Accounting Information Systems 2nd Edition Vernon Richardson, Chengyee Chang, Rod Smith - Solutions

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List the advantages of an EDI system.
How could it be possible for two companies to conduct EDI if they are not directly connected with each other?
What are the three important characteristics of the EDI definition?
Why is a redundant server system needed in an e‐commerce environment?
List the advantages of e‐commerce systems.
Ryan McGuire is an auditor for a large CPA firm. McGuire was recently assigned to perform a financial statement audit of Kraft Brewery, Inc., a brewery and distributor of German specialty foods. McGuire’s firm is auditing Kraft for the first time. The audit is nearly complete, but it has required
Kyle Sanders was auditing the financial statements of World Wholesale Industries when she was presented with a curious situation. A member of World’s top management team approached her with an anonymous note that had been retrieved from the company’s suggestion box. The note accused unnamed
Perform an Internet search to determine the nature of Xerox Corporation’s management fraud scheme and to find out what happened to the company after the problems were discovered.
Visit the AICPA website at www.aicpa.org and select the tab for Career Paths. Click on “This Way to CPA” to locate information on audit careers.
Identify whether each of the following audit tests is used to evaluate internal access controls (I), external access controls (E), or both (B):• Authenticity tests• Penetration tests• Vulnerability assessments• Review of access logs• Review of policies concerning the issuance of passwords
Given is a list of audit standard-setting bodies (shown on the left) and a description of their purpose (shown on the right). Match each standard‐setting body with its purpose.I. PCAOBII. ASBIII. IAASBIV. ISACAa. Established by the AICPA to issue SASsb. Issues ISASs to provide guidelines for IT
Kim and Kresiki are assigned to perform the audit of Ying & Yang’s Yoga Company. During the audit, it was discovered that the amount of sales reported on Ying & Yang’s income statement was understated because one week’s purchasing transactionswere not recorded due to a computer
Explain why standards of fieldwork for GAAS are not particularly helpful to an auditor who is trying to determine the types of testing to be used on an audit engagement.
During which phase of an audit would an auditor consider risk assessment and materiality?
Michael Michner Industries (MMI) is a manufacturer of warehouse and inventory tracking systems. MMI has four U.S. plants and three warehouses. The company employs 3,500 workers at these facilities and the corporate headquarters. MMI is using legacy systems for its accounting, materials requirement
Which professional standard‐setting organization provides guidance on the conduct of an IT audit?
Explain how the presence of IT processes can improve the quality of information that management uses for decision making.
Which type of audit is most likely to be performed by government auditors? Which type of audit is most likely to be performed by internal auditors?
What are assurance services? What value do assurance services provide?
Chacon University is a Midwest university with 16,000 students, using various legacy systems for student records, financial systems, human resources, and financial aid. The president of Chacon heard a presentation about ERP systems at a seminar for university administrators.Required:Read the
Using the Internet or other research tool, search for “Microsoft Dynamics GP software” and describe the type of company where Great Plains would be a good choice for an ERP system.
Using the Internet or other research tool, search for “SAP software” and describe the type of company where SAP would be a good choice for an ERP system.
Using the Internet or other research tool, search for “compare ERP software” and describe pros and cons of two Midmarket/tier two ERP systems.
Using the Internet or other research tool, search for “Total Cost of Ownership” and “ERP Software” and describe costs to consider when calculating the total cost of ownership for an ERP system.
Using the Internet or other research tool, search for “ERP software in the cloud” and outline(a) Pros,(b) Cons,(c) Considerations of adopting cloud deployment for an ERP system.
Which tier one company introduced the first ERP system that was “pure Internet,” requiring no programming code to reside on the client computer?
Which company is today’s top seller of ERP systems in the United States?
How did the tragic events of September 11, 2001, affect the market for ERP systems?
What was unique about SAP’s first ERP system?
Refer to case 48. Describe which parts of the design phase Miller should undertake to ensure that the purchased software matches with the business processes that it will use.In caseMiller International Corp. is in the process of purchasing a new accounting software system. Miller is in a very
Miller International Corp. is in the process of purchasing a new accounting software system. Miller is in a very specialized industry, with an international market. The company manufactures specialized parts to sell to companies in the oil exploration and drilling industry. The corporate
Thomas Clark is an accounting software consultant at Tann and Associates Consulting. Tann is a value‐added reseller of accounting software for midsize companies, which normally have revenue between $50 million and $500 million. One of Clark’s responsibilities is to solicit new client companies
Millennium Tech Stop is a regional retailer of consumer electronics, with warehouses and stores located in several large cities in California. The board and top management of Millennium are considering updating their accounting, inventory, and retail sales software and hardware. The current systems
Middleton Corporation just became a public corporation when shares of its stock were sold to the public three months ago. A new board of directors has been appointed to govern the corporation. Assume that you will be giving a presentation to the board members on their responsibilities for IT
Describe the purpose of business process reengineering during the system analysis phase.
What ethical obligations do employees have as IT systems are revised?
How does the SDLC serve as an internal control?
Why is post‐implementation review undertaken?
Why is parallel conversion costly?
Why is a direct cutover conversion risky?
What is the purpose of software testing?
Which part of the system design phase would include designing rows and columns of output reports? Why is it important to design reports?
Within the system design phase, what are the purposes of evaluation and selection?
Why might it be important to follow some or all of the SDLC phases for purchased software?
What are the advantages of purchased software when compared with software developed in‐house?
During the systems analysis phase, which two data collection methods help determine user requirements?
What is the advantage of studying the current system during the systems analysis phase?
Why would IT governance include measuring the performance of IT systems?
Why is it important that IT systems be aligned with the business strategy?
Near the beginning of Chapter 5, the real‐world example of Allstate’s IT expenditure is mentioned. Prior to the implementation of its IT governance committee, “whoever spoke the loudest or whoever had the biggest checkbook” got to select IT projects. What do you think the problems were with
In the early days of computers, Chris Schuler was a very enterprising young man who, while attending UCLA, was also conducting a major fraud against Continental Telephone and Telegraph Company (CT&T). At the height of his fraud in 2015, he was collecting approximately $30,000 a day from
Gleason, Inc., is a manufacturer of plastic knobs for lawn and garden tractors and lawn mowers. The company has always used traditional paper‐based systems to conduct transactions with its customers. For example, when a customer ordered knobs, Gleason personnel filled out a sales order
Using the Internet or other research tool, search “cloud computing” and create a list of at least 10 companies that provide cloud computing services. List the names of the companies and a brief description of the cloud computing services provided by each company.
Explain how control totals such as record counts, batch totals, and hash totals serve as input controls, processing controls, and output controls.
Each of the given situations is independent of the other. For each, list the programmed input validation check that would prevent or detect the error.a. The ZIP code field was left blank on an input screen requesting a mailing address.b. A state abbreviation of “NX” was entered in the state
How can control totals serve as input, processing, and output controls?
Why is a private cloud less risky than a public cloud?
Cody Chambers agreed to help his fraternity obtain sponsors for its annual charitable event to be held during Homecoming week. He accepted this responsibility at the recommendation of last year’s fund‐raiser, who told Cody that the task would require approximately 10 hours of time and would
Lynn Roberts frequently makes purchases from mail‐order catalogs. Recently, she ordered a dress she intended to wear to her cousin’s wedding. Unfortunately, she did not receive the package on time, and on the evening before the wedding, Lynn went shopping and purchased another outfit at a local
The CEO of Missouri Motor Company, Jason Bell, resigned on November 1, 2014. His resignation had been negotiated with the Board of Directors of Missouri Motor after it was revealed that Mr. Bell violated the company’s corporate ethics policy by having an affair with a subordinate employee. The
It’s November 15, and Gary, brand manager for a major consumer products firm, is contemplating his year‐end bonus. It is becoming increasingly obvious that unless he takes action, he will not achieve his brand profitability target for the year. Gary’s eyes fall to the expense estimate for the
At the old city hall, mail was sorted in a glorified closet—not the sort of place you’d expect to be frequented by a high‐ranking city official with multiple degrees. However, the city of Weston’s chief financial officer, Steve Kaufmann, had an unusual interest in the mail. He was often
Read a summary of an academic study of section 404 of the Sarbanes–Oxley Act at the following website: http://merrilldisclosuresolutions. org/2015/10/07/sarbanes‐oxley‐section‐404‐oninternal‐ control‐reporting‐might‐not‐packa‐ punch/Discuss the effectiveness of the SEC
What does section 404 of the Sarbanes–Oxley Act require of management regarding internal control systems?
Due to cost/benefit considerations, many business organizations are unable to achieve complete segregation of duties. What else could they do to minimize risks?
Name the COSO report’s five internal control activities.
Identify the COSO report’s five interrelated components of internal controls.
If an employee made a mistake that resulted in loss of company funds and misstated financial reports, would the employee be guilty of fraud? Discuss.
Kim Sheridan is a college student. Each Monday through Thursday, she commutes to her classes at York Technical College (YTC). Each semester, Kim pays for on‐campus parking privileges. Before Wednesday of the week prior to each new semester, Kim writes a check to YTC Parking Services for $150. She
In both Chapters 1 and 2, examples of restaurants and fast food chains were used to describe business processes, as they are deemed to be readily familiar to many students. On the basis of your experiences from using the drive‐through window at a fast food chain, prepare one each of the three
Visit the campus bookstore at your university. From what you see happening at the bookstore, try to draw a process map of how the processes at that store serve students, the customers.
How does documenting a system through a pictorial representation offer benefits?
What are some examples of outputs generated for trading partners?
In general, what types of transactions are well suited to batch processing?
What are the advantages to using some form of IT systems for input, rather than manual input?
Why do you think there are different market segments for accounting software?
What is the purpose of source documents?
Are manual systems and processes completely outdated?
What is the relationship between business processes and the accounting information system?
Cooper’s Cues Company is a small manufacturing operation that makes and sells pool cues for sporting goods stores and billiard halls in Baltimore, Maryland, and the surrounding local area. Rob Cooper and his wife, Stacy are the owners and only employees.Rob Cooper purchases all of the materials
Consider any recent purchase you made at a department store such as Target, Walmart, or Kmart. A business process that occurred was the sale of a product to you. However, to make that sale, the department store had to engage in many other processes that support that sales process, or result from
The Gas and Java Mart (G & J) is a gas station and convenience market similar to any BP, Shell, or Speedway gas and convenience stores. G & J is a regional chain located in eastern Missouri, with 14 locations.Required:The section of this chapter identified as Learning Objective 2 describes
Melissa Simpson is currently pursuing her accounting degree at Fairfield University. She has excelled in each of her major courses to date; however, she tends to struggle in her computer classes and with assignments requiring use of computer technology. Nevertheless, Melissa confidently claims that
Give a brief summary of each of the following:a. Enterprise risk managementb. Corporate governancec. IT governance
For an accounts receivable system, what kind of data would be found in the master files and transaction files, respectively? What type of structured and unstructured data might relate to an accounts receivable system?
Describe automated matching in the purchasing process and explain how this IT enablement has improved efficiency in companies.
What roles do accountants have in relation to the accounting information system?
In what way is a code of ethics beneficial to an organization?
Describe why enterprise risk management is important.
What do you think would be the advantages of an e‐payables system over a traditional system that uses paper purchase orders and invoices?
Prepare a list of the types of businesses that you have been involved in that use point of sale systems.
Why do real‐time systems require direct access files?
What two kinds of efficiency improvements result from business process reengineering in conjunction with IT systems?
Describe any IT enablement that you have noticed at a large retail store such as Wal‐Mart or Target.
When a company evaluates a supplier of materials, what kinds of characteristics might be evaluated?
What are the differences between internal reports and external reports generated by the accounting information system?
What occurs in an accounting information system that classifies accounting transactions?
1. Which of the following is a question that companies should answer when preparing the business case for an IT investment?a. How much will it cost?b. What are the risks?c. What are the alternatives?d. How will success be measured?e. All of the above2. What is the first step in the economic
An important first step in the economic justification process is to assess business requirements. How would the Balanced Scorecard framework presented in Chapter 14 help companies assess their business requirements for IT?
Chapter 14 described three types of IT: function, network, and enterprise IT. Consider the diagram shown in Figure 15.2. Which type of IT is likely to have the greatest impact on business performance? Which type of IT would require the most complementary changes? Why?FIGURE 15.2: Benefit Dependency

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Accounting Information Systems 2nd Edition Vernon Richardson, Chengyee Chang, Rod Smith - Solutions

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