Instructor’s Solutions Manual
Accounting Information
Systems
16th Edition
Global Edition
,Contents Included
Suggested Answers to Discussion Questions
Suggested Answers to the Problems
Suggested Answers to the Cases
Chapter-by-Chapter Solutions
Comprehensive Study & Teaching Resource
Designed to support learning, coursework, classroom instruction, and concept review.
TABLE OF CONTENTS
1. Accounting Information Systems: An Overview
2. Overview of Transaction Processing and Enterprise Resource Planning Systems
3. Systems Documentation Techniques
4. Relational Databases
5. Introduction to Data Analytics in Accounting
6. Transforming Data
7. Data Analysis and Presentation
8. Fraud and Errors
9. Computer Fraud and Abuse Techniques
10. Control and Accounting Information Systems
11. Controls for Information Security
12. Confidentiality and Privacy Controls
13. Processing Integrity and Availability Controls
14. The Revenue Cycle: Sales to Cash Collections
15. The Expenditure Cycle: Purchasing to Cash Disbursements
16. The Production Cycle
17. The Human Resources Management and Payroll Cycle
18. General Ledger and Reporting System
19. Database Design Using the REA Data Model
20. Implementing an REA Model in a Relational Database
21. Special Topics in REA Modeling
22. Introduction to Systems Development and Systems Analysis
23. AIS Development Strategies
24. Systems Design, Implementation, and Operation
,CHAPTER NO. 01: ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
1.1 Discuss the concept of a system and the issues of goal conflict and goal congruence.
A system is a set of two or more components that are somehow interrelated and interact together to
achieve a specific goal. A system usually consists of smaller components called subsystems. These
subsystems have specific and defined functions, which interact with and support the larger system.
The concept of systems is key to information technology and AIS. All systems, including the AIS,
must work to achieve one or more organizational goals. Goal conflict results when a decision or
action of a subsystem is inconsistent with another subsystem or the system (organization) as a
whole. Suppose the sales department aims to maximize revenue by offering generous discounts to
customers, while the finance department is responsible for controlling costs and maintaining profit
margins. In this scenario, there is a goal conflict between increasing sales and maintaining
profitability. Goal congruence results when a subsystem achieves its goals while contributing to the
organization's overall goal. Subsystems should maximize organizational goals.
1.2 What are the steps involved in the decision-making process? Provide some examples of how
AI and Data Analytics can facilitate the decision-making process.
Decision making is a complex, multistep activity: identify the problem, collect and interpret
information, evaluate ways to solve the problem, select a solution methodology, and implement the
solution. An AIS can provide assistance in all phases of decision making. Reports can help to
identify potential problems. Decision models and analytical tools can be provided to users. Query
languages can gather relevant data to help make the decision. Various tools, such as graphical
interfaces, can help the decision maker interpret decision model results, evaluate them, and choose
among alternative courses of action. In addition, the AIS can provide feedback on the results of
actions.
An AIS can help improve decision making in several ways:
It can identify situations requiring management action. For example, a cost report with a large
variance might stimulate management to investigate and, if necessary, take corrective action.
It can reduce uncertainty and thereby provide a basis for choosing among alternative actions.
It can store information about the results of previous decisions, which provides valuable
feedback that can be used to improve future decisions. For example, if a company tries a
particular marketing strategy and the information gathered indicates that it did not succeed, the
company can use that information to select a different marketing strategy.
It can provide accurate information in a timely manner. For example, Walmart has an enormous
database that contains detailed information about sales transactions at each of its stores. It uses
this information to optimize the amount of each product carried at each store.
It can analyze sales data to discover items that are purchased together and can use such information
to improve the layout of merchandise or to encourage additional sales of related items. For
example, Amazon uses its sales database to suggest additional books for customers to purchase.
, 1.3 A software company in Munich is organizing a competition, inviting business ideas that
promote the use of smartphone technology to conduct business. You enter your business plan,
an initiative to involve unemployed teenagers and young adults from local communities to
generate business and employment, and it was so well received that you were awarded a
special prize of €5,000. You plan on using your prize money to implement your idea.
a. Identify key decisions you need to make, the information you require to make these key
decisions, and the five major business processes you need to engage in.
b. Identify the external parties with whom you would need to exchange information and
specify the information you will receive from these parties and the information that you
will send to these parties.
Answers will vary, but the main aim is to get students to understand (for part a) how the business
processes, key decisions, and information needs are all intertwined (as shown in Table 1-2). This
then links to the external parties (part b) in Figure 1-1.
Some points that the students may mention:
a. Key Decisions:
Budget Allocation: Determining efficient utilization of €5,000 among various business needs.
Recruitment Strategy: Identifying the criteria and methods to recruit unemployed teenagers and
young adults.
Training Program: Identifying training needs and designing an appropriate training program.
Technology Investment: Selecting the right smartphone technology and software applications.
Marketing Strategy: Promote the business initiative to potential clients and the local community.
b. External Parties and Information Exchange:
Smartphone Suppliers: Information on product options, prices, and service agreements, followed by
procurement.
Trainer: Training content and method; exchange requirements and schedules.
Legal Advisors: Information on legal compliance pertinent to the business model and operational
plans.
Marketing Agencies: Market analysis and marketing strategies suitable to the business goals and
target demographics.
Local Employment Agencies: Data on potential recruits to send employment opportunities and
company information.
1.4 How do an organization’s business processes and lines of business affect the design of its
AIS? Give several examples of how differences among organizations are reflected in their
AIS.
Accounting Information
Systems
16th Edition
Global Edition
,Contents Included
Suggested Answers to Discussion Questions
Suggested Answers to the Problems
Suggested Answers to the Cases
Chapter-by-Chapter Solutions
Comprehensive Study & Teaching Resource
Designed to support learning, coursework, classroom instruction, and concept review.
TABLE OF CONTENTS
1. Accounting Information Systems: An Overview
2. Overview of Transaction Processing and Enterprise Resource Planning Systems
3. Systems Documentation Techniques
4. Relational Databases
5. Introduction to Data Analytics in Accounting
6. Transforming Data
7. Data Analysis and Presentation
8. Fraud and Errors
9. Computer Fraud and Abuse Techniques
10. Control and Accounting Information Systems
11. Controls for Information Security
12. Confidentiality and Privacy Controls
13. Processing Integrity and Availability Controls
14. The Revenue Cycle: Sales to Cash Collections
15. The Expenditure Cycle: Purchasing to Cash Disbursements
16. The Production Cycle
17. The Human Resources Management and Payroll Cycle
18. General Ledger and Reporting System
19. Database Design Using the REA Data Model
20. Implementing an REA Model in a Relational Database
21. Special Topics in REA Modeling
22. Introduction to Systems Development and Systems Analysis
23. AIS Development Strategies
24. Systems Design, Implementation, and Operation
,CHAPTER NO. 01: ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
1.1 Discuss the concept of a system and the issues of goal conflict and goal congruence.
A system is a set of two or more components that are somehow interrelated and interact together to
achieve a specific goal. A system usually consists of smaller components called subsystems. These
subsystems have specific and defined functions, which interact with and support the larger system.
The concept of systems is key to information technology and AIS. All systems, including the AIS,
must work to achieve one or more organizational goals. Goal conflict results when a decision or
action of a subsystem is inconsistent with another subsystem or the system (organization) as a
whole. Suppose the sales department aims to maximize revenue by offering generous discounts to
customers, while the finance department is responsible for controlling costs and maintaining profit
margins. In this scenario, there is a goal conflict between increasing sales and maintaining
profitability. Goal congruence results when a subsystem achieves its goals while contributing to the
organization's overall goal. Subsystems should maximize organizational goals.
1.2 What are the steps involved in the decision-making process? Provide some examples of how
AI and Data Analytics can facilitate the decision-making process.
Decision making is a complex, multistep activity: identify the problem, collect and interpret
information, evaluate ways to solve the problem, select a solution methodology, and implement the
solution. An AIS can provide assistance in all phases of decision making. Reports can help to
identify potential problems. Decision models and analytical tools can be provided to users. Query
languages can gather relevant data to help make the decision. Various tools, such as graphical
interfaces, can help the decision maker interpret decision model results, evaluate them, and choose
among alternative courses of action. In addition, the AIS can provide feedback on the results of
actions.
An AIS can help improve decision making in several ways:
It can identify situations requiring management action. For example, a cost report with a large
variance might stimulate management to investigate and, if necessary, take corrective action.
It can reduce uncertainty and thereby provide a basis for choosing among alternative actions.
It can store information about the results of previous decisions, which provides valuable
feedback that can be used to improve future decisions. For example, if a company tries a
particular marketing strategy and the information gathered indicates that it did not succeed, the
company can use that information to select a different marketing strategy.
It can provide accurate information in a timely manner. For example, Walmart has an enormous
database that contains detailed information about sales transactions at each of its stores. It uses
this information to optimize the amount of each product carried at each store.
It can analyze sales data to discover items that are purchased together and can use such information
to improve the layout of merchandise or to encourage additional sales of related items. For
example, Amazon uses its sales database to suggest additional books for customers to purchase.
, 1.3 A software company in Munich is organizing a competition, inviting business ideas that
promote the use of smartphone technology to conduct business. You enter your business plan,
an initiative to involve unemployed teenagers and young adults from local communities to
generate business and employment, and it was so well received that you were awarded a
special prize of €5,000. You plan on using your prize money to implement your idea.
a. Identify key decisions you need to make, the information you require to make these key
decisions, and the five major business processes you need to engage in.
b. Identify the external parties with whom you would need to exchange information and
specify the information you will receive from these parties and the information that you
will send to these parties.
Answers will vary, but the main aim is to get students to understand (for part a) how the business
processes, key decisions, and information needs are all intertwined (as shown in Table 1-2). This
then links to the external parties (part b) in Figure 1-1.
Some points that the students may mention:
a. Key Decisions:
Budget Allocation: Determining efficient utilization of €5,000 among various business needs.
Recruitment Strategy: Identifying the criteria and methods to recruit unemployed teenagers and
young adults.
Training Program: Identifying training needs and designing an appropriate training program.
Technology Investment: Selecting the right smartphone technology and software applications.
Marketing Strategy: Promote the business initiative to potential clients and the local community.
b. External Parties and Information Exchange:
Smartphone Suppliers: Information on product options, prices, and service agreements, followed by
procurement.
Trainer: Training content and method; exchange requirements and schedules.
Legal Advisors: Information on legal compliance pertinent to the business model and operational
plans.
Marketing Agencies: Market analysis and marketing strategies suitable to the business goals and
target demographics.
Local Employment Agencies: Data on potential recruits to send employment opportunities and
company information.
1.4 How do an organization’s business processes and lines of business affect the design of its
AIS? Give several examples of how differences among organizations are reflected in their
AIS.
