Solutions Manual
l
For
Accounting
Information Systems
l l
15th Edition, Global Edition
l l l
Marshall B. Romney l l
Paul John Steinbart
l l l
Scott L. Summers
l l l
l David A. Wood l l
, CHAPTER 1 l
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
l l l l
SUGGESTED lANSWERS lTO lDISCUSSION lQUESTIONS
1.1 Discuss lthe lconcept lof la lsystem land lthe lissues lof lgoal lconflict land lgoal lcongruence.
A lsystem lis la lset lof ltwo lor lmore lcomponents lthat lare lsomehow linterrelated land linteract ltogether lto
lachieve la lspecific lgoal. lA lsystem lusually lconsists lof lsmaller lcomponents lcalled lsubsystems. lThese
lsubsystems lhave lspecific land ldefined lfunctions, lwhich linteract lwith land lsupport lthe llarger lsystem.
lThe lconcept lof lsystems lis lkey lto linformation ltechnology land lAIS. lAll lsystems, lincluding lthe lAIS,
lmust lwork lto lachieve lone lor lmore lorganizational lgoals. lGoal lconflict lresults lwhen la ldecision lor
laction lof la lsubsystem lis linconsistent lwith lanother lsubsystem lor lthe lsystem l(organization) las la
lwhole. lGoal lcongruence lresults lwhen la lsubsystem lachieves lits lgoals lwhile lcontributing lto lthe
lorganization's l overall lgoal. l Subsystems lshould lmaximize lorganizational l goals.
1.2 Give lan lexample lof lhow lan lAIS lcan limprove ldecision lmaking land ldescribe lthe lmultistep
lactivities linvolved lin lthe lprocess.
Decision lmaking lis la lcomplex, lmultistep lactivity: lidentify lthe lproblem, lcollect land linterpret
linformation, l evaluate lways lto lsolve lthe lproblem, lselect la l solution lmethodology, land limplement lthe
lsolution. lAn lAIS lcan lprovide lassistance lin lall lphases lof ldecision lmaking. lReports lcan lhelp lto
lidentify lpotential lproblems. lDecision lmodels land lanalytical ltools lcan lbe lprovided lto lusers. lQuery
llanguages lcan lgather lrelevant ldata lto lhelp lmake lthe ldecision. lVarious ltools, lsuch las lgraphical
linterfaces, lcan lhelp lthe ldecision lmaker linterpret ldecision lmodel lresults, levaluate lthem, land lchoose
lamong lalternative lcourses lof laction. lIn laddition, lthe lAIS lcan lprovide lfeedback lon lthe lresults lof
lactions.
An lAIS lcan lhelp limprove ldecision lmaking lin lseveral lways:
• It lcan lidentify lsituations lrequiring lmanagement laction. lFor lexample, la lcost lreport lwith la llarge
lvariance lmight lstimulate lmanagement lto linvestigate land, lif lnecessary, l take lcorrective laction.
• It lcan lreduce luncertainty land lthereby lprovide la lbasis lfor lchoosing lamong lalternative lactions.
• It lcan lstore linformation labout lthe lresults lof lprevious ldecisions, lwhich lprovides lvaluable lfeedback
lthat lcan lbe lused lto limprove lfuture ldecisions. lFor lexample, lif la lcompany ltries la lparticular
lmarketing lstrategy land lthe linformation lgathered lindicates lthat lit ldid lnot lsucceed, lthe lcompany
lcan luse lthat linformation lto lselect l a l different l marketing lstrategy.
• It lcan lprovide laccurate linformation lin la ltimely lmanner. lFor lexample, lWalmart lhas lan lenormous
ldatabase lthat lcontains ldetailed linformation labout lsales ltransactions lat leach lof lits lstores. lIt luses
lthis linformation lto loptimize lthe lamount l of l each lproduct l carried lat leach lstore.
• It lcan lanalyze lsales ldata lto ldiscover litems lthat lare lpurchased ltogether land lcan luse lsuch
linformation lto limprove lthe llayout lof lmerchandise lor lto lencourage ladditional lsales lof lrelated
litems. lFor lexample, l Amazon luses lits lsales ldatabase lto lsuggest ladditional lbooks lfor lcustomers lto
lpurchase.
1-1
.
,Ch. l1: lAccounting lInformation lSystems: lAn lOverview
1.3 A lsoftware lcompany lin lMunich lis lorganizing la lcompetition, linviting lbusiness lideas lthat
lpromote lthe luse lof lsmartphone ltechnology lto lconduct lbusiness. lYou lenter lyour lbusiness lplan,
lan linitiative lto linvolve lunemployed lteenagers land lyoung ladults lfrom llocal lcommunities lto
lgenerate lbusiness land lemployment, land lit lwas lso lwell lreceived lthat lyou lwere lawarded la
lspecial lprize lof l€5,000. lYou lplan lon lusing lyour lprize l money lto limplement lyour lidea.
a. Identify lkey ldecisions lyou lneed lto lmake, lthe linformation lyou lrequire lto lmake lthese lkey
ldecisions, l and lthe l five l major lbusiness l processes lyou lneed lto lengage lin.
b. Identify lthe lexternal lparties lwith lwhom lyou lwould lneed lto lexchange linformation land
lspecify lthe linformation lyou lwill lreceive lfrom lthese lparties land lthe linformation lthat lyou
lwill lsend lto lthese lparties.
The lauthor luses lthis las la lclass ldiscussion: lthe ltypical lprocess lthe lauthor lfollows lis lthat lstudents
lwork lthrough lthe lcontent lof la lchapter l before lit lis lcovered lin lclass. lStudents lare lrequired lto lanswer
lquestions l(such las lthis lone) land lsubmit lit lbefore lthe llecture. lThe lauthor lthen lassesses lthe lanswers,
land, lbased lon lproblems l identified lwithin lthe lanswers, lthe llecture lcontent lwould lbe ldetermined.
Students lare lthus lrequired lto lcomplete lthe lquestions lbefore lcoming lto lthe lclass. lIn lclass, lthe
lstudents lare ldivided linto lsmall lgroups l(about l4 l– l5 lstudents lper lgroup). lEach lsmall lgroup lhas lto
lcome lto lsome lconsensus labout lthe lanswers lthat lthey lwill lpresent lto lthe lclass. lThe lgroups lcould lbe
lrandomly lallocated, l or l the lgroups l could lbe lbased lon lsimilarity lin linitial lideas.
A lgroup lis lthen lselected l(or la lgroup lcan lvolunteer) lto lpresent ltheir lanswers lto lthe lclass. lSince lall
lstudents lhave lhad lthe lopportunity lto lengage lwith lthe lcontent l prior l to lthe lpresentation lin lclass, lthere
lshould lbe lmeaningful lcontributions land ldiscussions labout lhow lthe lpresented lsolutions lcould lbe
limproved.
Answers lwill lvary, lbut lthe lmain laim lis lto lget lstudents lto lunderstand l(for lpart la) lhow lthe lbusiness
lprocesses, lkey ldecisions, land linformation lneeds lare lall lintertwined l(as lshown lin lTable l1-2). lThis
lthen llinks l to lthe lexternal lparties l (part lb) lin lFigure l1-1.
Since lthe lscenario lindicated lthe luse lof lmobile lphones lto lconduct lbusiness, lstudents lshould lideally
lrelate ltheir l answers lto lsome lform lof lretail l(buying l/ l selling lof l goods l/ l services).
1-2
.
, Accounting lInformation lSystems l15e, lGE
1.4 How ldo lan lorganization’s lbusiness lprocesses land llines lof lbusiness laffect lthe ldesign lof lits
lAIS? l Give lseveral lexamples lof lhow ldifferences lamong lorganizations lare lreflected lin ltheir
lAIS.
An lorganization’s lAIS lmust lreflect lits lbusiness lprocesses land lits lline lof lbusiness. l For lexample:
• Manufacturing lcompanies lwill lneed la lset lof lprocedures land ldocuments lfor lthe lproduction
lcycle; l non-manufacturing lcompanies l do lnot.
• Government lagencies lneed lprocedures lto ltrack lseparately lall linflows land loutflows lfrom
lvarious lfunds, l to lensure lthat llegal lrequirements labout lthe luse lof lspecific lfunds lare lfollowed.
• Financial linstitutions ldo lnot lneed lextensive linventory lcontrol lsystems.
• Passenger lservice lcompanies l(e.g., lairlines, lbus, land ltrains) lgenerally lreceive lpayments lin
ladvance lof lproviding lservices. lTherefore, lextensive lbilling land laccounts lreceivable
lprocedures lare lnot lneeded; linstead, lthey lmust ldevelop lprocedures lto laccount lfor lprepaid
lrevenue.
• Construction lfirms ltypically lreceive lpayments lat lregular lintervals, lbased lon lthe lpercentage lof
lwork lcompleted. lThus, ltheir lrevenue lcycles lmust lbe ldesigned lto ltrack lcarefully lall lwork
lperformed land lthe lamount lof l work lremaining lto lbe ldone.
• Service lcompanies l(e.g., lpublic laccounting land llaw lfirms) ldo lnot lsell lphysical lgoods land,
ltherefore, ldo lnot lneed linventory lcontrol lsystems. lThey lmust ldevelop land lmaintain ldetailed
lrecords lof lthe lwork lperformed lfor leach lcustomer lto lprovide lbackup lfor lthe lamounts lbilled.
lTracking lindividual lemployee ltime lis l especially limportant lfor lthese lfirms lbecause llabor lis lthe
lmajor l cost l component.
1.5 Figure l1-5 lshows lthat lorganizational lculture land lthe ldesign lof lan lAIS linfluence lone lanother.
lWhat ldoes lthis limply labout lthe ldegree lto lwhich lan linnovative lsystem ldeveloped lby lone
lcompany lcan lbe ltransferred lto lanother lcompany?
Since lpeople lare lone lof lthe lbasic lcomponents lof lany lsystem, lit lwill lalways lbe ldifficult lto ltransfer
lsuccessfully la lspecific linformation lsystems ldesign lintact lto lanother lorganization. lConsidering lin
ladvance lhow laspects lof lthe lnew lorganizational lculture lare llikely lto laffect lacceptance lof lthe lsystem
lcan lincrease lthe lchances lfor l successful ltransfer. l Doing lso lmay lenable lthe lorganization lto ltake lsteps
lto lmitigate llikely lcauses lof lresistance. lThe ldesign lof lan lAIS, lhowever, litself lcan linfluence land
lchange lan lorganization’s lculture land lphilosophy. lTherefore, lwith ladequate ltop lmanagement
lsupport, limplementation lof la lnew lAIS lcan lbe lused las la lvehicle lto lchange lan lorganization. lThe
lreciprocal leffects lof ltechnology land lorganizational lculture lon lone lanother, lhowever, lmean lthat lit lis
lunrealistic lto lexpect lthat lthe lintroduction lof la lnew lAIS lwill lproduce lthe lsame lresults lobserved lin
lanother l organization.
1-3
.
l
For
Accounting
Information Systems
l l
15th Edition, Global Edition
l l l
Marshall B. Romney l l
Paul John Steinbart
l l l
Scott L. Summers
l l l
l David A. Wood l l
, CHAPTER 1 l
ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW
l l l l
SUGGESTED lANSWERS lTO lDISCUSSION lQUESTIONS
1.1 Discuss lthe lconcept lof la lsystem land lthe lissues lof lgoal lconflict land lgoal lcongruence.
A lsystem lis la lset lof ltwo lor lmore lcomponents lthat lare lsomehow linterrelated land linteract ltogether lto
lachieve la lspecific lgoal. lA lsystem lusually lconsists lof lsmaller lcomponents lcalled lsubsystems. lThese
lsubsystems lhave lspecific land ldefined lfunctions, lwhich linteract lwith land lsupport lthe llarger lsystem.
lThe lconcept lof lsystems lis lkey lto linformation ltechnology land lAIS. lAll lsystems, lincluding lthe lAIS,
lmust lwork lto lachieve lone lor lmore lorganizational lgoals. lGoal lconflict lresults lwhen la ldecision lor
laction lof la lsubsystem lis linconsistent lwith lanother lsubsystem lor lthe lsystem l(organization) las la
lwhole. lGoal lcongruence lresults lwhen la lsubsystem lachieves lits lgoals lwhile lcontributing lto lthe
lorganization's l overall lgoal. l Subsystems lshould lmaximize lorganizational l goals.
1.2 Give lan lexample lof lhow lan lAIS lcan limprove ldecision lmaking land ldescribe lthe lmultistep
lactivities linvolved lin lthe lprocess.
Decision lmaking lis la lcomplex, lmultistep lactivity: lidentify lthe lproblem, lcollect land linterpret
linformation, l evaluate lways lto lsolve lthe lproblem, lselect la l solution lmethodology, land limplement lthe
lsolution. lAn lAIS lcan lprovide lassistance lin lall lphases lof ldecision lmaking. lReports lcan lhelp lto
lidentify lpotential lproblems. lDecision lmodels land lanalytical ltools lcan lbe lprovided lto lusers. lQuery
llanguages lcan lgather lrelevant ldata lto lhelp lmake lthe ldecision. lVarious ltools, lsuch las lgraphical
linterfaces, lcan lhelp lthe ldecision lmaker linterpret ldecision lmodel lresults, levaluate lthem, land lchoose
lamong lalternative lcourses lof laction. lIn laddition, lthe lAIS lcan lprovide lfeedback lon lthe lresults lof
lactions.
An lAIS lcan lhelp limprove ldecision lmaking lin lseveral lways:
• It lcan lidentify lsituations lrequiring lmanagement laction. lFor lexample, la lcost lreport lwith la llarge
lvariance lmight lstimulate lmanagement lto linvestigate land, lif lnecessary, l take lcorrective laction.
• It lcan lreduce luncertainty land lthereby lprovide la lbasis lfor lchoosing lamong lalternative lactions.
• It lcan lstore linformation labout lthe lresults lof lprevious ldecisions, lwhich lprovides lvaluable lfeedback
lthat lcan lbe lused lto limprove lfuture ldecisions. lFor lexample, lif la lcompany ltries la lparticular
lmarketing lstrategy land lthe linformation lgathered lindicates lthat lit ldid lnot lsucceed, lthe lcompany
lcan luse lthat linformation lto lselect l a l different l marketing lstrategy.
• It lcan lprovide laccurate linformation lin la ltimely lmanner. lFor lexample, lWalmart lhas lan lenormous
ldatabase lthat lcontains ldetailed linformation labout lsales ltransactions lat leach lof lits lstores. lIt luses
lthis linformation lto loptimize lthe lamount l of l each lproduct l carried lat leach lstore.
• It lcan lanalyze lsales ldata lto ldiscover litems lthat lare lpurchased ltogether land lcan luse lsuch
linformation lto limprove lthe llayout lof lmerchandise lor lto lencourage ladditional lsales lof lrelated
litems. lFor lexample, l Amazon luses lits lsales ldatabase lto lsuggest ladditional lbooks lfor lcustomers lto
lpurchase.
1-1
.
,Ch. l1: lAccounting lInformation lSystems: lAn lOverview
1.3 A lsoftware lcompany lin lMunich lis lorganizing la lcompetition, linviting lbusiness lideas lthat
lpromote lthe luse lof lsmartphone ltechnology lto lconduct lbusiness. lYou lenter lyour lbusiness lplan,
lan linitiative lto linvolve lunemployed lteenagers land lyoung ladults lfrom llocal lcommunities lto
lgenerate lbusiness land lemployment, land lit lwas lso lwell lreceived lthat lyou lwere lawarded la
lspecial lprize lof l€5,000. lYou lplan lon lusing lyour lprize l money lto limplement lyour lidea.
a. Identify lkey ldecisions lyou lneed lto lmake, lthe linformation lyou lrequire lto lmake lthese lkey
ldecisions, l and lthe l five l major lbusiness l processes lyou lneed lto lengage lin.
b. Identify lthe lexternal lparties lwith lwhom lyou lwould lneed lto lexchange linformation land
lspecify lthe linformation lyou lwill lreceive lfrom lthese lparties land lthe linformation lthat lyou
lwill lsend lto lthese lparties.
The lauthor luses lthis las la lclass ldiscussion: lthe ltypical lprocess lthe lauthor lfollows lis lthat lstudents
lwork lthrough lthe lcontent lof la lchapter l before lit lis lcovered lin lclass. lStudents lare lrequired lto lanswer
lquestions l(such las lthis lone) land lsubmit lit lbefore lthe llecture. lThe lauthor lthen lassesses lthe lanswers,
land, lbased lon lproblems l identified lwithin lthe lanswers, lthe llecture lcontent lwould lbe ldetermined.
Students lare lthus lrequired lto lcomplete lthe lquestions lbefore lcoming lto lthe lclass. lIn lclass, lthe
lstudents lare ldivided linto lsmall lgroups l(about l4 l– l5 lstudents lper lgroup). lEach lsmall lgroup lhas lto
lcome lto lsome lconsensus labout lthe lanswers lthat lthey lwill lpresent lto lthe lclass. lThe lgroups lcould lbe
lrandomly lallocated, l or l the lgroups l could lbe lbased lon lsimilarity lin linitial lideas.
A lgroup lis lthen lselected l(or la lgroup lcan lvolunteer) lto lpresent ltheir lanswers lto lthe lclass. lSince lall
lstudents lhave lhad lthe lopportunity lto lengage lwith lthe lcontent l prior l to lthe lpresentation lin lclass, lthere
lshould lbe lmeaningful lcontributions land ldiscussions labout lhow lthe lpresented lsolutions lcould lbe
limproved.
Answers lwill lvary, lbut lthe lmain laim lis lto lget lstudents lto lunderstand l(for lpart la) lhow lthe lbusiness
lprocesses, lkey ldecisions, land linformation lneeds lare lall lintertwined l(as lshown lin lTable l1-2). lThis
lthen llinks l to lthe lexternal lparties l (part lb) lin lFigure l1-1.
Since lthe lscenario lindicated lthe luse lof lmobile lphones lto lconduct lbusiness, lstudents lshould lideally
lrelate ltheir l answers lto lsome lform lof lretail l(buying l/ l selling lof l goods l/ l services).
1-2
.
, Accounting lInformation lSystems l15e, lGE
1.4 How ldo lan lorganization’s lbusiness lprocesses land llines lof lbusiness laffect lthe ldesign lof lits
lAIS? l Give lseveral lexamples lof lhow ldifferences lamong lorganizations lare lreflected lin ltheir
lAIS.
An lorganization’s lAIS lmust lreflect lits lbusiness lprocesses land lits lline lof lbusiness. l For lexample:
• Manufacturing lcompanies lwill lneed la lset lof lprocedures land ldocuments lfor lthe lproduction
lcycle; l non-manufacturing lcompanies l do lnot.
• Government lagencies lneed lprocedures lto ltrack lseparately lall linflows land loutflows lfrom
lvarious lfunds, l to lensure lthat llegal lrequirements labout lthe luse lof lspecific lfunds lare lfollowed.
• Financial linstitutions ldo lnot lneed lextensive linventory lcontrol lsystems.
• Passenger lservice lcompanies l(e.g., lairlines, lbus, land ltrains) lgenerally lreceive lpayments lin
ladvance lof lproviding lservices. lTherefore, lextensive lbilling land laccounts lreceivable
lprocedures lare lnot lneeded; linstead, lthey lmust ldevelop lprocedures lto laccount lfor lprepaid
lrevenue.
• Construction lfirms ltypically lreceive lpayments lat lregular lintervals, lbased lon lthe lpercentage lof
lwork lcompleted. lThus, ltheir lrevenue lcycles lmust lbe ldesigned lto ltrack lcarefully lall lwork
lperformed land lthe lamount lof l work lremaining lto lbe ldone.
• Service lcompanies l(e.g., lpublic laccounting land llaw lfirms) ldo lnot lsell lphysical lgoods land,
ltherefore, ldo lnot lneed linventory lcontrol lsystems. lThey lmust ldevelop land lmaintain ldetailed
lrecords lof lthe lwork lperformed lfor leach lcustomer lto lprovide lbackup lfor lthe lamounts lbilled.
lTracking lindividual lemployee ltime lis l especially limportant lfor lthese lfirms lbecause llabor lis lthe
lmajor l cost l component.
1.5 Figure l1-5 lshows lthat lorganizational lculture land lthe ldesign lof lan lAIS linfluence lone lanother.
lWhat ldoes lthis limply labout lthe ldegree lto lwhich lan linnovative lsystem ldeveloped lby lone
lcompany lcan lbe ltransferred lto lanother lcompany?
Since lpeople lare lone lof lthe lbasic lcomponents lof lany lsystem, lit lwill lalways lbe ldifficult lto ltransfer
lsuccessfully la lspecific linformation lsystems ldesign lintact lto lanother lorganization. lConsidering lin
ladvance lhow laspects lof lthe lnew lorganizational lculture lare llikely lto laffect lacceptance lof lthe lsystem
lcan lincrease lthe lchances lfor l successful ltransfer. l Doing lso lmay lenable lthe lorganization lto ltake lsteps
lto lmitigate llikely lcauses lof lresistance. lThe ldesign lof lan lAIS, lhowever, litself lcan linfluence land
lchange lan lorganization’s lculture land lphilosophy. lTherefore, lwith ladequate ltop lmanagement
lsupport, limplementation lof la lnew lAIS lcan lbe lused las la lvehicle lto lchange lan lorganization. lThe
lreciprocal leffects lof ltechnology land lorganizational lculture lon lone lanother, lhowever, lmean lthat lit lis
lunrealistic lto lexpect lthat lthe lintroduction lof la lnew lAIS lwill lproduce lthe lsame lresults lobserved lin
lanother l organization.
1-3
.
