Solutions Manual_
Accounting Information Systems: Controls And Processes 4th Edition, (2020)
By Leslie Turner, Andrea B. Weickgenannt, Mary Kay Copeland
All Chapters| Verified Solutions| Rated A+
From: [Bestmaxsolutions.stuvia
, Turner/Accounting Information Systems, 4e Solutions
Manual
Chapter 1
Concept Check
1. D
2. D
3. B
4. C
5. C
6. C
7. B
8. B
9. B
10. A
Discussion Questions
11. (SO 1) How Might The Sales And Cash Collection Processes At A Wal-Mart Store Differ
From The Sales And Cash Collection Processes At Mcdonald’s? Wal-Mart Sells Items That
Are Pre-Priced And Bar Coded With That Price. Therefore The Cash Registers At Wal-Mart
Use Bar Code Scanners. However, Mcdonalds Sells Fast Foods That Are Not Bar Coded.
The Cash Registers At Mcdonalds Use Touch Screen Systems That Require A Cashier To
Indicate The Items Purchased. The Cash Collection Processes Are Not Different. In Both
Cases, The Employee Collects The Cash Or Credit Card, And Returns Any Change.
12. (SO 1) Can You Think Of Any Procedures In Place At Mcdonald’s That Are Intended To
Ensure The Accuracy Of Your Order? Student Responses May Vary, However, Following
Are A Few Examples: Often, At Either The Drive-Through Or The Inside Cash Register,
The Customer Can See A Screen That Displays The Items Ordered. In Addition, A Fast
Food Restaurant Uses Pre-Designed Slots To Hold Certain Types Of Menu Items. When A
Customer Orders A Particular Sandwich, The Person Filling The Order Knows Exactly
Which Slot To Pull The Sandwich From. Each Customer Receives A Printed Receipt With
The Items Listed And The Customer Can Verify The Accuracy.
13. (SO 1) How Might The Sales And Cash Collection Processes At Boeing Co. (Maker Of
Commercial Passenger Jets) Differ From The Sales And Cash Collection Processes At
Page 1-1
,Chapter 1 Solutions Introduction to AIS
Mcdonald’s? Boeing Does Not Sell To End-User Consumers; Rather, It Sells To
Companies Such As Airlines. Therefore Boeing Does Not Have Stores, Nor Inventory In
Stores, Nor Cash Registers To Process Sales. Boeing Is More Likely To Maintain A Sales
Force That Visits Potential Customers To Solicit Sales. Those Sales May Be Entered By
The Salesperson Into A Laptop Computer Connected To Boeing’s Network. Mcdonald’s,
On The Other Hand, Sells To Consumers, Uses Order Input Touch Screens At Each
Location, And Maintains Supplies Of Perishable Food Products.
14. (SO 1) Are There Business Processes That Do Not In Some Way Affect Accounting
Records Or Financial Statements? There May Be Processes That Do Not Directly Affect
Accounting Records (Such As Recruiting And Hiring A New Employee), But All Processes
Have A Direct Or Indirect Affect On Accounting Records. All Processes Use Resources
Such As Material Or Employee Time. Therefore, All Processes Have Expenses Related To
Those Processes That Will Affect The Accounting Records.
15. (SO 2) Briefly Describe The Five Components Of An Accounting Information System.
1. Work Steps Within A Business Process That Capture Accounting Data As The
Business Process Occurs.
2. Manual Or Computer-Based Records That Capture The Accounting Data From
The Business Processes.
3. Internal Controls Within The Business Process That Safeguard Assets And
Ensure Accuracy And Completeness Of The Data.
4. Work Steps That Process, Classify, Summarize, And Consolidate The Raw
Accounting Data.
5. Work Steps That Generate Both Internal And External Reports.
16. (SO 2) Describe How Sales Data Are Captured And Recorded At A Restaurant Such As
Applebee’s. At Most Applebee’s Restaurants, A Server Writes The Order On A Pad And
Carries That Pad To A Cash Register. The Server Enters The Order On A Touch Screen
Terminal. The Order Information Is Then Displayed On A Terminal In The Kitchen. When
The Customer Has Finished The Meal, The Server Prints A Check And Delivers The Check
To The Table. The Customer Pays The Server By Using Cash Or A Credit Card. The
Server Processes The Payment On The Touch Screen Register And Returns The Change
Or Credit Card Slip To The Customer.
17. (SO 2) What Occurs In An Accounting Information System That Classifies Accounting
Transactions? For Each Business Process That Affects Accounting Records, The
Accounting Information System Must Capture Any Resulting Accounting Data, Record The
Data, Process It Through Classification, Summarization, And Consolidation, And Generate
Appropriate Reports.
18. (SO 2) What Are The Differences Between Internal Reports And External Reports
Generated By The Accounting Information System? Internal Reports Are Used By
Management To Oversee And Direct Processes Within The Organization. External Reports
Are The Financial Statements Used By Investors And Creditors To Make
Page 1-2
,Chapter 1 Solutions Introduction to AIS
Decisions About Investing Or Extending Credit To The Organization.
19. (SO 3) What Types Of Businesses Are In The Supply Chain Of An Automobile
Manufacturer? The Types Of Businesses In An Automaker’s Supply Chain Are Often
Manufacturers Of Parts Used In Cars. This Would Include Manufacturers Of Tires,
Batteries, Steel, Plastic, Vinyl And Leather, As Well As Many Other Manufacturers Making
The Thousands Of Parts In A Car.
20. (SO 3) When A Company Evaluates A Supplier Of Materials, What Kinds Of Characteristics
Might Be Evaluated? The Supplier’s Characteristics That Are Likely To Be Evaluated
Include Price And Payment Terms, Quality, Reliability Of The Materials, As Well As
Whether The Supplier Can Deliver Materials When Needed.
21. (SO 3) How Do You Think A Company May Be Able To Influence A Supplier To Meet Its
Business Processing Requirements? A Company May Be Able To Influence A Supplier By
Choosing Only Suppliers That Meet Expectations Regarding The Terms Of Price, Quality,
And Delivery Timing. Those Suppliers That Do Not Meet These Expectations May Not Be
Used In The Future. This Exerts Some Influence Over Suppliers, As The Suppliers Will
Lose Business If They Do Not Meet The Buyer’s Requirements.
22. (SO 4) Describe Any IT Enablement That You Have Noticed At A Large Retail Store Such As
Wal-Mart Or Target. The Most Noticeable IT Enablement Is The Use Of Bar Coded
Systems On The Products And How They Are Read By The Cash Registers.
23. (SO 4) How Do You Think The World Wide Web (WWW) Has Led To Business Process
Reengineering At Companies Such As Lands End Or J.Crew? Prior To The World Wide
Web, Customers Placed Orders Either On The Phone Or By Mail. Both Phone And Mail
Orders Require Employees To Take The Order And Enter It Into The Computer System.
Using Online Sales, Customers Enter Their Own Orders And No Company Personnel Are
Needed To Key Orders Into The Computer System. Therefore, There Was A Major Change
In The Number Of People Employed To Key Orders.
24. (SO 4) What Two Kinds Of Efficiency Improvement Result From Business Process
Reengineering In Conjunction With IT Systems? The Use Of IT Systems Usually Leads To
Two Kinds Of Efficiency Improvements. First, The Underlying Processes Are
Reengineered (Through Rethinking And Redesign) To Be Conducted More Efficiently.
Second, The IT Systems Improve The Efficiency Of The Underlying Processes.
25. (SO 5) Explain The Differences Between A Field, A Record, And A File. A Field Is One Set
Of Characters That Make Up A Single Data Item. For Example, Last Name Would Be A
Field In A Customer Database. A Record Is A Collection Of Related Fields For A Single
Entity. For Example, Last Name, First Name, Address, Phone Number, And Credit Card
Number Fields Might Make Up A Single Customer Record. A File Is A Collection Of Similar
Records. For Example, All Customer Records Together Make Up A Customer File.
Page 1-3
,Chapter 1 Solutions Introduction to AIS
26. (SO 5) Explain Why Random Access Files Would Be Preferable To Sequential Access Files
When Payroll Personnel Are Changing A Pay Rate For A Single Employee. When The
Desired Action Is To Access A Single Record, Random Access Is Preferable. If Sequential
Access Storage Is Used, All Records Must Be Read In Sequence Until The Desired Record
Is Reached. On The Other Hand, Random Access Allows A Single Record To Be Accessed
Without The Necessity Of Reading Other Records. This Makes It More Efficient To Access
A Particular Employee Record To Change The Pay Rate.
27. (SO 5) Why Do Real-Time Systems Require Direct Access Files? If Transactions Are To
Be Processed Online And In Real-Time, It Is Necessary That The Computer Access A
Single Record Immediately. Thus, Direct Access Files Are Required So The Records Can
Be Accessed In Real-Time.
28. (SO 5) Why Is Data Contained In The Data Warehouse Called Nonvolatile? Each Time A
New Transaction Is Completed, Parts Of The Operational Data Must Be Updated.
Therefore, The Operational Database Is Volatile – With Constantly Changing Information.
However, The Data Warehouse Does Not Change With Each Transaction. The Data
Warehouse Is Only Changed When Periodic Updates Occur. The Data In The Data
Warehouse Are Nonvolatile Because They Do Not Change Constantly.
29. (SO 5) How Is An Extranet Different From The Internet? The Extranet Allows Access Only
To Selected Outsiders, While The Internet Is Open To An Unlimited Number Of Outsiders
(Essentially Anyone Having Access To The Internet). On The Other Hand, Extranets Are
Typically Used By Companies To Interact With Specific Suppliers And Customers Who
Have Been Granted Access To A Company’s Network.
30. (SO 6) Prepare A List Of The Types Of Businesses That You Have Been In That Use Point
Of Sale Systems. Student Responses May Vary, But Would Likely Include Department
Stores, Grocery Stores, Specialty Stores, Restaurants, Gas Stations, And Car Washes.
31. (SO 6) What Do You Think Would Be The Advantages Of An E-Payables System Over A
Traditional System That Uses Paper Purchase Orders And Invoices? An E-Payables
System Should Be Faster And More Efficient Than A Paper-Based System. In Addition,
Fewer Processing Errors Should Be Expected From An E-Payables System.
32. (SO 7) Describe Why Enterprise Risk Management Is Important. All Organizations Face
Risks And Enterprise Risk Management (ERM) Assists Managers In Reducing And
Controlling Risk. ERM Also Involves Personnel Across The Entire Business Organization,
As They Implement Strategies To Achieve The Organization’s Objectives.
33. (SO 7) What Is The Difference Between General Controls And Application Controls? General
Controls Apply Overall To The IT Accounting System. They Are Controls That Are Not
Restricted To Any Particular Accounting Application. An Example Of A General Control Is
The Use Of Passwords To Allow Only Authorized Users To Log Into An IT-Based Accounting
System. Application Controls Are Used Specifically In Accounting Applications To Control
Inputs, Processing, And Output. Application Controls Are
Page 1-4
,Chapter 1 Solutions Introduction to AIS
Intended To Insure That Inputs Are Accurate And Complete, Processing Is Accurate And
Complete, And That Outputs Are Properly Distributed, Controlled, And Disposed.
34. (SO 7) In What Way Is A Code Of Ethics Beneficial To An Organization? If Top
Management Institutes A Code Of Ethics And Emphasizes This Code By Modeling Its
Principles And Disciplining Or Discharging Those Who Violate The Code, It Can Help
Reduce Unethical Behavior In The Organization.
35. (SO 8) What Roles Do Accountants Have In Relation To The Accounting Information
System? Accountants Are Users Of The AIS, They Assist In The Design Of The AIS, And
They Are Auditors Of The AIS.
Brief Exercises
36. (SO 1) For Each Category Of Business Processes (Revenue, Expenditure, Conversion,
Administrative), Give An Example Of A Business Process. Student Responses Are Likely To
Vary Greatly, As They May Refer To Any Of The Subprocesses Within Each Category. For
Example, The Revenue Processes Include Sales, Sales Returns, And Cash Collections;
The Expenditure Processes Include Purchasing, Purchase Returns, Cash Disbursements,
Payroll, And Fixed Asset Processes; The Conversion Processes Include Planning, Resource
Management, And Logistics; Administrative Processes Include Capital Processes,
Investments, And General Ledger Processes. Accordingly, Any Type Of Business Process
Can Be Cited To Answer This Question, But The Student Must Match The Example With
The Appropriate Process.
37. (SO 2) Think Of A Company That You Have Worked For Or With Which You Have Done
Business. Which Departments Within The Company Need Reports Generated By The
Accounting Information Systems? Student Responses Are Likely To Vary Greatly, As Nearly
Every Department Within A Business Organization Uses Reports Generated By The
Accounting Information Systems. For Example, Sales Departments Need Customer Account
Information To Help In Their Efforts To Sell Products To Customers. Purchasing
Departments Need Product Information To Help In Their Efforts To Purchase Products
Needed In The Business. These Types Of Information Are Maintained In Accounting
Information Systems. There Are Numerous Additional Examples That Could Apply.
38. (SO 3) Explain A Supply Chain Linkage And Give An Example. A Supply Chain Linkage Is
The Connection Of Activities In The Supply Chain, Including The Entities, Processes, And
Information Flows That Involve The Movement Of Materials, Funds, And Related
Information Through The Full Logistics Process – From The Acquisition Of Raw Materials
To The Delivery Of Finished Products To The End User. It Therefore Includes The Linked
Activities Of Vendors, Service Providers, Customers, And Intermediaries. In Addition To The
Example Of Mcdonald’s Buns Given In The Text, Another Example Would Be A Shirt Sold
By The Gap. The Gap’s Supply Chain Linkage Would Likely Include A Supplier From Whom
The Shirt Was Purchased, A Manufacturer Who Assembled And Sewed The Shirt,
Page 1-5
, Chapter 1 Solutions Introduction to AIS
A Secondary Supplier That Provided The Fabric From Which The Shirt Was Constructed,
And A Farmer Who Raised Cotton Used To Make The Fabric.
39. (SO 4) Explain How Business Process Reengineering Occurs. Also, Explain How It Differs
From The Typical Changes In Company Policies. With Business Process Reengineering
(BPR), The Underlying Business Processes Are Reengineered To Be Conducted More
Efficiently. In Other Words, A Comprehensive Rethinking And Redesign Takes Place In
Order To Enhance Performance Of The Process. A Key Component Of BPR Is The
Leveraging Of IT Capabilities To Improve Process Efficiencies. BPR Differs From Typically
Organizational Change In That It Involves “Thinking Outside The Box” In Order To Offer
Completely New And Improved Methods For Business Processes.
40. (SO 4, 6) Describe Automated Matching In The Purchasing Process And Explain How This
IT Enablement Has Improved Efficiency In Companies.
Microsoft Dynamics GP Has Automated Purchase Order Matching Functionality. This
Functionality Electronically Matches A Purchase Order, Receiving Report And Vendor
Invoice Within The System.
In MS Dynamics GP A Vendor Purchase Order Can Be Created And Printed In The System.
The Purchase Order Is Sent To The Vendor Identifying The Amount Of The Authorized
Purchase. When The Goods Or Services Are Received, The Person Responsible For
Logging The Receipt Can Pull Up The Original Purchase Order And Receive The Items On
The PO. If There Are Any Discrepancies Between What Was Ordered And What Was
Received The System Adjusts For The Discrepancies. Later When The Vendor Invoices For
The Goods Or Services That Were Received, The Matched PO And Receiving Report Can
Be Selected And Compared With The Prices And Quantities Of The Items Invoiced. If There
Are Any Differences Between The Amounts Ordered/Received And Invoiced, The System
Will Adjust For The Differences. This Automated Matching Of A PO/Receiving Report And
Vendor Invoice Eliminates The Need To Manually Match These Items.
Automated Matching Is An Example Of IT Enablement. In This Example Of IT Enablement,
The Process Is More Streamlined, Efficient And Reduces The Likelihood Of Errors..
41. (SO 5) For An Accounts Receivable System, What Kind Of Data Would Be Found In The
Master Files And Transaction Files, Respectively? An Accounts Receivable Master File
Would Include Relatively Permanent Data Necessary To Process Customer Transactions.
This Would Include A Record For Each Customer. The Data In The Master File Would
Likely Include Customer Name, Address, Phone Numbers, Credit Limit, And Current
Balance. A Transaction File For Accounts Receivable Would Contain The Relatively
Temporary Data That Must Be Processed To Update The Master File, Such As Details
From Individual Sales And Cash Collection Transactions From Customers.
Page 1-6
Accounting Information Systems: Controls And Processes 4th Edition, (2020)
By Leslie Turner, Andrea B. Weickgenannt, Mary Kay Copeland
All Chapters| Verified Solutions| Rated A+
From: [Bestmaxsolutions.stuvia
, Turner/Accounting Information Systems, 4e Solutions
Manual
Chapter 1
Concept Check
1. D
2. D
3. B
4. C
5. C
6. C
7. B
8. B
9. B
10. A
Discussion Questions
11. (SO 1) How Might The Sales And Cash Collection Processes At A Wal-Mart Store Differ
From The Sales And Cash Collection Processes At Mcdonald’s? Wal-Mart Sells Items That
Are Pre-Priced And Bar Coded With That Price. Therefore The Cash Registers At Wal-Mart
Use Bar Code Scanners. However, Mcdonalds Sells Fast Foods That Are Not Bar Coded.
The Cash Registers At Mcdonalds Use Touch Screen Systems That Require A Cashier To
Indicate The Items Purchased. The Cash Collection Processes Are Not Different. In Both
Cases, The Employee Collects The Cash Or Credit Card, And Returns Any Change.
12. (SO 1) Can You Think Of Any Procedures In Place At Mcdonald’s That Are Intended To
Ensure The Accuracy Of Your Order? Student Responses May Vary, However, Following
Are A Few Examples: Often, At Either The Drive-Through Or The Inside Cash Register,
The Customer Can See A Screen That Displays The Items Ordered. In Addition, A Fast
Food Restaurant Uses Pre-Designed Slots To Hold Certain Types Of Menu Items. When A
Customer Orders A Particular Sandwich, The Person Filling The Order Knows Exactly
Which Slot To Pull The Sandwich From. Each Customer Receives A Printed Receipt With
The Items Listed And The Customer Can Verify The Accuracy.
13. (SO 1) How Might The Sales And Cash Collection Processes At Boeing Co. (Maker Of
Commercial Passenger Jets) Differ From The Sales And Cash Collection Processes At
Page 1-1
,Chapter 1 Solutions Introduction to AIS
Mcdonald’s? Boeing Does Not Sell To End-User Consumers; Rather, It Sells To
Companies Such As Airlines. Therefore Boeing Does Not Have Stores, Nor Inventory In
Stores, Nor Cash Registers To Process Sales. Boeing Is More Likely To Maintain A Sales
Force That Visits Potential Customers To Solicit Sales. Those Sales May Be Entered By
The Salesperson Into A Laptop Computer Connected To Boeing’s Network. Mcdonald’s,
On The Other Hand, Sells To Consumers, Uses Order Input Touch Screens At Each
Location, And Maintains Supplies Of Perishable Food Products.
14. (SO 1) Are There Business Processes That Do Not In Some Way Affect Accounting
Records Or Financial Statements? There May Be Processes That Do Not Directly Affect
Accounting Records (Such As Recruiting And Hiring A New Employee), But All Processes
Have A Direct Or Indirect Affect On Accounting Records. All Processes Use Resources
Such As Material Or Employee Time. Therefore, All Processes Have Expenses Related To
Those Processes That Will Affect The Accounting Records.
15. (SO 2) Briefly Describe The Five Components Of An Accounting Information System.
1. Work Steps Within A Business Process That Capture Accounting Data As The
Business Process Occurs.
2. Manual Or Computer-Based Records That Capture The Accounting Data From
The Business Processes.
3. Internal Controls Within The Business Process That Safeguard Assets And
Ensure Accuracy And Completeness Of The Data.
4. Work Steps That Process, Classify, Summarize, And Consolidate The Raw
Accounting Data.
5. Work Steps That Generate Both Internal And External Reports.
16. (SO 2) Describe How Sales Data Are Captured And Recorded At A Restaurant Such As
Applebee’s. At Most Applebee’s Restaurants, A Server Writes The Order On A Pad And
Carries That Pad To A Cash Register. The Server Enters The Order On A Touch Screen
Terminal. The Order Information Is Then Displayed On A Terminal In The Kitchen. When
The Customer Has Finished The Meal, The Server Prints A Check And Delivers The Check
To The Table. The Customer Pays The Server By Using Cash Or A Credit Card. The
Server Processes The Payment On The Touch Screen Register And Returns The Change
Or Credit Card Slip To The Customer.
17. (SO 2) What Occurs In An Accounting Information System That Classifies Accounting
Transactions? For Each Business Process That Affects Accounting Records, The
Accounting Information System Must Capture Any Resulting Accounting Data, Record The
Data, Process It Through Classification, Summarization, And Consolidation, And Generate
Appropriate Reports.
18. (SO 2) What Are The Differences Between Internal Reports And External Reports
Generated By The Accounting Information System? Internal Reports Are Used By
Management To Oversee And Direct Processes Within The Organization. External Reports
Are The Financial Statements Used By Investors And Creditors To Make
Page 1-2
,Chapter 1 Solutions Introduction to AIS
Decisions About Investing Or Extending Credit To The Organization.
19. (SO 3) What Types Of Businesses Are In The Supply Chain Of An Automobile
Manufacturer? The Types Of Businesses In An Automaker’s Supply Chain Are Often
Manufacturers Of Parts Used In Cars. This Would Include Manufacturers Of Tires,
Batteries, Steel, Plastic, Vinyl And Leather, As Well As Many Other Manufacturers Making
The Thousands Of Parts In A Car.
20. (SO 3) When A Company Evaluates A Supplier Of Materials, What Kinds Of Characteristics
Might Be Evaluated? The Supplier’s Characteristics That Are Likely To Be Evaluated
Include Price And Payment Terms, Quality, Reliability Of The Materials, As Well As
Whether The Supplier Can Deliver Materials When Needed.
21. (SO 3) How Do You Think A Company May Be Able To Influence A Supplier To Meet Its
Business Processing Requirements? A Company May Be Able To Influence A Supplier By
Choosing Only Suppliers That Meet Expectations Regarding The Terms Of Price, Quality,
And Delivery Timing. Those Suppliers That Do Not Meet These Expectations May Not Be
Used In The Future. This Exerts Some Influence Over Suppliers, As The Suppliers Will
Lose Business If They Do Not Meet The Buyer’s Requirements.
22. (SO 4) Describe Any IT Enablement That You Have Noticed At A Large Retail Store Such As
Wal-Mart Or Target. The Most Noticeable IT Enablement Is The Use Of Bar Coded
Systems On The Products And How They Are Read By The Cash Registers.
23. (SO 4) How Do You Think The World Wide Web (WWW) Has Led To Business Process
Reengineering At Companies Such As Lands End Or J.Crew? Prior To The World Wide
Web, Customers Placed Orders Either On The Phone Or By Mail. Both Phone And Mail
Orders Require Employees To Take The Order And Enter It Into The Computer System.
Using Online Sales, Customers Enter Their Own Orders And No Company Personnel Are
Needed To Key Orders Into The Computer System. Therefore, There Was A Major Change
In The Number Of People Employed To Key Orders.
24. (SO 4) What Two Kinds Of Efficiency Improvement Result From Business Process
Reengineering In Conjunction With IT Systems? The Use Of IT Systems Usually Leads To
Two Kinds Of Efficiency Improvements. First, The Underlying Processes Are
Reengineered (Through Rethinking And Redesign) To Be Conducted More Efficiently.
Second, The IT Systems Improve The Efficiency Of The Underlying Processes.
25. (SO 5) Explain The Differences Between A Field, A Record, And A File. A Field Is One Set
Of Characters That Make Up A Single Data Item. For Example, Last Name Would Be A
Field In A Customer Database. A Record Is A Collection Of Related Fields For A Single
Entity. For Example, Last Name, First Name, Address, Phone Number, And Credit Card
Number Fields Might Make Up A Single Customer Record. A File Is A Collection Of Similar
Records. For Example, All Customer Records Together Make Up A Customer File.
Page 1-3
,Chapter 1 Solutions Introduction to AIS
26. (SO 5) Explain Why Random Access Files Would Be Preferable To Sequential Access Files
When Payroll Personnel Are Changing A Pay Rate For A Single Employee. When The
Desired Action Is To Access A Single Record, Random Access Is Preferable. If Sequential
Access Storage Is Used, All Records Must Be Read In Sequence Until The Desired Record
Is Reached. On The Other Hand, Random Access Allows A Single Record To Be Accessed
Without The Necessity Of Reading Other Records. This Makes It More Efficient To Access
A Particular Employee Record To Change The Pay Rate.
27. (SO 5) Why Do Real-Time Systems Require Direct Access Files? If Transactions Are To
Be Processed Online And In Real-Time, It Is Necessary That The Computer Access A
Single Record Immediately. Thus, Direct Access Files Are Required So The Records Can
Be Accessed In Real-Time.
28. (SO 5) Why Is Data Contained In The Data Warehouse Called Nonvolatile? Each Time A
New Transaction Is Completed, Parts Of The Operational Data Must Be Updated.
Therefore, The Operational Database Is Volatile – With Constantly Changing Information.
However, The Data Warehouse Does Not Change With Each Transaction. The Data
Warehouse Is Only Changed When Periodic Updates Occur. The Data In The Data
Warehouse Are Nonvolatile Because They Do Not Change Constantly.
29. (SO 5) How Is An Extranet Different From The Internet? The Extranet Allows Access Only
To Selected Outsiders, While The Internet Is Open To An Unlimited Number Of Outsiders
(Essentially Anyone Having Access To The Internet). On The Other Hand, Extranets Are
Typically Used By Companies To Interact With Specific Suppliers And Customers Who
Have Been Granted Access To A Company’s Network.
30. (SO 6) Prepare A List Of The Types Of Businesses That You Have Been In That Use Point
Of Sale Systems. Student Responses May Vary, But Would Likely Include Department
Stores, Grocery Stores, Specialty Stores, Restaurants, Gas Stations, And Car Washes.
31. (SO 6) What Do You Think Would Be The Advantages Of An E-Payables System Over A
Traditional System That Uses Paper Purchase Orders And Invoices? An E-Payables
System Should Be Faster And More Efficient Than A Paper-Based System. In Addition,
Fewer Processing Errors Should Be Expected From An E-Payables System.
32. (SO 7) Describe Why Enterprise Risk Management Is Important. All Organizations Face
Risks And Enterprise Risk Management (ERM) Assists Managers In Reducing And
Controlling Risk. ERM Also Involves Personnel Across The Entire Business Organization,
As They Implement Strategies To Achieve The Organization’s Objectives.
33. (SO 7) What Is The Difference Between General Controls And Application Controls? General
Controls Apply Overall To The IT Accounting System. They Are Controls That Are Not
Restricted To Any Particular Accounting Application. An Example Of A General Control Is
The Use Of Passwords To Allow Only Authorized Users To Log Into An IT-Based Accounting
System. Application Controls Are Used Specifically In Accounting Applications To Control
Inputs, Processing, And Output. Application Controls Are
Page 1-4
,Chapter 1 Solutions Introduction to AIS
Intended To Insure That Inputs Are Accurate And Complete, Processing Is Accurate And
Complete, And That Outputs Are Properly Distributed, Controlled, And Disposed.
34. (SO 7) In What Way Is A Code Of Ethics Beneficial To An Organization? If Top
Management Institutes A Code Of Ethics And Emphasizes This Code By Modeling Its
Principles And Disciplining Or Discharging Those Who Violate The Code, It Can Help
Reduce Unethical Behavior In The Organization.
35. (SO 8) What Roles Do Accountants Have In Relation To The Accounting Information
System? Accountants Are Users Of The AIS, They Assist In The Design Of The AIS, And
They Are Auditors Of The AIS.
Brief Exercises
36. (SO 1) For Each Category Of Business Processes (Revenue, Expenditure, Conversion,
Administrative), Give An Example Of A Business Process. Student Responses Are Likely To
Vary Greatly, As They May Refer To Any Of The Subprocesses Within Each Category. For
Example, The Revenue Processes Include Sales, Sales Returns, And Cash Collections;
The Expenditure Processes Include Purchasing, Purchase Returns, Cash Disbursements,
Payroll, And Fixed Asset Processes; The Conversion Processes Include Planning, Resource
Management, And Logistics; Administrative Processes Include Capital Processes,
Investments, And General Ledger Processes. Accordingly, Any Type Of Business Process
Can Be Cited To Answer This Question, But The Student Must Match The Example With
The Appropriate Process.
37. (SO 2) Think Of A Company That You Have Worked For Or With Which You Have Done
Business. Which Departments Within The Company Need Reports Generated By The
Accounting Information Systems? Student Responses Are Likely To Vary Greatly, As Nearly
Every Department Within A Business Organization Uses Reports Generated By The
Accounting Information Systems. For Example, Sales Departments Need Customer Account
Information To Help In Their Efforts To Sell Products To Customers. Purchasing
Departments Need Product Information To Help In Their Efforts To Purchase Products
Needed In The Business. These Types Of Information Are Maintained In Accounting
Information Systems. There Are Numerous Additional Examples That Could Apply.
38. (SO 3) Explain A Supply Chain Linkage And Give An Example. A Supply Chain Linkage Is
The Connection Of Activities In The Supply Chain, Including The Entities, Processes, And
Information Flows That Involve The Movement Of Materials, Funds, And Related
Information Through The Full Logistics Process – From The Acquisition Of Raw Materials
To The Delivery Of Finished Products To The End User. It Therefore Includes The Linked
Activities Of Vendors, Service Providers, Customers, And Intermediaries. In Addition To The
Example Of Mcdonald’s Buns Given In The Text, Another Example Would Be A Shirt Sold
By The Gap. The Gap’s Supply Chain Linkage Would Likely Include A Supplier From Whom
The Shirt Was Purchased, A Manufacturer Who Assembled And Sewed The Shirt,
Page 1-5
, Chapter 1 Solutions Introduction to AIS
A Secondary Supplier That Provided The Fabric From Which The Shirt Was Constructed,
And A Farmer Who Raised Cotton Used To Make The Fabric.
39. (SO 4) Explain How Business Process Reengineering Occurs. Also, Explain How It Differs
From The Typical Changes In Company Policies. With Business Process Reengineering
(BPR), The Underlying Business Processes Are Reengineered To Be Conducted More
Efficiently. In Other Words, A Comprehensive Rethinking And Redesign Takes Place In
Order To Enhance Performance Of The Process. A Key Component Of BPR Is The
Leveraging Of IT Capabilities To Improve Process Efficiencies. BPR Differs From Typically
Organizational Change In That It Involves “Thinking Outside The Box” In Order To Offer
Completely New And Improved Methods For Business Processes.
40. (SO 4, 6) Describe Automated Matching In The Purchasing Process And Explain How This
IT Enablement Has Improved Efficiency In Companies.
Microsoft Dynamics GP Has Automated Purchase Order Matching Functionality. This
Functionality Electronically Matches A Purchase Order, Receiving Report And Vendor
Invoice Within The System.
In MS Dynamics GP A Vendor Purchase Order Can Be Created And Printed In The System.
The Purchase Order Is Sent To The Vendor Identifying The Amount Of The Authorized
Purchase. When The Goods Or Services Are Received, The Person Responsible For
Logging The Receipt Can Pull Up The Original Purchase Order And Receive The Items On
The PO. If There Are Any Discrepancies Between What Was Ordered And What Was
Received The System Adjusts For The Discrepancies. Later When The Vendor Invoices For
The Goods Or Services That Were Received, The Matched PO And Receiving Report Can
Be Selected And Compared With The Prices And Quantities Of The Items Invoiced. If There
Are Any Differences Between The Amounts Ordered/Received And Invoiced, The System
Will Adjust For The Differences. This Automated Matching Of A PO/Receiving Report And
Vendor Invoice Eliminates The Need To Manually Match These Items.
Automated Matching Is An Example Of IT Enablement. In This Example Of IT Enablement,
The Process Is More Streamlined, Efficient And Reduces The Likelihood Of Errors..
41. (SO 5) For An Accounts Receivable System, What Kind Of Data Would Be Found In The
Master Files And Transaction Files, Respectively? An Accounts Receivable Master File
Would Include Relatively Permanent Data Necessary To Process Customer Transactions.
This Would Include A Record For Each Customer. The Data In The Master File Would
Likely Include Customer Name, Address, Phone Numbers, Credit Limit, And Current
Balance. A Transaction File For Accounts Receivable Would Contain The Relatively
Temporary Data That Must Be Processed To Update The Master File, Such As Details
From Individual Sales And Cash Collection Transactions From Customers.
Page 1-6
