AccountingjInformationjSystems
Solution_Manual Accounting_Information_Syste
j
ms_14th_Edition
_by_Marshall
1.1 Thejvaluejofjinformationjisjthejdifferencejbetweenjthejbenefitsjrealizedjfromjusingjthatjin
formationjandjthejcostsjofjproducingjit.jWouldjyou,jorjanyjorganization,jeverjproducejinfo
rmationjifjitsjexpectedjcostsjexceededjitsjbenefits?jIfjso,jprovidejsomejexamples.jIfjnot,jw
hyjnot?
Mostjorganizationsjproducejinformationjonlyjifjitsjvaluejexceedsjitsjcost.jHowever,jtherejar
ejtwojsituationsjwherejinformationjmayjbejproducedjevenjifjitsjcostjexceedsjitsjvalue.
a. Itjisjoftenjdifficultjtojestimatejaccuratelyjthejvaluejofjinformationjandjthejcostjofjprod
ucingjit.jTherefore,jorganizationsjmayjproducejinformationjthatjtheyjexpectjwilljprodu
cejbenefitsjinjexcessjofjitsjcosts,jonlyjtojbejdisappointedjafterjthejfact.
b. Productionjofjthejinformationjmayjbejmandatedjbyjeitherjajgovernmentjagencyjorjajpri
vatejorganization.jExamplesjincludejthejtaxjreportsjrequiredjbyjthejIRSjand
disclosurejrequirementsjforjfinancialjreporting.
1.2 CanjthejcharacteristicsjofjusefuljinformationjlistedjinjTablej1-
1jbejmetjsimultaneously?jOrjdoesjachievingjonejmeanjsacrificingjanother?
SeveraljofjthejcriteriajinjTablej1.1jcanjbejmetjsimultaneously.jForjexample,jmorejtimelyjinf
ormationjisjalsojlikelyjtojbejmorejrelevant.jVerifiablejinformationjisjlikelyjtojbejmorejreliab
le.
However,jachievingjonejobjectivejmayjrequirejsacrificingjanother.jForjexample,jensuringjth
atjinformationjisjmorejcompletejmayjreducejitsjtimeliness.jSimilarly,jincreased
verifiabilityjandjreliabilityjmayjreducejitsjtimeliness.
, AccountingjInformationjSystems
Thejdecisionjmakerjmustjdecidejwhichjtrade-offsjarejwarrantedjinjajgivenjsituation.
, AccountingjInformationjSystems
1.3 Youjandjajfewjofjyourjclassmatesjdecidedjtojbecomejentrepreneurs.jYoujcamejupjwithjajgr
eatjideajforjajnewjmobilejphonejapplicationjthatjyoujthinkjwilljmakejlotsjofjmoney.jYourjb
usinessjplanjwonjsecondjplacejinjajlocaljcompetition,jandjyoujarejusingjthe
$10,000jprizejtojsupportjyourselvesjasjyoujstartjyourjcompany.
a. Identifyjthejkeyjdecisionsjyoujneedjtojmakejtojbejsuccessfuljentrepreneurs,jthejin
formationjyoujneedjtojmakejthem,jandjthejbusinessjprocessesjyoujwilljneedjtoje
ngagejin.
b. Yourjcompanyjwilljneedjtojexchangejinformationjwithjvariousjexternaljparties.jIden
tifyjthejexternaljparties,jandjspecifyjthejinformationjreceivedjfromjandjsentjtojeachjo
fjthem.
Thejauthorjturnsjthisjquestionjintojanjin-
classjgroupjactivity.jStudentsjarejdividedjupjinjgroups,jtoldjtojclosejtheirjbooks,jandjgivenj15j
minutesjto:
a. Thinkjthroughjthejbusinessjprocesses,jkeyjdecisions,jandjinformationjneedsjissuesjinjth
eirjgroup.
b. Identifyjthejexternaljusersjofjinformationjandjspecifyjthejinformationjreceivedjfromja
ndjsentjtojeachjofjthem.
Onejgroupjisjselectedjtojpresentjtheirjanswersjtojthejclass.jThejotherjgroupsjarejtoldjtojchall
engejthejgroup’sjanswers,jprovidejalternativejanswers,jandjchipjinjwithjadditionaljanswersj
notjprovidedjbyjthejselectedjgroup.jSincejthejgroupjthatjpresentsjisjnotjselectedjuntiljafterjth
ejtimejhasjexpired,jstudentsjarejmotivatedjtojdojajgoodjjob,jasjtheyjwilljbejpresentingjtojthei
rjpeers.
Thejvaluejofjthisjactivityjisjnotjinjarrivingjatjaj“rightjanswer”jasjtherejarejmanyjrightjanswers
andjstudentjanswersjwilljvary.jInstead,jitjisjinjthinkingjthroughjthejissuesjpresentedjinjTablej1
-2j(businessjprocesses,jkeyjdecisions,jandjinformationjneeds)jandjFigurej1-1
(interactionsjwithjexternaljparties).jStudentjanswersjshouldjcontainjmanyjofjthejthingsjinjTa
blej1-2jandjFigurej1-
1jasjwelljasjothersjnotjshown,jasjajretailjoperationjdiffersjfromjanjapplicationjdevelopmentj
enterprise.
, AccountingjInformationjSystems
ThejauthorjconcludesjthejexercisejbyjhavingjthejstudentsjturnjtojTablej1-2jandjFigurej1-
1jwhile
hejemphasizesjthejneedjforjowners,jmanagers,jandjemployeesjofjorganizationsjtojidentifyjth
ejinformationjneededjtojmakejkeyjdecisionsjinjthejcompany’sjbusinessjprocessesjandjthejke
yjinformationjinterchangesjwithjexternaljparties.jAlljofjthejdatajneededjtojproducejthisjinfor
mationjmustjbejenteredjintojthejAIS,jprocessed,jstored,jprotected,jandjmadejavailablejtojth
ejappropriatejusers.
Whilejthisjactivejlearningjactivityjtakesjmorejtimejthanjajlecturejdoes,jitjdrivesjthejpointjho
mejmuchjbetterjthanjajlecturejwould.jItjalsojkeepsjthejstudentsjmorejengagedjinjthejmater
ial.
Solution_Manual Accounting_Information_Syste
j
ms_14th_Edition
_by_Marshall
1.1 Thejvaluejofjinformationjisjthejdifferencejbetweenjthejbenefitsjrealizedjfromjusingjthatjin
formationjandjthejcostsjofjproducingjit.jWouldjyou,jorjanyjorganization,jeverjproducejinfo
rmationjifjitsjexpectedjcostsjexceededjitsjbenefits?jIfjso,jprovidejsomejexamples.jIfjnot,jw
hyjnot?
Mostjorganizationsjproducejinformationjonlyjifjitsjvaluejexceedsjitsjcost.jHowever,jtherejar
ejtwojsituationsjwherejinformationjmayjbejproducedjevenjifjitsjcostjexceedsjitsjvalue.
a. Itjisjoftenjdifficultjtojestimatejaccuratelyjthejvaluejofjinformationjandjthejcostjofjprod
ucingjit.jTherefore,jorganizationsjmayjproducejinformationjthatjtheyjexpectjwilljprodu
cejbenefitsjinjexcessjofjitsjcosts,jonlyjtojbejdisappointedjafterjthejfact.
b. Productionjofjthejinformationjmayjbejmandatedjbyjeitherjajgovernmentjagencyjorjajpri
vatejorganization.jExamplesjincludejthejtaxjreportsjrequiredjbyjthejIRSjand
disclosurejrequirementsjforjfinancialjreporting.
1.2 CanjthejcharacteristicsjofjusefuljinformationjlistedjinjTablej1-
1jbejmetjsimultaneously?jOrjdoesjachievingjonejmeanjsacrificingjanother?
SeveraljofjthejcriteriajinjTablej1.1jcanjbejmetjsimultaneously.jForjexample,jmorejtimelyjinf
ormationjisjalsojlikelyjtojbejmorejrelevant.jVerifiablejinformationjisjlikelyjtojbejmorejreliab
le.
However,jachievingjonejobjectivejmayjrequirejsacrificingjanother.jForjexample,jensuringjth
atjinformationjisjmorejcompletejmayjreducejitsjtimeliness.jSimilarly,jincreased
verifiabilityjandjreliabilityjmayjreducejitsjtimeliness.
, AccountingjInformationjSystems
Thejdecisionjmakerjmustjdecidejwhichjtrade-offsjarejwarrantedjinjajgivenjsituation.
, AccountingjInformationjSystems
1.3 Youjandjajfewjofjyourjclassmatesjdecidedjtojbecomejentrepreneurs.jYoujcamejupjwithjajgr
eatjideajforjajnewjmobilejphonejapplicationjthatjyoujthinkjwilljmakejlotsjofjmoney.jYourjb
usinessjplanjwonjsecondjplacejinjajlocaljcompetition,jandjyoujarejusingjthe
$10,000jprizejtojsupportjyourselvesjasjyoujstartjyourjcompany.
a. Identifyjthejkeyjdecisionsjyoujneedjtojmakejtojbejsuccessfuljentrepreneurs,jthejin
formationjyoujneedjtojmakejthem,jandjthejbusinessjprocessesjyoujwilljneedjtoje
ngagejin.
b. Yourjcompanyjwilljneedjtojexchangejinformationjwithjvariousjexternaljparties.jIden
tifyjthejexternaljparties,jandjspecifyjthejinformationjreceivedjfromjandjsentjtojeachjo
fjthem.
Thejauthorjturnsjthisjquestionjintojanjin-
classjgroupjactivity.jStudentsjarejdividedjupjinjgroups,jtoldjtojclosejtheirjbooks,jandjgivenj15j
minutesjto:
a. Thinkjthroughjthejbusinessjprocesses,jkeyjdecisions,jandjinformationjneedsjissuesjinjth
eirjgroup.
b. Identifyjthejexternaljusersjofjinformationjandjspecifyjthejinformationjreceivedjfromja
ndjsentjtojeachjofjthem.
Onejgroupjisjselectedjtojpresentjtheirjanswersjtojthejclass.jThejotherjgroupsjarejtoldjtojchall
engejthejgroup’sjanswers,jprovidejalternativejanswers,jandjchipjinjwithjadditionaljanswersj
notjprovidedjbyjthejselectedjgroup.jSincejthejgroupjthatjpresentsjisjnotjselectedjuntiljafterjth
ejtimejhasjexpired,jstudentsjarejmotivatedjtojdojajgoodjjob,jasjtheyjwilljbejpresentingjtojthei
rjpeers.
Thejvaluejofjthisjactivityjisjnotjinjarrivingjatjaj“rightjanswer”jasjtherejarejmanyjrightjanswers
andjstudentjanswersjwilljvary.jInstead,jitjisjinjthinkingjthroughjthejissuesjpresentedjinjTablej1
-2j(businessjprocesses,jkeyjdecisions,jandjinformationjneeds)jandjFigurej1-1
(interactionsjwithjexternaljparties).jStudentjanswersjshouldjcontainjmanyjofjthejthingsjinjTa
blej1-2jandjFigurej1-
1jasjwelljasjothersjnotjshown,jasjajretailjoperationjdiffersjfromjanjapplicationjdevelopmentj
enterprise.
, AccountingjInformationjSystems
ThejauthorjconcludesjthejexercisejbyjhavingjthejstudentsjturnjtojTablej1-2jandjFigurej1-
1jwhile
hejemphasizesjthejneedjforjowners,jmanagers,jandjemployeesjofjorganizationsjtojidentifyjth
ejinformationjneededjtojmakejkeyjdecisionsjinjthejcompany’sjbusinessjprocessesjandjthejke
yjinformationjinterchangesjwithjexternaljparties.jAlljofjthejdatajneededjtojproducejthisjinfor
mationjmustjbejenteredjintojthejAIS,jprocessed,jstored,jprotected,jandjmadejavailablejtojth
ejappropriatejusers.
Whilejthisjactivejlearningjactivityjtakesjmorejtimejthanjajlecturejdoes,jitjdrivesjthejpointjho
mejmuchjbetterjthanjajlecturejwould.jItjalsojkeepsjthejstudentsjmorejengagedjinjthejmater
ial.
