Deck 15: Decision-Making Models and Knowledge Management

Question 1

Task and process parameters can contribute to information overload. All of the following are task and process parameters except:

A)Doing a Google search.
B)Taking on a task for the first time.
C)Being interrupted by a phone call.
D)Waiting for a team member to complete the first part of a task.

Answer 1

B

Question 2

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Bradley would benefit from which of the following countermeasures for information overload?

A)Allow more time to complete important tasks.
B)Use graphs and other visual aids.
C)Both A and B.
D)Neither A nor B.

Answer 2

C

Question 3

Isabella is the CEO of BHR Corporation. By virtue of her position, she is in the best position to complete which of the seven steps involved in creating a knowledge management system?

A)The first step
B)The third step
C)The fourth step
D)The sixth step

Answer 3

A

Question 4

In response to information overload, decision makers can:

A)Allow more time to complete important tasks.
B)Rely on informal language to describe information.
C)Both A and B.
D)Neither A nor B.

Question 5

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Which decision makers are experiencing relapse errors?

A)Jorge only
B)Maria only
C)Both Jorge and Maria
D)Neither Jorge nor Maria

Question 6

Jon attempted to read an advanced accounting text after sleeping four hours the previous night. Which of the following statements is most true?

A)He is experiencing information overload from personal factors.
B)He is experiencing information overload from information characteristics.
C)Both A and B.
D)Neither A nor B.

Question 7

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Which decision makers are experiencing different causes of information overload?

A)Irene and Jorge
B)Jorge and Maria
C)Both A and B
D)Neither A nor B

Question 8

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Which decision makers are experiencing information overload due to task and process parameters?

A)Bradley only
B)Jorge only
C)Both Bradley and Jorge
D)Neither Bradley nor Jorge

Question 9

Ways to combat information overload include:

A)Applying effective models for making decisions.
B)Managing knowledge.
C)Both A and B.
D)Neither A nor B.

Question 10

The generalized set of processes people use to gather, organize and retain information is often called:

A)Bounded rationality.
B)Knowledge management.
C)Enterprise risk management.
D)Enterprise resource planning.

Question 11

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Jorge and his group would benefit from which of the following countermeasures for information overload?

A)Focus on creating value-added information.
B)Compress, aggregate, categorize and structure information.
C)Both A and B.
D)Neither A nor B.

Question 12

Causes of information overload include:

A)Personal factors.
B)Information characteristics.
C)Organizational design.
D)All of the above.

Question 13

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Which decision makers share at least one common cause of information overload?

A)Irene and Maria
B)Irene and Bradley
C)Bradley and Maria
D)Irene, Bradley and Maria

Question 14

Call recommended a seven-step process for creating a knowledge management system. The first step could be completed by:

A)Making knowledge management a component of performance evaluation.
B)Requiring managers to conduct focus groups with their employees about the importance of knowledge management.
C)Both A and B.
D)Neither A nor B.

Question 15

Brown's taxonomy of risk includes "systems risk" as a form of operational risk. An organization creating a knowledge management system has the greatest exposure to systems risk in which of the seven steps for creating the knowledge management system?

A)The fourth step
B)The fifth step
C)The sixth step
D)All seven steps

Question 16

When a decision maker reaches the point where the amount of information actually integrated into a decision begins to decline, the decision maker is experiencing:

A)Information asymmetry.
B)Information overload.
C)Enterprise risk.
D)Relapse errors.

Question 17

Knowledge:

A)Is an element of financial statements.
B)Should be managed.
C)Both A and B.
D)Neither A nor B.

Question 18

Jon continually worked on a team that experienced a lot of non-productive conflict. Which of the following best describes Jon's behavior?

A)Satisficing
B)Bounded rationality
C)Relapse errors
D)Knowledge management

Question 19

Objectives of knowledge management include:

A)Creating knowledge repositories.
B)Improving knowledge access.
C)Both A and B.
D)Neither A nor B.

Question 20

Consider the following independent situations as you answer the next seven questions:
A) Irene, a freshman accounting major, thought she would benefit from reading an intermediate accounting text while taking introductory financial accounting.
B) Bradley developed a plan to study for all four parts of the CPA exam during his last semester at college, thus making himself ready to take the exam immediately after graduation.
C) Jorge met weekly with a group of five students, all of whom were preparing their resume for the very first time.
D) Maria planned to use the same strategies in advanced accounting courses that she had used in introductory accounting courses.Which decision makers are experiencing information overload due to information characteristics?

A)Irene only.
B)Bradley only
C)Both Irene and Bradley
D)Neither Irene nor Bradley

Question 21

After attending a seminar on the importance of knowledge management, the managers of TCH Corporation developed a set of objectives their knowledge management system should address. As their next step, the managers should:

A)Lay out database specifications for the system.
B)Interview employees to determine their level of knowledge and misunderstanding of organizational processes.
C)Both A and B.
D)Neither A nor B.

Question 22

Knowledge management is important to the study of accounting information systems because, like business processes, it:

A)Represents one way to create value for stakeholders.
B)Crosses functional boundaries such as the accounting department and the purchasing department.
C)Both A and B.
D)Neither A nor B.

Question 23

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.Amanda's firm has set a goal that all audits be completed within seven days, regardless of the size and nature of the client. Thus, Amanda's team may be experiencing information overload due to:

A)Task and process parameters.
B)Information characteristics.
C)Both A and B.
D)Neither A nor B.

Question 24

Knowledge management is important to the study of accounting information systems because:

A)Information technology is an essential part of both knowledge management and AIS.
B)Knowledge is an important asset on the balance sheet.
C)Both A and B.
D)Neither A nor B.

Question 25

Call suggested seven steps for creating a knowledge management system. How are those seven steps similar to the COSO internal control framework?

A)They both involve organizational culture.
B)They both require some form of system documentation, such as a flowchart.
C)Both A and B
D)Neither A nor B

Question 26

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.In assigning personnel to a specific audit team, Amanda normally has one licensed CPA working with a professional who is not yet licensed, thus cutting down on information overload due to:

A)Organizational design.
B)Poor use of information technology.
C)Both A and B.
D)Neither A nor B.

Question 27

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.Amanda's goal of creating a knowledge management system has helped to:

A)Create an organizational culture that supports the idea of knowledge sharing.
B)Define the business goals the knowledge management system will address.
C)Both A and B.
D)Neither A nor B.

Question 28

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.Call recommended seven steps for developing a knowledge management system, one of which relates to defining business goals. Appropriate business goals for Amanda's situation include:

A)Hire more auditors.
B)Cut down on relapse errors.
C)Both A and B.
D)Neither A nor B.

Question 29

Which of the following statements about information overload and accounting information systems is most true?

A)Even with a properly designed AIS, decision makers can experience information overload.
B)A well designed AIS can help decision makers manage information overload.
C)Both A and B are true.
D)Neither A nor B is true.

Question 30

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.In assigning personnel to a specific audit team, Amanda normally has one licensed CPA working with a professional who is not yet licensed. Rather than considering alternative approaches to the audit that might achieve the same goals more efficiently, the licensed CPAs in Amanda's firm rely on their past practice in conducting audits. The licensed CPAs are therefore demonstrating:

A)Bounded rationality.
B)At least one countermeasure for information overload.
C)Both A and B.
D)Neither A nor B.

Question 31

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.One important step in conducting an audit is the evaluation of internal controls; one step in creating a knowledge management system is the creation of a visual map. If Amanda wanted to create a visual map focused on internal control, it could be organized into which of the following categories?

A)General and application
B)Physical, technical and administrative
C)Safeguarding assets, promoting operational efficiency, ensuring reliable financial reporting and encouraging compliance with management directives
D)Any of the above

Question 32

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.Amanda's staff may be committing relapse errors due to information overload. Which of the following best pairs a cause of information overload with an appropriate countermeasure?

A)Auditors regularly work ten to twelve hours per day; they need to allow more time to complete important tasks.
B)Auditors work in teams of two; they need to formalize the language used to describe information.
C)Auditors regularly work ten to twelve hours per day; they need to engage in more satisficing.
D)Auditors work in teams of two; they need to engage in more satisficing.

Question 33

Steps for Better Thinking involves all of the following stages except:

A)Identifying.
B)Exploring.
C)Prioritizing.
D)Thinking.

Question 34

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.Consider the following comments Amanda could make after purchasing or building appropriate tools for knowledge management. Which of them best demonstrates that she understands the seven steps in creating a knowledge management system?

A)I'm glad that's over. Now that the system is designed, we don't have to think about it again.
B)We can monitor the system in the same ways we monitor our internal control plan.
C)Now that the system is created, we need to determine its value for balance sheet purposes.
D)I can be assured now that relapse errors are a thing of the past.

Question 35

In preparation for her retirement, Debra, the chief information officer of TPC Corporation, developed a diagram that showed all her areas of responsibility and how they were related to one another. Her actions contributed to which of Call's seven steps for creating a knowledge management system?

A)The first step only.
B)The fourth step only.
C)Both the first and fourth steps.
D)Neither the first nor the fourth step.

Question 36

After developing a set of objectives their knowledge management system should address, the managers of TCH Corporation distributed a survey to employees, followed by a series of focus groups designed to identify issues such as duplication, gaps and overlaps in knowledge. To complete the next step in creating TCH's knowledge management system, the managers could use a:

A)Flowchart.
B)Data flow diagram.
C)REA model.
D)None of the above.

Question 37

Which of the following occurs first in Steps for Better Thinking?

A)Exploring
B)Envisioning
C)Knowing
D)Identifying

Question 38

The systems development life cycle would be most useful in the ___ step to create a knowledge management system.

A)First
B)Sixth
C)Both the first and the sixth
D)Neither the first nor the sixth

Question 39

Consider the following short case as you respond to the next question: Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of whom are already licensed CPAs and some of whom are still working toward licensure. She is responsible for audits of independent bookstores in California, Nevada and Arizona. Amanda is concerned that the less experienced professionals she supervises are repeating the mistakes she and the more experienced professionals on her team made when they began auditing. She therefore wants to create a knowledge management system.The less experienced accountants on Amanda's team are suffering from:

A)Relapse errors.
B)Satisficing.
C)Bounded rationality.
D)Lack of information technology.

Question 40

One step in developing a knowledge management system is to create a visual map that describes units of knowledge and the relationships between them. In creating a knowledge management system focused on internal control, such a map might include which of the following?

A)COSO framework
B)CoBIT framework
C)Both A and B
D)Neither A nor B

Question 41

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. As part of ___ in Steps for Better Thinking, David might ask them whether cost or quality is more important.

A)Identifying
B)Exploring
C)Prioritizing
D)Envisioning

Question 42

Bumble Beasley was attempting to improve internal controls over his firm's sales / collection process. He completed the following tasks in the order listed, but made several errors. Revise each statement based on Steps for Better Thinking.
A. Read one general article about the importance of internal control.
B. Focus on the costs of physical and technical controls in the sales / collection process.
C. Make a list of three cost categories common to physical and technical controls in the sales / collection process.
D. Implement the two least expensive physical and two least expensive technical controls.
E. Write a report summarizing his work; store it in a three-ring binder on his office bookshelf.

Question 43

Which level of Steps for Better Thinking is indicated in each of the following:
A. Acquire background knowledge and skills.
B. Deal with limitations to the solution.
C. Identify the problem, relevant information and uncertainties.
D. Implement solutions.
E. Interpret and organize the information.

Question 44

Examples of Step 1 in Steps for Better Thinking include:

A)Recognizing the need to create an enterprise risk management plan.
B)Learning about the eXtensible Business Reporting Language.
C)Both A and B.
D)Neither A nor B.

Question 45

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. As part of the "prioritizing" step in Steps for Better Thinking, David could:

A)Complete a weighted rating analysis of various software packages.
B)Ask about their familiarity with general ledger software.
C)Both A and B.
D)Neither A nor B.

Question 46

In which stage of Steps for Better Thinking should a decision maker interpret and organize information?

A)Identifying
B)Exploring
C)Prioritizing
D)Envisioning

Question 47

Which element of Steps for Better Thinking is described in each independent item below? Use each element of the model exactly twice.
A. Classifying previously identified costs and benefits as financial or nonfinancial
b. Conducting internal audits to assess the effectiveness of implemented internal controls
c. Organizing focus groups to discuss ways to improve internal controls after implementing several controls
d. Preparing a list of previously identified costs and benefits for specific internal controls
e. Ranking a list of five internal control objectives according to their importance
f. Reading an article about the purposes of internal control
g. Recognizing a weakness in internal control
h. Recommending specific internal controls to implement
i. Taking a course to learn about the COSO internal control framework
j. Wondering if a CEO supports changes in internal control

Question 48

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. After some discussion, they decided to use Quickbooks as their basic AIS software. Editing the standard chart of accounts to fit their clothing business would be part of ___ in Steps for Better Thinking.

A)Identifying
B)Exploring
C)Prioritizing
D)Envisioning

Question 49

Robert and Claudia are partners in Retail Consulting Associates (RCA), a firm specializing in enterprise risk management for small retail businesses. As their client base expands, they want to develop a knowledge management system that will benefit themselves, their employees and their clients. They have established three key knowledge areas for RCA: costs of enterprise risk management, role of information technology in enterprise risk management and communication with clients. Use those three areas to complete the following knowledge map for RCA.

Question 50

Divide the following examples of information overload causes into five groups based on the categories suggested by Eppler and Mengis. Specify the name of each group.1) Anxiety about job performance
2) Attempting a task for the first time
3) Disagreements about who should be a group leader
4) E-mail forwarded to a smart phone
5) Health conditions
6) Highly technical information
7) Information conveyed via symbols
8) Internet searches with very broad terms
9) Significant time pressure
10) Working with too large a group

Question 51

YRC Corporation's operations had been limited to the US, Canada and Mexico, but management wanted to expand into other countries. In preparation for the expansion, they designed a knowledge management system which included the knowledge map shown below. Based on the knowledge map and the principles of database normalization, create specifications (table names and field names) for three database tables YRC should use to capture, analyze, categorize and distribute knowledge.

Question 52

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. Which of the following questions should David ask them as part of Step 1 of Steps for Better Thinking?

A)What is your budget for developing the AIS?
B)Which is more important to you: cost or quality?
C)Either A or B
D)Neither A nor B

Question 53

Helena, the chief financial officer of TRM Corporation, attempted to explain the role and purpose of financial statements to employees in the production department with no prior training in accounting. Suggest two causes of information overload the production employees might experience; for each cause, suggest one countermeasure.

Question 54

The COSO internal control framework includes "monitoring" as one component. Monitoring is most similar to which step in Steps for Better Thinking?

A)Identifying
B)Exploring
C)Prioritizing
D)Envisioning

Question 55

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. If David uses Steps for Better Thinking to help them set up the system, we can infer that their accounting processes are at the ___ level of the capability maturity model.

A)Chaotic
B)Repeatable
C)Managed
D)None of the above

Question 56

Accounting information systems work often involves documenting business processes through flowcharts, data flow diagrams and REA models. Briefly explain the importance of managing knowledge about documentation techniques; also explain, in your own words, how you would manage that knowledge.

Question 57

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. Which of the following methodologies could David use to assist them?

A)Systems development life cycle
B)Steps for Better Thinking
C)Either A or B
D)Neither A nor B

Question 58

List, in order, the seven steps to create a knowledge management system.

Question 59

The nature and complexity of topics in accounting information systems can lead to information overload. Consider the situations below; for each situation, indicate one countermeasure from the list suggested by Eppler and Mengis.
A. Ray attempted to design relational database tables for his company's acquisition / payment process before lunch.
B. Employees at TRM Corporation listened to Susan's two-hour presentation on the COSO internal control model.
C. Peter prepared a report for the board of directors explaining each inventory purchase for the previous six months.
D. Juanita, the chief financial officer of TRM Corporation, attempted to explain the role and purpose of financial statements without using the proper accounting terminology.
E. After receiving a report evaluating various prospective ERP vendors, Sam decided to delay making a choice for three weeks.

Question 60

Russell had been asked by his supervisor to document the purchasing process in his company, but did not specify any particular technique for doing so. If Russell uses Steps for Better Thinking to choose a documentation technique, which of the following statements is most true?

A)He should immediately choose the documentation technique with which he is most comfortable.
B)Determining his supervisor's objective in documenting the process should be part of Step 1.
C)Completing a cost / benefit analysis of various documentation methods should be part of the foundation level of Steps for Better Thinking.
D)None of the above; Steps for Better Thinking is not an appropriate way to make the decision.

Question 61

Describe your personal strategy for making decisions and managing knowledge.

Question 62

YHW Corporation had been a traditional brick-and-mortar business, but was interested in expanding into e-business practices. Starting with the "identifying" phase, explain how you would use Steps for Better Thinking to make a recommendation on the expansion.