Solution Manual for Accounting Information Systems 15th Edition by Marshall B Romney, Paul J. Steinbart, Scott L. Summers, David A. Wood

Accounting Information Systems 3-1 Copyright (c) 2021 Pearson Education, Inc. Accounting Information Systems 15th Edition Marshall B. Romney Professor Emeritus, Brigham Young University Paul John Steinbart Professor Emeritus, Arizona State University Scott L. Summers Brigham Young University David A. Wood Brigham Young University Instructor’s Solutions Manual Accounting Information Systems 3-2 Copyright (c) 2021 Pearson Education, Inc. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. 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Unless otherwise indicated herein, any third -party trademarks, logos, or icons that may appear in this work are the property of their respective owners, and any references to third -party trademarks, logos, icons, or other trade dre ss are for demonstrative or descriptive purposes only. Such references are not intended to imply any sponsorship, endorsement, authorization, or promotion of Pearson’s products by the owners of such marks, or any relationship between the owner and Pearson Education, Inc., or its affiliates, authors, licensees, or distributors. Accounting Information Systems 3-3 Copyright (c) 2021 Pearson Education, Inc. 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, t here 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 requirem ents 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 Accounting Information Systems 3-4 Copyright (c) 2021 Pearson Education, Inc. 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 entreprene urs. 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 inform ation 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 need s issues in their group . b. Identify the external users of information and specify the information received from and sent to each of them . One group is selected to pr esent their answers to the class. The other groups are told to challenge the group’s answers , provide alternative answers, and chip in with additional answers not provided by the selected group. Since the g roup that present s is not selected until after the time has expired, students are motivated to do a good job, as they will be presenting to their peers. The value of this activity is not in arriving at a