased-in approach is more suited to diversified businesses.

27. Which statements about data warehousing is not correct?

a. The data warehouse should be separate from the operational system.
b. Data cleansing is a process of transforming data into standard form.
c. Drill-down is a data-mining tool available to users of OLAP.
d. Normalization is a requirement of databases included in a data warehouse.

28. Data warehousing processes does not include

a. modeling data
b. condensing data
c. extracting data
d. transforming data

29. Which of the following is usually not part of an ERP’s core applications?
a. OLTP applications
b. sales and distribution applications
c. business planning applications
d. OLAP applications

30. Goals of ERP include all of the following except

a. improved customer service
b. improvements of legacy systems
c. reduced production time
d. increased production

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III. PROBLEMS. Write your answer at the back of the paper.

1. A table of data for a library is shown in the table below. Normalize these data into the third normal form,
preparing it for use in a relational database environment. The library’s computer is programmed to
compute the due date to be 14 days after the check out date.

STUDENT STUDENT NUMBER BOOK

STUDENT ID BOOK DATE DUE
FIRST LAST OF BOOKS CALL
NUMBER TITLE OUT DATE
NAME NAME OUT NO.
678-98-4567 Amy Baker 4 hf351.j6 Avalanches 09-02-18 09-16-18
678-98-4567 Amy Baker 4 hf878.k3 Tornadoes 09-02-18 09-16-18
244-23-2348 Ramesh Sunder 1 i835.123 Politics 09-02-18 09-16-18
398-34-8793 James Talley 3 k987.d98 Sports 09-02-18 09-16-18
398-34-8793 James Talley 3 d879.39 Legal Rights 09-02-18 09-16-18
678-98-4567 Amy Baker 4 p987.t87 Earthquakes 09-03-18 09-17-18
244-23-2348 Ramesh Sunder 1 q875.i76 Past Heroes 09-03-18 09-17-18

2. Prepare the 3NF base tables needed to produce the sales report view shown in the diagram for this
problem.
USER VIEW
Reorder Unit Vendor Vendor Tel. No.
Part# Description QOH EOQ Vendor#
Point Cost Name Address
1.50 987 ABC Co. 654 Elm St. 555-5498
132 BOLT 100 50 1000 1.55 750 RST Co. 3415 8th St. 555-3421
1.45 742 XYZ Co. 510 Smith 555-8921
1.00 987 ABC Co. 654 Elm St. 555-5498
982 NAIL 100 50 800 1.10 742 XYZ Co. 510 Smith 555-8921
1.00 549 LMN Co. 18 Oak St. 555-9987

3. Horizon Books is a bookstore in Cebu. It carries an inventory of approximately 5,000 books. Customers
come in and browse the shelves, select their books, and take them to the cashier. At the cashier’s desk,
they can also discover whether a particular book is in stock, place orders for books not currently available
in the bookstore, and collect and pay for books previously ordered. There are no credit sales. All
customers pay for their purchases at the time of purchase. Required: Prepare an REA model for Horizons’
database. Show all the associations only.

4. K Cannon Inc. is a manufacturer of portable CD players. The company purchases raw materials such as
plastics and computer chips for its conversion cycle. The following describes K Cannon’s purchases and
payments procedures.
John, the purchasing department clerk, monitors raw materials inventory levels and prepares a
purchase requisition when purchases are necessary. These are sent to the purchasing agent, who prepares
six copies of a purchase order. Two purchase orders are sent directly to the vendor. One is placed in an
open purchase order file in the purchasing department, and one is used to post to the purchases journal.
Each week, the purchasing department clerk prepares a journal voucher from the purchases journal and
sends it to the general ledger department for posting. The AP and the receiving departments also each
receive a copy of the purchase order, which they file temporarily.
Upon receiving the raw materials, the receiving department clerk creates five copies of the
receiving report. One copy is sent to the raw materials warehouse and one copy is sent to the AP
department. Two copies are sent to the purchasing department, where one is filed and one is used to
update the inventory records. The final copy is filed in the receiving department with the purchase order
and packing slip. Vendors send their invoices to the AP department, where they are used to update the AP
subsidiary ledger.
In the cash disbursements department, Larry receives the information from the AP department,
such as the purchase requisition, purchase order, receiving report, and invoice. He then prepares and signs
the checks for the suppliers. After preparation of the checks, these supporting documents are sent back to
the AP department. Each week, Larry prepares a journal voucher and sends it to the general ledger
department for posting.

Required:
a. Prepare the REA model of the purchase cash payment process.
b. Show all the associations only.

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