Chapter 17Acquiring and Implementing Accounting Information Systems

TRUE/FALSE

1. A rapidly developing segment of the outsourcing market is the application service provider which are
similar to service bureaus and provide services via Web browsers over public networks.

ANS: T

2. The purpose of AIS selection is to develop specifications for a new AIS.

ANS: F

3. The purpose of AIS implementation is to successfully switch from the old to the new AIS.

ANS: T

4. Some of the tasks of AIS operation are to conduct post implementation review and to perform systems
maintenance.

ANS: T

5. The accountant as an implementer can become involved with systems survey and needs analysis tasks.

ANS: F

6. As an analyst, the accountant could be involved in change management issues and/or technical aspects
of converting data, software, and hardware from the old to the new AIS.

ANS: F

7. The internal auditor may review acquisition projects to ensure that systems are acquired efficiently and
effectively, that the systems purchased have adequate internal controls, and will be auditable.

ANS: T

8. The external auditor may perform an independent review of the systems that produce financial
statements and their internal controls.

ANS: T

9. A problem has an economically feasible solution if it can be solved with existing software and
hardware technology.

ANS: F
10. Users, managers, and auditors are required to participate in the systems development project. These
people generally provide approvals, often called signoffs, at preestablished management control points.

ANS: T
11. Structured systems analysis is a set of procedures conducted to generate the specifications for a new
(or modified) information system or subsystem.

ANS: T

12. Specific reports and other documentation, called process documents, must be produced periodically
during systems development to make development personnel accountable for faithful execution of
systems development tasks

ANS: F

13. Within the characteristics of systems development methodology, deliverables signify approval of the
development process and the system being developed.

ANS: F

14. The logical specification, physical requirements, and budget and schedule are all part of the systems
analysis deliverable called an approved systems analysis document.

ANS: T

15. The organizations management or IT steering committee approves the project for further systems
development.

ANS: T

16. The analysis team conducts a cost/effectiveness study which provides quantitative and certain
qualitative information concerning each of the system alternatives.

ANS: T

17. The cost/benefit study attempts to answer the question, "which alternative accomplishes the user's
goals for the least cost (or greatest benefit)?"

ANS: F

18. The cost/effectiveness study attempts to answer the question, "which alternative best accomplishes the
user's goals for the system being developed?"

ANS: T
19. A indirect cost is one that can be traced to the system or the system change in an economically feasible
way.

ANS: F

20. A tangible cost is one that can be reasonably quantified, such as software purchase and insurance.

ANS: T

21. An intangible cost is one that cannot be reasonably quantified, such as productivity losses caused by
low employee morale.

ANS: T
22. A direct cost is one that is directly attributable to the system or the system change, such as reduced
overhead costs.

ANS: F

23. Indirect benefits are not directly attributable to the system or the system change.

ANS: T

24. Tangible benefits are those that can be reasonably quantified, such as reduced equipment costs and
increased revenues.

ANS: T

25. Intangible benefits are those that cannot be reasonably quantified, such as those that result from having
improved information.

ANS: T

26. The logical specifications are a DFD and narrative outlining the major features, objectives, benefits,
and design constraints of the new system.

ANS: F

27. The logical specifications and physical requirements become the criteria by which the user will accept
the new or modified system.

ANS: T

28. Systems design is a set of procedures performed to choose the software specifications and hardware
resources for an information system.

ANS: F
29. As depicted in the text, the approved configuration plan is the final output of the software and
hardware study.

ANS: F

30. A service bureau is a firm that owns and manages computer equipment located on its property and uses
that equipment to provide data processing services to client organizations for a fee.

ANS: T

31. Outsourcing is a term that describes an organization's assigning any of its internal functions (e.g.,
accounting, legal, data processing) to an outside vendor.

ANS: T
32. An RFP is a document used to solicit from prospective vendors their plans for providing hardware,
software, and services.

ANS: T

33. To validate vendor proposals for supplying computer resources, an organization will assess both a
system's functional characteristics and its performance.

ANS: T

34. A benchmark is a representative workload, processed on each vendor's proposed system configuration,
to obtain comparative throughput measures.

ANS: T

35. The design of conversions involves how the new or revised information system will talk with the
existing system

ANS: F

36. The design of interfaces involves how to reformat data from the old system to the new system.

ANS: F

37. Structured systems design is a set of procedures performed to convert the logical specifications into a
design that can be implemented on the organization's computer system.

ANS: T

38. The approved systems design document documents the system design and summarizes the
implementation training and test plans.

ANS: T

39. Within the approved systems design document, a training manual is included that provides instructions
on how to use the new system.

ANS: F

40. Within the approved systems design document, a user manual is included that describes the training
program required for system users and personnel who will operate the system.

ANS: F

41. Systems operation includes the post implementation review.

ANS: T
42. Systems maintenance is a set of procedures performed to complete the design contained in the
approved systems design document and to test, install, and begin to use the new/revised information
system.

ANS: F

43. In the parallel approach to systems implementation, both the new and old systems operate together for
a period of time.

ANS: T

44. Of the three approaches to systems implementation presented in the text, the parallel approach is the
riskiest.

ANS: F

45. With the modular approach to systems implementation, the new system either is implemented one
subsystem at a time or is introduced into one organizational unit at a time.

ANS: T

46. Enterprise systems are often implemented using the direct approach.

ANS: T

47. The direct approach is also known as the big bang or cold turkey approach.

ANS: T

48. The modular approach forces the users to learn the new system without the old system to fall back on.

ANS: F

49. The modular approach is also referred to as the phased approach.

ANS: T

50. As an analyst, the accountant could be the development team member who completes the systems
design.

ANS: T

51. As an internal auditor the accountant could be called in to complete the design, help prepare the
contracts, or help plan, conduct, and evaluate the system tests.

ANS: F
52. As a user, the accountant could become deeply involved in systems implementation helping to design
system inputs and outputs, or specify testing criteria.

ANS: T

53. The project completion report usually includes a summary of requirements satisfied by the new system
as well as system and program documentation.

ANS: T

54. The development team must layout the database which depicts a physical view of each database
record, and indicates the field (attribute) names and lengths.

ANS: F

55. The user, the programmer, and another member of the programming team do a walkthrough of the
module specifications and the test plan to determine that the test plan is adequate; then the programmer
codes the program.

ANS: T

56. The removal of program errors is called debugging.

ANS: T

57. Making program changes, correcting errors in the programs, and adding enhancements to the programs
is called systems development.

ANS: F

58. The system test verifies the new system against the original specifications.

ANS: T

59. An operations test of the complete system in a test environment is called an acceptance test.

ANS: F

60. The user-directed test runs a subset of the system in the actual production environment.

ANS: F

61. The post implementation review is an examination of a working system, conducted soon after the
system's implementation.
 ANS: T

62. Systems maintenance is the modification of existing applications.

ANS: T

63. Perfective maintenance is performed to fix errors.

ANS: F

64. Corrective maintenance is conducted to improve the performance of an application.

ANS: F
 65. Adaptive maintenance adjusts applications to reflect changing business needs and environmental
challenges.

ANS: T

66. The Sarbanes-Oxley Act prohibits CPA firms from serving as system consultants to companies they do
not audit.

ANS: F

MULTIPLE CHOICE

1. Which of the following is the assignment of selected business functions to a vendor?

a. outsourcing
b. application service provider
c. insourcing
d. benchmarking
ANS: A

2. Which of the following provides services through an easy to use Web browser over public networks
rather than private lines?
a. outsourcing
b. application service provider
c. insourcing
d. benchmarking
ANS: B

3. Which of the following functions can not be outsourced?

a. accounting
b. legal
c. data processing
d. all of these functions can be outsourced
ANS: D

4. Which of the following has the task of evaluating alternative AIS solutions?
a. AIS analysis
b. AIS selection
c. AIS implementation
d. AIS operations
ANS: B

5. Which development phase has the purpose of developing specifications for the new or revised system?
a. analysis
b. design
c. implementation
d. operation
ANS: A
 6. Which development phase has the task of post implementation review?
a. analysis
b. design
c. implementation
d. operation
ANS: D

7. Which of the following involves the successful switch from the old to the new AIS?
a. analysis
b. design
c. implementation
d. operation
ANS: C

8. Which of the accountant roles involves contributing to systems survey and needs analysis?
a. programmer
b. analyst
c. purchaser
d. implementer
ANS: B

9. Which role in the AIS Development/Acquisition process requires the accountant to be equally adept at
dealing with people, accounting, and technology?
a. user
b. analyst
c. purchaser
d. implementer
ANS: D

10. In which role might the accountant be the person who initiates the AIS acquisition cycle, and is in a
prime position to recognize deficiencies and incompatibilities related to the existing AIS?
a. user
b. analyst
c. purchaser
d. implementer
ANS: A

11. In which role might the accountant types help meet the organizations AIS needs by selecting the final
system for purchase?
a. consultant
b. internal auditor
c. external auditor
d. none of the above
ANS: D
12. Outputs of the systems analysis phase of development typically would include all of the following
except:
a. requests for proposal (RFPs) for software/hardware acquisition
b. the logical specifications for the selected system design alternative
c. the physical requirements for the selected system design alternative
d. a budget for the systems design and systems implementation phases of development
ANS: A

13. The system development phase that precedes the system design phase is:
a. systems analysis
b. systems implementation and operations
c. systems survey
d. systems selection
ANS: A

14. Which of the following is a deliverable from the analysis phase of systems development?
a. selected hardware and software
b. logical specification
c. approved configuration
d. project completion plan
ANS: B

15. Which of the following is not a systems analysis goal?

a. develop the physical requirements for the selected design
b. develop the budget for the next two system development phases
c. develop logical specifications for the select design
d. develop the system survey
ANS: D

16. Determination of user requirements in the analysis step of systems development is more difficult in an
e-business implementation because:
a. user requirements inside and outside the organization must be determined
b. users are more resistant to change to an e-business implementation
c. e-business software is inherently more complex
d. users fear e-business implementations will negatively impact their jobs
ANS: A

17. Which of the following would be the likely trigger for the systems analysis step of systems
development?
a. a request for proposal (RFP)
b. the systems logical specifications
c. an approved feasibility document
d. the systems physical requirements
ANS: C
18. Which of the following is not a reason for using a team in systems analysis?
a. The work requires a variety of skills one individual seldom possesses.
b. Tasks can be completed in a longer time.
c. Team members can exercise a quality control function over one another's work.
d. A joint effort in creative aspects of the analysis can lead to a better analysis than if one
person was left to his or her own devices.
ANS: B

19. In structured systems analysis, the analysis preferably should start with an analysis and documentation
of:
a. the current physical system description
b. the current logical system description
c. the future logical system description
d. the future physical system description
ANS: A

20. After the analysis team studies and documents the current physical system they should next:
a. study and document the current logical system
b. define user requirements for the new/modified system
c. design alternative future physical systems
d. determine the cost of the new/modified system
ANS: B

21. The following is a jumbled list of the four steps in systems analysis that were presented in the text:

I. Define the future logical system.

II. Document the current logical system.
III. Study the current physical system.
IV. Design the future physical system.

Which of the following is the logically correct sequence of steps?

a. II, IV, I, III
b. III, II, I, IV
c. III, II, IV, I
d. II, I, III, IV
ANS: B

22. After defining the requirements for the new system, the current logical DFD should be modified to
reflect the components of the future system. The development team may propose logical design
alternatives for the future logical system that may involve derivatives of the following except:
a. internal entities
b. activities
c. data stores
d. control activities
ANS: A
23. Which of the following ranks each alternative on its relative capability to satisfy the users
requirements (goals) for the system?
a. the cost/effectiveness study
b. the cost/benefits analysis
c. the effectiveness analysis
d. the intangible benefits analysis
ANS: C

24. The cost of computer hardware to be purchased for a new system is an example of a(n) ____ cost for
that system.
a. direct cost
b. indirect cost
c. intangible cost
d. recurring cost
ANS: A

25. Personnel fringe benefits are an example of a(n) ____ cost.

a. direct cost
b. indirect cost
c. intangible cost
d. nonrecurring cost
ANS: B

26. Which of the following benefits can be reasonably quantified?

a. direct benefits
b. tangible benefits
c. indirect benefits
d. intangible benefits
ANS: B

27. Insurance on a computer installation is an example of a(n) ____ cost.

a. tangible
b. intangible
c. indeterminate
d. variable
ANS: A

28. Productivity losses caused by reduced employee morale are an example of a(n) ____ cost.
a. direct cost
b. indirect cost
c. intangible cost
d. nonrecurring cost
ANS: C

29. Which of the following is a cost that cannot be reasonably quantified?

a. nonrecurring cost
b. recurring cost
c. tangible cost
 d. intangible cost
ANS: D
30. Reduced salaries and wages that will result from a systems change are an example of a(n) ____
benefit.
a. direct
b. indirect
c. intangible
d. nonrecurring
ANS: A

31. The logical specification items might include all of the following except:
a. executive summary
b. application description
c. information requirements
d. budget and schedule
ANS: D

32. The physical requirements of a proposed system would include all of the following except:
a. functional layouts for computer inquiry screens and reports
b. executive summary
c. processing response time requirements
d. amount of data to be stored
ANS: B

33. Structured systems design is to the systems development process what ____ is to the tasks required in
constructing an industrial park.
a. drafting the blueprints and other construction-related plans
b. choosing the construction contractors
c. the architect's determining each building's specific use, required room sizes, electrical and
plumbing requirements, etc.
d. estimating the construction costs and preparing the forecasted construction schedule
ANS: A

34. The systems selection tasks include all of the following except:
a. determine what computer software design will implement the logical specification
developed in structured systems analysis
b. determine what computer hardware will satisfy the physical requirements established in
structured systems analysis
c. determine miscellaneous environmental needs
d. determine appropriate acquisition ancillaries
ANS: C

35. Which of the following is specified in the approved configuration plan?

a. chosen software configuration and expected performance specifications
b. results of testing alternative software design and hardware resources
c. assessment of financing and outsourcing activities
d. appropriate acquisition ancillaries
ANS: D
36. Which of the following triggers the systems selection process?
a. logical specification
b. physical requirements
c. both a and c
d. neither a nor b
ANS: C

37. Which of the following is a characteristic of internal hardware sources?

a. costs are mainly fixed
b. management and staff are provided
c. additional capacity may be available
d. costs are mainly variable
ANS: A

38. Which of the following is a characteristic of external hardware sources?

a. costs are mainly fixed
b. management and staff are provided
c. capacity is limited
d. can determine the level of control, security and privacy
ANS: B

39. Which of the following issues is not a task of systems selection?

a. determine software and hardware acquisition alternatives
b. choose financing methods
c. determine appropriate acquisition ancillaries
d. prepare request for proposal
ANS: D

40. An organization might request bids for computer resources from only one vendor for all of the
following reasons except:
a. to reduce training cost by staying with its present vendor
b. to avoid time and expense of preparing RFP's and evaluating responses
c. to improve its bargaining position by maintaining a competitive selection posture
d. to minimize conversion cost by staying with its present vendor
ANS: C

41. Which of the following statement regarding use of a service bureau is false?
a. a service bureau provides information processing services
b. a service bureau is more expensive than using an in-house computer
c. a service bureau can provide both hardware and software for a fee
d. a service bureau contract generally include company involvement with the system.
ANS: B
42. Which of the following statements regarding software acquisition (purchase vs. in-house development)
is false?
a. software developed in house can cost 10 times more than purchased software
b. when a suitable software package is available for purchase, it is better to buy it rather than
try to reinvent it in-house
c. the annual maintenance of in-house software is typically 25% of its cost, whereas the
annual maintenance of purchased software is typically 50% of the purchase price
d. none of the statements are false
ANS: C

43. The process of evaluating the vendor proposals include all of the following except:
a. determine to which vendors the RFPs will be sent
b. validate vendor proposals
c. consider other data and criteria
d. suggest resources
ANS: A

44. The goal of validating vendor proposals is to determine:

a. which vendor has the equipment that is easiest to use
b. which vendor proposal costs the least
c. which vendors offer proposed systems that meet the organization's requirements
d. which vendor should be selected
ANS: C

45. A representative workload, processed on a vendors proposed system configuration, to obtain

comparative throughput measures is called a(n)

a. benchmark
b. RFP test
c. time trial
d. systems analysis test
ANS: A

46. The number of sales that can be entered within a specified period of time is a measure of the computer
system's:
a. throughput
b. computing capacity
c. outsource production
d. performance ratio
ANS: A

47. A detailed vendor comparison would normally include all of the following except:
a. documentation volume
b. cost of typical configuration
c. maximum number of workstations
d. benchmark results
 ANS: A

48. Typically, all of the following are goals of structured systems design except:
a. to recommend which computer hardware to use for the new system
b. to convert the structured specification into a reliable, maintainable design
c. to develop a plan and budget that will ensure an orderly and controlled implementation of
the new system
d. to develop a user manual which facilitates efficient and effective use of the new system
ANS: A

49. Which of the following statements regarding SDLC methodology is false?

a. Following this type of methodology should ensure that development efforts are efficient
and consistently lead to information systems that meet organizational needs.
b. These guidelines are appropriate only when an organization is going to acquire an AIS, not
when they plan to develop it in-house.
c. Systems analysis is the first phase of the SDLC.
d. Specific reports and other documentation, called deliverables, must be produced
periodically during systems development.
.
ANS: B

50. To write computer programs and interfaces, programmers use:

a. the approved systems design document
b. the approved systems analysis document
c. the approved feasibility document
d. the approved configuration plan
ANS: A

51. As presented in this text, systems operation comprises two steps--namely, ____ and ____.
a. systems implementation, systems maintenance
b. systems maintenance, post-implementation review
c. systems implementation, post-implementation review
d. systems design, systems implementation
ANS: B

52. A building inspection shortly after completing the construction of an industrial park is analogous to the
____ step in the systems development process.
a. systems implementation
b. systems maintenance
c. post-implementation review
d. systems operation
ANS: C

53. Making repairs and modifications to the system is known as

a. systems implementation
b. systems maintenance
c. post-implementation review
d. systems operation
ANS: B
54. Checking to see if the new system is doing what it is supposed to do is part of
a. systems implementation
b. systems maintenance
c. post-implementation review
d. systems operation
ANS: C

55. Which of the following is not a goal of systems implementation?

a. complete the design contained in the approved systems design document
b. write, test, and document the programs and procedures required by the approved systems
design document
c. complete the preparation of user manuals
d. determine, by thoroughly testing the system with programmers, that the system satisfies
the programmers requirements
ANS: D

56. Which of the following statements related to implementation approaches is false?

a. The parallel approach provides a high level of control.
b. In very large implementations, such as enterprise systems, it is often best to take the
parallel approach.
c. The modular approach can be combined with either of the other two approaches.
d. The direct approach is the riskiest of the three approaches.

ANS: B

57. Which of the following statements related to implementation approaches is true?

a. The parallel system significantly decreases employee's work load during the conversion
period.
b. The parallel system terminates the operation of the old system and then compares the
outputs of the two systems
c. The modular approach can only be combined with the direct approach.
d. The direct approach is the riskiest of the three approaches
ANS: D

58. If a new payroll system is installed for the employees of plant 1 at time A, followed by plant 2 at time
B, and finally plant 3 at time C, this is an example of the ____ approach to systems implementation.
a. parallel
b. direct
c. modular
d. indirect
ANS: C
59. The following picture from the text illustrates the ____ approach to systems implementation:

a. parallel
b. direct
c. modular
d. Indirect
ANS: A

60. The following picture from the text illustrates the ____ approach to systems implementation:

a. parallel
b. direct
c. modular
d. indirect
ANS: B
61. The following picture from the text illustrates the ____ approach to systems implementation:

a. parallel
b. direct
c. modular
d. indirect
ANS: C

62. Which of the following statements regarding the modular approach is false?
a. It is also referred to as the phased approach.
b. It can be combined with the parallel or the direct approach.
c. It is always a faster approach than parallel.
d. It can combine the safety and control of a parallel implementation with cost/time savings
of the direct approach.
ANS: C

63. Which of the following is not a potential role for the accountant in a systems implementation?
a. user
b. programmer
c. analyst
d. consultant
ANS: B

64. The final step in the in the implementation process is to write:

a. the approved configuration plan
b. the project completion report
c. the post-implementation review report
d. the user manual(s)
ANS: B

65. The project completion report will include all of the following except:
a. summary of requirements satisfied by the new system
b. request for proposals
c. estimated and actual duration of each development stage
d. system documentation
 ANS: B

66. Which of the following is not a significant activity during the systems implementation phase?
a. computer resource acquisition
b. system maintenance
c. software and hardware installation
d. site preparation
ANS: B

67. Systems implementation is triggered by:

a. the approved configuration plan
b. the approved system design document
c. both a and b
d. neither a or b
ANS: C

68. When completing the design of the system we need to complete all of the following except:
a. the design of the input and output reports, documents, computer screens
b. laying out the database
c. the specifications for the manual and automated processes
d. the contract negotiation
ANS: D

69. A user-directed test of the complete system in a test environment is called a(n) ____ test.
a. unit
b. integration
c. stub
d. acceptance
ANS: D

70. The ____ runs a subset of the system in the actual production environment.
a. unit test
b. integration test
c. systems test
d. operations test
ANS: D

71. Which of the following statements regarding systems maintenance is false?

a. It should include analysis, cost/benefit study, design, implementation, and approvals for
each development step.
b. To ensure that all necessary maintenance requests are submitted, users should never be
charged for maintenance costs.
c. A formal procedure for submitting change requests should be adopted.
d. High-quality documentation must be created and maintained.
ANS: B
 72. Which of the following is conducted as a follow up to a systems recent implementation?
a. a post-implementation review
b. systems maintenance
c. a systems survey
d. troubleshooting
ANS: A

73. All of the following would be tasks of post-implementation review except:

a. ensure a correct conversion by planning, controlling, and conducting an orderly
installation of the new system
b. determine if the user is satisfied with the new system
c. review the performance of the new system
d. evaluate the quality of the new systems documentation
ANS: A

74. The type of maintenance that is conducted to improve the performance of an application is referred to
as:
a. preventive
b. perfective
c. adaptive
d. corrective
ANS: B

75. The type of maintenance that is conducted to fix errors of an application is referred to as:
a. preventive
b. perfective
c. adaptive
d. corrective
ANS: D

76. The type of maintenance that is conducted to adjust applications for changing business needs of an
application is referred to as:
a. preventive
b. perfective
c. adaptive
d. corrective
ANS: C

COMPLETION

1. ____________________ is the assignment of an internal function to an outside vendor.

ANS: Outsourcing
 2. A(n)_________________________________ offers a traditional outsourcing mechanism whereby it
hosts, manages, and provides access to application software and hardware over the Internet to multiple
customers.

ANS: application service provider (ASP)

3. The purpose of the Information System Development ____________________ phase is to develop
specifications for a new or revised system.

ANS: analysis

4. The outcome of the _________________ process will support either the purchase or development of
an AIS.

ANS: system selection

5. One task of the _________________________ phase is to convert to the new or revised system.

ANS: implementation

6. Tasks of the _________________________ phase are to conduct post implementation review and to
perform systems maintenance.

ANS: operation

7. As a(n)_________________, the accountant can become involved with any or all of the AIS
acquisition phases.

ANS: consultant

8. In particular, intricate knowledge of accounting and information technology helps the accountant be
successful in the role of _______________________.

ANS: implementer

9. As agents of management and the board of directors, ____________________ ensure that the
acquisition team has followed the organizations standard procedures for systems acquisition and that
the process has been efficient and effective.

ANS: internal auditors

10. ______________________________ review the acquisition cycle and assess if and how internal
controls have been impacted.

ANS: External auditors

11. A problem has a(n) ____________________ feasible solution if it can be solved with existing
technology.

ANS: technically

12. If the payback and internal rate of return estimates are sufficient to allow the development project to
proceed it is said to have ____________________ feasibility.

ANS: economic

13. ___________________________________ reflects a set of procedures conducted to generate the

specifications for a new (or modified) information system or subsystem.

ANS: Structured systems analysis

14. The logical specification, physical requirements, budget and schedule are all part of the systems
analysis deliverable called a(n) ___________________________________.

ANS: approved systems analysis document

15. The organizations management or IT _________________________ approves the project for further
systems development.

ANS: steering committee

16. The systems analysis team conducts a(n) _________________________ which provides quantitative
and certain qualitative information concerning each of the system alternatives.

ANS: cost/effectiveness study

17. The ____________________ analysis or study is performed first because the data are relatively easy
to obtain and are more objective than the data on effectiveness.

ANS: cost/benefit

18. A(n) ____________________ cost is one that is directly attributable to the system or the system
change.

ANS: direct

19. ____________________ costs are associate with but not directly attributable to the system or the
system change.

ANS: Indirect
20. A(n) ____________________ cost is one that can be reasonably quantified, such as software purchase
and insurance.

ANS: tangible

21. A(n) ____________________ cost is one that cannot be reasonably quantified, such as productivity
losses caused by low employee morale.

ANS: intangible

22. _________________________ are incurred only once to get the system operational.

ANS: Nonrecurring costs

23. A(n) ____________________ benefit is one that is directly attributable to the system or the system
change, such as reduced personnel costs.

ANS: direct

24. ____________________ benefits are not directly attributable to the system or the system change.

ANS: Indirect

25. ____________________ benefits are those that can be reasonably quantified, such as reduced
equipment costs and increased revenues.

ANS: Tangible

26. ____________________ benefits are those that cannot be reasonably quantified, such as those that
result from having improved information.

ANS: Intangible

27. Structured system design is a set of procedures performed to convert the _____________________
into a design that can be implemented on the organizations computer system.

ANS: logical specification

28. Defining requirements such as the amount of data to be stored, functional layouts for computer inquiry
screens and reports, and processing response times are part of developing the __________________
for the selected design.

ANS: physical requirements

29. A(n) _________________________ is a firm providing information processing services, including

hardware and software for a fee

ANS: service bureau

30. A(n) ______________________________ is a document used to solicit from prospective vendors their
plans for providing hardware, software, and services.

ANS: request for proposal (RFP)

31. A computer system's ____________________ is the quantity of work performed in a period of time.

ANS: throughput

32. A(n) ____________________ is a representative user workload, processed on each vendor's proposed
system configuration, to obtain comparative throughput measures.
 ANS: benchmark

33. Interviews that are conducted with personnel outside the organization are called
______________________________.

ANS: external interviews

34. The ________________________________________ documents the system design and summarizes
the implementation, training, and test plans.

ANS: approved systems design document

35. Systems operation includes systems maintenance and __________________________________.

ANS: post-implementation review

36. ___________________________________ reflects a set of procedures performed to complete the

design contained in the approved systems design document and to test, install, and begin to use the
new or revised information system.

ANS: Systems implementation

37. In the ____________________ approach to systems implementation, both the new and old systems
operate together for a period of time.

ANS: parallel

38. Of the three approaches to systems implementation presented in the text, the ____________________
approach is the riskiest.

ANS: direct

39. With the ____________________ approach to systems implementation, the new system either is
implemented one subsystem at a time or is introduced into one organizational unit at a time.

ANS: modular

40. When implementing ___________________ systems, it is often capacity or cost prohibitive to take the
parallel approach.

ANS: enterprise

41. The direct approach is also known as the _________________________ or

_________________________ approach.

ANS:
 big bang, cold turkey OR cold turkey, big bang

42. The ____________________ approach forces the users to learn the new system without the old system
to fall back on.

ANS: direct

43. The ____________________ approach is also referred to as the phased approach.

ANS: modular

44. As a(n) ____________________, the accountant could be the person who initiates the AIS acquisition
cycle because (s)he will be in a prime position to recognize deficiencies and incompatibilities related
to the existing AIS.

ANS: user

45. The ______________________________ summarizes the implementation activities and provides

documentation for operating the new system and for conducting the post-implementation review and
systems maintenance.

ANS: project completion report

46. The two main inputs that trigger systems implementation are the
___________________________________ and the ______________________________________.

ANS: approved configuration plan, approved systems design document

47. The user, the programmer, and another member of the programming team do a(n) _______________
of the module specifications and the test plan to determine that the test plan is adequate; then the
programmer codes the program.

ANS: walkthrough

48. The removal of program errors is called ____________________.

ANS: debugging

49. Making program changes, correcting errors in the programs, and adding enhancements to the programs
is called ____________________.

ANS: maintenance
 49. The _________________________ should describe operating procedures for both manual and
automated systems functions.

ANS: user manual

50. The _________________________ verifies the new system against the original specifications.

ANS: system test

51. A user-directed test of the complete system in a test environment is called a(n)
____________________ test.

ANS: acceptance

52. The ____________________ test runs a subset of the system in the actual production environment.

ANS:
Operations OR environmental

53. The ___________________________________ is an examination of a working system, conducted

soon after the system's implementation.

ANS: post-implementation review

54. ______________________________ is the modification of existing applications.

ANS: Systems maintenance

55. ____________________ maintenance is performed to fix errors.

ANS: Corrective

56. ____________________ maintenance is conducted to improve the performance of an application.

ANS: Perfective

57. ____________________ maintenance adjusts applications to reflect changing business needs and
environmental challenges.

ANS: Adaptive

ESSAY

1. Briefly discuss application service providers (ASP) and Software as a Service (SaaS).
 ANS:

An application service provider (ASP) offers a traditional outsourcing mechanism whereby it hosts,
manages, and provides access to application software and hardware over the Internet to multiple
customers. The fee is really a rental based on usage. Some ASPs provide service for free, obtaining
revenue from advertising and the sale of other services. ASPs relieve the organization of the burden of
developing or buying and installing software and hardware. Because ASPs are accessed over the
Internet, a user needs only a Web browser and a basic PC or other method of accessing the Internet
(such as a browser-enabled mobile phone) to obtain the ASP service. When using an ASP, a user
obtains constantly updated software. The user does not need the technical resources to install or
support the application. ASPs are a good choice for applications where the user does not want to
purchase and maintain the application or simply wants access from any Internet access point.
QuickBooks Online Edition and TurboTax, both from Intuit, Inc., are two consumer products that
traditionally have been sold as purchase and install but are now available as an ASP service.

Software as a Service (SaaS) is a Web-based model of software distribution where multiple users may
simultaneously use the software. SaaS provides similar results to an ASP, with some underlying
differences. ASPs are generally traditional applications with Web-interfaces, whereas SaaSs are
typically created for the Web environment. With an ASP, the hosting site may have application
knowledge as well as hardware configured to optimize the software, whereas SaaS applications may be
hosted by third parties unrelated to the software provider or developer. SaaS is in its infancy, but many
vendors are exploring the technology. One of the more widely adopted examples of SaaS is Google
Apps.a Google Apps offerings include on-demand, net-based document creation and management
(Docs), e-mail (Gmail), and sharing capabilities (Sites).

2. Discuss four ways that an accountant is often involved with the AIS acquisition?

ANS:

Students should discuss four of the following items:

User
Analyst
Purchaser
Implementer
Consultant
Internal auditor
External auditor

User: Whether as a staff accountant, controller, or CFO, an accountant will be using an AIS on a
regular basis. In any of these roles, (s)he might be a business process owner as well, which means that
(s)he will be responsible for (or own) certain data sets (such as payroll, general ledger, or customer
billing data). As such, the accountant very well could be the person who initiates the AIS acquisition
cycle because (s)he will be in prime position to recognize deficiencies and incompatibilities related to
the existing AIS.
 Analyst: Because the accountant is intimately familiar with functionality and controllability aspects of
accounting systems, (s)he could be asked to participate on a systems analysis team to conduct a
preliminary survey used to determine what is needed in a new AIS. Even when the accountant is not
familiar with a particular business process, (s)he can contribute skills in acquiring and documenting
descriptions of processes.

Purchaser: The accountant could also become a member of the AIS selection team. In this capacity,
(s)he will have to match the organizations requirements with the capability of various commercially
available accounting systems, evaluate a set of potential AIS solutions, and help to make the final
purchase selection.

Implementer: After the AIS is purchased, it is time to switch the old with the new, which is much
easier said than done. The accountant could become involved with this delicate and vitally important
hase of the acquisition cycle. If so, (s)he will have to be equally adept at dealing with people,
accounting, and technology. In particular, intricate knowledge of accounting and information
technology will help the accountant be successful in this role.

Consultant: Although the Sarbanes-Oxley Act prohibits CPA firms who audit a public company to
also serve as systems consultants for the same company, AIS consulting is nevertheless alive and well.
Even though all but one major CPA firm (Deloitte Touche Tohmatsu) has spun-off their consulting
divisions into separate entities, these new consulting companies continue to need accountants. Also,
CPA firms still consult (they often call themselves business advisors), just not for their audit clients.
As a consultant, an accountant can become involved with any or all of the AIS acquisition phases.

Internal auditor: Because internal auditors are knowledgeable about AIS function and control
requirements, they often serve as advisors or consultants during the acquisition cycle. Also, as agents
of management and the board of directors, internal auditors ensure that the acquisition team has
followed the organizations standard procedures for systems acquisition and that the process has been
efficient and effective.

External auditor: As an external auditor, the accountant will conduct an internal control assessment.
During the assessment, (s)he will have to determine how changes in the AIS might have affected
overall audit risk. Professional guidance in this regard is found in the Statement on Auditing Standards
(SAS) 94, entitled The Effect of Information Technology on the Auditors Consideration of Internal
Control in a Financial Statement Audit. Thus, external auditors will review the acquisition cycle and
assess if and how internal controls have been impacted.

3. Discuss the accountants involvement in systems selection including:

1. As an analyst
2. As consultant
3. As a user
4. As an internal auditor

ANS:
An accountant might become involved in systems selection in a number of ways. As an analyst, the
accountant could be the evaluation team member with the most expertise in internal control and
possess expertise in computer applications for the AIS. As a consultant, the accountant might be called
on to provide such expertise, as well as objectivity. The accountant has a great deal of knowledge in
making software and hardware selections for the AIS. As a user of the system, the accountant could
provide guidance on the tax and financial implications of alternative financing methods. The
accountant might also be called upon to comment on the adequacy of the proposed resource choices.
The accountant as an internal auditor could be a member of the evaluation team regarding auditability
and controllability of the system. Also, as an internal auditor, the accountant could be responsible for
reviewing and reporting on the efficiency and effectiveness of the system.
PROBLEMS

1. Growing State University (GSU) is planning to change from its batch-oriented grade reporting system
(BGRS) to a new, online grade reporting system (OGRS). The partial organization chart for GSU
appears in TB Figure 17.1. TB Figure TB 17.2 is reproduced from Chapter 17 and shows three
possible system implementation approaches.

Required:
Demonstrate your understanding of the three approaches in TB Figure 17.2 by constructing an
example from the GSU scenario to explain (in one paragraph for each) how each approach might be
applied at GSU. Be specific as to which of GSU's organizational units would convert to OGRS and
when. Assume that time X in TB Figure 17.2 is the start of the 20X8 fall semester. Make and state any
other assumptions you feel are necessary.
ANS:
INSTRUCTOR NOTE: Obviously, several alternative solutions are possible and acceptable. The
following solution assumes that GSU wants to isolate any conversion problems that might arise by
confining them to the smallest population possible. Therefore, GSU decides to start the conversion at
the lowest level in the organization chart--namely, sections 001 through 005 of AIS.

Parallel Approach:
For the fall semester, 20X8, all AIS sections report grades on both the old (BGRS) and new (OGRS)
systems. The output results are compared and, if satisfactory, BGRS is abandoned and OGRS is
adopted for all AIS sections, effective with the spring 20X9 semester. Similar pilot projects could then
be extended to higher levels in the organization in spring 20X9.

Direct Approach:
All sections of AIS abandon BGRS and adopt OGRS for fall 20X8, without any pilot project to
compare the old and new systems in parallel operation.

Modular Approach:
For the fall semester, 20X8, section 001 of AIS only reports grades on both the old (BGRS) and new
(OGRS) systems. Sections 002 through 005 continue to use BGRS as before. The output results for
section 001 under both the old and new systems are compared and, if satisfactory, BGRS is abandoned
and OGRS is adopted for section 001, effective with the spring 20X9 semester. Also in spring 20X9,
section 002 (perhaps all other AIS sections) runs BGRS and OGRS in parallel. If the results for 002 are
also satisfactory, it switches to OGRS in summer 20X9 and so on.
2. TB Figure 17.3 is taken from the text figure showing the systems selection task and documents.

Required:
Explode bubble 3.0 Systems Selection into a Level 1 DFD. The DFD should include the items listed
below. The data flows for available hardware and physical requirements are listed twice because these
data flows will each appear twice in the Level 1 DFD.

Process bubbles
3.1 Prepare requests for proposal
3.2 Evaluate vendor proposals
3.3 Assess software plan
3.4 Complete configuration plan

External entities
External sources
Hardware/ software vendors

Data flows
Approved configuration plan
Available hardware
Available hardware
Logical specification
Physical requirements
Physical requirements
Request for proposal
Software specifications
Suggested hardware resources
Vendor proposals

ANS:
3. Figure TB 17.5 is the DFD of the systems development life cycle as presented in the text.

Required
Explode bubble 4.0 Structured Systems Design into a Level 1 DFD. All of the process bubbles and data
flows are presented below. The data flows for implementation plan and budget and logical
specification are listed twice because these data flows will appear twice in the Level 1 DFD.
Process Bubbles
4.1 Specify modules
4.2 Develop implementation plan and budget
4.3 Develop implementation test plan
4.4 Develop user manual
4.5 Develop training program
4.6 Complete systems design document

Data Flows
Approved configuration plan
Approved systems design document
Design specifications
Implementation plan and budget
Implementation test plan
Implementation plan and budget
Logical specification
Logical specification
Training plan
User manual

ANS:
TB Figure 17.6