Solutions Manual for n n n
Core Concepts of Acc
n n n
ounting Information
n n
Systems,14e Mark Si
n n n
mkin, James n
Worrell, Arlin n
e Savage (All Chapter
n n n
s)
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
Chapter 1 n
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
n n n n n
Discussion Questions
n
1-1.
Thenanswerntonthisnquestionnwillnvarynwithneachnuniversity’snlocation.nHowever,nitnisnl
ikelynmostnstudentsnwillnrevealnthatntheirnparentsnarenemployedninnnon-manufacturingnjobs.
Instructorsnmaynwishntonemphasizenthatnthenlargennumbersnofnservicensectornemployeesnandnk
nowledgenworkersnreflectnantrend.
1-2.
Thisnquestionnencouragesnstudentsntonthinknaboutnsomenofntheninformationnreportingnl
imitationsnimposednbynthentraditionalnaccountingngeneralnledgernarchitecture.nOthernbusinessnact
ivitiesn(ornbusinessnevents)nthatndonnotnrequirenjournalnentriesnincluden(1)nobtainingnanlinenofncredi
t,n(2)nissuingnpurchasenrequisitionsnornpurchasenorders,n(3)nsigningncontracts,n(4)nhiringnannewnex
ecutive,nandn(5)nsendingnfinancialninformationntoninvestorsnornbanknloannpersonnel.
Instructorsnmaynwishntonpointnoutnthatnimportantninformationnaboutnancompany’snbusinessnactivitie
snmaynbenincludedninnannannualnreportnoutsidenthenfinancialnstatements.nThenmanagementnlettersnan
dnfootnotesninnannualnreportsnmaynrevealnmuchnaboutnancompany’snfuturenprospects.
Managersnhavenaccessntonmuchnmoreninformationnthannwhatnisnpublishedninnfinancialnreports.nWhe
thernornnotntheynwouldnlikentonhavenaccessntonmorennon-
financialninformation,nornifntheynwouldnprefernthatnthenaccountingninformationnsystemncapturendatan
aboutnbusinessneventsnrathernthannaccountingntransactions,nisndebatable.nItnmaynalsonbenanfunctionn
ofnthenaccountingnsystemninnanparticularncompany.nInvestorsnmaynwishntonhavenmoreninformationna
vailablentonthemnbutnthendownsidenisnthatntoonmuchninformationncannbenjustnasnproblematicnasntoonli
ttleninformation.
1-3.
Thenfinancialnaccountingnsystemsnwenhavenknownnfornmorenthann500nyearsnarenchangin
gndramaticallynasnanresultnofnadvancesninninformationntechnologynandnfinancialnaccountingnsoftware
.nFornexample,ndatabasesnallownaccountantsntoncollectnandnstorenallnthendatan(accountingntransaction
ndatan andnnon-
financialndata)naboutnanbusinessnactivitynorneventninnonensystem,nallowingnthosenneedingnsuchninfor
mationntonretrievenitnquickly,nefficiently,nandnspecificallyninnanynformatntheynwish.nFinancialndatanca
nnalsonbenmoreneasilynlinkedntonnonfinancialndatanbecausenofndatabasentechnology.nnThus,nitnisnlikely
nthatnfinancialnreportingnwillnundergon tremendousnchangeninnthennextnfewn yearsnasnwenlearnntonusente
chnology,nincludingnartificialnintelligence,nmoreneffectivelyninnthendesignnofnAISs.
ERPnsystemsnarenanothernexamplenofntheninformationnage'snimpactnonnfinancialnaccounting.n Now,no
rganizationsncapturenmorenfinancialnandnnon-
financialndatanandnproducenmoreninformationnthannevernbefore.nThisnallowsncompaniesntonintegraten
theirninformationnsystems,nbetternforecastneverythingnfromnrawnmaterialsnrequirementsntonfinishedn
productnproduction,nandntonperformnmorensophisticatednanalysesnofnimportantnbusinessnfunctions.nF
orninstance,nsalesncannbenexaminednatnmanyndifferentnlevelsnandnorganizednaccordingntoncriteriansuc
SMn1.1
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
hnasngeography,ncustomer,nproduct,nornsalesperson.
SMn1.2
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
OnenofnthenmostnimportantnchangesninnAISsnisnthenwaynthesensystemsnwillngathernfinancialninform
ationninnthenfuture.nAlthoughnmanynofnthesensystemsnwillncontinuentoncapturendataninntraditionalnba
tchnmodenornatnPOSnsites,nwenexpectnnewernsystemsntoncollectnmorenofnitnonnmobilendevices—
fornexample,ncellnphones,nPDAs,nandndigitalncameras.nBecausenmorenemployeesnandnworkingnatnh
omenthesendays,n“digitalncommuting”nmaynbenanotherntrend.
1-4.
Thenobjectivenofnancompany’snfinancialnstatementsnisntoncommunicatenrelevantnfinancia
lninformationntonsuchnexternalnpartiesnasnstockholders,ninvestors,nandngovernmentnagencies.nIssuing
nfinancialnstatementsninnXBRLnformatsncontributesntonthisnobjectivenbynmakingnsuchnfinancialndatan
morensearchable,ncomparable,ninformative,nandnthereforenuseful.nAlso,nbecausenXBRLnenablesnco
mpaniesntonusenstandardntagsntonidentifynspecificnaccountingnvalues,nthenlanguagenitselfnimposesnang
reaterndegreenofnstandardizationninntheninformationalncontentnofnthenreports.n Finally,nXBRLnhelpsn
governmentnagenciesngathernfinancialndatanthatnarenmorenconsistent,neasierntonunderstand,nself-
checking,nandnmorenquicklyncommunicated.nChaptern2ncontainsnmorenaboutnXBRL,nincludingntheni
deanthatnthenlanguagenalsonenablesnitsnusersntonverifynaccountingnrelationshipsnasnassetsn=nliabilitiesn
+nstockholdernequity.
1-5.
Thenquestionsnaskednherenaboutnsuspiciousnactivitynreportingn(SAR)nrequirenopinionsnf
romnstudents.nRegardingnthenfirstnquestion,nwhichnasksnifnSARnactivitynshouldnbenanlegalnmatter,nth
erenisnlittlenroomnforndisagreementnbecausensonmuchnofnSARnisnmandatednbynfederalnlegislationnsuc
hnasnthenAnnunzio-WylienAnti-
MoneynLaunderingnActnofn1992,nthenBanknSecrecynActnofn1996,nandnthenPatriotnActnofn2001.nAlth
oughntherenarenstatisticsnonnthennumbernofnSARnfilings,nlessnisnknownnaboutnhownmuchnofnwhatnapp
earsntonbensuspiciousnareninnfactnviolationsnofnfederalnstatutes.
1-6.
Thenexamplengivenninnthenquestionndemonstratesnonenwayninnwhichncomputerizationnh
asnrefinedncostnestimationnandnthusnhasnimpactednmanagerialnaccounting.nHowever,nITnhasnimpac
tednalmostneverynareanofnmanagerialnaccountingn(andndecisionnmaking).nConsider,nfornexample,nt
henemergencenofnsuchnconceptsnasnjust-in-
timensystems,ncomputernintegratednmanufacturingnsystems,nmanufacturingnresourcenplanningnsys
tems,ntargetncosting,nandnactivitynbasedncostingn–
nallnofnthesenrequirenITntonsupportnmanagerialndecisionnmaking.nForecastingnandnbudgetingnarenoth
ernareasnofnmanagerialnaccountingnimpactednbynadvancesninntechnology,nasnarenthenmanynapplicati
onsnofnspreadsheetnsoftware,ndecisionnsupportnsystems,nandnexpertnsystems.
UniversitiesnarenalsonimpactednbynthenmanynadvancesninnIT.nYounmightnhavenstudentsntypen“univer
sitynusenofnscorecards”ninntheirnfavoritenbrowserntondiscovernthenmanynusesnthisntoolnoffersntonadmin
istratorsninnannacademicnenvironment.nThensearchnresultsnshownanvarietynofnusesnatnsuchnuniversitie
snasnThenOhionStatenUniversity,nCSU-
Stanislaus,nClemsonnUniversity,nColoradonStatenUniversity,nSannJosenStatenUniversity,nandnothers
.nFornexample,nthenUniversitynofnDenvernadaptednanversionnofnthenBalancednScorecardntonevaluatent
heirnStudentnLifenAssessmentnPlann(SLAP),nwhichnfocusesnonnLearningnOutcomes.nSannJosenState
nUniversitynusesnanScorecardntonevaluatenandncontinuouslynimproventheirnonlinenprograms.
1-7.
SMn1.3
Core Concepts of Acc
n n n
ounting Information
n n
Systems,14e Mark Si
n n n
mkin, James n
Worrell, Arlin n
e Savage (All Chapter
n n n
s)
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
Chapter 1 n
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
n n n n n
Discussion Questions
n
1-1.
Thenanswerntonthisnquestionnwillnvarynwithneachnuniversity’snlocation.nHowever,nitnisnl
ikelynmostnstudentsnwillnrevealnthatntheirnparentsnarenemployedninnnon-manufacturingnjobs.
Instructorsnmaynwishntonemphasizenthatnthenlargennumbersnofnservicensectornemployeesnandnk
nowledgenworkersnreflectnantrend.
1-2.
Thisnquestionnencouragesnstudentsntonthinknaboutnsomenofntheninformationnreportingnl
imitationsnimposednbynthentraditionalnaccountingngeneralnledgernarchitecture.nOthernbusinessnact
ivitiesn(ornbusinessnevents)nthatndonnotnrequirenjournalnentriesnincluden(1)nobtainingnanlinenofncredi
t,n(2)nissuingnpurchasenrequisitionsnornpurchasenorders,n(3)nsigningncontracts,n(4)nhiringnannewnex
ecutive,nandn(5)nsendingnfinancialninformationntoninvestorsnornbanknloannpersonnel.
Instructorsnmaynwishntonpointnoutnthatnimportantninformationnaboutnancompany’snbusinessnactivitie
snmaynbenincludedninnannannualnreportnoutsidenthenfinancialnstatements.nThenmanagementnlettersnan
dnfootnotesninnannualnreportsnmaynrevealnmuchnaboutnancompany’snfuturenprospects.
Managersnhavenaccessntonmuchnmoreninformationnthannwhatnisnpublishedninnfinancialnreports.nWhe
thernornnotntheynwouldnlikentonhavenaccessntonmorennon-
financialninformation,nornifntheynwouldnprefernthatnthenaccountingninformationnsystemncapturendatan
aboutnbusinessneventsnrathernthannaccountingntransactions,nisndebatable.nItnmaynalsonbenanfunctionn
ofnthenaccountingnsystemninnanparticularncompany.nInvestorsnmaynwishntonhavenmoreninformationna
vailablentonthemnbutnthendownsidenisnthatntoonmuchninformationncannbenjustnasnproblematicnasntoonli
ttleninformation.
1-3.
Thenfinancialnaccountingnsystemsnwenhavenknownnfornmorenthann500nyearsnarenchangin
gndramaticallynasnanresultnofnadvancesninninformationntechnologynandnfinancialnaccountingnsoftware
.nFornexample,ndatabasesnallownaccountantsntoncollectnandnstorenallnthendatan(accountingntransaction
ndatan andnnon-
financialndata)naboutnanbusinessnactivitynorneventninnonensystem,nallowingnthosenneedingnsuchninfor
mationntonretrievenitnquickly,nefficiently,nandnspecificallyninnanynformatntheynwish.nFinancialndatanca
nnalsonbenmoreneasilynlinkedntonnonfinancialndatanbecausenofndatabasentechnology.nnThus,nitnisnlikely
nthatnfinancialnreportingnwillnundergon tremendousnchangeninnthennextnfewn yearsnasnwenlearnntonusente
chnology,nincludingnartificialnintelligence,nmoreneffectivelyninnthendesignnofnAISs.
ERPnsystemsnarenanothernexamplenofntheninformationnage'snimpactnonnfinancialnaccounting.n Now,no
rganizationsncapturenmorenfinancialnandnnon-
financialndatanandnproducenmoreninformationnthannevernbefore.nThisnallowsncompaniesntonintegraten
theirninformationnsystems,nbetternforecastneverythingnfromnrawnmaterialsnrequirementsntonfinishedn
productnproduction,nandntonperformnmorensophisticatednanalysesnofnimportantnbusinessnfunctions.nF
orninstance,nsalesncannbenexaminednatnmanyndifferentnlevelsnandnorganizednaccordingntoncriteriansuc
SMn1.1
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
hnasngeography,ncustomer,nproduct,nornsalesperson.
SMn1.2
, CorenConceptsnofnAccountingnInformationnSystems,n14thnEdition,nbynSimkin,nWorrellnandnSavage
OnenofnthenmostnimportantnchangesninnAISsnisnthenwaynthesensystemsnwillngathernfinancialninform
ationninnthenfuture.nAlthoughnmanynofnthesensystemsnwillncontinuentoncapturendataninntraditionalnba
tchnmodenornatnPOSnsites,nwenexpectnnewernsystemsntoncollectnmorenofnitnonnmobilendevices—
fornexample,ncellnphones,nPDAs,nandndigitalncameras.nBecausenmorenemployeesnandnworkingnatnh
omenthesendays,n“digitalncommuting”nmaynbenanotherntrend.
1-4.
Thenobjectivenofnancompany’snfinancialnstatementsnisntoncommunicatenrelevantnfinancia
lninformationntonsuchnexternalnpartiesnasnstockholders,ninvestors,nandngovernmentnagencies.nIssuing
nfinancialnstatementsninnXBRLnformatsncontributesntonthisnobjectivenbynmakingnsuchnfinancialndatan
morensearchable,ncomparable,ninformative,nandnthereforenuseful.nAlso,nbecausenXBRLnenablesnco
mpaniesntonusenstandardntagsntonidentifynspecificnaccountingnvalues,nthenlanguagenitselfnimposesnang
reaterndegreenofnstandardizationninntheninformationalncontentnofnthenreports.n Finally,nXBRLnhelpsn
governmentnagenciesngathernfinancialndatanthatnarenmorenconsistent,neasierntonunderstand,nself-
checking,nandnmorenquicklyncommunicated.nChaptern2ncontainsnmorenaboutnXBRL,nincludingntheni
deanthatnthenlanguagenalsonenablesnitsnusersntonverifynaccountingnrelationshipsnasnassetsn=nliabilitiesn
+nstockholdernequity.
1-5.
Thenquestionsnaskednherenaboutnsuspiciousnactivitynreportingn(SAR)nrequirenopinionsnf
romnstudents.nRegardingnthenfirstnquestion,nwhichnasksnifnSARnactivitynshouldnbenanlegalnmatter,nth
erenisnlittlenroomnforndisagreementnbecausensonmuchnofnSARnisnmandatednbynfederalnlegislationnsuc
hnasnthenAnnunzio-WylienAnti-
MoneynLaunderingnActnofn1992,nthenBanknSecrecynActnofn1996,nandnthenPatriotnActnofn2001.nAlth
oughntherenarenstatisticsnonnthennumbernofnSARnfilings,nlessnisnknownnaboutnhownmuchnofnwhatnapp
earsntonbensuspiciousnareninnfactnviolationsnofnfederalnstatutes.
1-6.
Thenexamplengivenninnthenquestionndemonstratesnonenwayninnwhichncomputerizationnh
asnrefinedncostnestimationnandnthusnhasnimpactednmanagerialnaccounting.nHowever,nITnhasnimpac
tednalmostneverynareanofnmanagerialnaccountingn(andndecisionnmaking).nConsider,nfornexample,nt
henemergencenofnsuchnconceptsnasnjust-in-
timensystems,ncomputernintegratednmanufacturingnsystems,nmanufacturingnresourcenplanningnsys
tems,ntargetncosting,nandnactivitynbasedncostingn–
nallnofnthesenrequirenITntonsupportnmanagerialndecisionnmaking.nForecastingnandnbudgetingnarenoth
ernareasnofnmanagerialnaccountingnimpactednbynadvancesninntechnology,nasnarenthenmanynapplicati
onsnofnspreadsheetnsoftware,ndecisionnsupportnsystems,nandnexpertnsystems.
UniversitiesnarenalsonimpactednbynthenmanynadvancesninnIT.nYounmightnhavenstudentsntypen“univer
sitynusenofnscorecards”ninntheirnfavoritenbrowserntondiscovernthenmanynusesnthisntoolnoffersntonadmin
istratorsninnannacademicnenvironment.nThensearchnresultsnshownanvarietynofnusesnatnsuchnuniversitie
snasnThenOhionStatenUniversity,nCSU-
Stanislaus,nClemsonnUniversity,nColoradonStatenUniversity,nSannJosenStatenUniversity,nandnothers
.nFornexample,nthenUniversitynofnDenvernadaptednanversionnofnthenBalancednScorecardntonevaluatent
heirnStudentnLifenAssessmentnPlann(SLAP),nwhichnfocusesnonnLearningnOutcomes.nSannJosenState
nUniversitynusesnanScorecardntonevaluatenandncontinuouslynimproventheirnonlinenprograms.
1-7.
SMn1.3
