Solution manual for sm tb accounting information systems 15th edition by marshall b romney paul j steinbart scott

AccountingInformation Systems
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Instructor’sSolutionsManual
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AccountingInformation b




Systems
15thEdition b




Marshall B. Romney b b




Professor Emeritus, Brigham Young University
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Paul John Steinbart
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Professor Emeritus, Arizona State University
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ScottL.Summers b b




BrighamYoung University
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DavidA.Wood b b




BrighamYoung University
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, AccountingInformation Systems b b




This work is protected by United States copyright laws and is provided solely for
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will destroy the integrity of the work and is not permitted. The work and
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materials from it should never be made available to students except by
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instructors using the accompanying text in their classes.
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this work are expected to abide by these restrictions and to honor the intended
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pedagogical purposes and the needsof other instructors who relyon these
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materials.
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, AccountingInformation Systems b b




chapter 1 b




accountinginformationsystems: b b




Anoverview
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SuggestedAnswers to Discussion Questions
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1.1 The value of information is the difference between the
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benefits realized from using that information and the costs of
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producing it. Would you, or any organization,ever produce
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information if its expected costs exceededits benefits? If so,
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provide some examples. If not, why?
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Most organizations produce information only if its value
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exceeds its cost. However, there are two situations where
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information may be produced even if its cost exceeds its value.
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a. It is often difficult to estimate accurately the value of
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information and the cost of producing it. Therefore,
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organizations may produce information that they expect
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will produce benefits in excess ofits costs, only to be
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disappointed after the fact.
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b. Production of the information may be mandated by either a b b b b b b b b b




government agency or a private organization. Examples
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include the tax reports required by the IRS and disclosure
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requirements forfinancial reporting.
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1.2 Can the characteristics of useful information listed in Table
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1-1 be met simultaneously? Or does achieving one mean
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sacrificing another?
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Several of the criteria in Table 1.1 can be met simultaneously.
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bFor example, more timely information is
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, AccountingInformation Systems b b




also likely to be more relevant.
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likely to be more accurate.
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However, achieving one objective mayrequire sacrificing b b b b b b




another. For example, ensuring that information is more
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complete may reduce its timeliness. Similarly, increased
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verifiability and accuracy may reduce its timeliness.
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The decision maker must decide which trade-offs are
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warranted in each situation.
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1.3 You and a few of your classmates decided to become
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entrepreneurs. You came up with a great idea for a newmobile
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phone application that you think will make lots of money. Your
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business plan won second place in a local competition, and you
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are using the $10,000 prize to support yourselves as you start
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your company.
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a. Identify the key decisions you need to make to be successful b b b b b b b b b b




entrepreneurs, the information you need tomake them, and the
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business processes you will need to engage in.
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b. Your company will need to exchange information with
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various external parties. Identify the external
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parties, and specify the information received from and
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sent to each of them.
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The author turns this question into an in-class group
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activity. Students are divided up in groups, told to close
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their books, and given 15 minutes to:
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a. Think through the business processes, key decisions,and b b b b b b b




information needs issues in their group.
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b. Identify the external users of information and specify b b b b b b b




the information received from and sent toeach of them.
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One group is selected to present their answers to the class. The
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other groups are told to challenge the group’s answers, provide
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alternative answers, and chip in with additional answers not
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provided by the selected group. Since the group that presents is
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not selected until after the time has expired, students are
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motivatedto do a good job, as they will be presenting to their
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peers.
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The value of this activity is not in arriving at a
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