Solutions Manual for m m m
Core Concepts of Acc
m m m
ounting Information
m m
Systems,14e Mark Si
m m m
mkin, James m
Worrell, Arlin m
e Savage (All Chapter
m m m
s)
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
Chapter 1 m
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTAN
m m m m m
T
Discussion Questions
m
1-1.
Themanswermtomthismquestionmwillmvarymwithmeachmuniversity’smlocation.mHowever,mit
mismlikelymmostmstudentsmwillmrevealmthatmtheirmparentsmarememployedminmnon-
manufacturingmjobs.
Instructorsmmaymwishmtomemphasizemthatmthemlargemnumbersmofmservicemsectormemployeesma
ndmknowledgemworkersmreflectmamtrend.
1-2.
Thismquestionmencouragesmstudentsmtomthinkmaboutmsomemofmtheminformationmreporti
ngmlimitationsmimposedmbymthemtraditionalmaccountingmgeneralmledgermarchitecture.mOthermbusin
essmactivitiesm(ormbusinessmevents)mthatmdomnotmrequiremjournalmentriesmincludem(1)mobtainingmam
linemofmcredit,m(2)missuingmpurchasemrequisitionsmormpurchasemorders,m(3)msigningmcontracts,m(4)m
hiringmamnewmexecutive,mandm(5)msendingmfinancialminformationmtominvestorsmormbankmloanmpers
onnel.
Instructorsmmaymwishmtompointmoutmthatmimportantminformationmaboutmamcompany’smbusinessmacti
vitiesmmaymbemincludedminmanmannualmreportmoutsidemthemfinancialmstatements.mThemmanagementml
ettersmandmfootnotesminmannualmreportsmmaymrevealmmuchmaboutmamcompany’smfuturemprospects.
Managersmhavemaccessmtommuchmmoreminformationmthanmwhatmismpublishedminmfinancialmreports.m
Whethermormnotmtheymwouldmlikemtomhavemaccessmtommoremnon-
financialminformation,mormifmtheymwouldmprefermthatmthemaccountingminformationmsystemmcapturem
datamaboutmbusinessmeventsmrathermthanmaccountingmtransactions,mismdebatable.mItmmaymalsombemamf
unctionmofmthemaccountingmsystemminmamparticularmcompany.mInvestorsmmaymwishmtomhavemmoremin
formationmavailablemtomthemmbutmthemdownsidemismthatmtoommuchminformationmcanmbemjustmasmprob
lematicmasmtoomlittleminformation.
1-3.
Themfinancialmaccountingmsystemsmwemhavemknownmformmoremthanm500myearsmaremchan
gingmdramaticallymasmamresultmofmadvancesminminformationmtechnologymandmfinancialmaccountingmso
ftware.mFormexample,mdatabasesmallowmaccountantsmtomcollectmandmstoremallmthemdatam(accountingmt
ransactionmdatamandmnon-
financialmdata)maboutmambusinessmactivitymormeventminmonemsystem,mallowingmthosemneedingmsuchmi
nformationmtomretrievemitmquickly,mefficiently,mandmspecificallyminmanymformatmtheymwish.mFinancial
mdatamcanmalsombemmoremeasilymlinkedmtomnonfinancialmdatambecausemofmdatabasemtechnology.mmThu
s,mitmismlikelymthatmfinancialmreportingmwillmundergomtremendousmchangeminmthemnextmfewmyearsmasm
wemlearnmtomusemtechnology,mincludingmartificialmintelligence,mmoremeffectivelyminmthemdesignmofm
AISs.
ERPmsystemsmaremanothermexamplemofmtheminformationmage'smimpactmonmfinancialmaccounting.m No
w,morganizationsmcapturemmoremfinancialmandmnon-
financialmdatamandmproducemmoreminformationmthanmevermbefore.mThismallowsmcompaniesmtomintegr
SMm1.1
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
atemtheirminformationmsystems,mbettermforecastmeverythingmfrommrawmmaterialsmrequirementsmtomfi
nishedmproductmproduction,mandmtomperformmmoremsophisticatedmanalysesmofmimportantmbusinessmf
unctions.mForminstance,msalesmcanmbemexaminedmatmmanymdifferentmlevelsmandmorganizedmaccordin
gmtomcriteriamsuchmasmgeography,mcustomer,mproduct,mormsalesperson.
SMm1.2
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
OnemofmthemmostmimportantmchangesminmAISsmismthemwaymthesemsystemsmwillmgathermfinancialminf
ormationminmthemfuture.mAlthoughmmanymofmthesemsystemsmwillmcontinuemtomcapturemdataminmtradi
tionalmbatchmmodemormatmPOSmsites,mwemexpectmnewermsystemsmtomcollectmmoremofmitmonmmobilemd
evices—
formexample,mcellmphones,mPDAs,mandmdigitalmcameras.mBecausemmorememployeesmandmworkingm
atmhomemthesemdays,m“digitalmcommuting”mmaymbemanothermtrend.
1-4.
Themobjectivemofmamcompany’smfinancialmstatementsmismtomcommunicatemrelevantmfinan
cialminformationmtomsuchmexternalmpartiesmasmstockholders,minvestors,mandmgovernmentmagencies.mI
ssuingmfinancialmstatementsminmXBRLmformatsmcontributesmtomthismobjectivembymmakingmsuchmfina
ncialmdatammoremsearchable,mcomparable,minformative,mandmthereforemuseful.mAlso,mbecausemXBR
Lmenablesmcompaniesmtomusemstandardmtagsmtomidentifymspecificmaccountingmvalues,mthemlanguagemit
selfmimposesmamgreatermdegreemofmstandardizationminmtheminformationalmcontentmofmthemreports.m Fi
nally,mXBRLmhelpsmgovernmentmagenciesmgathermfinancialmdatamthatmaremmoremconsistent,measiermt
omunderstand,mself-
checking,mandmmoremquicklymcommunicated.mChapterm2mcontainsmmoremaboutmXBRL,mincludingmt
hemideamthatmthemlanguagemalsomenablesmitsmusersmtomverifymaccountingmrelationshipsmasmassetsm=mli
abilitiesm+mstockholdermequity.
1-5.
Themquestionsmaskedmheremaboutmsuspiciousmactivitymreportingm(SAR)mrequiremopinion
smfrommstudents.mRegardingmthemfirstmquestion,mwhichmasksmifmSARmactivitymshouldmbemamlegalmma
tter,mtheremismlittlemroommformdisagreementmbecausemsommuchmofmSARmismmandatedmbymfederalmlegi
slationmsuchmasmthemAnnunzio-WyliemAnti-
MoneymLaunderingmActmofm1992,mthemBankmSecrecymActmofm1996,mandmthemPatriotmActmofm2001.m
AlthoughmtheremaremstatisticsmonmthemnumbermofmSARmfilings,mlessmismknownmaboutmhowmmuchmof
mwhatmappearsmtombemsuspiciousmareminmfactmviolationsmofmfederalmstatutes.
1-6.
Themexamplemgivenminmthemquestionmdemonstratesmonemwayminmwhichmcomputerizati
onmhasmrefinedmcostmestimationmandmthusmhasmimpactedmmanagerialmaccounting.mHowever,mITmha
smimpactedmalmostmeverymareamofmmanagerialmaccountingm(andmdecisionmmaking).mConsider,mfor
mexample,mthememergencemofmsuchmconceptsmasmjust-in-
timemsystems,mcomputermintegratedmmanufacturingmsystems,mmanufacturingmresourcemplanningm
systems,mtargetmcosting,mandmactivitymbasedmcostingm–
mallmofmthesemrequirem ITmtomsupportmmanagerialmdecisionmmaking.mForecastingmandm
budgetingmare
mothermareasmofmmanagerialmaccountingmimpactedm bym advancesminmtechnology,masmarem
themmanym
applicationsmofmspreadsheetmsoftware,mdecisionmsupportmsystems,mandmexpertmsystems.
UniversitiesmaremalsomimpactedmbymthemmanymadvancesminmIT.mYoummightmhavemstudentsmtypem“u
niversitymusemofmscorecards”minmtheirmfavoritembrowsermtomdiscovermthemmanymusesmthismtoolmoffer
smtomadministratorsminmanmacademicmenvironment.mThemsearchmresultsmshowmamvarietymofmusesmatms
uchmuniversitiesmasmThemOhiomStatemUniversity,mCSU-
Stanislaus,mClemsonmUniversity,mColoradomStatemUniversity,mSanmJosemStatemUniversity,mandmoth
ers.mFormexample,mthemUniversitymofmDenvermadaptedmamversionmofmthemBalancedmScorecardmtomev
aluatemtheirmStudentmLifemAssessmentmPlanm(SLAP),mwhichmfocusesmonmLearningmOutcomes.mSan
mJosemStatemUniversitymusesmamScorecardmtomevaluatemandmcontinuouslymimprovemtheirmonlinempro
SMm1.3
Core Concepts of Acc
m m m
ounting Information
m m
Systems,14e Mark Si
m m m
mkin, James m
Worrell, Arlin m
e Savage (All Chapter
m m m
s)
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
Chapter 1 m
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTAN
m m m m m
T
Discussion Questions
m
1-1.
Themanswermtomthismquestionmwillmvarymwithmeachmuniversity’smlocation.mHowever,mit
mismlikelymmostmstudentsmwillmrevealmthatmtheirmparentsmarememployedminmnon-
manufacturingmjobs.
Instructorsmmaymwishmtomemphasizemthatmthemlargemnumbersmofmservicemsectormemployeesma
ndmknowledgemworkersmreflectmamtrend.
1-2.
Thismquestionmencouragesmstudentsmtomthinkmaboutmsomemofmtheminformationmreporti
ngmlimitationsmimposedmbymthemtraditionalmaccountingmgeneralmledgermarchitecture.mOthermbusin
essmactivitiesm(ormbusinessmevents)mthatmdomnotmrequiremjournalmentriesmincludem(1)mobtainingmam
linemofmcredit,m(2)missuingmpurchasemrequisitionsmormpurchasemorders,m(3)msigningmcontracts,m(4)m
hiringmamnewmexecutive,mandm(5)msendingmfinancialminformationmtominvestorsmormbankmloanmpers
onnel.
Instructorsmmaymwishmtompointmoutmthatmimportantminformationmaboutmamcompany’smbusinessmacti
vitiesmmaymbemincludedminmanmannualmreportmoutsidemthemfinancialmstatements.mThemmanagementml
ettersmandmfootnotesminmannualmreportsmmaymrevealmmuchmaboutmamcompany’smfuturemprospects.
Managersmhavemaccessmtommuchmmoreminformationmthanmwhatmismpublishedminmfinancialmreports.m
Whethermormnotmtheymwouldmlikemtomhavemaccessmtommoremnon-
financialminformation,mormifmtheymwouldmprefermthatmthemaccountingminformationmsystemmcapturem
datamaboutmbusinessmeventsmrathermthanmaccountingmtransactions,mismdebatable.mItmmaymalsombemamf
unctionmofmthemaccountingmsystemminmamparticularmcompany.mInvestorsmmaymwishmtomhavemmoremin
formationmavailablemtomthemmbutmthemdownsidemismthatmtoommuchminformationmcanmbemjustmasmprob
lematicmasmtoomlittleminformation.
1-3.
Themfinancialmaccountingmsystemsmwemhavemknownmformmoremthanm500myearsmaremchan
gingmdramaticallymasmamresultmofmadvancesminminformationmtechnologymandmfinancialmaccountingmso
ftware.mFormexample,mdatabasesmallowmaccountantsmtomcollectmandmstoremallmthemdatam(accountingmt
ransactionmdatamandmnon-
financialmdata)maboutmambusinessmactivitymormeventminmonemsystem,mallowingmthosemneedingmsuchmi
nformationmtomretrievemitmquickly,mefficiently,mandmspecificallyminmanymformatmtheymwish.mFinancial
mdatamcanmalsombemmoremeasilymlinkedmtomnonfinancialmdatambecausemofmdatabasemtechnology.mmThu
s,mitmismlikelymthatmfinancialmreportingmwillmundergomtremendousmchangeminmthemnextmfewmyearsmasm
wemlearnmtomusemtechnology,mincludingmartificialmintelligence,mmoremeffectivelyminmthemdesignmofm
AISs.
ERPmsystemsmaremanothermexamplemofmtheminformationmage'smimpactmonmfinancialmaccounting.m No
w,morganizationsmcapturemmoremfinancialmandmnon-
financialmdatamandmproducemmoreminformationmthanmevermbefore.mThismallowsmcompaniesmtomintegr
SMm1.1
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
atemtheirminformationmsystems,mbettermforecastmeverythingmfrommrawmmaterialsmrequirementsmtomfi
nishedmproductmproduction,mandmtomperformmmoremsophisticatedmanalysesmofmimportantmbusinessmf
unctions.mForminstance,msalesmcanmbemexaminedmatmmanymdifferentmlevelsmandmorganizedmaccordin
gmtomcriteriamsuchmasmgeography,mcustomer,mproduct,mormsalesperson.
SMm1.2
, CoremConceptsmofmAccountingmInformationmSystems,m14thmEdition,mbymSimkin,mWorrellmandmSav
age
OnemofmthemmostmimportantmchangesminmAISsmismthemwaymthesemsystemsmwillmgathermfinancialminf
ormationminmthemfuture.mAlthoughmmanymofmthesemsystemsmwillmcontinuemtomcapturemdataminmtradi
tionalmbatchmmodemormatmPOSmsites,mwemexpectmnewermsystemsmtomcollectmmoremofmitmonmmobilemd
evices—
formexample,mcellmphones,mPDAs,mandmdigitalmcameras.mBecausemmorememployeesmandmworkingm
atmhomemthesemdays,m“digitalmcommuting”mmaymbemanothermtrend.
1-4.
Themobjectivemofmamcompany’smfinancialmstatementsmismtomcommunicatemrelevantmfinan
cialminformationmtomsuchmexternalmpartiesmasmstockholders,minvestors,mandmgovernmentmagencies.mI
ssuingmfinancialmstatementsminmXBRLmformatsmcontributesmtomthismobjectivembymmakingmsuchmfina
ncialmdatammoremsearchable,mcomparable,minformative,mandmthereforemuseful.mAlso,mbecausemXBR
Lmenablesmcompaniesmtomusemstandardmtagsmtomidentifymspecificmaccountingmvalues,mthemlanguagemit
selfmimposesmamgreatermdegreemofmstandardizationminmtheminformationalmcontentmofmthemreports.m Fi
nally,mXBRLmhelpsmgovernmentmagenciesmgathermfinancialmdatamthatmaremmoremconsistent,measiermt
omunderstand,mself-
checking,mandmmoremquicklymcommunicated.mChapterm2mcontainsmmoremaboutmXBRL,mincludingmt
hemideamthatmthemlanguagemalsomenablesmitsmusersmtomverifymaccountingmrelationshipsmasmassetsm=mli
abilitiesm+mstockholdermequity.
1-5.
Themquestionsmaskedmheremaboutmsuspiciousmactivitymreportingm(SAR)mrequiremopinion
smfrommstudents.mRegardingmthemfirstmquestion,mwhichmasksmifmSARmactivitymshouldmbemamlegalmma
tter,mtheremismlittlemroommformdisagreementmbecausemsommuchmofmSARmismmandatedmbymfederalmlegi
slationmsuchmasmthemAnnunzio-WyliemAnti-
MoneymLaunderingmActmofm1992,mthemBankmSecrecymActmofm1996,mandmthemPatriotmActmofm2001.m
AlthoughmtheremaremstatisticsmonmthemnumbermofmSARmfilings,mlessmismknownmaboutmhowmmuchmof
mwhatmappearsmtombemsuspiciousmareminmfactmviolationsmofmfederalmstatutes.
1-6.
Themexamplemgivenminmthemquestionmdemonstratesmonemwayminmwhichmcomputerizati
onmhasmrefinedmcostmestimationmandmthusmhasmimpactedmmanagerialmaccounting.mHowever,mITmha
smimpactedmalmostmeverymareamofmmanagerialmaccountingm(andmdecisionmmaking).mConsider,mfor
mexample,mthememergencemofmsuchmconceptsmasmjust-in-
timemsystems,mcomputermintegratedmmanufacturingmsystems,mmanufacturingmresourcemplanningm
systems,mtargetmcosting,mandmactivitymbasedmcostingm–
mallmofmthesemrequirem ITmtomsupportmmanagerialmdecisionmmaking.mForecastingmandm
budgetingmare
mothermareasmofmmanagerialmaccountingmimpactedm bym advancesminmtechnology,masmarem
themmanym
applicationsmofmspreadsheetmsoftware,mdecisionmsupportmsystems,mandmexpertmsystems.
UniversitiesmaremalsomimpactedmbymthemmanymadvancesminmIT.mYoummightmhavemstudentsmtypem“u
niversitymusemofmscorecards”minmtheirmfavoritembrowsermtomdiscovermthemmanymusesmthismtoolmoffer
smtomadministratorsminmanmacademicmenvironment.mThemsearchmresultsmshowmamvarietymofmusesmatms
uchmuniversitiesmasmThemOhiomStatemUniversity,mCSU-
Stanislaus,mClemsonmUniversity,mColoradomStatemUniversity,mSanmJosemStatemUniversity,mandmoth
ers.mFormexample,mthemUniversitymofmDenvermadaptedmamversionmofmthemBalancedmScorecardmtomev
aluatemtheirmStudentmLifemAssessmentmPlanm(SLAP),mwhichmfocusesmonmLearningmOutcomes.mSan
mJosemStatemUniversitymusesmamScorecardmtomevaluatemandmcontinuouslymimprovemtheirmonlinempro
SMm1.3
