Deck 14: Monitoring and Auditing Ais

Question 1

In the chapter, we discussed an example of Starbucks using the systems development lifecycle to develop the capability to analyze what type of pastries sell best with its various hot and cold drinks. Now, let's suppose that NASDAQ requires all of the firms trading on the exchange to report their financial statements not only using GAAP but also International Financial Reporting Standards (IFRS). Because Starbucks' current system cannot handle the IFRS requirements, the financial reporting system must be modified. Using Starbucks as an example, explain what types of activities would occur in each of the five phases of the systems development life cycle in preparation for reporting financial results according to IFRS.

Answer 1

The systems development life cycle refers to the generating the information system to fulfill the requirements of the users. SDLC includes five phases: Planning, analysis, pattern, enactment and maintenance.
IFRS requirements regarding the disclosure of financial reports can be defined as follows:
1. Statement of Financial situation: Financial position also known as balance sheet. IFRS regulate the components of balance sheet of the company.
2. Statement of all-inclusive income: This statement includes either the single statement for the disclosure of income of the company or company can use separate statement for the disclosure of the income.
3. Equity disclosure: According to the requirement of IFRS, Every company has to disclose the every single change in equity to the financial reports.
4. Cash flow statement: This statement includes the disclosure of the operating, financing and investing activities of the company.
Company can develop the new system as per requirement of the IFRS regarding the disclosure of financial reports with the help of five stages of SDLC. Five stages of SDLC includes various activities, these can be described as follow:
1. Planning phase : This phase starts with the requirements of business for a new information system. This phase includes state the problems, establish the objectives and looking for another solutions.
As requirement of S company that is to disclose the trading on exchange with accordance of IFRS. S Company has to develop a new system to record every transaction of trading on exchange during the year. Company has to make change in the recording of financial statement.
2. Analysis phase : The analysis phase of system development life cycle contains the whole analysis of the information system requirements of the final user. This phase includes the analysis of current progress and projected result.
The analysis team of Company S. will analyze the changes of the system in accordance of the requirement of IFRS and try to find out the best outcomes with the development of the system.
3. Design phase : This phase includes those expected features that it skipped under the analysis phase of SDLC. This phase may be referred as the operating the blueprint, process, and bar charts and other supportive documents.
In this phase, the designer team of the Company S. will try to make a final picture of new develop system that how will it looks like on the final screen and find out the any other need of system before the implementation of the new system.
4. Implementation phase : This phase includes improvement, checking the final progress and implement of the new introduced system. This phase removes bugs and errors of the system.
In implementation phase, the developer of new system will encode the new system and test it. Developer of the company will implement the new system. Now in this phase company can use the new system to prepare the financial statements.
5. Maintenance Phase : Final phase of SLDC includes the corrections and up gradation in the new system to ensure the system continues to meet the requirement set by the company.
In final phase, system developer implements the some new feature to the system for ensuring the maintenance of the system and check the capability of the new system in accordance of the requirements.

Question 2

The technology acceptance model does not address: a. Perceived usefulness
B) Perceived systems quality
C) Perceived ease of use
D) Intention to use

Answer 2

Technology acceptance model refers to the technology adopted by user is effective or not and the outcomes after adopting the technology is accepted by user or not. This model shows the prediction about the acceptance of technology. This model shows the behavioral changes in user after the adoption of technology.
a.
Perceived usefulness : This is the belief of the user, that whether using technology will increase the performance or not. In case, user tries to adopt new technology and it increases the performance of the user it would be referred as perceived usefulness.
In other case, if the user thinks that technology is not too easy to use and finally technology is not adopted by user. Thus, option (a) is incorrect.
b.
Perceived system quality : Perceived system quality refers to the perception of user towards the technology. User make the perception that technology is easy to use or not and the effect of the technology after the adoption.
This is the individual thinking of user. Technology acceptance model does not consider this quality. Thus, option (b) is correct.
c.
Perceived ease of use : This contains the study of the user regarding the technology that it can adopt by less effort or it will easy to use. This model includes the meaning of easy towards the technology. Thus, option (c) is incorrect.
d.
Intention to use : This technology is grounded on apparent usefulness and apparent simplicity of use. Use of technology can be affected by individual's behavior, intention and perception. Thus, option (d) is incorrect.
Hence, the correct option is
.

Question 3

Explain the 100% rule. Assume you are telling your roommate about this rule, and use an example that is relevant to him or her.

Answer 3

Program evaluation review technique is the graphical representation of task of the project. PERT determine the consumed time by a particular task and denotes it in the queue with another task. PERT examines the dependencies of the task.
Gantt is the graphical representation of task of the project. PERT determine the consumed time by a particular task but it denotes the task with bar.
100% rule : Task of entire project must be defined. Every project includes many tasks. According to the 100% rule every task must be completed with the completion of the whole project. 100% rule also defined the ability of the project that the project will able to fulfill the requirement or not. This rule examines the internal, interim and external tasks of the project.
The 100% rule can be explained with the help example of formation of house mention as below:
In this example, main task is Formation of house, internal tasks are electricity and plumbing and interim tasks are excavate and steel fittings and external tasks are masonry work and building finishes.
The main task is complete when the internal, interim and external tasks contribute their contribution. Internal tasks contribute the 30%, interim tasks contribute the 45% and the external tasks contribute the 25% to the entire construction then it will be called as 100% completion of the formation of house.
100% rule provides the way for understanding the requirement of project. When project is under process the 100% rule ensures that costs of project are shown in accounting information system is relevant to the house. 100% rule states the accurate costing, which is same as expected cost of the project.
Thus, the 100% rule is mainly important in formation of house and some same case. The application of 100% rule provides the accurate plan and record the actual cost relevant to the construction of the house.

Question 4

Consider the triple constraint figure in Figure 15.3. Why is quality included in that figure even if it is not a triple constraint? Why is quality a concern (or not a concern, based on your point of view) for the project manager and project sponsor?

Question 5

Projects are considered challenged if they are a. Late, over budget, or do not have the required features and functions
B) Canceled prior to completion
C) Delivered, but never used
D) Completed early

Question 6

The Sarbanes-Oxley Act's 404 reports require management and auditors to report on a. The financial condition of the firm
B) The quality of the project management planning
C) The academic background and experience of the company's accounting leadership
D) The effectiveness of the internal controls of the company's accounting information system

Question 7

Accountants generally do not have all of the necessary systems analyst and systems development skills needed to develop accounting information systems. Why should you be interested in project management of an accounting information system?

Question 8

In this chapter, projects are defined as a. A series of tasks performed in a defined sequence
B) Turning raw talent into an NFL quality quarterback
C) Turning blueprints from an architect into a completed building
D) Merging two databases into one

Question 9

Your grandmother regularly uses a Sony Walkman (vintage 1989) that has cassette tapes. She is quite pleased with this technology because it lets her go on her evening constitutional and listen to music of her era. And of course, she has listened to this music for many years! What features would you point out to her to ease the "perceived usefulness" and "perceived ease of use" concerns? Use the technology acceptance model as discussed in the chapter to suggest whether she will use a brand new iPod Touch if given to her as a Christmas present.

Question 10

The triple constraint of project management does not include the constraint of a. Technical issues
B) Time
C) Cost
D) Scope

Question 11

For your personal consulting business, you decide to set up an accounting information system to help with taxes as well as to help monitor your revenues and expenses. You've heard that QuickBooks is easy to set up, so you buy it, install it on your computer, enter in recent transactions and begin to use it.
Required:
1. Explain one or two ways you could be a user of this accounting information system.( Hint: Use the discussion in the text considering the role of accountants in accounting information systems.)
2. Explain one or two ways you could be a manager of this accounting information system. ( One possibility: What practices do you employ to make sure your system is safe?)
3. After a few months, you decide to expand your QuickBooks with additional modules (payroll, inventory, etc.). Access the QuickBooks website ( http://quickbooks.intuit.com ), and consider one or two ways in which you could be a designer of your accounting information system.

Question 12

What are the differences between the situation in Question 4 and that of users of a brand new accounting information system?

Question 13

The PERT and Gantt charts primarily address the triple constraint of a. Technical issues
B) Time
C) Cost
D) Scope

Question 14

Brainstorm a list of reasons why 68 percent (including 44 percent challenged + 24 percent failed) of the information technology projects either failed or were challenged in 2009. Consider specifics of each of the elements of the triple constraints model and any other common delays, including the challenges of working with programmers, software and hardware suppliers and vendors, and the like. What is the best way to overcome these issues and decrease the number of projects failed or challenged?

Question 15

Compare and contrast a PERT chart and a Gantt chart. How do they complement each other?

Question 16

Rank the 10 core principles of effective information technology planning in order of importance in your opinion. Provide support for your top 5 important principles.

Question 17

The 100% rule suggests that before a PERT chart is done, a project manager must a. Make sure 100 percent of the project is funded
B) Make sure the project team is devoted solely, or 100 percent, to this project
C) Make sure 100 percent of the project tasks are defined
D) Make sure that each person on the project team got 100 percent on their project management final exam

Question 18

Which phase of the systems development life cycle would include a feasibility analysis? a. Analysis phase
B) Planning phase
C) Design phase
D) Implementation phase

Question 19

As mentioned in the opening vignette, Walmart is implementing its SAP system throughout its worldwide operations. If Walmart has the choice, should it implement this system in China before, at the same time, or after the implementation in the United States? Use the technology acceptance model (in particular, perceived ease of use) to explain your answer.

Question 20

As part of effective IT planning in the systems development life cycle, a return on investment (ROI) calculation may be performed as part of the economic feasibility analysis. Often, many of the benefits from a new information system may be intangible benefits (e.g., system is easier to use or system enhances customer service, etc.) that are hard to quantify in an income statement. How would you suggest this be included in the economic feasibility analysis?

Question 21

Using the 15-15 rule as a guide, when would a project manager and/or project sponsor proceed with completion of a project even if it is both 15 percent over budget and 15 percent off the initial schedule?

Question 22

Imagine the role of the project sponsor when a leader of the accounting book keepers comes to complain that the new information system could possibly result in the loss of five bookkeeper jobs. The bookkeepers argue that they will get the union involved if needed to protect their jobs. What should the project sponsor do?

Question 23

The critical path in a PERT chart represents: a. The sequencing of tasks
B) The most important tasks of the whole project
C) The longest path of tasks needed for project completion
D) The tasks that must be completed without errors

Question 24

The IFAC suggested 10 core principles of effective information technology planning. Which of the following is not one of those 10 core principles? a. Achievability
B) Reassessment
C) Accountability
D) Justifiable cost

Question 25

The following PERT chart ( Figure 15.7 ) represents the tasks to be done to implement a system. Can you think of other steps that should be included? Is there adequate time for training given the technology acceptance model's recommendation to focus on perceived usefulness and perceived ease of use? What is the critical path for this project?