Accounting Information System Answer Key Chapter 20

ANSWER KEY 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. C A A C C B A B C C C C D C A C D C D A B D D C D B&C C D A A B D D B B A C C B C A B D B A B B C C D A Accountants must first understand the development process, and then realize that they can make a valuable contribution to the development process in several ways. As users, accountants can 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. specify their needs and help explain such needs to the development team. As members of the development team, they can provide valuable input throughout the design and development process. As auditors, they can perform attest functions with a greater working knowledge and enhanced skill sets. Accountants should keep the project on track by evaluating and measuring benefits, monitoring costs, and helping to maintain the timetable. How well does the design meet organizational and systems objectives? How well does the design meet users' needs? How economically feasible is the design in terms of costs versus benefit? What are the advantages and disadvantages of the design? Do the advantages outweigh the disadvantages? The purpose of this report is to a) guide physical systems design activities, b) communicate how management and user information needs will be met, and c) help the steering committee assess system feasibility. Controls design ensures the effectiveness, efficiency, and accuracy of the AIS. Accountants have a vital role in this area. The important concerns to be addressed are: validity of transactionsauthorization of input, storage, and output activities- accuracy of input and processing activitiessecurity access to system numerical control pre-numbering and accounting of all documents. Audit trail - tracing of transactions from source documents to final output and vice versa Systems implementation is the process of installing hardware and software and getting the AIS in place and in use. Systems planning consists of: Implementation tasks and person(s) responsible for tasks. Setting expected completion dates. Cost estimates and variances. Identify risk factors that decrease likelihood of successful implementation. Strategies for coping with risk factors. Complete documentation - three types of documentation must be prepared: Development documentation which includes: System description. Copies of output, input, and file and database layouts. Program Flowcharts. Test results. User acceptance forms. Operations documentation includes: Operating schedules. Files and databases accessed. Equipment security and file retention requirements. User documentation includes: Procedures manual(s). Training materials. There are three methods: walkthroughs, which involve systematic reviews of procedures or program logic at different phases during the SDLC. In the early stages of the design process, the focus is inputs, outputs, and files. In the later stages, the focus is on program logic and structure. Processing test transactions to determine whether a program operates as designed. Different types of hypothetical transactions are processed to see if the controls catch various types of errors. Acceptance tests, which use real transactions and file records. Users develop the acceptance criteria and make the final acceptance or rejection decision. A post-implementation review ensures that the new AIS meets planned objectives. Any problems uncovered during the review are brought to the attention of the management and the necessary adjustments are made. When review is complete, prepare a report. The acceptance of the postimplementation review report by users concludes the systems development process. Control of the AIS now passes on to the data processing department. Two things must be considered regarding system output. First, who will use the output? Why do users need this type of output, and what decisions will be made based on such output? Second, the medium of the output must be addressed. What medium should be used? Should the output be on paper, computer screen, stored as a voice response file, placed on diskette, microfilm, or some possible combinations of these mediums? These are two important considerations that can either "make or break" a system in terms of its successful use. Other considerations are: What format (tale, graph, etc)? Should preprinted forms be used? Where should the output be sent? Who should have access to the output? How often should the output be produced? Lengthy output should be preceded by an executive summary and a table of contents. Structured programming refers to programs that are subdivided into small, well-defined modules with the goal of reducing complexity and enhancing reliability and modifiability. Each module should interact with a control module rather then with each other. Proper structured programming dictates that each module should have only one entry and exit point to facilitate testing and modification. The conceptual systems design phase involves the development of the general framework for implementing user requirements and solving problems identified in the analysis phase. Conceptual design elements include the following elements: Output specifications to meet users' information needs. Data storage specifications based on reports that need to be produced, the manner in which 63. 64. 65. 66. data are stored (sequential, random, etc.), the type of database to use, and appropriate field sizes. Input specification after output is identified so that the "when, where, and how" of data input are appropriate for the types of output needed. Processing procedures and operations specifications are determined after the sequencing and processes for input and data storage are known. Output design: The objective is to determine the nature, format, content, and timing of printed reports, documents, and screen displays. Design considerations: Use - who will use, why is it needed, what is needed for use. Medium - paper, screen, diskette. Format - tables, graphs, narratives. Preprinted - e.g., purchase orders, checks. Location - where sent. Access - by whom and to what. Detail - summary, table of contents, headings. Timeliness - how often. Categories of output are: Scheduled reports are prespecified and formatted and prepared regularly. Specialpurpose analyses are not prespecified or formatted, but are prepared when management requests data to evaluate an issue. Triggered exception reports are prespecified and formatted and prepared in event of abnormal conditions. Demand reports are prespecified and formatted and prepared when requested. Direct conversion is used when the old system is of no value or is not comparable to the new system. This type of conversion carries a high risk of failure. Parallel conversion protects the company from error, but it is costly and stressful to process transactions twice. Phase-in conversion results in gradual changes over time that also allows resources to be acquired over time. However, creating temporary interfaces is costly and gradual changes take time and come at greater expense. Pilot conversion implements the system in just one part of the organization that allows problems to be corrected before the system is completely adopted. However, the costs of interfaces and running both systems are a disadvantage. There are several controls design considerations to be addressed in this phase of the SDLC. Validity, authorization, accuracy, access, numerical control, and providing an audit trail are the major items, which must be taken into account in physical design. Validity would address a question such as, "Are all system interactions valid?" Authorization could be examined by asking, "Are input, processing, storage, and output activities authorized by the appropriate managers?" Accuracy can be analyzed by asking, "Is input verified to ensure accuracy and what controls are in place to ensure that data passed between processing activities is not lost?" When dealing with access issues, the analyst should ask if there is adequate control over accessing data, and ask the important question, "How is a hacker denied access to a data file?" Asking the question, "Are documents pre-numbered to prevent errors or intentional abuse?" can provide insight about numerical controls. Finally, to provide appropriate audit trails, the analyst should ask the question, "Can transaction data be traced from source documents to final output, and vice versa?" It is imperative that controls design be properly implemented in this phase of the SDLC to ensure the success of launching the system and its ongoing use. Also , availability and integrity. Generally speaking, developers use an eight-step method to develop and test software programs. As part of the systems implementation phase of the SDLC, it is important that these steps faithfully are followed by the development team. 1) The team should consult with users and write an agreement about software requirements as a way to determine user needs. 2) Next, a development plan should be created and documented. 3) The overall approach and major processing tasks should be identified on a high level before proceeding to levels of greater detail. At that point the activity of writing program instructions can begin. 4) After program code has been written, the next step is to test the program. This can be achieved in part through debugging and desk checking, along with other types of testing. 5) The next thing to be done is to document the program, since this will explain how the program works and assist analysts in correcting and resolving errors. 6) Training program users is the beginning of the end of the test phase. Program documentation developed in step five will be used at this time. 7) The seventh step is to install and use the system. At this point the program can be used and program maintenance can take place as needed. 8) Use and modify the system. Revise existing programs (called program maintenance). Chapter 20 MULTIPLE CHOICE 1. What is one activity that is not one of the responsibilities of accountants to help keep a project on track? a) b) c) d) ensuring that the project is on schedule evaluating and measuring benefits helping programmers write code monitoring costs 2. Developing a general framework for implementing user requirements and solving problems identified in the analysis phase occurs in which phase of the SDLC? a) b) c) d) conceptual systems design implementation and conversion operations and maintenance . physical design 3. Who is responsible for identifying and evaluating a variety of design alternatives? a) b) c) d) design team implementation committee steering committee systems analysts 4. Who is responsible for evaluating the design alternatives and selecting the one that best meets the organization's needs? a) b) c) d) design team implementation committee steering committee systems analysts 5. Which of the following lists represent the sequence of elements in developing the conceptual design specifications? a) b) c) d) input, data storage, processing procedures and operations, and output input, output, data storage, and processing procedures and operations output, data storage, input, and processing procedures and operations processing procedures and operations, input, data storage, and output 6. The project team wants to find the most efficient way to collect data in order to prepare a report on sales per store. Which element in design specifications will deal with the decision? a) b) c) d) data collection input output processing procedures 7. One of the purposes of the __________ is to guide physical systems design activities. a) b) c) d) conceptual systems design report physical systems design report program design systems analysis report 8. The conceptual design phase is the second phase in the systems design life cycle. There are several steps in this phase. Which step listed below is not a valid step made in the second phase of the SDLC? a) b) c) d) evaluate design alternatives physical systems design prepare a conceptual systems design report prepare design specifications 9. A part of the conceptual design phase is the evaluation of design alternatives. The design team should identify a variety of design alternatives and evaluate them based on several standards. Who is responsible for approving the final design that best meets the organization's needs? a) b) c) d) IS management the end-users of the system the steering committee the system analyst design team 10. Once a design alternative has been chosen, the project team is responsible for the development of several conceptual design elements. A decision about how often to produce a certain report falls under the category of which design element? a) b) c) d) data storage input output processing procedures and operations 11. At the end of the conceptual design phase the development team prepares a conceptual systems design report. What item below is not considered a rationale for issuing the report? a) b) c) d) it can be used to guide physical systems design activities it communicates how management and user information needs will be met it discusses the design alternatives that were not selected for the project it helps the steering committee assess system feasibility 12. The objective of __________ is to determine the nature, format, content, and timing of printed reports, documents, and screen displays. a) b) c) d) input design output design report design None of the above are correct. 13. Which consideration below is not considered important to output design? a) b) c) d) format location medium source 14. All of the four categories of output have pre-specified content and format except for a) b) c) d) demand reports. scheduled reports. special-purpose reports. triggered exception reports. 15. In the file and database design step of the physical systems design phase, it is advantageous to have a) b) c) d) a compatible format. easy access. timely queries. various capabilities. 16. In evaluating input design, the design team must identify a) b) c) d) a single view so data can be shared. organization and access. types of data input and optimal input methods. what is relevant, complete, and useful. 17. Program development can be improved by a) b) c) d) having special codes for input, output, and file maintenance. having users code the programs. using standards to find incorrect logic errors, omissions, or other problems. using structured programming. 18. Structured programming divides the program into small, well-defined modules. Which of the following statements below is correct? a) b) c) d) Modules interact with each other directly and also through the control module. Modules interact with each other directly. Modules interact with only the control module. Modules primarily, but not always, interact with the control module. 19. Rules for writing programs are called a) b) c) d) applications. basic code. common routines. programming standards. 20. Everyone who interacts with the newly designed AIS should follow __________ that answer the who, what, where, why, and how questions related to all AIS activities. a) b) c) d) procedures programs standards none of the above 21. Which consideration is not of concern in controls design? a) b) c) d) security alphabetical control audit trail validity 22. The accountant wants to make sure that all cash disbursements are made only to legitimate vendors. Which of the following control considerations will deal with this concern? a) b) c) d) security accuracy authorization validity 23. The sales department wants to make sure that all customer inquiries are answered in real-time. Which of the following controls design considerations will deal with this concern? a) b) c) d) security authorization accuracy audit trail 24. At what point in the systems development life cycle does the company determine how the conceptual AIS design is to be implemented? a) b) c) d) the conceptual design phase the implementation and conversion phase the physical design phase the systems analysis phase 25. The physical design stage of the SDLC is the point at which the broad, user-oriented AIS requirements of conceptual design are translated into detailed specifications that are used to code and test the various computer programs. What is the most timeconsuming activity found in this phase, or even in the entire SDLC process? a) b) c) d) controls design input design output design program design 26. Which consideration listed below applies to file and database design? a) b) c) d) form size format medium organization and access 27. Control design considerations are important to the physical systems design phase of the SDLC. One concern of control design relates to the pre-numbering of documents to prevent errors or intentional abuse. What is the control design consideration related to this concern? a) accuracy b) audit trail c) numerical control d) validity 28. __________ is the process of installing hardware and software and getting the AIS up and running. a) b) c) d) Conceptual design Physical design Systems analysis Systems implementation 29. The first step in developing software is to a) b) c) d) determine user needs. develop a plan. hire program users. write program instructions. 30. The initial visual and mental review to discover keying or programming errors is called a) b) c) d) desk checking. desk correction. desk debugging. desk imaging. 31. Flowcharts, record layouts, decision tables, and related items are part of a) b) c) d) determining user needs. documenting the program. testing the program. training program users. 32. Effective AIS training involves a) b) c) d) instruction on new hardware and software. orientation to new policies and operations. planning and scheduling so it occurs before system testing and conversion. All of the above are correct. 33. Step-by-step reviews of procedures or program logic early in the system design that focus on inputs, files, outputs, and data flows are called a) b) c) d) acceptance tests. operating tests. processing of test transactions. walk-throughs. 34. The implementation planning and conversion phase of the SDLC incorporates many systems implementation elements. One such element is the development and testing of software programs. One process used to uncover and eliminate program errors is known as a) black box testing. b) debugging. c) desk checking. d) white box testing. 35. What is used as the basis for management to make a "go/no go" decision regarding whether to proceed from the physical design phase to the implementation planning and conversion phase of the SDLC? a) b) c) d) a conceptual system design report a physical systems design report a systems design report an implementation planning design report 36. An implementation plan consists of the various implementation tasks to be accomplished along with a variety of other data and information, such as expected completion dates, cost estimates, and identification of the individuals responsible for each task. The plan should also address the area of risks to successful implementation. Who is responsible for identifying such risk factors? a) b) c) d) the implementation team the steering committee the systems analysis team the systems development team 37. Within the implementation planning and conversion phase of the SDLC, analysts must __________ before they can __________. a) b) c) d) complete documentation; test software programs install and test software; test software programs test software programs; test the system test the system; select and train personnel 38. A software program must be changed to accommodate new tax rate values. What is the name of the process used to make such a change? a) b) c) d) debugging desk checking program maintenance programming 39. Several types of documentation must be prepared for a new system. The type of documentation that includes operating schedules and file retention requirements is called a) b) c) d) development documentation. operations documentation. reference documentation. user documentation. 40. Inadequate testing can lead to serious systems failures. Part of the SDLC process is to adequately test the system being implemented. What is the type of test that determines whether a program is operating as desired? a) b) c) d) acceptance testing debugging processing of test transactions program walk-through 41. What is the name for the type of testing where copies of real transaction and file records are used rather than hypothetical ones? a) b) c) d) acceptance testing debugging desk checking program walk-through 42. In __________, old and new systems are operated simultaneously at different parts of the organization. a) b) c) d) direct conversion parallel conversion phase-in conversion pilot conversion 43. A company wishes to introduce and test a new AIS at a branch location before company-wide adoption. This approach is called a) b) c) d) direct conversion. parallel conversion. phase-in conversion. pilot conversion. 44. Which of the following activities does not pertain to the area of data conversion? a) b) c) d) changing the data content changing the database changing the file format moving files to a new medium 45. "Conversion" in the implementation planning and conversion phase of the SDLC is the task of changing from an old system to a new system. What is the name for the type of conversion where the old AIS is immediately terminated as the new AIS is introduced? a) b) c) d) direct conversion parallel conversion phase-in conversion pilot conversion 46. What is a phase-in conversion? a) b) c) d) both the old and new AIS are operated simultaneously elements of the old AIS are replaced gradually with elements of the new AIS the new AIS is introduced into one part of the organization, such as a branch the old AIS is terminated as the new AIS is introduced 47. The data conversion process of the implementation planning and conversion phase of the SDLC can be a tedious and time-consuming task. Data files may need to be modified in any of several ways. What is an example of modifying the medium of data files? a) adding or deleting fields or records b) changing from tapes to disks c) changing the file format d) changing the storage capacity of the file format 48. There are several steps in the data conversion process that must take place in a certain sequence. What is the last step in this process? a) b) c) d) actual data conversion checking the files for completeness and removing any data inaccuracies or inconsistencies documentation of conversion activities monitoring of the system after the actual data conversion 49. Which factor is not investigated during the post-implementation review? a) b) c) d) accuracy benefits completion costs 50. The final step in the SDLC is that of the operation and maintenance of the new system. What is the final activity in the systems development process? a) b) c) d) monitoring of the system ongoing maintenance activities preparation of the post-implementation review report user acceptance of the post-implementation review report 51. Some investigation must occur during the postimplementation review process to prepare the report and wrap-up systems development activities. An analyst who asks the question, "Does the system produce actual and complete data?" is investigating what postimplementation factor? a) b) c) d) accuracy compatibility goals and objectives reliability SHORT ANSWER 52. How can accountants help in the SDLC process? 53. What factors does a steering committee consider when evaluating different system designs? 54. What is the purpose of a conceptual systems design report? 55. What are the controls design considerations in a new AIS? 56. What is systems implementation? How do you plan for it? 57. What are the different types of documentation that should be prepared for a new system? 58. What are the different methods of testing a system? 59. What is a post-implementation review? What are the activities involved in a postimplementation review? 60. What output design considerations should be analyzed as part of the physical system design phase? 61. Briefly discuss structured programming. ESSAY 62. What is the conceptual systems design phase? What are the elements of conceptual design specifications? 63. What is the objective of output design? What are the output design considerations? What are the various categories of outputs? 64. What are the different approaches to system conversion? 65. Discuss controls design considerations in the physical systems design phase of the SDLC. 66. What are the eight basic steps used to develop and test software programs?