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Solutions Manual for Core Concepts of Accounting Information Systems, 14th Edition by Mark Simkin, James Worrell, Arline Savage (All Chapters) A+

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core concepts of accounting information systems

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Created By: A Solution

Solutions Manual for Core Concepts of Accounting Information

Systems, 14th Edition by Mark Simkin, James Worrell, Arline

Savage (All Chapters) A+

Chapter 1

ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT

Discussion Questions

1-1. The answer to this question will vary with each university’s location. However, it is

likely most students will reveal that their parents are employed in non-manufacturing jobs.

Instructors may wish to emphasize that the large numbers of service sector employees and

knowledge workers reflect a trend.

1-2. This question encourages students to think about some of the information reporting

limitations imposed by the traditional accounting general ledger architecture. Other business

activities (or business events) that do not require journal entries include (1) obtaining a line of

credit, (2) issuing purchase requisitions or purchase orders, (3) signing contracts, (4) hiring a

new executive, and (5) sending financial information to investors or bank loan personnel.

Instructors may wish to point out that important information about a company’s business

activities may be included in an annual report outside the financial statements. The management

letters and footnotes in annual reports may reveal much about a company’s future prospects.

Managers have access to much more information than what is published in financial reports.

Whether or not they would like to have access to more non-financial information, or if they

would prefer that the accounting information system capture data about business events rather

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than accounting transactions, is debatable. It may also be a function of the accounting system in a

particular company. Investors may wish to have more information available to them but the

downside is that too much information can be just as problematic as too little information.

1-3. The financial accounting systems we have known for more than 500 years are changing

dramatically as a result of advances in information technology and financial accounting software.

For example, databases allow accountants to collect and store all the data (accounting transaction

data and non-financial data) about a business activity or event in one system, allowing those

needing such information to retrieve it quickly, efficiently, and specifically in any format they

wish. Financial data can also be more easily linked to nonfinancial data because of database

technology. Thus, it is likely that financial reporting will undergo tremendous change in the next

few years as we learn to use technology, including artificial intelligence, more effectively in the

design of AISs.

ERP systems are another example of the information age's impact on financial accounting. Now,

organizations capture more financial and non-financial data and produce more information than

ever before. This allows companies to integrate their information systems, better forecast

everything from raw materials requirements to finished product production, and to perform more

sophisticated analyses of important business functions. For instance, sales can be examined at

many different levels and organized according to criteria such as geography, customer, product,

or salesperson.

One of the most important changes in AISs is the way these systems will gather financial

information in the future. Although many of these systems will continue to capture data in

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traditional batch mode or at POS sites, we expect newer systems to collect more of it on mobile

devices—for example, cell phones, PDAs, and digital cameras. Because more employees and

working at home these days, ―digital commuting‖ may be another trend.

1-4. The objective of a company’s financial statements is to communicate relevant financial

information to such external parties as stockholders, investors, and government agencies. Issuing

financial statements in XBRL formats contributes to this objective by making such financial data

more searchable, comparable, informative, and therefore useful. Also, because XBRL enables

companies to use standard tags to identify specific accounting values, the language itself imposes

a greater degree of standardization in the informational content of the reports. Finally, XBRL

helps government agencies gather financial data that are more consistent, easier to understand,

self-checking, and more quickly communicated. Chapter 2 contains more about XBRL, including

the idea that the language also enables its users to verify accounting relationships as assets =

liabilities + stockholder equity.

1-5. The questions asked here about suspicious activity reporting (SAR) require opinions from

students. Regarding the first question, which asks if SAR activity should be a legal matter, there

is little room for disagreement because so much of SAR is mandated by federal legislation such

as the Annunzio-Wylie Anti-Money Laundering Act of 1992, the Bank Secrecy Act of 1996, and

the Patriot Act of 2001. Although there are statistics on the number of SAR filings, less is known

about how much of what appears to be suspicious are in fact violations of federal statutes.

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1-6. The example given in the question demonstrates one way in which computerization has

refined cost estimation and thus has impacted managerial accounting. However, IT has impacted

almost every area of managerial accounting (and decision making). Consider, for example, the

emergence of such concepts as just-in-time systems, computer integrated manufacturing systems,

manufacturing resource planning systems, target costing, and activity based costing – all of these

require IT to support managerial decision making. Forecasting and budgeting are other areas of

managerial accounting impacted by advances in technology, as are the many applications of

spreadsheet software, decision support systems, and expert systems.

Universities are also impacted by the many advances in IT. You might have students type

―university use of scorecards‖ in their favorite browser to discover the many uses this tool offers

to administrators in an academic environment. The search results show a variety of uses at such

universities as The Ohio State University, CSU-Stanislaus, Clemson University, Colorado State

University, San Jose State University, and others. For example, the University of Denver adapted

a version of the Balanced Scorecard to evaluate their Student Life Assessment Plan (SLAP),

which focuses on Learning Outcomes. San Jose State University uses a Scorecard to evaluate

and continuously improve their online programs.

1-7. The AICPA website lists hundreds of potential assurance services for CPAs to offer.

These include Trust Services and Information Integrity, Guidance on Audit Data Analytics,

XBRL Assurance Services, and Systems and Organization Controls for Cybersecurity,

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