Solutions Manual - Accounting Information Systems A Practitioner
Emphasis, 7th Edition By Cynthia D. Heagy With All
Chapters 1-15/ Latest With Verified Solutions
,table of content
chapter 1. significance of accounting information systems and the accountant’s role.
chapter 2. accounting systems documentation.
chapter 3. essential elements and basic activities of accounting systems.
chapter 4. data flows, activities, and structure of accounting systems.
chapter 5. reporting principles, coding methods, and audit trails.
chapter 6. internal control and risk assessment.
chapter 7. control activities and monitoring.
chapter 8. the financial process.
chapter 9. the revenue process.
chapter 10. the purchasing process.
chapter 11. the inventory process.
chapter 12. database structure of accounting systems.
chapter 13. developing a relational database for an accounting information system.
chapter 14. electronic business.
chapter 15. ais selection and implementation.
,chapter 1
significance of accounting information systems and the
accountant’s role
introductory scenario: suggested solutions to questions
1. employee overtime hours, customer information (e.g., age groups), inventory levels, reorder points, eoq
calculation, volume/quantity discount analysis, square footage in use v. storage, customer flow data,
spoilage
2. how much is client willing to pay? system that is easy for servers to use with proper controls. bob’s hourly
rate would be a concern for client. will bob be around “after the sale” (i.e., tech support)? what types of pre-
packaged systems are available?
3. information to help with software division (e.g., total sales dollars, complexity of accounting system).
how many computers needed? any expansion planned? what types of employees do they have (e.g.,
waiters would want quick touch screens)?
4 the owner of the restaurant wants a new accounting system because he needs up-to-date information on
how the business is doing. waiting until the end of the year, or even the quarter, does not give marshall
the information he needs to make those day-to-day decisions that will ensure the success of his
restaurant.
chapter vignettes: suggested responses to questions
vignette 1.1
1. closer relationships with remaining suppliers, the ability to carry less inventory (reducing carrying
costs and risks of theft or loss of inventory), sharing of planning information with suppliers, easier
to monitor vendor performance. might lose volume discounts if trying to minimize inventory on
hand by having smaller shipments from vendors shipped more often.
2. reduction in paperwork, reduction in input errors, ordering and cash receipt processes more efficient,
increases in efficiency in meeting changes in demand. one disadvantage would relate to problems with
settling disputed orders or payments with loss of “paper trail” that includes authorized signatures.
vignette 1.2
1. managers would probably find information in units to be most useful for planning decisions because this
information would represent things over which he/she has control. while the manager might not have
control over salaries, he/she does have control over the amount of overtime and the approval of vacation
of the employees.
2. managers would probably want information related to production numbers (to determine seasonality;
during slow times, more employees could be on vacation), the number of vacation hours per
employee, the number of overtime hours per employee, backorder information, and information to
help the manager match staffing levels with production.
vignette 1.3
1. the privacy of information is a major consideration, as the customer might not want their spending pattern
information shared with other parties. loss of confidential information can be disastrous to a company’s
reputation and lead to significant financial losses (lost sales, fines, etc.) information about customers must
be protected from information leakage to other third parties who gain authorized (or unauthorized) access
, to information. at the very least, confidential information about the customers should be encrypted and have
limited access.
2. inventory management (e.g., turnover, obsolescence, supply/demand, reorder levels), potential
markets or product lines for expansion, frequent buyer programs.
vignette 1.4
1. the situation could have been avoided if employees had been part of the decision-making and testing early
in the project. employee buy-in is essential to the success of any new system implementation. it is key that
the system provide managers with information that they need for decision-making. it is also important to
have a maintenance contract in place, with better reporting to management and regular follow-up. it
appears that this decision was not made by executive management, so its success was questionable since
the “tone at the top” with regard to the project was “ignorance”. since executive management did not
monitor the project, they could not respond to kluger’s complaints, nor could they provide “strong
encouragement” for continuation of the project originally started by lehmann. in fact, it appears that
executive management was not involved in the decision to take on the new system. kluger was not given
the opportunity to learn the new system, nor was there motivation to learn the new system. the company
also had inadequate backup so that the project could continue in the absence of a key employee.
2. .here are some suggested “next steps”
• improve the governance process and the “tone at the top” to get executive management involvement and
oversight of system projects—this includes aligning any system projects with the strategy of the
company
• determine that any system chosen by management will provide quality information useful for
decision- making at all levels
• reinstate the maintenance contract and set up a training contract if it is determined more cost-
effective and in line with the company business plan to use the new system
• provide training and employee involvement in developing the system
• provide better oversight of the controller function
vignette 1.5
1. the redesign process can be improved using the following suggestions:
• set up end-user groups to get input regarding output needs, data collection needs, screen, and form layouts
• develop a schedule of tests to be conducted with representative end users for pilot testing
• allow end user input for changes and improvements to system
• set up training for all affected employees
• get management and programmer buy-in for essential controls and audit trails at the front
end of development
• emphasize the importance of controls, protection of information assets, and
protection of confidential/private information
solutions to discussion questions and problems
1. the project that finkelstein and associates is considering is a capital investment that requires
information on the estimated initial investment and the estimated future return. the future return would
be measured by net incremental cash flows to the mall (incremental cash inflows less incremental cash
outflows).
estimated initial investment would include:
• architects fees
• renovation of existing facilities
• construction of new facilities and food court
• cost of disruption of trade during project
Emphasis, 7th Edition By Cynthia D. Heagy With All
Chapters 1-15/ Latest With Verified Solutions
,table of content
chapter 1. significance of accounting information systems and the accountant’s role.
chapter 2. accounting systems documentation.
chapter 3. essential elements and basic activities of accounting systems.
chapter 4. data flows, activities, and structure of accounting systems.
chapter 5. reporting principles, coding methods, and audit trails.
chapter 6. internal control and risk assessment.
chapter 7. control activities and monitoring.
chapter 8. the financial process.
chapter 9. the revenue process.
chapter 10. the purchasing process.
chapter 11. the inventory process.
chapter 12. database structure of accounting systems.
chapter 13. developing a relational database for an accounting information system.
chapter 14. electronic business.
chapter 15. ais selection and implementation.
,chapter 1
significance of accounting information systems and the
accountant’s role
introductory scenario: suggested solutions to questions
1. employee overtime hours, customer information (e.g., age groups), inventory levels, reorder points, eoq
calculation, volume/quantity discount analysis, square footage in use v. storage, customer flow data,
spoilage
2. how much is client willing to pay? system that is easy for servers to use with proper controls. bob’s hourly
rate would be a concern for client. will bob be around “after the sale” (i.e., tech support)? what types of pre-
packaged systems are available?
3. information to help with software division (e.g., total sales dollars, complexity of accounting system).
how many computers needed? any expansion planned? what types of employees do they have (e.g.,
waiters would want quick touch screens)?
4 the owner of the restaurant wants a new accounting system because he needs up-to-date information on
how the business is doing. waiting until the end of the year, or even the quarter, does not give marshall
the information he needs to make those day-to-day decisions that will ensure the success of his
restaurant.
chapter vignettes: suggested responses to questions
vignette 1.1
1. closer relationships with remaining suppliers, the ability to carry less inventory (reducing carrying
costs and risks of theft or loss of inventory), sharing of planning information with suppliers, easier
to monitor vendor performance. might lose volume discounts if trying to minimize inventory on
hand by having smaller shipments from vendors shipped more often.
2. reduction in paperwork, reduction in input errors, ordering and cash receipt processes more efficient,
increases in efficiency in meeting changes in demand. one disadvantage would relate to problems with
settling disputed orders or payments with loss of “paper trail” that includes authorized signatures.
vignette 1.2
1. managers would probably find information in units to be most useful for planning decisions because this
information would represent things over which he/she has control. while the manager might not have
control over salaries, he/she does have control over the amount of overtime and the approval of vacation
of the employees.
2. managers would probably want information related to production numbers (to determine seasonality;
during slow times, more employees could be on vacation), the number of vacation hours per
employee, the number of overtime hours per employee, backorder information, and information to
help the manager match staffing levels with production.
vignette 1.3
1. the privacy of information is a major consideration, as the customer might not want their spending pattern
information shared with other parties. loss of confidential information can be disastrous to a company’s
reputation and lead to significant financial losses (lost sales, fines, etc.) information about customers must
be protected from information leakage to other third parties who gain authorized (or unauthorized) access
, to information. at the very least, confidential information about the customers should be encrypted and have
limited access.
2. inventory management (e.g., turnover, obsolescence, supply/demand, reorder levels), potential
markets or product lines for expansion, frequent buyer programs.
vignette 1.4
1. the situation could have been avoided if employees had been part of the decision-making and testing early
in the project. employee buy-in is essential to the success of any new system implementation. it is key that
the system provide managers with information that they need for decision-making. it is also important to
have a maintenance contract in place, with better reporting to management and regular follow-up. it
appears that this decision was not made by executive management, so its success was questionable since
the “tone at the top” with regard to the project was “ignorance”. since executive management did not
monitor the project, they could not respond to kluger’s complaints, nor could they provide “strong
encouragement” for continuation of the project originally started by lehmann. in fact, it appears that
executive management was not involved in the decision to take on the new system. kluger was not given
the opportunity to learn the new system, nor was there motivation to learn the new system. the company
also had inadequate backup so that the project could continue in the absence of a key employee.
2. .here are some suggested “next steps”
• improve the governance process and the “tone at the top” to get executive management involvement and
oversight of system projects—this includes aligning any system projects with the strategy of the
company
• determine that any system chosen by management will provide quality information useful for
decision- making at all levels
• reinstate the maintenance contract and set up a training contract if it is determined more cost-
effective and in line with the company business plan to use the new system
• provide training and employee involvement in developing the system
• provide better oversight of the controller function
vignette 1.5
1. the redesign process can be improved using the following suggestions:
• set up end-user groups to get input regarding output needs, data collection needs, screen, and form layouts
• develop a schedule of tests to be conducted with representative end users for pilot testing
• allow end user input for changes and improvements to system
• set up training for all affected employees
• get management and programmer buy-in for essential controls and audit trails at the front
end of development
• emphasize the importance of controls, protection of information assets, and
protection of confidential/private information
solutions to discussion questions and problems
1. the project that finkelstein and associates is considering is a capital investment that requires
information on the estimated initial investment and the estimated future return. the future return would
be measured by net incremental cash flows to the mall (incremental cash inflows less incremental cash
outflows).
estimated initial investment would include:
• architects fees
• renovation of existing facilities
• construction of new facilities and food court
• cost of disruption of trade during project
