Solutions %qaManual
For
Accounting
Information
%qa
Systems
%qa
16th Edition
%qa
♦️♦️♦️All % q a % q a % q a Chapters % q a % q a % q a Included✅✅✅
♦️♦️♦️All %qa %qa %qa Answers %qa %qa %qa Included✅✅✅
, CHAPTER 1
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
1.1 The value of information is the difference between the benefits realized from using that
information and the costs of producing it. Would you, or any organization, ever produce
information if its expected costs exceeded its benefits? If so, provide some examples. If not,
why?
Most organizations produce information only if its value exceeds its cost. However, there are two
situations where information may be produced even if its cost exceeds its value.
a. It is often difficult to estimate accurately the value of information and the cost of producing
it. Therefore, organizations may produce information that they expect will produce benefits
in excess of its costs, only to be disappointed after the fact.
b. Production of the information may be mandated by either a government agency or a private
organization. Examples include the tax reports required by the IRS and disclosure
requirements for financial reporting.
1.2 Can the characteristics of useful information listed in Table 1-1 be met simultaneously? Or
does achieving one mean sacrificing another?
Several of the criteria in Table 1.1 can be met simultaneously. For example, more timely
information is also likely to be more relevant. Verifiable information is likely to be more accurate.
However, achieving one objective may require sacrificing another. For example, ensuring that
information is more complete may reduce its timeliness. Similarly, increased verifiability and
accuracy may reduce its timeliness.
The decision maker must decide which trade-offs are warranted in each situation.
1.3 You and a few of your classmates decided to become entrepreneurs. You came up with a
great idea for a new mobile phone application that you think will make lots of money. Your
business plan won second place in a local competition, and you are using the $10,000 prize to
support yourselves as you start your company.
a. Identify the key decisions you need to make to be successful entrepreneurs, the
information you need to make them, and the business processes you will need to engage
in.
b. Your company will need to exchange information with various external parties. Identify
the external parties, and specify the information received from and sent to each of them.
The author turns this question into an in-class group activity. Students are divided up in groups,
told to close their books, and given 15 minutes to:
a. Think through the business processes, key decisions, and information needs issues in their
group.
.
, b. Identify %qathe %qaexternal %qausers %qaof %qainformation %qaand %qaspecify %qathe %qainformation %qareceived
%qafrom %qaand %qasent %qato %qaeach %qaof %qathem.
One %qagroup %qais %qaselected %qato %qapresent %qatheir %qaanswers %qato %qathe %qaclass. %qaThe %qaother %qagroups
%qaare %qatold %qato %qachallenge %qathe %qagroup’s %qaanswers, %qaprovide %qaalternative %qaanswers, %qaand %qachip
%qain %qawith %qaadditional %qaanswers %qanot %qaprovided %qaby %qathe %qaselected %qagroup. %qaSince %qathe %qagroup
%qathat %qapresents %qais %qanot %qaselected %qauntil %qaafter %qathe %qatime %qahas %qaexpired, %qastudents %qaare
%qamotivated %qato %qado %qaa %qagood %qajob, %qaas %qathey %qawill %qabe %qapresenting %qato %qatheir %qapeers.
The %qavalue %qaof %qathis %qaactivity %qais %qanot %qain %qaarriving %qaat %qaa %qa“right %qaanswer” %qaas %qathere %qaare
%qamany %qaright %qaanswers %qaand %qastudent %qaanswers %qawill %qavary. %qaInstead, %qait %qais %qain %qathinking
%qathrough %qathe %qaissues %qapresented %qain %qaTable %qa1-2 %qa(business %qaprocesses, %qakey %qadecisions,
%qaand %qainformation %qaneeds) %qaand %qaFigure %qa1-1 %qa(interactions %qawith %qaexternal %qaparties).
%qaStudent %qaanswers %qashould %qacontain %qamany %qaof %qathe %qathings %qain %qaTable %qa1-2 %qaand %qaFigure %qa1-
1 %qaas %qawell %qaas %qaothers %qanot %qashown, %qaas %qaa %qaretail %qaoperation %qadiffers %qafrom %qaan
%qaapplication %qadevelopment %qaenterprise.
The %qaauthor %qaconcludes %qathe %qaexercise %qaby %qahaving %qathe %qastudents %qaturn %qato %qaTable %qa1-2 %qaand
%qaFigure %qa1-1 %qawhile %qahe %qaemphasizes %qathe %qaneed %qafor %qaowners, %qamanagers, %qaand
%qaemployees %qaof %qaorganizations %qato %qaidentify %qathe %qainformation %qaneeded %qato %qamake %qakey
%qadecisions %qain %qathe %qacompany’s %qabusiness %qaprocesses %qaand %qathe %qakey %qainformation
%qainterchanges %qawith %qaexternal %qaparties. %qaAll %qathe %qadata %qaneeded %qato %qaproduce %qathis
%qainformation %qamust %qabe %qaentered %qainto %qathe %qaAIS, %qaprocessed, %qastored, %qaprotected, %qaand
%qamade %qaavailable %qato %qathe %qaappropriate %qausers.
While %qathis %qaactive %qalearning %qaactivity %qatakes %qamore %qatime %qathan %qaa %qalecture %qadoes, %qait %qadrives
%qathe %qapoint %qahome %qamuch %qabetter %qathan %qaa %qalecture %qawould. % q a It %qaalso %qakeeps %qathe
%qastudents %qamore %qaengaged %qain %qathe %qamaterial.
1.4 How % q a do %qaan %qaorganization’s %qabusiness %qaprocesses %qaand %qalines %qaof %qabusiness
%qaaffect %qathe %qadesign %qaof %qaits %qaAIS? % q a Give %qaseveral %qaexamples %qaof %qahow
%qadifferences %qaamong %qaorganizations %qaare %qareflected %qain %qatheir %qaAIS.
An %qaorganization’s %qaAIS %qamust %qareflect %qaits %qabusiness %qaprocesses %qaand %qaits %qaline %qaof %qabusiness.
% q a For %qaexample:
• Manufacturing %qacompanies %qawill %qaneed %qaa %qaset %qaof %qaprocedures %qaand %qadocuments %qafor
%qathe %qaproduction %qacycle; %qanon-manufacturing %qacompanies %qado %qanot.
• Government %qaagencies %qaneed %qaprocedures %qato %qatrack %qaseparately %qaall %qainflows %qaand
%qaoutflows %qafrom %qavarious %qafunds, %qato %qaensure %qathat %qalegal %qarequirements %qaabout %qathe
%qause %qaof %qaspecific %qafunds %qaare %qafollowed.
• Financial %qainstitutions %qado %qanot %qaneed %qaextensive %qainventory %qacontrol %qasystems.
• Passenger %qaservice %qacompanies %qa(e.g., %qaairlines, %qabus, %qaand %qatrains) %qagenerally %qareceive
%qapayments %qain %qaadvance %qaof %qaproviding %qaservices. %qaTherefore, %qaextensive %qabilling
%qaand %qaaccounts %qareceivable %qaprocedures %qaare %qanot %qaneeded; %qainstead, %qathey %qamust
%qadevelop %qaprocedures %qato %qaaccount %qafor %qaprepaid %qarevenue.
• Construction %qafirms %qatypically %qareceive %qapayments %qaat %qaregular %qaintervals, %qabased %qaon %qathe
%qapercentage %qaof %qawork %qacompleted. %qaThus, %qatheir %qarevenue %qacycles %qamust %qabe
%qadesigned %qato %qatrack %qacarefully %qaall %qawork %qaperformed %qaand %qathe %qaamount %qaof %qawork
%qaremaining %qato %qabe %qadone.
• Service %qacompanies %qa(e.g., %qapublic %qaaccounting %qaand %qalaw %qafirms) %qado %qanot %qasell
%qaphysical %qagoods %qaand, %qatherefore, %qado %qanot %qaneed %qainventory %qacontrol %qasystems.
.
, %qa They %qamust %qadevelop %qaand %qamaintain %qadetailed %qarecords %qaof %qathe %qawork %qaperformed
%qa for %qaeach %qacustomer %qato %qaprovide %qabackup %qafor %qathe %qaamounts %qabilled. %qaTracking
%qaindividual %qaemployee %qatime %qais %qaespecially %qaimportant %qafor %qathese %qafirms %qabecause %qalabor
%qais %qathe %qamajor %qacost %qacomponent.
1.5 Figure %qa1-5 %qashows %qathat %qaorganizational %qaculture %qaand %qathe %qadesign %qaof %qaan %qaAIS
%qainfluence %qaone %qaanother. %qaWhat %qadoes %qathis %qaimply %qaabout %qathe %qadegree %qato
%qawhich %qaan %qainnovative %qasystem %qadeveloped %qaby %qaone %qacompany %qacan %qabe
%qatransferred %qato %qaanother %qacompany?
.
For
Accounting
Information
%qa
Systems
%qa
16th Edition
%qa
♦️♦️♦️All % q a % q a % q a Chapters % q a % q a % q a Included✅✅✅
♦️♦️♦️All %qa %qa %qa Answers %qa %qa %qa Included✅✅✅
, CHAPTER 1
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
1.1 The value of information is the difference between the benefits realized from using that
information and the costs of producing it. Would you, or any organization, ever produce
information if its expected costs exceeded its benefits? If so, provide some examples. If not,
why?
Most organizations produce information only if its value exceeds its cost. However, there are two
situations where information may be produced even if its cost exceeds its value.
a. It is often difficult to estimate accurately the value of information and the cost of producing
it. Therefore, organizations may produce information that they expect will produce benefits
in excess of its costs, only to be disappointed after the fact.
b. Production of the information may be mandated by either a government agency or a private
organization. Examples include the tax reports required by the IRS and disclosure
requirements for financial reporting.
1.2 Can the characteristics of useful information listed in Table 1-1 be met simultaneously? Or
does achieving one mean sacrificing another?
Several of the criteria in Table 1.1 can be met simultaneously. For example, more timely
information is also likely to be more relevant. Verifiable information is likely to be more accurate.
However, achieving one objective may require sacrificing another. For example, ensuring that
information is more complete may reduce its timeliness. Similarly, increased verifiability and
accuracy may reduce its timeliness.
The decision maker must decide which trade-offs are warranted in each situation.
1.3 You and a few of your classmates decided to become entrepreneurs. You came up with a
great idea for a new mobile phone application that you think will make lots of money. Your
business plan won second place in a local competition, and you are using the $10,000 prize to
support yourselves as you start your company.
a. Identify the key decisions you need to make to be successful entrepreneurs, the
information you need to make them, and the business processes you will need to engage
in.
b. Your company will need to exchange information with various external parties. Identify
the external parties, and specify the information received from and sent to each of them.
The author turns this question into an in-class group activity. Students are divided up in groups,
told to close their books, and given 15 minutes to:
a. Think through the business processes, key decisions, and information needs issues in their
group.
.
, b. Identify %qathe %qaexternal %qausers %qaof %qainformation %qaand %qaspecify %qathe %qainformation %qareceived
%qafrom %qaand %qasent %qato %qaeach %qaof %qathem.
One %qagroup %qais %qaselected %qato %qapresent %qatheir %qaanswers %qato %qathe %qaclass. %qaThe %qaother %qagroups
%qaare %qatold %qato %qachallenge %qathe %qagroup’s %qaanswers, %qaprovide %qaalternative %qaanswers, %qaand %qachip
%qain %qawith %qaadditional %qaanswers %qanot %qaprovided %qaby %qathe %qaselected %qagroup. %qaSince %qathe %qagroup
%qathat %qapresents %qais %qanot %qaselected %qauntil %qaafter %qathe %qatime %qahas %qaexpired, %qastudents %qaare
%qamotivated %qato %qado %qaa %qagood %qajob, %qaas %qathey %qawill %qabe %qapresenting %qato %qatheir %qapeers.
The %qavalue %qaof %qathis %qaactivity %qais %qanot %qain %qaarriving %qaat %qaa %qa“right %qaanswer” %qaas %qathere %qaare
%qamany %qaright %qaanswers %qaand %qastudent %qaanswers %qawill %qavary. %qaInstead, %qait %qais %qain %qathinking
%qathrough %qathe %qaissues %qapresented %qain %qaTable %qa1-2 %qa(business %qaprocesses, %qakey %qadecisions,
%qaand %qainformation %qaneeds) %qaand %qaFigure %qa1-1 %qa(interactions %qawith %qaexternal %qaparties).
%qaStudent %qaanswers %qashould %qacontain %qamany %qaof %qathe %qathings %qain %qaTable %qa1-2 %qaand %qaFigure %qa1-
1 %qaas %qawell %qaas %qaothers %qanot %qashown, %qaas %qaa %qaretail %qaoperation %qadiffers %qafrom %qaan
%qaapplication %qadevelopment %qaenterprise.
The %qaauthor %qaconcludes %qathe %qaexercise %qaby %qahaving %qathe %qastudents %qaturn %qato %qaTable %qa1-2 %qaand
%qaFigure %qa1-1 %qawhile %qahe %qaemphasizes %qathe %qaneed %qafor %qaowners, %qamanagers, %qaand
%qaemployees %qaof %qaorganizations %qato %qaidentify %qathe %qainformation %qaneeded %qato %qamake %qakey
%qadecisions %qain %qathe %qacompany’s %qabusiness %qaprocesses %qaand %qathe %qakey %qainformation
%qainterchanges %qawith %qaexternal %qaparties. %qaAll %qathe %qadata %qaneeded %qato %qaproduce %qathis
%qainformation %qamust %qabe %qaentered %qainto %qathe %qaAIS, %qaprocessed, %qastored, %qaprotected, %qaand
%qamade %qaavailable %qato %qathe %qaappropriate %qausers.
While %qathis %qaactive %qalearning %qaactivity %qatakes %qamore %qatime %qathan %qaa %qalecture %qadoes, %qait %qadrives
%qathe %qapoint %qahome %qamuch %qabetter %qathan %qaa %qalecture %qawould. % q a It %qaalso %qakeeps %qathe
%qastudents %qamore %qaengaged %qain %qathe %qamaterial.
1.4 How % q a do %qaan %qaorganization’s %qabusiness %qaprocesses %qaand %qalines %qaof %qabusiness
%qaaffect %qathe %qadesign %qaof %qaits %qaAIS? % q a Give %qaseveral %qaexamples %qaof %qahow
%qadifferences %qaamong %qaorganizations %qaare %qareflected %qain %qatheir %qaAIS.
An %qaorganization’s %qaAIS %qamust %qareflect %qaits %qabusiness %qaprocesses %qaand %qaits %qaline %qaof %qabusiness.
% q a For %qaexample:
• Manufacturing %qacompanies %qawill %qaneed %qaa %qaset %qaof %qaprocedures %qaand %qadocuments %qafor
%qathe %qaproduction %qacycle; %qanon-manufacturing %qacompanies %qado %qanot.
• Government %qaagencies %qaneed %qaprocedures %qato %qatrack %qaseparately %qaall %qainflows %qaand
%qaoutflows %qafrom %qavarious %qafunds, %qato %qaensure %qathat %qalegal %qarequirements %qaabout %qathe
%qause %qaof %qaspecific %qafunds %qaare %qafollowed.
• Financial %qainstitutions %qado %qanot %qaneed %qaextensive %qainventory %qacontrol %qasystems.
• Passenger %qaservice %qacompanies %qa(e.g., %qaairlines, %qabus, %qaand %qatrains) %qagenerally %qareceive
%qapayments %qain %qaadvance %qaof %qaproviding %qaservices. %qaTherefore, %qaextensive %qabilling
%qaand %qaaccounts %qareceivable %qaprocedures %qaare %qanot %qaneeded; %qainstead, %qathey %qamust
%qadevelop %qaprocedures %qato %qaaccount %qafor %qaprepaid %qarevenue.
• Construction %qafirms %qatypically %qareceive %qapayments %qaat %qaregular %qaintervals, %qabased %qaon %qathe
%qapercentage %qaof %qawork %qacompleted. %qaThus, %qatheir %qarevenue %qacycles %qamust %qabe
%qadesigned %qato %qatrack %qacarefully %qaall %qawork %qaperformed %qaand %qathe %qaamount %qaof %qawork
%qaremaining %qato %qabe %qadone.
• Service %qacompanies %qa(e.g., %qapublic %qaaccounting %qaand %qalaw %qafirms) %qado %qanot %qasell
%qaphysical %qagoods %qaand, %qatherefore, %qado %qanot %qaneed %qainventory %qacontrol %qasystems.
.
, %qa They %qamust %qadevelop %qaand %qamaintain %qadetailed %qarecords %qaof %qathe %qawork %qaperformed
%qa for %qaeach %qacustomer %qato %qaprovide %qabackup %qafor %qathe %qaamounts %qabilled. %qaTracking
%qaindividual %qaemployee %qatime %qais %qaespecially %qaimportant %qafor %qathese %qafirms %qabecause %qalabor
%qais %qathe %qamajor %qacost %qacomponent.
1.5 Figure %qa1-5 %qashows %qathat %qaorganizational %qaculture %qaand %qathe %qadesign %qaof %qaan %qaAIS
%qainfluence %qaone %qaanother. %qaWhat %qadoes %qathis %qaimply %qaabout %qathe %qadegree %qato
%qawhich %qaan %qainnovative %qasystem %qadeveloped %qaby %qaone %qacompany %qacan %qabe
%qatransferred %qato %qaanother %qacompany?
.
