Franklyn A Plus Pass
SOLUTION & INSTRUCTOR’S MANUAL for Core
Concepts of Accounting Information Systems 14th
Edition by Mark G. Simkin, James L. Worrell
All Chapters Fully Covered| Verified Study Guide for Exam
Preparations| A+ PASS GUARANTEED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Chapter 1
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
Discussion Questions
1-1. The answer to this question will vary with each university’s location. However, it is likely
most students will reveal that their parents are employed in non-manufacturing jobs.
Instructors may wish to emphasize that the large numbers of service sector employees and knowledge
workers reflect a trend.
1-2. This question encourages students to think about some of the information reporting
limitations imposed by the traditional accounting general ledger architecture. Other business activities
(or business events) that do not require journal entries include (1) obtaining a line of credit, (2) issuing
purchase requisitions or purchase orders, (3) signing contracts, (4) hiring a new executive, and (5)
sending financial information to investors or bank loan personnel.
Instructors may wish to point out that important information about a company’s business activities may
be included in an annual report outside the financial statements. The management letters and footnotes in
annual reports may reveal much about a company’s future prospects.
Managers have access to much more information than what is published in financial reports. Whether or
not they would like to have access to more non-financial information, or if they would prefer that the
accounting information system capture data about business events rather than accounting transactions, is
debatable. It may also be a function of the accounting system in a particular company. Investors may
wish to have more information available to them but the downside is that too much information can be
just as problematic as too little information.
1-3. The financial accounting systems we have known for more than 500 years are changing
Fr
dramatically as a result of advances in information technology and financial accounting software. For
example, databases allow accountants to collect and store all the data (accounting transaction data and
an
non-financial data) about a business activity or event in one system, allowing those needing such
information to retrieve it quickly, efficiently, and specifically in any format they wish. Financial data can
also be more easily linked to nonfinancial data because of database technology. Thus, it is likely that
kl
financial reporting will undergo tremendous change in the next few years as we learn to use technology,
yn
including artificial intelligence, more effectively in the design of AISs.
ERP systems are another example of the information age's impact on financial accounting. Now,
e
organizations capture more financial and non-financial data and produce more information than ever
A
before. This allows companies to integrate their information systems, better forecast everything from raw
materials requirements to finished product production, and to perform more sophisticated analyses of
pl
important business functions. For instance, sales can be examined at many different levels and organized
according to criteria such as geography, customer, product, or salesperson.
us
Pa
SM 1.1
ss
,One of the most important changes in AISs is the way these systems will gather financial information in
the future. Although many of these systems will continue to capture data in traditional batch mode or at
POS sites, we expect newer systems to collect more of it on mobile devices—for example, cell phones,
PDAs, and digital cameras. Because more employees and working at home these days, ―digital
commuting‖ may be another trend.
1-4. The objective of a company’s financial statements is to communicate relevant financial
information to such external parties as stockholders, investors, and government agencies. Issuing
financial statements in XBRL formats contributes to this objective by making such financial data more
searchable, comparable, informative, and therefore useful. Also, because XBRL enables companies to
use standard tags to identify specific accounting values, the language itself imposes a greater degree of
standardization in the informational content of the reports. Finally, XBRL helps government agencies
gather financial data that are more consistent, easier to understand, self-checking, and more quickly
communicated. Chapter 2 contains more about XBRL, including the idea that the language also enables
its users to verify accounting relationships as assets = liabilities + stockholder equity.
1-5. The questions asked here about suspicious activity reporting (SAR) require opinions from
students. Regarding the first question, which asks if SAR activity should be a legal matter, there is little
room for disagreement because so much of SAR is mandated by federal legislation such as the
Annunzio-Wylie Anti-Money Laundering Act of 1992, the Bank Secrecy Act of 1996, and the Patriot
Act of 2001. Although there are statistics on the number of SAR filings, less is known about how much
of what appears to be suspicious are in fact violations of federal statutes.
1-6. The example given in the question demonstrates one way in which computerization has
refined cost estimation and thus has impacted managerial accounting. However, IT has impacted
almost every area of managerial accounting (and decision making). Consider, for example, the
emergence of such concepts as just-in-time systems, computer integrated manufacturing systems,
manufacturing resource planning systems, target costing, and activity based costing – all of these
require IT to support managerial decision making. Forecasting and budgeting are other areas of
Fr
managerial accounting impacted by advances in technology, as are the many applications of
spreadsheet software, decision support systems, and expert systems.
an
Universities are also impacted by the many advances in IT. You might have students type ―university
kl
use of scorecards‖ in their favorite browser to discover the many uses this tool offers to administrators in
an academic environment. The search results show a variety of uses at such universities as The Ohio
yn
State University, CSU-Stanislaus, Clemson University, Colorado State University, San Jose State
University, and others. For example, the University of Denver adapted a version of the Balanced
e
Scorecard to evaluate their Student Life Assessment Plan (SLAP), which focuses on Learning
Outcomes. San Jose State University uses a Scorecard to evaluate and continuously improve their online
A
programs.
pl
1-7. The AICPA website lists hundreds of potential assurance services for CPAs to offer. These
include Trust Services and Information Integrity, Guidance on Audit Data Analytics, XBRL Assurance
us
Services, and Systems and Organization Controls for Cybersecurity,
Pa
SM 1.2
ss
, Outsourced Services and Vendor Supply Chains. Several of the assurance services are in the information
technology management/security category. Classroom discussion might address the particular skills that
CPAs would need for each of the proposed assurance service areas.
Skepticism and integrity, for example, are two characteristics typically associated with public
accountants.
It is interesting to learn which of the existing or proposed assurance services recommended by the
AICPA will actually be offered by a given public accounting organization. Many of the larger firms
already offer at least some of these services, and the largest accounting firms today derive a large portion
of their revenues from professional services other than auditing and tax consulting. But the industry
shake-up in 2002 may also prompt some accounting firms to scale back services and focus more on their
auditing business.
1-8. This question asks students to interview auditors from professional service firms and asks
them whether or not the firms offer any assurance services. Hopefully, several firms do offer such
services and instructors can use this as point of departure for additional discussion about such work.
1-9. Almost every traditional accounting job today requires at least some information systems
skills. In addition, there are many job opportunities that require combined skills in both accounting and
information systems. Consulting is one key area. Consultants with these skill sets can work at helping
companies choose and install accounting software. They can also help companies with reviews of their
business processes. Evaluating information systems security is another area of consulting where
accounting and information systems skills are valuable. Tax planning, preparation, and consulting are
yet other areas.
Prior research suggests that it is easier to train an accountant in information systems than vice versa.
Whether this is true or not, it is certainly clear that accounting students with information systems skills are
valuable employees. Individuals who are technically skilled at computers but lack knowledge about
accounting concepts are handicapped when trying to help a company to develop and enhance its
Fr
information systems. Their lack of accounting skills may lead their employer to install information
systems that fail to meet their needs.
an
1-10. Employers of both accounting and IS personnel often rank ―analytical reasoning‖ and
kl
―writing‖ skills on the same priority as technical skills, and some rank them even higher. Said one
recruiter at the school of one author: ―I can train new employees to use our computer systems and
yn
perform the majority of the technical tasks we will require of them. What I cannot train them to do is to
think analytically or logically. And what I refuse to do is to teach them to speak and write clearly and
effectively—skills they should have learned in high school.‖ Another recruiter said it slightly differently:
e
―Give me a technically-competent accounting or IS student who can perform AIS tasks well, and I will
A
pay them X dollars. Give me a student who can explain to my clients how our services can solve their
business problems and I will pay them 2X dollars.‖
pl
There are several other attributes beyond ―analytical thinking‖ and ―writing‖ skills that many
us
employers also value highly. One of them is ―teamwork‖—i.e., the ease and willingness of an
Pa
SM 1.3
ss
SOLUTION & INSTRUCTOR’S MANUAL for Core
Concepts of Accounting Information Systems 14th
Edition by Mark G. Simkin, James L. Worrell
All Chapters Fully Covered| Verified Study Guide for Exam
Preparations| A+ PASS GUARANTEED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Chapter 1
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
Discussion Questions
1-1. The answer to this question will vary with each university’s location. However, it is likely
most students will reveal that their parents are employed in non-manufacturing jobs.
Instructors may wish to emphasize that the large numbers of service sector employees and knowledge
workers reflect a trend.
1-2. This question encourages students to think about some of the information reporting
limitations imposed by the traditional accounting general ledger architecture. Other business activities
(or business events) that do not require journal entries include (1) obtaining a line of credit, (2) issuing
purchase requisitions or purchase orders, (3) signing contracts, (4) hiring a new executive, and (5)
sending financial information to investors or bank loan personnel.
Instructors may wish to point out that important information about a company’s business activities may
be included in an annual report outside the financial statements. The management letters and footnotes in
annual reports may reveal much about a company’s future prospects.
Managers have access to much more information than what is published in financial reports. Whether or
not they would like to have access to more non-financial information, or if they would prefer that the
accounting information system capture data about business events rather than accounting transactions, is
debatable. It may also be a function of the accounting system in a particular company. Investors may
wish to have more information available to them but the downside is that too much information can be
just as problematic as too little information.
1-3. The financial accounting systems we have known for more than 500 years are changing
Fr
dramatically as a result of advances in information technology and financial accounting software. For
example, databases allow accountants to collect and store all the data (accounting transaction data and
an
non-financial data) about a business activity or event in one system, allowing those needing such
information to retrieve it quickly, efficiently, and specifically in any format they wish. Financial data can
also be more easily linked to nonfinancial data because of database technology. Thus, it is likely that
kl
financial reporting will undergo tremendous change in the next few years as we learn to use technology,
yn
including artificial intelligence, more effectively in the design of AISs.
ERP systems are another example of the information age's impact on financial accounting. Now,
e
organizations capture more financial and non-financial data and produce more information than ever
A
before. This allows companies to integrate their information systems, better forecast everything from raw
materials requirements to finished product production, and to perform more sophisticated analyses of
pl
important business functions. For instance, sales can be examined at many different levels and organized
according to criteria such as geography, customer, product, or salesperson.
us
Pa
SM 1.1
ss
,One of the most important changes in AISs is the way these systems will gather financial information in
the future. Although many of these systems will continue to capture data in traditional batch mode or at
POS sites, we expect newer systems to collect more of it on mobile devices—for example, cell phones,
PDAs, and digital cameras. Because more employees and working at home these days, ―digital
commuting‖ may be another trend.
1-4. The objective of a company’s financial statements is to communicate relevant financial
information to such external parties as stockholders, investors, and government agencies. Issuing
financial statements in XBRL formats contributes to this objective by making such financial data more
searchable, comparable, informative, and therefore useful. Also, because XBRL enables companies to
use standard tags to identify specific accounting values, the language itself imposes a greater degree of
standardization in the informational content of the reports. Finally, XBRL helps government agencies
gather financial data that are more consistent, easier to understand, self-checking, and more quickly
communicated. Chapter 2 contains more about XBRL, including the idea that the language also enables
its users to verify accounting relationships as assets = liabilities + stockholder equity.
1-5. The questions asked here about suspicious activity reporting (SAR) require opinions from
students. Regarding the first question, which asks if SAR activity should be a legal matter, there is little
room for disagreement because so much of SAR is mandated by federal legislation such as the
Annunzio-Wylie Anti-Money Laundering Act of 1992, the Bank Secrecy Act of 1996, and the Patriot
Act of 2001. Although there are statistics on the number of SAR filings, less is known about how much
of what appears to be suspicious are in fact violations of federal statutes.
1-6. The example given in the question demonstrates one way in which computerization has
refined cost estimation and thus has impacted managerial accounting. However, IT has impacted
almost every area of managerial accounting (and decision making). Consider, for example, the
emergence of such concepts as just-in-time systems, computer integrated manufacturing systems,
manufacturing resource planning systems, target costing, and activity based costing – all of these
require IT to support managerial decision making. Forecasting and budgeting are other areas of
Fr
managerial accounting impacted by advances in technology, as are the many applications of
spreadsheet software, decision support systems, and expert systems.
an
Universities are also impacted by the many advances in IT. You might have students type ―university
kl
use of scorecards‖ in their favorite browser to discover the many uses this tool offers to administrators in
an academic environment. The search results show a variety of uses at such universities as The Ohio
yn
State University, CSU-Stanislaus, Clemson University, Colorado State University, San Jose State
University, and others. For example, the University of Denver adapted a version of the Balanced
e
Scorecard to evaluate their Student Life Assessment Plan (SLAP), which focuses on Learning
Outcomes. San Jose State University uses a Scorecard to evaluate and continuously improve their online
A
programs.
pl
1-7. The AICPA website lists hundreds of potential assurance services for CPAs to offer. These
include Trust Services and Information Integrity, Guidance on Audit Data Analytics, XBRL Assurance
us
Services, and Systems and Organization Controls for Cybersecurity,
Pa
SM 1.2
ss
, Outsourced Services and Vendor Supply Chains. Several of the assurance services are in the information
technology management/security category. Classroom discussion might address the particular skills that
CPAs would need for each of the proposed assurance service areas.
Skepticism and integrity, for example, are two characteristics typically associated with public
accountants.
It is interesting to learn which of the existing or proposed assurance services recommended by the
AICPA will actually be offered by a given public accounting organization. Many of the larger firms
already offer at least some of these services, and the largest accounting firms today derive a large portion
of their revenues from professional services other than auditing and tax consulting. But the industry
shake-up in 2002 may also prompt some accounting firms to scale back services and focus more on their
auditing business.
1-8. This question asks students to interview auditors from professional service firms and asks
them whether or not the firms offer any assurance services. Hopefully, several firms do offer such
services and instructors can use this as point of departure for additional discussion about such work.
1-9. Almost every traditional accounting job today requires at least some information systems
skills. In addition, there are many job opportunities that require combined skills in both accounting and
information systems. Consulting is one key area. Consultants with these skill sets can work at helping
companies choose and install accounting software. They can also help companies with reviews of their
business processes. Evaluating information systems security is another area of consulting where
accounting and information systems skills are valuable. Tax planning, preparation, and consulting are
yet other areas.
Prior research suggests that it is easier to train an accountant in information systems than vice versa.
Whether this is true or not, it is certainly clear that accounting students with information systems skills are
valuable employees. Individuals who are technically skilled at computers but lack knowledge about
accounting concepts are handicapped when trying to help a company to develop and enhance its
Fr
information systems. Their lack of accounting skills may lead their employer to install information
systems that fail to meet their needs.
an
1-10. Employers of both accounting and IS personnel often rank ―analytical reasoning‖ and
kl
―writing‖ skills on the same priority as technical skills, and some rank them even higher. Said one
recruiter at the school of one author: ―I can train new employees to use our computer systems and
yn
perform the majority of the technical tasks we will require of them. What I cannot train them to do is to
think analytically or logically. And what I refuse to do is to teach them to speak and write clearly and
effectively—skills they should have learned in high school.‖ Another recruiter said it slightly differently:
e
―Give me a technically-competent accounting or IS student who can perform AIS tasks well, and I will
A
pay them X dollars. Give me a student who can explain to my clients how our services can solve their
business problems and I will pay them 2X dollars.‖
pl
There are several other attributes beyond ―analytical thinking‖ and ―writing‖ skills that many
us
employers also value highly. One of them is ―teamwork‖—i.e., the ease and willingness of an
Pa
SM 1.3
ss
