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ACCT 336 Exam 1 || with 100% Errorless Solutions.

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  • ACCT 336

Why must we have knowledge of a system's objectives to study that system? correct answers Understanding and evaluation of a system's procedures must be studied in light of the system's objectives. For example, in an accounts receivable process, we periodically send customer statements and follow-up...

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  • August 25, 2024
  • 15
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ACCT 336
  • ACCT 336
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ACCT 336 Exam 1 || with 100% Errorless Solutions.
Why must we have knowledge of a system's objectives to study that system? correct answers
Understanding and evaluation of a system's procedures must be studied in light of the system's
objectives. For example, in an accounts receivable process, we periodically send customer
statements and follow-up on delinquent receivables found on those statements. Why? To ensure
timely receipt of all outstanding receivables (i.e., an accounts receivable process objective).

Can one person be a member of all three business process components: information,
management, and operations? Discuss your answer correct answers Many employees of an
organization, particularly those assigned to a management position, can at one time or another be
a member of all three components. Other personnel (i.e., non-management) can be members of
the operations and information processes. For example, the warehouse clerk who picks the goods
(i.e., an operations function) and writes the quantity picked on the picking ticket and signs the
picking ticket (i.e., an information function) is a member of two processes.

Examine Figure 1.5 (pg. 14). Discuss the relative importance of horizontal information flows and
vertical information flows to the business professional. correct answers An information system
captures and records data as business operations take place. This business event processing or
horizontal information flow is the very basis of the IS. From this horizontal flow the business
professional must capture the data necessary for business records and to produce reports.
Vertical information flows, derived from the horizontal flows, provide managers with
information with which to plan, manage, and control operations. The business professional
participates in the processes (summarize, calculate, filter, consolidate, etc.) necessary to produce
the vertical flows.

Where do you see your role(s) as a business professional—in the information, management, or
operations processes? Discuss your answer. correct answers The student should see that they
may function in all three processes. Certainly, the design and operation of the IS implies an
information systems role. Business professionals, at some point in their careers will fill
management functions as supervisors of a project implementation team, of an office, etc..
Finally, although more difficult to see, business professionals may find themselves in an
operations role. For example, preparing budgets, reviewing financing plans, and performance of
business processes are operational functions.

"When we computerize an IS, we merely change how the data are processed; we don't change
what tasks are performed." Do you agree? Give examples to support your position. correct
answers We agree. Whether an IS is manual or computer-based, we record, post, and summarize
business transactions. For example, when an event, such as a sale occurs, the relevant sales event
data must be recorded and posted to the customer's accounts receivable master data. And, so,
while the business process logic may remain the same (or similar), the implementation will
probably differ.
But, while control objectives will not change, controls may change because they are related to
technology. Also, integration among IS modules, such as with an enterprise system, may mean
that business event data is being collected and processed with data related to the context for the

, event (e.g., geographic region of the purchaser, how the customer identified this item for
purchase)

Assume that a manager can obtain information from the organization's computer in three ways:
by direct inquiry using his laptop connected to the enterprise system, by a daily paper report, and
by a monthly report. Using the qualities of information discussed in this chapter
(understandability, relevance, timeliness, predictive value/feedback value, neutrality/freedom
from bias, comparability, consistency, validity, accuracy and completeness), compare and
contrast these three sources of information. correct answers word document

Give several examples not mentioned in the chapter of potential conflicts between pairs of
information qualities. correct answers word document

What information quality is most important for decision making - relevance or reliability?
Discuss your answer. correct answers To answer this question it is useful to first review the
definitions given in the Chapter to make sure that we answer this question using the terms as
they are defined here and not as they might be used in general practice. Relevance is defined as
"information capable of making a difference in a decision-making situation by reducing
uncertainty or increasing knowledge for that particular decision." Reliability is defined (in
Exhibit 1.1) as "relates to the provision of appropriate information for management to operate the
entity and for management to exercise its financial and compliance reporting responsibilities."
First, we can say that relevance addresses a decision to be made and to reducing uncertainty (or
increasing knowledge). The uncertainty being reduced must be relative to the knowledge already
possessed by a particular decision-maker for a particular decision. Reliability does not refer to
specific decisions (or decision-makers). So, for a specific decision and decision-maker, relevance
is most important.
Second we can say that reliability refers to some externally imposed constraints (e.g. regulatory
bodies, laws). For example, organization with stock publicly traded in the United States must
adhere to the rules for financial reporting prescribed by the Securities and Exchange Commission
and the Financial Accounting Standards Board. Generally Accepted Accounting Principles
(GAAP) would, for example, require that historical cost be used to report the dollar value of
assets held by an entity. Historical cost information may not be "relevant" for some decisions,
but it is "reliable".
Another definition of reliability from FASB Concepts Statement #2 states "Reliability: The
quality of information that assures that information is reasonably free from error and bias and
faithfully represents what it purports to r

Which information qualities are most important to Amazon.com's ability to fill advance orders
for books? Explain your answer. correct answers Timeliness and accuracy are two of the most
important information qualities necessary for Amazon.com to fill advance orders for books.
Amazon.com's main competitive advantage is its ability to fill a customer's order and ship it to
them quickly. Therefore, advance order information must be timely so that the orders can be
filled and shipped as soon as possible.
However, if Amazon.com fills a customer's order using inaccurate information then the customer
may receive the wrong book. Accuracy is also a key information quality of Amazon.com's

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