Solutions Manual
m
For
Accounting Inf mm
ormation Systems
m
15th Edition
m
, CHAPTER 1 m
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
m m m m
SUGGESTED mANSWERSmTOmDISCUSSION mQUESTIONS
1.1 Themvaluemofminformationmismthemdifferencembetweenmthembenefitsmrealizedmfrommusing mtha
tminformationmandmthemcostsmofmproducingmit.m Wouldmyou,mormany morganization,mevermprod
uceminformationmifmitsmexpectedmcostsmexceededmitsmbenefits?m Ifmso,mprovidemsomemexamples
.m Ifmnot,mwhy?
Mostmorganizationsmproduceminformationmonlymif mitsmvaluemexceedsmitsmcost.m However,mtheremaremtwo msit
uationsmwhereminformation mmay mbemproduced meven mif mitsmcostmexceedsmitsmvalue.
a. Itmismoften mdifficultmto mestimate maccurately mthemvaluemof minformation mand mthemcostmof mprodu
cingmit.m Therefore,morganizationsmmay mproduceminformation mthatmthey mexpectmwillmproducem
benefitsmin mexcessmof mitsmcosts,monly mto mbemdisappointed maftermthemfact.
b. Productionmofmtheminformationmmaymbemmandated mbymeithermamgovernmentmagency mormampri
vatemorganization.m Examplesmincludemthemtaxmreportsmrequiredmby mthemIRSmandmdisclosurem
requirementsmformfinancialmreporting.
1.2 CanmthemcharacteristicsmofmusefulminformationmlistedminmTablem1-
1 mbemmetmsimultaneously? m Ormdoesmachieving monemmeanmsacrificing manother?
Severalmofmthemcriteriamin mTablem1.1mcan mbemmetmsimultaneously.m Formexample,mmoremtimelyminfor
mation mismalso mlikely mtombemmoremrelevant.m Verifiableminformation mismlikelymto mbemmoremaccurate.
However,machievingmonemobjective mmay mrequiremsacrificingmanother.m Formexample,mensuringmt
hatminformation mismmoremcompletemmay mreducemitsmtimeliness.m Similarly,mincreased mverifiabili
ty mand maccuracy mmay mreducemitsmtimeliness.
Themdecision mmakermmustmdecidemwhich mtrade-offsmaremwarranted min meach msituation.
1-1
.
,Ch.m 1:mAccountingmInformationmSystems:mAn mOvervie
w
1.3 Youmandma mfewmofmyourmclassmatesmdecidedmtombecomementrepreneurs.m Youmcamemupmwithm
a mgreatmideamformamnewmmobilemphonemapplicationmthatmyoumthinkmwillmmakemlotsmofmmoney.
m Your mbusiness mplanmwonmsecondmplace minma mlocalmcompetition,mandmyoumaremusing mthe m$10,
000 mprizemto msupportmyourselvesmasmyoumstartmyourmcompany.
a. Identify mthemkeymdecisionsmyoumneedmtommakemtombemsuccessfulmentrepreneurs, mtheminf
ormationmyoumneedmto mmakemthem,mandmthembusinessmprocessesmyoumwillmneedmtomengag
emin.
b. Yourmcompany mwillmneedmtomexchangeminformationmwithmvariousmexternalmparties.m Iden
tify mthemexternalmparties,mandmspecifymtheminformationmreceivedmfrommandmsentmtomeachm
ofmthem.
Themauthormturnsmthismquestion minto man min-
classmgroup mactivity.m Studentsmaremdividedmup min mgroups,mtoldmto mclosemtheirmbooks,mand mgivenm15
mminutes mto:
a. Think mthroughmthembusinessmprocesses,mkeymdecisions,mandminformationmneedsmissuesminmth
eirmgroup.
b. Identifymthemexternalmusersmofminformationmandmspecifymtheminformationmreceived mfrommand ms
entmto meach mof mthem.
Onemgroup mismselectedmto mpresentmtheirmanswersmto mthemclass.m Themothermgroupsmaremtoldmto mchalle
ngemthemgroup’smanswers,mprovidemalternativemanswers,mand mchip min mwith madditionalmanswersmnotmp
rovided mby mthemselected mgroup.m Sincemthemgroupmthatmpresentsmismnotmselectedmuntilmaftermthemtimem
hasmexpired,mstudentsmaremmotivatedmto mdomamgoodmjob,masmthey mwillmbempresentingmto mtheirmpeers.
Themvaluemofmthismactivity mismnotminmarrivingmatmam“rightmanswer”masmtheremaremmany mrightmanswersm
and mstudentmanswersmwillmvary.m Instead,mitmismin mthinkingmthrough mthemissuesmpresented minmTablem1
-2 m(businessmprocesses,mkey mdecisions, mand minformation mneeds)mand mFigurem1-
1 m(interactionsmwithmexternalmparties).m Studentmanswersmshould mcontainmmanymofmthemthingsminmTabl
em1-2 mand mFigurem1-
1 masmwellmasmothersmnotmshown,masmamretailmoperationmdiffersmfromman mapplicationmdevelopmentment
erprise.
Themauthormconcludesmthemexercise mby mhavingmthemstudentsmturn mto mTablem1-2 mand mFigurem1-
1 mwhilemhememphasizesmthemneedmformowners,mmanagers,mandmemployeesmofmorganizationsmto midenti
fy mtheminformation mneeded mtommakemkeymdecisionsmin mthemcompany’smbusinessmprocessesmandmthemk
ey minformationminterchangesmwith mexternalmparties.m Allmthemdatamneededmto mproducemthisminformati
on mmustmbementered minto mthemAIS,mprocessed,mstored,mprotected,mand mmademavailablemtomthemapprop
riatemusers.
Whilemthismactivemlearningmactivity mtakesmmoremtimemthan mamlecturemdoes,mitmdrivesmthempointmhome
mmuch mbettermthan ma mlecture mwould. m Itmalso mkeeps mthe mstudents mmore mengaged min mthe mmaterial.
1-2
.
, AccountingmInformation mSystem
s
1.4 Howm do manmorganization’smbusinessmprocessesmandmlinesmofmbusinessmaffectmthemdesignmo
fmitsmAIS? m Givemseveralmexamplesmofmhowmdifferencesmamong morganizationsmaremreflected
minmtheir mAIS.
An morganization’smAISmmustmreflectmitsmbusinessmprocessesmand mitsmlinemof mbusiness.m Formexample:
• Manufacturingmcompaniesmwillmneedmamsetmofmproceduresmandmdocumentsmformthemproduct
ion mcycle;mnon-manufacturingmcompaniesmdo mnot.
• Governmentmagenciesmneedmproceduresmto mtrack mseparatelymallminflowsmand moutflowsmfromm
variousmfunds,mtomensuremthatmlegalmrequirementsmaboutmthemusemofmspecificmfundsmaremfollo
wed.
• Financialminstitutionsmdo mnotmneed mextensive minventory mcontrolmsystems.
• Passengermservicemcompaniesm(e.g.,mairlines,mbus,mandmtrains)mgenerally mreceivempayments
min madvancemofmprovidingmservices. m Therefore,mextensivembillingmandmaccountsmreceivabl
emproceduresmaremnotmneeded;minstead,mthey mmustmdevelopmproceduresmtomaccountmformpre
paid mrevenue.
• Construction mfirmsmtypicallymreceivempaymentsmatmregularmintervals,mbased monmthempercentage
mof mworkmcompleted.m Thus,mtheirmrevenue mcycles mmustmbe mdesignedmtomtrackmcarefullymallmw
ork mperformed mand mthemamountmof mwork mremainingmto mbemdone.
• Servicemcompaniesm(e.g.,mpublicmaccountingmand mlawmfirms)mdomnotmsellmphysicalmgoodsmand,
mtherefore, mdo mnotmneedminventorymcontrolmsystems. m Theymmustmdevelopmand mmaintainmdetail
ed mrecordsmofmthemworkmperformedmformeach mcustomermtomprovidembackupmformthemamountsmb
illed.mTrackingmindividualmemployeemtimemismespecially mimportantmformthesemfirmsmbecause mla
bormismthemmajormcostmcomponent.
1.5 Figurem1-
5 mshowsmthatmorganizationalmculturemandmthemdesignmofmanmAISminfluencemonemanother.mWh
atmdoesmthismimply maboutmthemdegreemto mwhichmanminnovative msystemmdevelopedmby monemco
mpany mcanmbemtransferredmto manother mcompany?
Sincempeople maremonemofmthembasicmcomponentsmofmanymsystem,mitmwillmalwaysmbemdifficultmto mtrans
fermsuccessfullymamspecificminformationmsystemsmdesignmintactmto manothermorganization.m Considerin
gmin madvancemhowmaspectsmofmthemnewmorganizationalmculturemaremlikely mtomaffectmacceptancemofmth
emsystem mcanmincreasemthemchancesmformsuccessfulmtransfer.m Doingmso mmay menablemthemorganization
mto mtake msteps mtommitigatemlikelymcauses mofmresistance. m Themdesign mofmanmAIS, mhowever, mitselfmcanm
influence mandmchangeman morganization’smculturemandmphilosophy.m Therefore,mwith madequatemtopmm
anagementmsupport,mimplementation mofmamnewmAISmcanmbemusedmasmamvehiclemtomchangemanmorgani
zation.m Themreciprocalmeffectsmofmtechnology mandmorganizationalmculturemon monemanother,mhowever
,mmean mthatmitmismunrealisticmto mexpectmthatmthemintroductionmofmamnewmAISmwillmproduce mthemsamem
resultsmobserved min manothermorganization.
1-3
.
m
For
Accounting Inf mm
ormation Systems
m
15th Edition
m
, CHAPTER 1 m
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
m m m m
SUGGESTED mANSWERSmTOmDISCUSSION mQUESTIONS
1.1 Themvaluemofminformationmismthemdifferencembetweenmthembenefitsmrealizedmfrommusing mtha
tminformationmandmthemcostsmofmproducingmit.m Wouldmyou,mormany morganization,mevermprod
uceminformationmifmitsmexpectedmcostsmexceededmitsmbenefits?m Ifmso,mprovidemsomemexamples
.m Ifmnot,mwhy?
Mostmorganizationsmproduceminformationmonlymif mitsmvaluemexceedsmitsmcost.m However,mtheremaremtwo msit
uationsmwhereminformation mmay mbemproduced meven mif mitsmcostmexceedsmitsmvalue.
a. Itmismoften mdifficultmto mestimate maccurately mthemvaluemof minformation mand mthemcostmof mprodu
cingmit.m Therefore,morganizationsmmay mproduceminformation mthatmthey mexpectmwillmproducem
benefitsmin mexcessmof mitsmcosts,monly mto mbemdisappointed maftermthemfact.
b. Productionmofmtheminformationmmaymbemmandated mbymeithermamgovernmentmagency mormampri
vatemorganization.m Examplesmincludemthemtaxmreportsmrequiredmby mthemIRSmandmdisclosurem
requirementsmformfinancialmreporting.
1.2 CanmthemcharacteristicsmofmusefulminformationmlistedminmTablem1-
1 mbemmetmsimultaneously? m Ormdoesmachieving monemmeanmsacrificing manother?
Severalmofmthemcriteriamin mTablem1.1mcan mbemmetmsimultaneously.m Formexample,mmoremtimelyminfor
mation mismalso mlikely mtombemmoremrelevant.m Verifiableminformation mismlikelymto mbemmoremaccurate.
However,machievingmonemobjective mmay mrequiremsacrificingmanother.m Formexample,mensuringmt
hatminformation mismmoremcompletemmay mreducemitsmtimeliness.m Similarly,mincreased mverifiabili
ty mand maccuracy mmay mreducemitsmtimeliness.
Themdecision mmakermmustmdecidemwhich mtrade-offsmaremwarranted min meach msituation.
1-1
.
,Ch.m 1:mAccountingmInformationmSystems:mAn mOvervie
w
1.3 Youmandma mfewmofmyourmclassmatesmdecidedmtombecomementrepreneurs.m Youmcamemupmwithm
a mgreatmideamformamnewmmobilemphonemapplicationmthatmyoumthinkmwillmmakemlotsmofmmoney.
m Your mbusiness mplanmwonmsecondmplace minma mlocalmcompetition,mandmyoumaremusing mthe m$10,
000 mprizemto msupportmyourselvesmasmyoumstartmyourmcompany.
a. Identify mthemkeymdecisionsmyoumneedmtommakemtombemsuccessfulmentrepreneurs, mtheminf
ormationmyoumneedmto mmakemthem,mandmthembusinessmprocessesmyoumwillmneedmtomengag
emin.
b. Yourmcompany mwillmneedmtomexchangeminformationmwithmvariousmexternalmparties.m Iden
tify mthemexternalmparties,mandmspecifymtheminformationmreceivedmfrommandmsentmtomeachm
ofmthem.
Themauthormturnsmthismquestion minto man min-
classmgroup mactivity.m Studentsmaremdividedmup min mgroups,mtoldmto mclosemtheirmbooks,mand mgivenm15
mminutes mto:
a. Think mthroughmthembusinessmprocesses,mkeymdecisions,mandminformationmneedsmissuesminmth
eirmgroup.
b. Identifymthemexternalmusersmofminformationmandmspecifymtheminformationmreceived mfrommand ms
entmto meach mof mthem.
Onemgroup mismselectedmto mpresentmtheirmanswersmto mthemclass.m Themothermgroupsmaremtoldmto mchalle
ngemthemgroup’smanswers,mprovidemalternativemanswers,mand mchip min mwith madditionalmanswersmnotmp
rovided mby mthemselected mgroup.m Sincemthemgroupmthatmpresentsmismnotmselectedmuntilmaftermthemtimem
hasmexpired,mstudentsmaremmotivatedmto mdomamgoodmjob,masmthey mwillmbempresentingmto mtheirmpeers.
Themvaluemofmthismactivity mismnotminmarrivingmatmam“rightmanswer”masmtheremaremmany mrightmanswersm
and mstudentmanswersmwillmvary.m Instead,mitmismin mthinkingmthrough mthemissuesmpresented minmTablem1
-2 m(businessmprocesses,mkey mdecisions, mand minformation mneeds)mand mFigurem1-
1 m(interactionsmwithmexternalmparties).m Studentmanswersmshould mcontainmmanymofmthemthingsminmTabl
em1-2 mand mFigurem1-
1 masmwellmasmothersmnotmshown,masmamretailmoperationmdiffersmfromman mapplicationmdevelopmentment
erprise.
Themauthormconcludesmthemexercise mby mhavingmthemstudentsmturn mto mTablem1-2 mand mFigurem1-
1 mwhilemhememphasizesmthemneedmformowners,mmanagers,mandmemployeesmofmorganizationsmto midenti
fy mtheminformation mneeded mtommakemkeymdecisionsmin mthemcompany’smbusinessmprocessesmandmthemk
ey minformationminterchangesmwith mexternalmparties.m Allmthemdatamneededmto mproducemthisminformati
on mmustmbementered minto mthemAIS,mprocessed,mstored,mprotected,mand mmademavailablemtomthemapprop
riatemusers.
Whilemthismactivemlearningmactivity mtakesmmoremtimemthan mamlecturemdoes,mitmdrivesmthempointmhome
mmuch mbettermthan ma mlecture mwould. m Itmalso mkeeps mthe mstudents mmore mengaged min mthe mmaterial.
1-2
.
, AccountingmInformation mSystem
s
1.4 Howm do manmorganization’smbusinessmprocessesmandmlinesmofmbusinessmaffectmthemdesignmo
fmitsmAIS? m Givemseveralmexamplesmofmhowmdifferencesmamong morganizationsmaremreflected
minmtheir mAIS.
An morganization’smAISmmustmreflectmitsmbusinessmprocessesmand mitsmlinemof mbusiness.m Formexample:
• Manufacturingmcompaniesmwillmneedmamsetmofmproceduresmandmdocumentsmformthemproduct
ion mcycle;mnon-manufacturingmcompaniesmdo mnot.
• Governmentmagenciesmneedmproceduresmto mtrack mseparatelymallminflowsmand moutflowsmfromm
variousmfunds,mtomensuremthatmlegalmrequirementsmaboutmthemusemofmspecificmfundsmaremfollo
wed.
• Financialminstitutionsmdo mnotmneed mextensive minventory mcontrolmsystems.
• Passengermservicemcompaniesm(e.g.,mairlines,mbus,mandmtrains)mgenerally mreceivempayments
min madvancemofmprovidingmservices. m Therefore,mextensivembillingmandmaccountsmreceivabl
emproceduresmaremnotmneeded;minstead,mthey mmustmdevelopmproceduresmtomaccountmformpre
paid mrevenue.
• Construction mfirmsmtypicallymreceivempaymentsmatmregularmintervals,mbased monmthempercentage
mof mworkmcompleted.m Thus,mtheirmrevenue mcycles mmustmbe mdesignedmtomtrackmcarefullymallmw
ork mperformed mand mthemamountmof mwork mremainingmto mbemdone.
• Servicemcompaniesm(e.g.,mpublicmaccountingmand mlawmfirms)mdomnotmsellmphysicalmgoodsmand,
mtherefore, mdo mnotmneedminventorymcontrolmsystems. m Theymmustmdevelopmand mmaintainmdetail
ed mrecordsmofmthemworkmperformedmformeach mcustomermtomprovidembackupmformthemamountsmb
illed.mTrackingmindividualmemployeemtimemismespecially mimportantmformthesemfirmsmbecause mla
bormismthemmajormcostmcomponent.
1.5 Figurem1-
5 mshowsmthatmorganizationalmculturemandmthemdesignmofmanmAISminfluencemonemanother.mWh
atmdoesmthismimply maboutmthemdegreemto mwhichmanminnovative msystemmdevelopedmby monemco
mpany mcanmbemtransferredmto manother mcompany?
Sincempeople maremonemofmthembasicmcomponentsmofmanymsystem,mitmwillmalwaysmbemdifficultmto mtrans
fermsuccessfullymamspecificminformationmsystemsmdesignmintactmto manothermorganization.m Considerin
gmin madvancemhowmaspectsmofmthemnewmorganizationalmculturemaremlikely mtomaffectmacceptancemofmth
emsystem mcanmincreasemthemchancesmformsuccessfulmtransfer.m Doingmso mmay menablemthemorganization
mto mtake msteps mtommitigatemlikelymcauses mofmresistance. m Themdesign mofmanmAIS, mhowever, mitselfmcanm
influence mandmchangeman morganization’smculturemandmphilosophy.m Therefore,mwith madequatemtopmm
anagementmsupport,mimplementation mofmamnewmAISmcanmbemusedmasmamvehiclemtomchangemanmorgani
zation.m Themreciprocalmeffectsmofmtechnology mandmorganizationalmculturemon monemanother,mhowever
,mmean mthatmitmismunrealisticmto mexpectmthatmthemintroductionmofmamnewmAISmwillmproduce mthemsamem
resultsmobserved min manothermorganization.
1-3
.
