Solution Manual for Accounting Information Systems, 11e Ulric Gelinas
1
SOLUTIONS FOR CHAPTER 1
Discussion Questions
DQ 1-1 “I just want to be a good accountant, technology does not interest me.”
Comment on this statement, considering today’s technology environment.
ANS. Possible points that could be made:
a. Distinguish between an accountant and a bookkeeper. An understanding of
accounting software and related technology would enable one to advance
beyond entry-level positions.
b. Without knowledge of computer technology, an accountant can be a
bookkeeper/accountant for a small firm that does not use computers at all.
(With the ubiquitous nature of computers, this has become a weak argument,
at best.) More realistically, with the low cost of accounting software, only
very select organizations may not benefit from automation. Examples of those
organizations would include businesses that sell a low volume of unique
products.
c. Because the ability to access data, present data for decision making, audit an
accounting system, and so on are all affected by computer technology, the
career path for an accountant will be severely limited by a lack of knowledge
of computer technology.
d. The public accounting profession is competitive and the effective use of
technology helps maintain a competitive edge. For example, an auditor can
usually complete an audit engagement in less time—and be surer of the
findings—than he/she would be without using technology in the audit. This
will permit the auditor to charge less for the work and to obtain more clients.
And, if the auditor’s findings can be supported, he/she will be less likely to
experience legal ramifications (e.g., from the SEC, from stockholders, and so
on).
e. The Sarbanes-Oxley Act of 2002 requires that the CFO (and CEO) sign the
financial statements and attest to their accuracy, that companies notify the
Securities and Exchange Commission of material events within two days, and
that companies file their earnings statements within 35 days of the end of a
quarter. All of these requirements have implications for the organization’s
accounting information system and the ability of the CFO to understand and
monitor its operation.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
,2 Solutions for Chapter 1
DQ 1-2 Examine Figure 1.1. Based on any work experience you have had, with which
elements are you least comfortable? With which are you most comfortable?
Discuss your answers.
ANS. See DQ 1-3.
DQ 1-3 Examine Figure 1.1. Based on your college education to date, with which
elements are you comfortable? With which are you least comfortable? Discuss
your answers.
ANS. The point of both of these questions (DQ 1-2 and DQ 1-3) is to get the students to
see the breadth of coverage of the AIS course and to see how the course will help
fill in gaps in their background that they may have. Also, the figure and the
discussion should help the student recognize the practical and academic
background that needs to be brought forward into this course.
For example, students with practical experience may have a good background in
business operations, information processing, and management decision making.
Students with computer coursework or practical experience may have background
in databases and technology. If the students have completed intermediate
accounting, accounting principles and reporting may be familiar.
DQ 1-4 Why might you have more trouble assessing the success of a not-for-profit
organization or federal government entitlement program than you would have
judging the success of a business organization?
ANS. The purpose of this question is to get the students to understand the relationship of
“success” and “accomplishing specific objectives.”
The issues are similar for any organization. After we move beyond generally
accepted, easily measured objectives, we will have difficulty determining
effectiveness. We must establish objectives and criteria or indicators that can
measure our success in achieving the objectives.
A business organization either explicitly or implicitly establishes objectives such
as market share, profits, and earnings per share. Measuring achievement of these
objectives is fairly straightforward.
The objectives for a federal government entitlement program or not-for-profit
(NFP) organization are often subjective and may not be acknowledged by all
parties. And measures of success may be elusive. For example, are programs for
the NFP successful when the number of people assisted is high or when the
number is low, or does it depend on the program? The Red Cross helps with
disaster relief on a large scale as well as operating smaller programs such as a
local blood drive. Or do we measure performance on the basis of program costs
per person assisted? Without an acknowledged set of objectives and measurable
success criteria, we have difficulty knowing we have been effective.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
, Accounting Information Systems, 11e 3
For non-private (governmental) organizations there is some guidance available to
directly address this issue. The Government Performance and Results Act of 1993
(P.L. 103-62) was enacted to “provide for the establishment of strategic planning
and performance measurement in the U.S. Federal Government.” To comply with
this act, the managers of all agencies of the federal government must prepare five-
year strategic plans setting forth the goals and objectives that measure mission
achievement and the approaches that will be used in achieving those goals.
Annual plans must include performance indicators and a statement of how
measured values will be verified.
A business, or any nongovernmental organization, may take on broader social
responsibilities and establish related objectives. These objectives might include
those for environmental impact, treatment of employees, relations with unions,
and impact on the surrounding community. Measurement of achievement of such
objectives can be problematic.
DQ 1-5 Why must you have knowledge of a system’s objectives to study that system?
ANS. With this question, we try to establish the connection between a system’s purpose
and its procedures.
Understanding and evaluating a system’s procedures must be studied in light of
the system’s objectives. For example, in an accounts receivable process, we
periodically send customer statements and follow up on delinquent receivables
found in those statements. Why? To ensure timely receipt of all outstanding
receivables (i.e., an accounts receivable process objective).
DQ 1-6 Do you think your accounting education is preparing you effectively to practice
accounting? Why or why not? Discuss, from both a short-term (i.e., immediately
on graduation) and a long-term (i.e., 5 to 10 years after beginning your career)
standpoint.
ANS. This question is a follow-up to Discussion Questions 1-2 and 1-3. The purpose is
to see that some of the skills and areas of study in Figure 1.1 are short-term in
focus and some are long-term. For example, accounting and auditing principles,
business operations, and events processing are necessary entry-level skills.
Management decision making, communications, and systems development and
operation may be longer-term skills.
DQ 1-7 Examine Figure 1.9. Discuss the importance of horizontal information flows and
vertical information flows to the daily operations of a manufacturing entity.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
,
1
SOLUTIONS FOR CHAPTER 1
Discussion Questions
DQ 1-1 “I just want to be a good accountant, technology does not interest me.”
Comment on this statement, considering today’s technology environment.
ANS. Possible points that could be made:
a. Distinguish between an accountant and a bookkeeper. An understanding of
accounting software and related technology would enable one to advance
beyond entry-level positions.
b. Without knowledge of computer technology, an accountant can be a
bookkeeper/accountant for a small firm that does not use computers at all.
(With the ubiquitous nature of computers, this has become a weak argument,
at best.) More realistically, with the low cost of accounting software, only
very select organizations may not benefit from automation. Examples of those
organizations would include businesses that sell a low volume of unique
products.
c. Because the ability to access data, present data for decision making, audit an
accounting system, and so on are all affected by computer technology, the
career path for an accountant will be severely limited by a lack of knowledge
of computer technology.
d. The public accounting profession is competitive and the effective use of
technology helps maintain a competitive edge. For example, an auditor can
usually complete an audit engagement in less time—and be surer of the
findings—than he/she would be without using technology in the audit. This
will permit the auditor to charge less for the work and to obtain more clients.
And, if the auditor’s findings can be supported, he/she will be less likely to
experience legal ramifications (e.g., from the SEC, from stockholders, and so
on).
e. The Sarbanes-Oxley Act of 2002 requires that the CFO (and CEO) sign the
financial statements and attest to their accuracy, that companies notify the
Securities and Exchange Commission of material events within two days, and
that companies file their earnings statements within 35 days of the end of a
quarter. All of these requirements have implications for the organization’s
accounting information system and the ability of the CFO to understand and
monitor its operation.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
,2 Solutions for Chapter 1
DQ 1-2 Examine Figure 1.1. Based on any work experience you have had, with which
elements are you least comfortable? With which are you most comfortable?
Discuss your answers.
ANS. See DQ 1-3.
DQ 1-3 Examine Figure 1.1. Based on your college education to date, with which
elements are you comfortable? With which are you least comfortable? Discuss
your answers.
ANS. The point of both of these questions (DQ 1-2 and DQ 1-3) is to get the students to
see the breadth of coverage of the AIS course and to see how the course will help
fill in gaps in their background that they may have. Also, the figure and the
discussion should help the student recognize the practical and academic
background that needs to be brought forward into this course.
For example, students with practical experience may have a good background in
business operations, information processing, and management decision making.
Students with computer coursework or practical experience may have background
in databases and technology. If the students have completed intermediate
accounting, accounting principles and reporting may be familiar.
DQ 1-4 Why might you have more trouble assessing the success of a not-for-profit
organization or federal government entitlement program than you would have
judging the success of a business organization?
ANS. The purpose of this question is to get the students to understand the relationship of
“success” and “accomplishing specific objectives.”
The issues are similar for any organization. After we move beyond generally
accepted, easily measured objectives, we will have difficulty determining
effectiveness. We must establish objectives and criteria or indicators that can
measure our success in achieving the objectives.
A business organization either explicitly or implicitly establishes objectives such
as market share, profits, and earnings per share. Measuring achievement of these
objectives is fairly straightforward.
The objectives for a federal government entitlement program or not-for-profit
(NFP) organization are often subjective and may not be acknowledged by all
parties. And measures of success may be elusive. For example, are programs for
the NFP successful when the number of people assisted is high or when the
number is low, or does it depend on the program? The Red Cross helps with
disaster relief on a large scale as well as operating smaller programs such as a
local blood drive. Or do we measure performance on the basis of program costs
per person assisted? Without an acknowledged set of objectives and measurable
success criteria, we have difficulty knowing we have been effective.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
, Accounting Information Systems, 11e 3
For non-private (governmental) organizations there is some guidance available to
directly address this issue. The Government Performance and Results Act of 1993
(P.L. 103-62) was enacted to “provide for the establishment of strategic planning
and performance measurement in the U.S. Federal Government.” To comply with
this act, the managers of all agencies of the federal government must prepare five-
year strategic plans setting forth the goals and objectives that measure mission
achievement and the approaches that will be used in achieving those goals.
Annual plans must include performance indicators and a statement of how
measured values will be verified.
A business, or any nongovernmental organization, may take on broader social
responsibilities and establish related objectives. These objectives might include
those for environmental impact, treatment of employees, relations with unions,
and impact on the surrounding community. Measurement of achievement of such
objectives can be problematic.
DQ 1-5 Why must you have knowledge of a system’s objectives to study that system?
ANS. With this question, we try to establish the connection between a system’s purpose
and its procedures.
Understanding and evaluating a system’s procedures must be studied in light of
the system’s objectives. For example, in an accounts receivable process, we
periodically send customer statements and follow up on delinquent receivables
found in those statements. Why? To ensure timely receipt of all outstanding
receivables (i.e., an accounts receivable process objective).
DQ 1-6 Do you think your accounting education is preparing you effectively to practice
accounting? Why or why not? Discuss, from both a short-term (i.e., immediately
on graduation) and a long-term (i.e., 5 to 10 years after beginning your career)
standpoint.
ANS. This question is a follow-up to Discussion Questions 1-2 and 1-3. The purpose is
to see that some of the skills and areas of study in Figure 1.1 are short-term in
focus and some are long-term. For example, accounting and auditing principles,
business operations, and events processing are necessary entry-level skills.
Management decision making, communications, and systems development and
operation may be longer-term skills.
DQ 1-7 Examine Figure 1.9. Discuss the importance of horizontal information flows and
vertical information flows to the daily operations of a manufacturing entity.
© 2018 Cengage®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or
school-approved learning management system for classroom use.
,
