FACULTY OF ACCOUNTING AND MANAGEMENT (FAM) ACADEMIC YEAR: 2012/2013 MAY 2012 TRIMESTER UKAI 2023 ACCOUNTING INFORMATION SYSTEMS 1 Bac!"#$ #% Acc#&'()'* (H#'+) T&(#$)a" S#"&()#'+ T&(#$)a" 2 REVIEW QUESTIONS Page 1 of 10 UKAI 2023- Tutorial Solution 1. Operational, operations management, middle management, and top management. Horizontal flows support operation-level tasks. The information is highly detailed about the day-to-day operations. Vertial flows distribute summarized information to managers at all levels, and this information flows upward. !nstrutions, "uotas, and budgets also flow downward. #. $ystem deomposition is the proess of dividing the system into smaller subsystem parts, while interdependeny is the interation between the subsystems. They are related by the degree and nature of the interation between the subsystems. !f a vital subsystem fails, the entire system will most likely fail. %. &ata are fats that are olleted in a 'raw( form and made meaningful through proesses suh as sorting, aggregating, lassifying, mathematially manipulating, and summarizing. The meaningful data is onsidered to be information. Page 2 of 10 UKAI 2023- Tutorial Solution ). *!$s proess finanial transations and ertain nonfinanial transations that diretly affet the proessing finanial transations. The e+ternal finanial reporting douments of *!$ are sub,et to legal and professional standards. -onse"uently, management and aountants have greater legal responsibility for *!$ appliations than for .!$ appliations. The .!$ proesses nonfinanial transations that are outside the sope of the *!$. .!$ appliations e+pand the information set provided to suh areas as prodution, sales, marketing, and inventory management. .!$ often draws from and builds on data from the *!$. /. 0evenue yle, e+penditure yle, and onversion yle. 1. $torage, retrieval, and deletion. 2. 3eedbak is output that is sent bak to the system as a soure of data. 3eedbak is useful beause it an be used to initiate or ad,ust the system proesses. 14. a. to support the stewardship funtion of management, b. to support the deision-making proesses of managers, and . to support the day-to-day operations of the firm. Page 3 of 10 UKAI 2023- Tutorial Solution 15. 6udgets and standards are set by upper-management levels. The responsibility for meeting these goals is passed to the managers at the losest operational level. !n order for these managers to have the power to make a differene as to whether these goals and7or standards are met, they must be entrusted with the appropriate level of authority to make deisions. 0esponsibility of goals and standards, along with orresponding authoritative powers, flow downward. The results of the operations must flow upward to upper-level management. These upward flows represent reports, whih hold managers aountable for their deisions and management ations. 1#. Turnkey systems are ready to implement systems that may be purhased. 6akbone systems are partially developed systems with an underlying basi struture that is built on to suit the lient8s uni"ue needs. Vendor-supported systems are ustom systems provided, maintained, and supported by a ommerial vendor. 1%. !nternal auditors are responsible for in-house appraisal of the finanial reporting system. !nternal auditors are onerned with deterring and deteting fraud and for onduting 9&: audits. 9+ternal auditors are independent -:*s engaged by the firm to attest to the ompleteness and auray of the finanial statements. 9+ternal auditors work together with the internal auditors. 1). The database administrator is responsible for the seurity and integrity of data stored in a entral database. Page 4 of 10 UKAI 2023- Tutorial Solution 1/. ;eographi loation, produt lines, and funtion. 11. !n a entralized data proessing approah, the omputer servies funtion is entrally loated. The databases are housed in one plae where all of the data proessing ours by one or more main omputers. *ll systems development and maintenane work for the entire organization is performed by systems professionals. 9nd users wishing to have new systems or features must submit a formal re"uest to this group and are usually prioritized and plaed in a "ueue. !n a distributed data-proessing approah, the -:<s are spread out and ontrol over data and proessing is at the information proessing unit =!:<> level. Thus, end users have more influene over the systems development pro,ets, whih are typially handled by systems professionals at the !:< level. DISCUSSION QUESTIONS Page 5 of 10 UKAI 2023- Tutorial Solution 1. The level of detail neessary for the stokholders is highly aggregated and typially follows the format presribed by the $9- and ;**:. .uh more detailed information is neessary for middle management to plan and ontrol operations. Highly detailed information is needed at the operations management level in order to run the day-to-day business proesses and operations. 5. 3inanial transations affet the aounts in the balane sheet in some manner. Three e+amples are 1> use of e"uipment-depreiation, 5> payment of a bond payable, and #> reeipt of ash from a ustomer for a sale previously made on aount. ?onfinanial transations inlude business events that do not impat the finanial statements. Three e+amples are 1> a book heked out by a student in a shool library, 5> the reording of a ustomer omplaint via a toll-free hotline, and #> status reports of researh and development pro,ets. /. 9ffiieny is ruial to an *!$. The ost of olleting and produing information should not outweigh its benefits. 3urther, the appliations should be run in a manner that plaes the least strain on the overall system. 3or e+ample, the printing of heks to vendors should not be done during the day if it slows down the online sales order proessing system in a multitasking environment. !n order for a system to be effetive, the appropriate data should be proessed, and the resulting information disseminated to the appropriate users. 3or e+ample, an aounts reeivable delin"uent report should be Page 6 of 10 UKAI 2023- Tutorial Solution sent to the olletion department in a timely fashion, so that measures an be taken to ollet the funds. The ability to reat to a hange is very important, espeially in an 30$ where reporting re"uirements and standards hange fre"uently. Page 7 of 10 UKAI 2023- Tutorial Solution 2. The internal auditors are responsible for deteting and pursuing fraud within the firm. !f management-level employees are involved, the internal auditors may fear losing their ,obs if they blow the whistle on suh ativities. Thus, the internal auditors should report to the board of diretors so that they do not fear any reperussions of their ations from top management. 14. !n a entralized data-proessing environment, the omputer servies personnel are all housed in one department where all of the systems development and maintenane takes plae. 9nd users must formally re"uest any additions or enhanements to the urrent system. !n a distributed data proessing =&&:> system, the systems professionals may still be housed together or they may be loated throughout the various segments of the organization. 9nd users gain more ontrol over their data and appliations. &&: is beoming more and more popular as networking omputers is beoming easier and more ommonplae. 11. *ountants, although providers of finanial information to both internal and e+ternal users, are still the primary 'users( of the *!$. The aountants oversee the data olletion, proessing, and output of the *!$. Thus, as new *!$s are developed by system professionals, aountants8 needs as seen from the viewpoint of a user are very important. Thus, the aountants guide the systems developers by onveying their needs and onstraints. Page 8 of 10 UKAI 2023- Tutorial Solution 15. The aounting funtion provides reord-keeping servies for all of the operations and day-to-day ativities of other departments, whih affet the finanial position of the organization. 0eord-keeping tasks must be kept separate from any area that has ustody over assets. Thus, the aounting funtion must remain independent so that the protetion of the firm8s assets is arried out in an environment with minimum possibilities for theft. 1#. Turnkey. These are ompletely finished and tested systems that are ready for implementation. Typially, they are general-purpose systems or systems ustomized to a speifi industry. Typially the end user will have standard business praties that permit the use of 'anned( or 'off-the-shelf( systems that an be employed with little or no modifiation. In-house. @arger organizations with uni"ue and fre"uently hanging needs engage in in-house development. The formal proess by whih this is aomplished is alled the system development life yle. Backbone. 6akbone systems onsist of a basi system struture on whih to build. The primary proessing logi is preprogrammed, and the vendor then designs the user interfaes to suit the lient8s uni"ue needs. * bakbone system is a ompromise between a ustom system and a turnkey system. PROBLES #. a. .0$ b. T:$ Page 9 of 10 UKAI 2023- Tutorial Solution . 30$ d. .0$ e. T:$ f. 30$ g. .0$ h. T:$ i. 30$ ,. T:$ k. .0$ Page 10 of 10