Gelinas AIS 9e Ch 17 solutions PDF

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Accounting Information Systems, 9e 1SOLUTIONS FOR CHAPTER 17Each end-of-chapter question in the Solutions Manual is tagged to correspond with AACSB, AICPA and CISA standards, allowing professors to more easily manage the task of reporting outcomes to these professional and accrediting bodies. Please...

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Accounting Information Systems, 9e

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SOLUTIONS FOR CHAPTER 17 Each end-of-chapter question in the Solutions Manual is tagged to correspond with AACSB, AICPA and CISA standards, allowing professors to more easily manage the task of reporting outcomes to these professional and accrediting bodies. Please see the corresponding spreadsheet file for the tagging information.

Discussion Questions DQ 17-1

Discuss several factors affecting (negatively or positively) the achievement of systems development objectives.

ANS.

AIS acquisition and development objectives include acquiring/developing an AIS that satisfies an organization’s strategic informational and operational needs in an efficient and effective manner. Possible factors affecting achievement of this include the following: a. Lack of senior management support. Management controls the budget for the acquisition project and directs the priorities for time, effort, and money. b. Shifting of user needs. If changes occur during the acquisition process, the project team must ensure that critical features are delivered. c. Emerging technologies. Personnel may not be familiar with the new technology, and certain business processes may become obsolete if the implementation time is long. d. Lack of standard project management and AIS acquisition methodologies. Formalized methodologies can help realize an acquisition on time and within the proposed budget. e. Failure to appreciate and act on strategic, organizational, and business process changes that may be required. f. Resistance to change. Employees’ fear and resentment of change and how it can impact their jobs could hinder the efforts to implement a new AIS. g. Lack of user participation. User input and feedback proves to be valuable and increases acceptance. h. Inadequate testing and user training. i. Complexity of the problem. j. Knowledge, skills, and experience of the acquisition team. k. Availability of products from vendors. l. Proper assessment of user needs.

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Solutions for Chapter 17

DQ 17-2

How might the absence of an organization’s strategic plan for the information system affect the conduct of a preliminary survey? Hint: Discuss the potential difficulties of making preliminary survey decisions in the absence of each of the strategic plan components.

ANS.

The purpose of conducting a system survey is to evaluate the importance and need for the potential system—individually and relative to other projects—and to prepare a development plan. The decision to proceed with the development can only be made wisely if an information system strategic plan is in place to determine whether the project is in line with the goals of the information system. The strategic plan provides a context within which to make the go/no go decision. For example, before deciding to proceed with development, we must determine whether the proposed development will be incompatible with other proposed system features or acquisitions.

DQ 17-3

In doing a preliminary survey for the proposed automation of the payroll system of Kay Company, the analyst in charge reached the tentative conclusion that Adam Clay, the popular cashier with more than 30 years of company service, will be displaced and perhaps asked to consider early retirement. Discuss how this scenario relates to the concept of “operational feasibility” presented in this chapter. Discuss the potential impact on the success of the new disbursements system.

ANS.

An information system is more than hardware, software, and policies. The users of the system are a very important component, and their attitudes can have an enormous effect on the success or failure of the system. These user attitudes are an important determinant of operational feasibility. One major reason for the inclusion of users on the analysis and design team is to encourage a good attitude toward the new system and to eliminate any fears that might accompany change. Nontechnical employees may be concerned about being replaced by computers. The impact of “designing out” a loyal and well-liked employee may have devastating effects on the morale of other employees. Negative behavioral implications may cause the system to be operationally infeasible because disgruntled employees could deliberately or inadvertently resist the new system.

DQ 17-4

“Choosing among renting, leasing, and purchasing an AIS is strictly a financial decision and should be done by the finance staff.” Do you agree? Discuss fully.

ANS.

In addition to the obvious financial differences among these choices, other considerations include the following: 

Flexibility

 

Years of commitment Service



Risk 

Control

Accounting Information Systems, 9e

DQ 17-5

“A vendor would never propose a system that would not meet an organization’s needs. Therefore, external validation of vendor proposals is not really needed.” Do you agree? Discuss fully.

ANS.

A vendor might submit a proposal that did not meet an organization’s needs in many situations. For example:

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 A vendor, believing that no vendor can exactly meet an organization’s needs, might submit a proposal to keep its name in the running for the contract. 

A vendor may misunderstand an RFP.



An RFP might be written poorly and be difficult to interpret. 

A vendor might bid for a portion of an RFP.

DQ 17-6

“As long as we plan a systems development project and carry out the project in an orderly manner, we don’t need a formal, documented systems development methodology.” Do you agree? Discuss fully.

ANS.

In one sense, the statement is correct. However, a systems development methodology offers some features that may improve the development effort: a. A systems development methodology breaks the project up into relatively short steps. Each step has a starting point, an ending point, specified tasks, and output deliverables. The review conducted at the conclusion of each step allows management to retain control over the project. Further, the person performing the tasks and completing the deliverables is made accountable for the quality and timely completion of the step. b. A methodology recommends or requires that certain actions be taken during major phases and/or steps during development. Such requirements can ensure completeness of the development team’s work. c. A methodology standardizes development procedures and documentation within an organization, thus facilitating the assignment of development staff to a variety of projects. Also, personnel assigned to maintain a system will be able to understand the system’s documentation.

DQ 17-7

One of the tasks of systems analysis is to choose and justify one of the alternative design solutions. Would it not be more effective, efficient, and practical for the systems analyst to pass along all alternative design solutions to top management (perhaps to the IT steering committee), together with arguments for and against each alternative, and let top management choose one of them? After all, top management has a broad perspective that the systems analyst does not possess. Discuss fully.

ANS.

Note: The following answer assumes that the information technology steering committee (SC) is the top management body to which the systems analyst (SA) makes her recommendations.

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Solutions for Chapter 17

At first, the proposition sounds appealing because it seems consistent with the systems approach, which looks at a systems problem in a holistic way. Because the SC has a broad view of company strategies and objectives, it would appear more capable of choosing from among several design alternatives, all of which having been passed along to it for consideration. However, there are many convincing arguments against the proposition. They include the following, in no particular order of importance:  Recall from Chapter 8 in the textbook that the SC generally is composed of executives from the organization’s major functional areas. This top-level management committee should be concerned only with broad, global issues involving resource allocation, goal congruence, and progress in achieving the firm’s strategic plan. The members have neither the time nor, in general, the technical expertise to immerse themselves in the details of alternative designs. For the detailed evaluation of technical, operational, and economic feasibility, they must delegate responsibility to the experts (i.e., users and SAs), who will filter the information that is reported upward to the SC. 





The decision concerning which design alternative is best is the product of an iterative process between the analysis team and the user(s). Because of the iterative nature of the process, any disagreements between the SA and users should have been resolved. Therefore, forwarding rejected alternatives to the SC is unnecessary except in a situation where the SA and users cannot agree. In that case, the SC might act as an arbiter. The SC can always ask that the recommended alternative be revised because the firm’s resources cannot justify the expenditure. Therefore, the SC is not limited to merely the two options of accepting or rejecting the proposed design. The users, management, and the SC should be kept apprised of the analysis team’s progress and should inform the team of the criteria to be used for choosing development solutions. Therefore, this two-way communication should minimize the likelihood that the SA and SC will disagree about which alternative design is “best.”  Typically, the analysis team does perform a cost/effectiveness study for more than one alternative. The systems analysis document that is submitted to the SC might well contain comparative summaries of several alternatives.

DQ 17-8

Discuss the decisions that must be made prior to initiating structured systems analysis. Indicate how the systems survey contributed to the decision.

ANS.

A review of the systems survey goals helps us answer this question. The purpose of the systems survey was to determine the existence, nature, and scope of the reported problem. Also, at the conclusion of the systems survey, the systems analyst proposes and justifies (i.e., a preliminary feasibility study) a course of action to solve the problem. Finally, the analyst develops a project plan.

Accounting Information Systems, 9e

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Therefore, at the beginning of the systems analysis step, we know that two major decisions have been made. We have decided to proceed with systems development (i.e., systems development is feasible), and we have decided how to proceed (i.e., scope, budget, schedule, etc.). DQ 17-9

Indicate who you would include on a systems analysis project team in each of the following situations, and discuss fully the reasons why you would include each member you suggest.

ANS.

Note: As is the case with many open-ended discussion questions such as this one, we can only suggest some possibilities in the solution that follows. Obviously, students may have included other possibilities in your answer. Students’ choices may well be as good as or better than ours, provided they have given solid reasons why they include each team member. a. A college’s system for tracking students from “cradle to grave” (i.e., from the time that prospective students apply for admission until the time that alumni die and are listed in the “In Memoriam” section of the alumni magazine).

ANS.

In addition to a systems analyst from the information systems department, a representative from each of the following departments is a likely candidate for inclusion on the project team. Each department or function is represented because it has different information needs in respect to the student: 

Admissions



Student affairs (we assume that this department would embody such nonacademic student activities as campus housing, meal plans, student counseling, campus security, and legal)



Student accounts, including financial aid



Registrar’s office (we assume this function would track all aspects of the student’s academic life while she was enrolled in college)

 

Career planning and placement Alumni relations  Internal audit (to provide expertise and advice in the areas of internal control and auditability of the new, integrated system)

b. A bank’s system for integrating the various previously separate affiliations that it has with its customers. ANS.

Note: This answer assumes that the customer is an individual rather than a business. However, for a business, some of the departments would be similar (i.e., commercial lending rather than mortgage lending for the individual). In addition to a systems analyst from the information systems department, we would include a representative from each department (function) with which the customer maintains a banking affiliation. As in the preceding part a, each

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Solutions for Chapter 17

department is represented because it has different (but sometimes overlapping) information needs in respect to the customer:  Depositor accounts (i.e., checking accounts, savings accounts, including preparing and mailing periodic statements of account activity) 

Safe deposit



Mortgage lending



Personal lending (e.g., car loan)



Trust department (includes functions such as financial and estate planning, trust arrangements in which the bank is the trustee)



Insurance (e.g., the bank may sell savings bank life insurance to its customers) 

Internal audit

c. A materials requirements planning (mrp) system, as discussed in Chapter 15 (Note: Discuss only if you have studied Chapter 15.) ANS.

In addition to a systems analyst from the information systems department, we would include the following individuals/departments (or their representatives) on the project team. We include each team member because he interacts either directly or indirectly with the materials requirements planning system. 

Master production scheduler



Capacity requirements planning (CRP) department



Shop floor control (SFC) supervisor



Cost accounting department 

Design/manufacturing engineering department

DQ 17-10

“If the results of the cost/benefit analysis do not agree with those of the effectiveness analysis, there is probably no difference among the alternatives.” Discuss fully.

ANS.

The cost/benefit analysis deals with questions of efficiency, addressing only those factors on which a monetary value can be placed. The end result is a ranking of projects in terms of their net effect on company cash flows. The effectiveness analysis takes into account the more subjective items that cannot be quantified and ranks projects on the basis of satisfying user needs. If the rankings of alternative projects are not the same under these two criteria, analysts and users must confer to further define the organization’s needs and priorities and to settle on trade-offs so that a choice can be made.

DQ 17-11

Discuss why the knowledge of documentation procedures (such as DFDs and systems flowcharts) is important to the acquisition/development process.

Accounting Information Systems, 9e

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ANS.

It is nearly impossible to understand an existing system without a visual representation of the system. Typically, when moving to a new system, it is not because 100 percent of the old system is bad—more likely, most of the system is adequate, but the organization has changed and outgrown part the old system. Documentation is important to understand not only what is not working but also what is operating as needed and what should be kept. If one has an understanding of the existing system, then it is likely that there will be reinventing of the working elements during the process. Additionally, it is nearly impossible to design (or implement) a new system (of any magnitude) without a deep understanding that only good documentation can bring. Training will also be enhanced when employees see how their jobs fit into the overall system.

DQ 17-12

The Eureka Company requests bids from vendors for specific configurations rather than bids for general performance objectives because it “knows what it needs.” Discuss fully.

ANS.

Even if an organization knows what it needs, requests for specific configurations sacrifice the following advantages of using an RFP with performance objectives:  Obtaining vendor input on solutions to the information processing problem 

Learning what hardware and software is available (or under development) that could solve the organization’s problem  Learning what additional functionality our proposed system could (or should) have

DQ 17-13

“An organization puts itself at a disadvantage by asking only one vendor (versus asking several vendors) for a proposal for hardware or software.” Do you agree? Discuss fully.

ANS.

In general, this statement is true. With only one vendor proposal an organization cannot do the following:  Obtain much help in generating ideas regarding possible solutions to the information processing problem 

Compare proposals to judge the reasonableness of a proposal 

Use the existence of other proposals as bargaining chips with the vendors

However, with only one proposal, the selection process is simplified. The organization need only validate the vendor proposal to make sure that the mandatory requirements have been met. There may be some valid reasons for an organization to limit its search to one vendor. It might have enjoyed a long, successful working relationship with the vendor, or it may be adding to an existing system, which consists of components supplied only by that vendor.

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Solutions for Chapter 17

DQ 17-14

Compare and contrast the efficiency and effectiveness of an in-house data center, an arrangement with an outsourcing vendor to own and operate a data center for you, a service bureau, an applications service provider (ASP), and software as a service (SaaS).

ANS.

In general, a data center over which we have relatively more control will be more effective at meeting our needs. For example, a decentralized data center will be designed and operated to meet the needs of the local (decentralized) managers, whereas a centralized data center must satisfy the needs of an entire, often diverse, organization and cannot, therefore, be designed to meet any one particular manager’s needs. Decentralized data centers, however, are less efficient users of an organization’s resources because such data centers often contain duplicate functions, such as technical support. Also, a centralized data center is larger and may be able to attract and retain a more experienced and more technically qualified staff. A service bureau may be as efficient as a centralized data center because it can distribute the costs for certain hardware, software, and personnel to many users. For example, the data center will only need one site license for its systems software. That software can then be used for multiple clients, and the cost for that software can be factored into the prices c...