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Accounting Information Systems
c. Systems analysis is often performed by a project team composed of a systems analyst, a
management accountant, and other knowledgeable and helpful people. What is the
management accountant’s role in systems analysis?
Most systems analysis work is performed by systems people. However, the management
accountant is an important part of the development team and would be of assistance in
providing information about various aspects of the system, including:
Accounting Information Systems
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20.11 Don Richardson, JEM Corporation’s vice president of marketing, is part of a management
team that for several months has been discussing plans to develop a new line of business.
Rumors about the major organizational changes that may be required to implement the
strategic plan have been circulating for months.
Implementing organizational change is one of the most demanding assignments an executive
faces. It has been suggested that every change requires three steps: unfreezing the current
situation, implementing the change, and refreezing the effected change. This view, however,
lacks the specific details needed by an operating manager who must initiate the change.
Adapted from the CMA Examination
a. Explain why employees resist organizational change.
• Uncertainty and fear. Employees become anxious and nervous when they fear the
unknown. They worry about losing their jobs and their ability to meet new job
requirements. If they do not understand the change or its implications or mistrust those
initiating the change, there is even more uncertainty and fear of the unknown.
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b. Discuss ways JEM Corporation can alleviate employee resistance to change.
• Employee participation. Encourage employees to participate in the change planning and
implementation. Employees who express their opinions, suggest ways to improve the
system, and hear the positions of others are more likely to accept change.
• Get management support. Top management should make it clear that they fully support
the system and everyone else to do so. When management is supportive of the changes,
employees are more willing to accept the change.
• Allay fears. To the degree possible, management should provide assurances that there
will be no major loss of jobs or changes in job responsibilities.
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20.12 Remnants, Inc., with headquarters in St. Louis, manufactures designer clothing. The company
markets and services its products by region, with each functioning as a profit center. Each region has
a manager, an accounting department, a human resources department, and several area offices to
market and service the products. Each area office has sales, service, and administrative departments
whose managers report to an area manager.
The Boston branch manager is encouraging the New York area manager to consider a new
information system to handle the local branch’s growing information needs. The NewYork area
manager and the eastern region manager want to establish a project team with employees from the
region, area, and branch office. The team will assess the information needs at the Boston branch
office and develop system recommendations. The following employees have been appointed to the
project team, with Keith Nash as chairperson:
Eastern Region Office
Kurt Johnson, Budget Supervisor
Sally Brown, Training Director
a. Project team members contribute their skills to help accomplish a given objective.
Characteristics of group members can influence the functioning and effectiveness of a
project team. Identify some of these characteristics.
• Personality. Aggressive employees often influence a task force by their nature, directing
resources to meet their needs first at the expense of the needs of the company.
b. Due to the team’s composition, what sources of conflict can you see arising among its
members? Do you think the group will succeed in its objective to develop an
information system for the Boston branch office? Why or why not?
• Conflicts among offices. Regional officers may be at odds with local managers
concerning Boston office needs and company resources available to meet these needs.
Accounting Information Systems
c. What contribution would a person who holds a position as budget supervisor make in a
project team such as this one?
The budget supervisor can contribute insight concerning the amount of funds available for the
Boston branch to finance the IS project. As the budget supervisor has access to future
financial projections, he can assess the economic feasibility of any potential project.
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20.13 Managers at some companies face an ongoing systems development crisis: IS departments
develop systems that businesses cannot or will not use. At the heart of the problem is a
“great divide” that separates the world of business and the world of IS. Few departments
seem able or ready to cross this gap.
The costs of the great divide can be devastating. An East Coast chemical company spent
over $1 million on a budgeting and control system that was never used. The systems
department’s expertise was technical excellence, not budgets. As a result, the new system
completely missed the mark when it came to meeting business needs. A Midwestern bank
used an expensive computer-aided software engineering (CASE) tool to develop a system
that users ignored because there had been no design planning. A senior analyst for the bank
said, “They built the system right; but unfortunately they didn’t build the right system.”
a. What is the great divide in the systems development process? What causes the gap?
The "great divide" is the gap between the information needs of business managers and the
information produced by IS. The great divide occurs because of the following:
b. What would you suggest to solve this great divide information crisis?
• A first step in effective systems design is a thorough business analysis to understand how
a business operates and how its business functions relate. This helps systems
professionals and business managers to communicate effectively when developing an
integrated system.
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c. Discuss the role a systems designer, business manager, and end user can take to narrow
the great divide.
Systems designers can involve end users and managers in the design and development
process. This reduces the behavioral problems associated with a new system and improves
d. Who plays the most vital role in the effective development of the system?
All players play important roles in the systems development process. The "information
crisis" is in large part the result of an overreliance upon the systems analyst to meet the needs
Accounting Information Systems
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20.14 Joanne Grey, a senior consultant, and David Young, a junior consultant, are conducting a
systems analysis for a client to determine the feasibility of integrating and automating
clerical functions. Joanne had previously worked for the client, but David was a recent hire.
David questioned the supervisor for 30 minutes but found him to be uncooperative. David
gave Joanne an oral report on how the interview went and what he learned about the
department.
Describe several flaws in David’s approach to obtaining information. How should this task
have been performed?
• Ms. Grey did not give Mr. Young adequate instructions about how to conduct the interview
and what information to obtain. A senior consultant must exercise closer supervision and
provide better guidance to junior employees. Perhaps Ms. Grey should have performed the
interview while Mr. Young observed.
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SUGGESTED ANSWERS TO THE CASES
20-1 Audio Visual Corporation (AVC) manufactures and sells visual display equipment.
Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its
inventory of new equipment and replacement parts. AVC has a departmentalized
manufacturing plant with assembly, maintenance, engineering, scheduling, and cost
accounting departments as well as several component parts departments.
Before acquiring the new computer, the systems analysts studied the existing AIS, identified
its weaknesses, and designed applications to solve them. In the 18 months since the new
equipment was acquired, the following applications were redesigned or developed: payroll,
production scheduling, financial statement preparation, customer billing, raw materials
usage, and finished goods inventory. The departments affected by the changes were rarely
consulted until the system was operational.
BILL TAYLOR, IS MANAGER AND JERRY ADAMS, PLANT MANAGER
JERRY: Bill, you’re trying to run my plant for me. I’m the manager, and you keep
interfering. I wish you would mind your own business.
BILL: You’ve got a job to do, and so do I. As we analyzed theinformation needed for
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JERRY: I’m responsible for the efficient operation of production. I’m the best judge of
production efficiency. The system you installed reduced my workforce and increased the
workload of the remaining employees, but it hasn’t improved anything. In fact, it might
explain the high error rate in the documents.
TERRY: I have no recommendations, but I’ve had similar complaints from purchasing and
shipping. We should explore your concerns during tomorrow’s plant management meeting.
Adapted from the CMA Examination
Evaluate the preceding information, and answer the following questions:
1. Identify the problems the new computer system created and discuss what caused them.
The problems stem from a total lack of communication at AVC. The failure to communicate
has existed for years and exists between all levels of management.
Top management did not adequately plan for the IS upgrade and did not involve non-IS
employees in the process. In addition, through lack of direction or control, top management
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2. How could AVC have avoided the problems? How can they prevent them in the future?
The problems could have been avoided by top management doing a better job of planning and
communication, holding meetings between the IS staff and user groups throughout the
