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CHAPTER 22
SYSTEMS DESIGN, IMPLEMENTATION, AND OPERATION
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
22.1 Prism Glass is converting to a new information system. To expedite and speed up
implementation, the CEO asked your consulting team to postpone establishing standards
and controls until after the system is fully operational. How should you respond to the
CEO’s request?
The consulting team should strongly advise the CEO that postponing standards and controls
is not advisable. Rather than save time and money, the company will probably lose time in the
future when unanticipated problems and weaknesses arise due to the lack of standards and
controls. The following are reasons why performance standards and control procedures should be
established before the system becomes operational:
Internal control considerations must be taken into account when assigning job
Procedures for guiding users and operators through the system and the various error
If the information system is not properly controlled, the information it produces will be of
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Ch 22: Systems Design, Implementation, and Operation
22.2 When a company converts from one system to another, many areas within the organization
are affected. Explain how conversion to a new system will affect the following groups, both
individually and collectively.
The following are possible responses to each of the five areas:
a. Personnel: Employees will be affected in at least two important ways.
b. Data Storage: One of the primary logistical concerns of implementing a new system is
c. Operations: New personnel may have to be hired or current employees may need to be
d. Policies and Procedures: A new information system usually requires new operating policies
e. Physical Facilities: The effect on the physical facilities will be largely determined by the
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Accounting Information Systems
22.3 The following notice was posted in the employee cafeteria on Monday morning:
To: All Accounting and Clerical Employees
From: I.M. Krewel, President
Subject: Termination of Employee Positions
Effective this Friday, all accounting and clerical employees not otherwise contacted will be
terminated. Our new computer system eliminates the need for most of these jobs. We’re
grateful for the loyal service you’ve rendered as employees and wish you success. You may
wish to pick up your final checks on Friday before you go.
Discuss the president’s approach to human resource management.
This approach is clearly unproductive and it would not work.
What are the possible repercussions of this episode?
Sabotage of the new system by disgruntled employees.
Assuming that job termination is the best alternative available, how should management
approach the situation?
Management should discuss the situation in person with each employee.
The changes that are being made should be clearly communicated to each employee.
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Ch 22: Systems Design, Implementation, and Operation
22.4 In which phase of the systems development life cycle would each of the following positions
be most actively involved? Justify your answers.
a. Managerial accountant - The managerial accountant is usually involved in the analysis
b. Programmer - Most of the programmer's involvement comes during the physical design and
c. Systems analyst - The analyst is usually involved in all phases of the SDLC.
d. Financial vice president - The financial vice-president is usually involved in the systems
e. Information systems manager – The IS manager is responsible for overseeing all
f. Internal auditor - The auditor is often consulted during the systems analysis phase when
22.5 During which of the five SDLC stages is each task, labeled (a) through (m), performed?
More than one answer may apply for each activity.
a. Writing operating procedures manuals - Physical (detailed) systems design phase and
b. Developing program and process controls - Physical (detailed) systems design phase and
c. Identifying alternative systems designs - Conceptual (general) systems design phase
d. Developing a logical model of the system - Conceptual (general) systems design phase
e. Identifying external and administrative controls - Conceptual (general) systems design
phase
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Accounting Information Systems
SUGGESTED ANSWERS TO THE PROBLEMS
22.1 You were hired to manage the accounting and control functions at the Glass Jewelry
Company. During your introductory meeting, the president asked you to design and
implement a new AIS within six months. Company sales for the past year were $10 million,
and they are expected to double in the next 18 months.
Outline the procedures you would follow to complete the assigned project.
a. You would perform the following steps to design and implement a new AIS:
Include a description of the following:
1. Sources of Information
ocompany documents (organization charts, job descriptions, and procedure manuals)
2. Methods of Recording Information
oprepare narrative descriptions and organization charts
3. Methods of Verifying the System Description
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Ch 22: Systems Design, Implementation, and Operation
b. The accounts payable system will contain a number of programs, including Enter
Invoices and Print Payable Checks. For each program, describe its purpose and outline
application control considerations.
1. Enter Invoices
This program permits operators to enter unpaid vendor invoices into the Accounts
Payable system. The program should enable the distribution of the invoice to specific
general ledger accounts. Controls include:
2. Print Payable Checks
This program generates supplier checks to pay outstanding invoices. Controls include:
oensures that the vendor number on the invoice is valid (i.e., vendor is still on file)
22.2 Wang Lab’s tremendous growth left the company with a serious problem. Customers would
often wait months for Wang to fill orders and process invoices. Repeated attempts by
Wang’s understaffed IS department to solve these problems met with failure. Finally, Wang
hired a consulting firm to solve its revenue tracking problems and expedite prompt receipt
of payments. The 18-month project turned into a doubly long nightmare. After three years
and $10 million, the consultants were dismissed from the unfinished project.
The project failed for many reasons. The systems development process was so dynamic that
the failure to complete the project quickly became self-defeating as modifications took over
the original design. Second, management did not have a clear vision of the new AIS and
lacked a strong support staff. As a result, a number of incompatible tracking systems sprang
from the company’s distributed computer system. Third, the project was too large and
complex for the consulting firm, who had little experience with the complex database at the
heart of the new system. Finally, the project had too many applications. Interdependencies
among subprograms left consultants with few completed programs. Every program was
linked to several subprograms, which in turn were linked to several other programs.
Programmers eventually found themselves lost in a morass of subroutines with no
completed program.
The IS department finally developed a system to solve the problem, but their revenue
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Accounting Information Systems
tracking system suffered quality problems for years.
Wang Labs asked you, a member of the IS staff, to write a memo explaining the failure of
the systems development project.
a. Why did the development project fail? What role did the consultants play in the
failure?
Dynamic requirements. The development process was so dynamic that the failure to
Management did not have a clear vision of the new system. As a result, incompatible
Management lacked a strong IS staff. A qualified IS staff could have planned and
The project was too large and too complex and the consulting firm had little
experience. The firm had little understanding of the desired technology: a complex
The project had too many applications. Interdependencies among subprograms and
b. Identify the organizational issues that management must address in the future.
Management should develop a unified strategic information plan. Organizations
Wang should establish an IS steering committee to govern the development process
and support the strategic plan. A steering committee monitors systems development
Wang should support the strategy with an expanded, qualified IS staff. A company's
Wang should set policies governing systems development. Well-established
c. Recommend steps the company could take to guarantee consulting service quality.
Wang should improve existing development policies. Wang must first establish its
Wang should establish consulting services evaluation criteria. Management must
Wang should use an IS steering committee and project development teams to
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22.3 Tiny Toddlers, a manufacturer of children’s toys and furniture, is designing and
implementing a distributed system to assist its sales force. Each of the 10 sales offices in
Canada and 20 in the United States maintains its own customers and is responsible for
granting credit and collecting receivables. Reports used by each sales office to maintain the
customer master file and to enter the daily sales orders are shown in Figures 22-4 and 22-5.
Evaluate the reports shown in Figures 22-4 and 22-5 using the following format:
Weakness Explanation Recommendation(s)
Customer Maintenance Form
Weakness Explanation Recommendation(s)
or website.
can sign or initial.
would not know who filled out
the form.
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Accounting Information Systems
22.3 (continued)
Sales Order Form
Weakness Explanation Recommendation(s)
There is no space to
The goods cannot be shipped to a
Add a ship to address to the sales
There is no space for
There is no way for the company to
Add as space on the form for the
There is no room for
the sales order form
There is no way to know if the
Include columns for Unit Price
Some students may refer to the sales order form shown in the Revenue Cycle chapter.
22.4 Mickie Louderman is the new assistant controller of Pickens Publishers. She was the
controller of a company in a similar industry, where she was in charge of accounting and had
considerable influence over computer center operations. Pickens wants to revamp its
information system, placing increased emphasis on decentralized data access and online
systems. John Richards, the controller, is near retirement. He has put Mickie in charge of
developing a new system that integrates the company’s accounting-related functions. Her
promotion to controller will depend on the success of the new AIS.
Mickie uses the same design characteristics and reporting format she used at her former
company. She sends details of the new AIS to the departments that interface with accounting,
including inventory control, purchasing, human resources, production control, and
marketing. If they do not respond with suggestions by a prescribed date, she will continue the
development process. Mickie and John have established a new schedule for many of the
reports, changing the frequency from weekly to monthly. After a meeting with the director of
IS, Mickie selects a programmer to help her with the details of the new reporting formats.
Most control features of the old system are maintained to decrease the installation time, with a
few new ones added for unusual situations. The procedures for maintaining the controls are
substantially changed. Mickie makes all the AIS control change and program-testing
decisions, including screening the control features related to payroll, inventory control,
accounts receivable, cash deposits, and accounts payable.
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Ch 22: Systems Design, Implementation, and Operation
As each module is completed, Mickie has the corresponding department implement the
change immediately to take advantage of the labor savings. Incomplete instructions
accompany these changes, and specific implementation responsibility is not assigned to
departmental personnel. Mickie believes operations people should learn as they go, reporting
errors as they occur.
Accounts payable and inventory control are implemented first, and several problems arise.
The semimonthly payroll runs, which had been weekly under the old system, have abundant
errors, requiring numerous manual paychecks. Payroll run control totals take hours to
reconcile with the computer printout. To expedite matters, Mickie authorizes the payroll clerk
to prepare payroll journal entries.
The new inventory control system fails to improve the carrying level of many stock items.
This causes critical stock outs of raw material that result in expensive rush orders. The new
system’s primary control procedure is the availability of ordering and user information. The
information is available to both inventory control and purchasing personnel so that both
departments can issue timely purchase orders. Because the inventory levels are updated daily,
Mickie discontinues the previous weekly report.
Because of these problems, system documentation is behind schedule, and proper backup
procedures have not been implemented. Mickie has requested budget approval to hire two
systems analysts, an accountant, and an administrative assistant to help her implement the
new system. John is disturbed by her request because her predecessor had only one part-time
assistant. Adapted from the CMA Exam.
a. List the steps Mickie should have taken during while designing the AIS to ensure that
end-user needs were satisfied.
Interviews should have been conducted with users affected by the changes to understand
The capabilities of the new system should have been explained so users can determine
Mickie should not have automatically assumed that the things that worked for her
As the different parts of the system are developed, the changes should be reviewed with
Mickie and John should not take upon themselves the responsibility of determining what
Mickie should not have assumed that the control features of the old system were
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Accounting Information Systems
Mickie cannot possibly understand the system and user needs well enough to made all the
While having departments implement changes immediately might produce labor savings,
Incomplete instructions accompanied the changes, and specific implementation
Documentation should be complete and back up procedures should be in place before a
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