34) Which of the following transactions is represented by the diagram below?

A) An automobile salvage business holds weekly auctions at which it sells its entire inventory.

B) A grocery store sells products to consumers.

C) A hobbyist restores antique cars. When a car is finished, she sells it on eBay.

D) A firm sells movies to consumers through an online downloading service.

Answer:  D

Page Ref: 506-507

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Reflective Thinking

35) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

B) Consumer retail sales paid in installments to the seller

C) Business to business sales of nondurable goods

D) Business that allows customers to carry a balance and make installment payments

Answer:  A

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

36) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

B) Consumer retail sales paid in installments to the seller

C) Business to business sales of nondurable goods

D) Business that allows customers to carry a balance and make installment payments

Answer:  B

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

37) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

B) Consumer retail sales paid in installments to the seller

C) Business to business sales of nondurable goods

D) Business that allows customers to carry a balance and make installment payments

Answer:  C

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

38) Which of the following transactions is represented by the diagram below?

A) Cash and carry consumer retail sales

B) Consumer retail sales paid in installments to the seller

C) Business to business sales of nondurable goods

D) Business that allows customers to carry a balance and make installment payments

Answer:  D

Page Ref: 505-506

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

39) Which of the following transactions is represented by the diagram below?

A) Vendors send a bill for each inventory item purchased which is payable on receipt.

B) A single purchase of inventory is paid for with multiple payments.

C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow installment payments.

D) Some inventory purchases are paid for with multiple payments and some payments may apply to multiple purchases.

Answer:  B

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

40) Which of the following transactions is represented by the diagram below?

A) Vendors send a bill for each inventory item purchased which is payable on receipt.

B) A single purchase of inventory is paid for with multiple payments.

C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow installment payments.

D) Some inventory purchases are paid for with multiple payments and some payments may apply to multiple purchases.

Answer:  C

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

41) Which of the following transactions is represented by the diagram below?

A) Vendors send a bill for each inventory item purchased which is payable on receipt.

B) A single purchase of inventory is paid for with multiple payments.

C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow installment payments.

D) Some inventory purchases are paid for with multiple payments and some payments may apply to multiple purchases.

Answer:  D

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

42) Which of the following transactions is represented by the diagram below?

A) Each sale is associated with a single order and there is a time lag between the time an order is taken and delivery of the product.

B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or no sales.

C) Each sale can be comprised of multiple orders and each order can be associated with one or more multiple sales.

D) Each sale is associated with a single order and there is no time lag between the time an order is taken and delivery of the product.

Answer:  A

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

43) Which of the following transactions is represented by the diagram below?

A) Each sale is associated with a single order and there is a time lag between the time an order is taken and delivery of the product.

B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or no sales.

C) Each sale can be comprised of multiple orders and each order can be associated with one or more sales.

D) Each sale is associated with a single order and there is no time lag between the time an order is taken and delivery of the product.

Answer:  B

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

44) Which of the following transactions is represented by the diagram below?

A) Each sale is associated with a single order and there is a time lag between the time an order is taken and delivery of the product.

B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or no sales.

C) Each sale can be comprised of multiple orders and each order can be associated with one or more sales.

D) Each sale is associated with a single order and there is no time lag between the time an order is taken and delivery of the product.

Answer:  C

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

45) Which of the following transactions is represented by the diagram below?

A) Each sale is associated with a single order and there is a time lag between the time an order is taken and delivery of the product.

B) Each sale can be comprised of multiple orders and each order can be associated with multiple sales or no sales.

C) Each sale can be comprised of multiple orders and each order can be associated with one or more sales.

D) Each sale is associated with a single order and there is no time lag between the time an order is taken and delivery of the product.

Answer:  D

Page Ref: 505

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

46) A relationship is diagrammed below using the [Min, Max] notation. Which of the diagrams below represents the same relationship using the “crow’s fee” notation?

A)

B)

C)

D)

Answer:  D

Page Ref: 502-503

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Analytic

47) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person’s name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the “asking” price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business’ name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer’s name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies, renting booths, and paying for all items, would

A) include eight unique entities.

B) include nine unique entities.

C) include seven unique entities.

D) include ten unique entities.

Answer:  A

Page Ref: 499

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Reflective Thinking

48) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person’s name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the “asking” price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business’ name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer’s name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies, renting booths, and paying for all items, would

A) reflect nine 1:N relationships.

B) reflect two M:N relationships.

C) reflect ten 1:N relationships.

D) include two 1:1 relationships.

Answer:  A

Page Ref: 502

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Reflective Thinking

49) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person’s name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the “asking” price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business’ name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer’s name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies, renting booths, and paying for all items, would

A) reflect minimum cardinalities of 1 for the relationship between Vendor and Cash Disbursement entities.

B) reflect the same number of 0 and 1 minimum cardinalities.

C) reflect more maximum cardinalities of M than of 1.

D) reflect maximum cardinalities of M for the relationship between Inventory and Purchase entities.

Answer:  A

Page Ref: 502

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Reflective Thinking

50) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person’s name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the “asking” price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business’ name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer’s name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

A well-planned and correctly drawn REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies, renting booths, and paying for all items, what entities would reflect economic duality?

A) Purchases and Cash Disbursements

B) Booth Rental and Cash Disbursements

C) Inventory and Purchases

D) Cash and Cash Disbursements

Answer:  A

Page Ref: 498

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Reflective Thinking

51) Cosgrove Art & Antiques sells unique art and antiques exclusively at antique shows. Cosgrove purchases inventory from individuals and other dealers at garage sales, flea markets, antique malls, and estate sales. Each time Cosgrove makes a purchase, she records the person’s name, address, date, specific items purchased and price paid, and total amount spent. Later at home, Cosgrove cleans, researches and prices the inventory items. She assigns an inventory number to each item and records the “asking” price. Cosgrove buys price tags and display supplies from a company that sells at flea market and antique shows. All inventory and supplies purchases are paid immediately with cash, or with checks from a bank account in the business’ name, to which sales are also deposited. Several times a year Cosgrove rents a booth at an antique show. A deposit is always required, with the balance due at the start of the show. Cosgrove records the deposit and final payment, along with the show organizer’s name and address, in the same worksheet on which purchases of inventory and supplies are recorded.

Draw an REA diagram for Cosgrove Art & Antiques, related to purchasing inventory and supplies, renting booths, and paying for all items.

Answer: 

Page Ref: 499

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Reflective Thinking

52) Describe data modeling.

Answer:  Data modeling is the process of defining a database so that it faithfully represents all aspects of the organization, including its interaction with the external environment.

Page Ref: 494

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

53) Describe an REA data model.

Answer:  The REA data model is a conceptual modeling tool specifically designed to provide structure for designing an AIS database. The REA data model identifies what entities should be included in the AIS database and prescribes how to structure relationships among the entities in the AIS database. REA stands for resources, events, and agents. Resources are defined as those things that have economic value to the organization. Events are the various business activities about which management wants to collect information for planning and control purposes. Agents are the people and organizations that participate in events and about which information is desired for planning, control, and evaluation purposes.

Page Ref: 496

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

54) Define cardinality.

Answer:  The cardinality of the relationship indicates how many occurrences of the entity on the other side of the relationship can be linked to a single occurrence of the entity on this side of the relationship. In relational database terms, cardinality provides information about how many rows in the other table can be linked to each row in this table.

Page Ref: 502

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

55) Describe the three basic rules that apply to the REA model pattern.

Answer:  Each event is linked to at least one resource that it affects. Each event is linked to at least one other event. Each event is linked to at least two participating agents.

Page Ref: 497

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

56) Describe the steps in developing an REA diagram.

Answer:  Developing an REA diagram involves three steps. First, identify the basic events of interest (any activity about which management wants to collect information in order to plan, control, and evaluate performance). Second, identify the resources affected by and the agents who participate in those events. Third, use knowledge about the organization’s business practices to add relationship cardinality information to the diagram.

Page Ref: 499

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

57) Explain how an AIS system can be viewed as a set of “give-to-get” exchanges.

Answer:  An AIS system can be viewed as a set of “give-to-get” exchanges because such exchanges reflect the nature of the five transaction cycles: revenue, expenditure, human resources, production, and financing. In each cycle the organization “gives” some resource in exchange for another resource (the “get” part of the transaction). The goal is that the “give” part of the exchange is of lesser value than the “get” portion, thus generating a profit for the organization. The AIS should capture, record, and organize information relating to any transaction that occurs within a cycle.

Page Ref: 497

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

58) Define minimum and maximum cardinalities.

Answer:  A minimum cardinality indicates the number of instances of that entity that must be associated with at least one instance of the other entity. Minimum cardinalities can be 0 or 1. A maximum cardinality indicates the number of instances of that entity that can be linked to at most one instance of the other entity. Maximum cardinalities can be 1 or N (many).

Page Ref: 503

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

59) Describe the possible relationships between entities, in terms of cardinalities.

Answer:  There are three types or relationships possible between entities depending upon maximum cardinality. These are: A one-to-one relationship exists when the maximum cardinality of each entity is 1. A one-to-many relationship exists when the maximum cardinality on one entity is 1 and maximum cardinality of the other entity is N. A many-to-many relationship exists when the maximum cardinality of both entities is N.

Page Ref: 504-505

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

60) Explain specifically what is meant by the following statement, “Accountants can and should participate in all stages of the database design process.”

Answer:  Accountants are in a unique position within a business organization. They are intimately acquainted with the many business transactions that occur in an organization and they are knowledgeable about the policies and practices of the business itself as well as the environment within which it operates. The knowledge base and skill sets of the accountant should be put to good use in the development of database design to the fullest extent possible (although some accountants may not possess AIS coding and development skill sets). Consider that during the planning stage accountants provide some of the information used to evaluate the feasibility of the proposed project and they participate in making the decision itself. Accountants can identify user information needs and develop logical schema during the requirement analysis and design stages. Accountants can also help test the accuracy of the new database and application programs during the implementation stage of development. Accountants can also act as “subject matter experts” since they are knowledgeable users of the new system. They can also serve as managers of the system once it is up and running.

Page Ref: 494

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

61) A dental office employs three dentists and five dental hygienists. One of the dentists is a very recent dental school graduate and can’t yet see patients on her own until she passes boards and obtains a license. Dentists perform all procedures personally, except for regular cleaning and x-rays, which are performed exclusively by dental hygienists. Three of the five dental hygienists perform only regular cleaning and x-rays. The other two hygienists each assist a specific dentist during procedures, as well as performing regular cleaning and x-rays. One of the hygienists will be assigned to the new dentist when she begins seeing patients. Hygienists usually ‘shadow’ other hygienists and dentists for two weeks prior to seeing patients.

Patients schedule appointments directly with dentists and hygienists, depending on the type of dental service needed. Patients do not have to choose a dentist until they need service other than routine cleaning or x-rays. Patients are assigned to a specific dental hygienist when they schedule their first appointment. The customer master file has 549 records. Diagram the agents described, relationships between agents, and the cardinality pairs for each relationship.

Answer: 

Page Ref: 504

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Reflective Thinking

Chapter 20  

1) A system change that results in an improved product or service and helps lower costs provided a(n)

A) competitive advantage.

B) improved business process.

C) productivity gain.

D) technological change.

Answer:  A

Page Ref: 580

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

2) An antiquated information system used by an office supply manufacturer caused customer dissatisfaction since it took two days to process a telephone order. After the system was upgraded and redesigned, the time to process a telephone order was reduced to three minutes. This is a prime example of

A) a competitive advantage.

B) a technological change.

C) an improved business process.

D) growth.

Answer:  C

Page Ref: 579

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

3) What is the correct sequence of the phases in the systems development life cycle?

A) conceptual design, physical design, system analysis, implementation and conversion, and operations and maintenance

B) conceptual design, system analysis, physical design, implementation and conversion

C) system analysis, conceptual design, physical design, implementation and conversion, and operations and maintenance

D) system analysis, physical design, conceptual design, and operations and maintenance

Answer:  C

Page Ref: 581

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

4) In which phase of the systems development life cycle are the broad needs of the users converted into detailed specifics that are coded and tested?

A) conceptual design

B) implementation and conversion

C) physical design

D) systems analysis

Answer:  C

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

5) The purpose of systems analysis is to

A) identify the problem to be solved by the new (or redesigned) system and the causes of the problem in the current system.

B) determine design specifications for the new (or redesigned) system.

C) communicate information needs to consider during business process reengineering.

D) discover any violations of policies established by the information systems steering committee.

Answer:  A

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Reflective Thinking

6) Which of the following statements about systems development is true?

A) Planning throughout the systems development life cycle promotes coordination between systems and strategic plans.

B) Organizations should conduct systems development activities at least once every five years.

C) The systems development steps are critical for profit-oriented businesses, but are too expensive and time consuming for most not-for-profit organizations.

D) Diligently following the steps and suggestions in the systems development life cycle ensures the final system will meet user needs and be implemented at or below the budgeted cost.

Answer:  A

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Reflective Thinking

7) Which of the following about planning for systems development is false?

A) Project plans are developed for each new system and each system modification, and together the project plans comprise the master plan.

B) A project development plan includes an economic feasibility analysis and a schedule of activities.

C) The master plan identifies system goals, who will develop the system, and the resources that will be needed.

D) The master plan includes details about organizational goals, existing systems and resources, projects being conducted, and predictions of future needs and requirements.

Answer:  A

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

8) Which of the following activities is performed during the systems development life cycle?

A) assessing the ongoing feasibility of the project

B) managing the behavioral reactions to change

C) planning

D) All of the above activities are performed during the life cycle.

Answer:  D

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

9) Which group of individuals listed below can be the most effective in generating employee support and encouraging the development and acceptance of an AIS project?

A) accountants

B) information systems steering committee

C) management

D) project development team

Answer:  C

Page Ref: 582

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

10) Who of the following is responsible for ensuring that the new system will meet the needs of users?

A) accountants

B) the information system steering committee

C) the project development team

D) the system analysts and programmers

Answer:  D

Page Ref: 583

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

11) Who is responsible for preparing the specifications that are used to create the programs?

A) management

B) programmers

C) systems analysts

D) the information systems steering committee

Answer:  C

Page Ref: 583

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

12) One step in the systems development life cycle (SDLC) identifies and evaluates design alternatives and to develop design specifications. This step is called

A) conceptual design.

B) implementation and conversion.

C) physical design.

D) systems analysis.

Answer:  A

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

13) In which step of the SDLC do all of the elements of the system come together?

A) conceptual design

B) implementation and conversion

C) physical design

D) systems analysis

Answer:  B

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

14) What is the role of the information systems steering committee?

A) It is a team of systems specialists, managers, accountants, and auditors that guides project development.

B) Since AIS development spans functional and divisional boundaries, an executive-level group is established to plan and oversee the IS function.

C) The group takes an active role in designing system controls and periodically monitoring and testing the system to verify the controls are implemented and functioning properly.

D) None of the descriptions above are appropriate.

Answer:  B

Page Ref: 582

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

15) Which group of professionals is responsible for planning and monitoring a project to ensure timely and cost-effective completion?

A) information systems steering committee

B) management

C) project development team

D) system analysts

Answer:  C

Page Ref: 583

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

16) All of the following are benefits of planning and managing systems development except

A) controlling costs.

B) ensuring that the system is consistent with the organization’s goals.

C) guaranteeing use of the system.

D) helping keep the organization abreast of technological change.

Answer:  C

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

17) In which plan within planning systems development is the prioritized list of projects contained?

A) project development plan

B) scheduled project plan

C) the master plan

D) all of the above

Answer:  C

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

18) What is the basic building block of information systems planning?

A) the master plan

B) the project development plan

C) systems analysis

D) adaptability

Answer:  B

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

19) A planning horizon of at least ________ years is reasonable for any master plan; however, the plan should be updated at least ________ each year.

A) 3; twice

B) 5; twice

C) 7; once

D) 5; once

Answer:  A

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

20) ________ requires that all activities and the precedent and subsequent relationships among them be identified.

A) CASE

B) The Gantt chart

C) The PERT diagram

D) The SDLC cycle

Answer:  C

Page Ref: 583-584

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

21) A network of arrows and nodes representing project activities that require an expenditure of time and resources and the completion of initiation of activities, respectively, is called

A) a Gantt chart.

B) a PERT diagram.

C) a SDLC cycle.

D) CASE.

Answer:  B

Page Ref: 584

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

22) Which planning technique does not show the relationships among various activities?

A) Gantt chart

B) PERT

C) the critical path method

D) VAN

Answer:  A

Page Ref: 585

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

23) In which phase of the systems development life cycle is the feasibility study first performed?

A) conceptual design

B) implementation and conversion

C) physical design

D) system analysis

Answer:  D

Page Ref: 585

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

24) A federal law demands that certain information about foreign customers should be maintained in the information system. In which part of a feasibility study should this requirement be considered?

A) economic feasibility

B) legal feasibility

C) operational feasibility

D) technical feasibility

Answer:  B

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

25) Which of the following parts of a feasibility study is generally considered the most important and is frequently re-analyzed?

A) economic feasibility

B) operational feasibility

C) scheduling feasibility

D) technical feasibility

Answer:  A

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

26) What is the basic model used to create a framework for economic feasibility analysis?

A) the capital budgeting model

B) the cash budgeting model

C) the cost/benefit model

D) All of the above models are used to create a framework.

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

27) What is most difficult to quantify when assessing economic feasibility?

A) benefits

B) costs

C) Costs, benefits, and the payback period are all of equal difficulty.

D) the payback period

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

28) When using the payback method to determine economic feasibility of projects, the company usually accepts the project with the

A) longest payback period.

B) mid-range payback period.

C) payback period that is equal to the project’s economic life.

D) shortest payback period.

Answer:  D

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

29) There are several important aspects to be considered during a feasibility study. The aspect that asks the question, “Can people use the system and will they use it?” is called

A) economic feasibility.

B) operational feasibility.

C) scheduling feasibility.

D) technical feasibility.

Answer:  B

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

30) Accountants can contribute to feasibility study analysis by evaluating cost savings and other benefits versus operating costs and other cash outflows. This is better known as

A) the “best guess” model of benefit analysis.

B) the “value added” benefit model.

C) the capital budgeting model.

D) the estimated benefits model.

Answer:  C

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

31) The capital budgeting technique where estimated future cash flows are discounted back to the present is referred to as

A) the future value method.

B) the internal rate of return.

C) the net present value method.

D) the payback method.

Answer:  C

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

32) The type of user resistance in which data are erroneously entered into a system is called

A) acceptance.

B) aggression.

C) avoidance.

D) projection.

Answer:  B

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

33) Continuing to use a manual system instead of the new AIS is a form of resistance known as

A) acceptance.

B) aggression.

C) avoidance.

D) projection.

Answer:  C

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

34) One behavioral problem occurs when there is insufficient explanation of why a change must take place. This problem is a result of

A) communication.

B) natural resistance to change.

C) the manner in which the change is introduced.

D) top management support of change.

Answer:  A

Page Ref: 588

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

35) Major resistance to change takes one of several forms. What is the name of the form of resistance where the new system is blamed for any and every unpleasant occurrence?

A) aggression

B) avoidance

C) procrastination

D) projection

Answer:  D

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

36) One behavioral problem occurs when there is insufficient explanation of why a change must take place. In order to curtail this resistance from occurring within the organization, what guideline should be implemented and followed?

A) attempt to meet the users’ needs

B) avoid emotionalism

C) keep communication lines open

D) keep the system simple

Answer:  C

Page Ref: 590

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

37) A good rule to follow to prevent behavioral problems associated with implementing a new system is “Avoid complex systems that cause radical changes.” What expression is used to describe this system design rule?

A) allay fears and stress new opportunities

B) keep the system simple and humanize it

C) control users’ expectations

D) test the system

Answer:  B

Page Ref: 590

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

38) During what step in systems analysis is an examination made of each development activity to define the problem to be solved?

A) information needs and systems requirements

B) the feasibility study

C) the initial investigation

D) the systems survey

Answer:  C

Page Ref: 590

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

39) When is a proposal to conduct a systems analysis prepared?

A) after a written request for systems development is prepared

B) after the development team completes the survey of the existing AIS

C) after the initial investigation of the project is approved

D) before the initial investigation

Answer:  C

Page Ref: 591

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

40) During which phase of systems analysis does modeling of the existing system occur?

A) information needs and system requirements

B) the feasibility study

C) the initial investigation

D) the systems survey

Answer:  D

Page Ref: 591

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

41) Which data gathering method is most helpful to deal with the question: “Why?”

A) interviews

B) observation by the analyst

C) questionnaires

D) system documentation

Answer:  A

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

42) Significant system changes were implemented two months ago. The changes were well-planned, well-designed, thoroughly tested before and after conversion, and several employee training sessions were conducted. Still, the changes haven’t resulted in any productivity increases, cost savings, or process improvements. Management is puzzled and needs to find out why the system isn’t successful. The best action for management to take is

A) conduct face-to-face interviews with managers, key personnel, and randomly selected employees from each functional area impacted by the system changes in an attempt to discover why the changes aren’t effective.

B) make sure the system changes were well documented and review the documentation to see if perhaps some important feature or process was overlooked during the design phase.

C) email a series of questions to all employees, asking for input about further changes that would bring about the desired results.

D) advise employees that consultants will be conducting observation sessions over the next two weeks to determine if employees have fully implemented changes and whether there is any evidence of resistance to the changes.

Answer:  A

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Difficult

AACSB:  Reflective Thinking

43) Which method of data gathering is most likely to result in information that represents the personal biases and opinions of the person giving the information?

A) a questionnaire

B) an interview

C) observation by the analyst

D) system documentation

Answer:  B

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

44) When the information is brief and well defined, which is the best data-gathering approach to use?

A) a questionnaire

B) an interview

C) observation by the analyst

D) system documentation

Answer:  A

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

45) Which is the best data-gathering approach to use when information must be obtained from many different people?

A) a questionnaire

B) an interview

C) observation by the analyst

D) system documentation

Answer:  A

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

46) The ________ method of gathering information helps to determine how a system actually works.

A) interview

B) observation

C) questionnaire

D) system documentation

Answer:  B

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

47) The ________ method of gathering information helps to determine how a system should work.

A) interview

B) observation

C) questionnaire

D) system documentation

Answer:  D

Page Ref: 593

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

48) What are the best strategies for determining system requirements?

A) analyze existing systems, ask users what they need, prototyping, and monitoring

B) ask users what they need, analyze existing systems, develop concept of new system, and prototyping

C) ask users what they need, analyze existing systems, examine existing system utilization, and prototyping

D) ask users what they need, analyze existing systems, examine existing system utilization, and develop concept of new system

Answer:  C

Page Ref: 595

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

49) When would a company go through a systems development life cycle?

A) only when major changes are needed

B) only when minor changes are needed

C) Usually a company only goes through one complete systems development life cycle, after which the only phase that is repeated is the operations and maintenance phase.

D) whenever minor or major changes are needed

Answer:  D

Page Ref: 579

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

50) What report serves as a repository of data from which systems designers can draw information?

A) the executive steering committee report

B) the initial investigation report

C) the systems analysis report

D) the systems survey report

Answer:  C

Page Ref: 596

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

51) Which group is responsible for preparing a systems analysis report?

A) computer analysts

B) management

C) the project development team

D) the steering committee

Answer:  C

Page Ref: 596

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

52) In which systems analysis step do analysts conduct an extensive study of the present system to gain a thorough understanding of how it works?

A) feasibility study

B) information needs and requirements

C) systems analysis report

D) systems survey

Answer:  D

Page Ref: 591

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

53) The question of what the project should and should not accomplish is determined in what step of systems analysis?

A) feasibility study

B) initial investigation

C) systems analysis report

D) systems survey

Answer:  B

Page Ref: 590

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

54) A Logical model used to gather information about an existing system

A) comes only after a physical model of the existing system is created.

B) describes how a system actually works, rather than how it should work.

C) illustrates how a system functions by describing the flow of documents and computer processes.

D) illustrates what is being done, regardless of how that flow is actually accomplished.

Answer:  D

Page Ref: 593

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

55) The system objective concerned that crucial information be produced first, and then less important items as time permits is known as

A) flexibility.

B) reliability.

C) timeliness.

D) usefulness.

Answer:  C

Page Ref: 595

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

56) A prototype

A) is expensive to create and is therefore only created once user needs are well-defined.

B) is making an internal and external review of the system to be analyzed, noting that users may not use the existing AIS as intended.

C) is typically created during the physical design phase of systems development.

D) can be used to help users identify and communicate their system needs.

Answer:  D

Page Ref: 595

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

57) A project development team at Midwest Construction was assigned the task of improving the efficiency of the firm’s accounting information system. As part of the ________ step in the systems development life cycle, the team has determined that implementation of the new system will yield an internal rate of return of 24.8%.

A) systems analysis

B) operations and maintenance

C) implementation and conversion

D) conceptual design

Answer:  A

Page Ref: 581

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

58) A project development team at Midwest Construction was assigned the task of improving the efficiency of the firm’s accounting information system. As part of the ________ step in the systems development life cycle, the team has determined that the objectives of the project can be accomplished by installing a new computer system or by upgrading the existing system.

A) systems analysis

B) implementation and conversion

C) physical design

D) conceptual design

Answer:  C

Page Ref: 582

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

59) A project development team at Midwest Construction was assigned the task of improving the efficiency of the firm’s accounting information system. As part of the ________ step in the systems development life cycle, the team has initiated an end user training program in preparation for switching over to the new system.

A) systems analysis

B) operations and maintenance

C) implementation and conversion

D) physical design

Answer:  C

Page Ref: 582

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

60) A project development team at Midwest Construction was assigned the task of improving the efficiency of the firm’s accounting information system. As part of the ________ step in the systems development life cycle, the team defined the procedures to back up and secure system data.

A) operations and maintenance

B) implementation and conversion

C) physical design

D) conceptual design

Answer:  C

Page Ref: 582

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

61) Refer to the diagram below, where the numbers next to the arrows refer to the number of days required for completion of the corresponding activity. What is the critical path?

A) A-B-D-F

B) A-C-E-F

C) A-B-D-E-F

D) A-C-B-D-F

E) A-C-B-D-E-F

Answer:  E

Page Ref: 584

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Analytic

62) Refer to the diagram below, where the numbers next to the arrows refer to the number of days required for completion of the corresponding activity. What is the critical path?

A) A-B-D-F

B) A-C-E-F

C) A-B-D-E-F

D) A-C-B-D-F

E) A-C-B-D-E-F

Answer:  B

Page Ref: 584

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Analytic

63) Refer to the diagram below, where the numbers next to the arrows refer to the number of days required for completion of the corresponding activity. What is the critical path?

A) A-B-D-F

B) A-C-E-F

C) A-B-D-E-F

D) A-C-B-D-F

E) A-C-B-D-E-F

Answer:  A

Page Ref: 584

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Analytic

64) Three months after a new telephone system with voice mail was installed at Modest Expectations College in Pennsylvania, several senior faculty members were contacted by a telecommunications secretary and were told that their voice mail boxes were full. This is an example of dealing with change by

A) deterrence.

B) projection.

C) avoidance.

D) aggression.

Answer:  C

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

65) Shortly after a new automated quality assurance system went online, production output declined by three percent. The production manager, a long time employee, blamed the new system. He argued that “after we laid off Tom and Jimmy and put this machine in, things just slowed down. Nothing seems to work right anymore.” This is an example of dealing with change by

A) deterrence.

B) projection.

C) avoidance.

D) aggression.

Answer:  B

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

66) On March 18, 2008, a newly installed robotic painting system broke down. A technician was called to repair the system. She found that a shoe had been shoved into the system’s innards. This is an example of dealing with change by

A) deterrence.

B) projection.

C) avoidance.

D) aggression.

Answer:  D

Page Ref: 589

Objective:  Learning Objective 5

Difficulty :  Easy

AACSB:  Analytic

67) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the payback criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

68) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the net present value criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  D

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

69) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the internal rate of return criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

70) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the internal rate of return criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

71) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the net present value criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  A

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

72) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the payback criterion?

A) Project A

B) Project B

C) Project C

D) Project D

Answer:  D

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

73) Dysfunctional employee behavior in response to implementation of a new computerized information system is likely to be the result of

A) poor human resource policies.

B) lack of communication and training.

C) weak system controls.

D) inadequate compensation policies.

Answer:  B

Page Ref: 588

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

74) The least time-consuming method of collecting data for use in a systems survey is

A) observation.

B) interviews.

C) questionnaires.

D) reviewing system documentation.

Answer:  C

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

75) Which of the following is the most important and frequently analyzed aspect of a feasibility study?

A) Economic feasibility

B) Technical feasibility

C) Legal feasibility

D) Operational feasibility

Answer:  A

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

76) Which of the following aspect of a feasibility study is concerned with meeting external reporting requirements?

A) Technical feasibility

B) Legal feasibility

C) Scheduling feasibility

D) Operational feasibility

Answer:  B

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

77) Which of the following aspect of a feasibility study is concerned with human resources?

A) Technical feasibility

B) Legal feasibility

C) Scheduling feasibility

D) Operational feasibility

Answer:  D

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

78) Identify the main reasons why companies change existing systems?

Answer:  Changes in user needs or business needs due to growth, consolidation, a merger, new regulations, or changes in regional and global relationships. Technological changes due to advances, improvements, and lower costs. Improvement of business processes to eliminate inefficiency. Competitive advantage from increased quality, quantity, and speed of information will result in an improved product to be sold at a lower price. Productivity gains that automate clerical and repetitive tasks and decrease performance time. Outgrowing old systems requires upgrades or the installation of completely new systems. Downsizing  moving from mainframes to networked PCs to get a better price/performance ratio. Systems age and need to be replaced.

Page Ref: 579-580

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

79) Who makes up the project development team and what is the team’s purpose?

Answer:  The project development team includes systems specialists, managers, accountants, internal auditors, and users. The project development team’s duties include planning each project, monitoring it to ensure timely and cost-effective implementation, properly introducing changes after considering the human element, and communication with the top management and the steering committee at all steps in the process.

Page Ref: 583

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

80) Describe the five phases of systems analysis.

Answer:  Initial investigation of each development activity to define the problem to be solved. Systems survey to study the present system and gain a thorough understanding of how it works. Feasibility study with special focus on the economic feasibility of the project. Information needs and system requirements which will identify the needs of users and determine the objectives of the new system. Systems analysis report which provides management with the findings of the analysis phase. Deliver systems requirements.

Page Ref: 591

Objective:  Learning Objective 6

Difficulty :  Difficult

AACSB:  Analytic

81) Describe the four primary objectives of a systems survey conducted during systems analysis.

Answer:  Analyze existing operations, policies and procedures, and data and information flow to gain a thorough understanding of the current system including its strengths and weaknesses. Make a preliminary assessment of current and future processing needs, and determine both the extent and nature of the changes that are needed. Develop relationships with users and build coalitions to gain support for the AIS. Collect data that identify user needs, conduct a feasibility analysis, and make recommendations to the management.

Page Ref: 591

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

82) Identify and briefly discuss the points at which a “go/no go” decision is made in the systems analysis process.

Answer:  There are three points at which a “go/no go” decision can be made during systems analysis. The first point is during the initial investigation, in which a decision will be made whether to conduct a systems survey. The second point is at the end of the feasibility study, at which point a decision will be made whether to proceed to the information requirement stage. The third (and last) point is at the completion of the analysis phase, which is the point at which a decision is rendered about whether to proceed to the design phase.

Page Ref: 596

Objective:  Learning Objective 6

Difficulty :  Difficult

AACSB:  Analytic

83) Describe the physical design stage of the systems development life cycle.

Answer:  The physical design stage of the systems development life cycle (SDLC) is the third of five stages in the lifecycle, coming after the systems analysis and conceptual design stages. In this stage of the SDLC, input, output, and database attributes are designed, as well as various controls. Programs and procedures are developed during this stage as well. A final part of this stage is the delivery of the developed system, which will be further enhanced during the implementation and conversion stage of the SDLC.

Page Ref: 582

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

84) Describe the importance of the master plan in systems development.

Answer:  A master plan is a long-range planning document specifying the components of the system, how the system will be developed, who will do the developing, how resources will be acquired for development, and the direction the AIS will take into the future. The document should give a status of projects already in process, prioritize them, describe criteria for prioritization and provide a timetable for their development. A master plan should span a time period of three years, and it should be updated at least two to three times each year.

Page Ref: 583

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

85) Identify and discuss the role of the groups that influence the development and implementation of an AIS.

Answer:  Management  support from management is crucial in successful development and implementation of an AIS. Any actual or perceived lack of support from management may cause skepticism and a lack of “buy in” from employees. Accountants  determine the user requirements and communicate to system developers; members of the project development team; design system controls and monitor and test the system. Accountants can also help in assessing and tracking costs of projects. Information systems steering committee  a cross-functional, executive-level team that champions the project and is responsible for high-level support of the project. Sets policies that govern AIS systems analysts – study existing systems, design new ones, and prepare system specifications for computer programmers. Systems programmers  write computer programs based on specifications and requirements created by the system analysts. External players  customers, vendors, auditors, and regulations from governmental entities influence design of an AIS.

Page Ref: 582-583

Objective:  Learning Objective 2

Difficulty :  Difficult

AACSB:  Analytic

86) Describe economic feasibility analysis. What techniques are used in economic feasibility analysis?

Answer:  The capital budgeting model is used as the foundation for economic feasibility analysis. In this model, cost savings and other (even intangible) benefits, as well as initial outlay costs, operating costs, and other cash outflows are quantified in terms of dollars and cents. The tangible and intangible benefits include cost savings; improved customer service, overall increased productivity; improved decision making and data processing; better management control; and increased job satisfaction and employee morale. The costs include: software acquisition; design; programming; testing; documentation and maintenance costs; site preparation; and human resource costs such as hiring, testing, and relocation. The capital budgeting model is used as a framework for economic feasibility analysis. The three techniques that are used are:  Payback period: The number of years for the net savings to recover the initial costs of the investment is calculated. A project with the shortest payback period is preferable under this method.  Net Present Value (NPV): A discount rate representing the time value of money is used to discount all future cash flows to the present. The initial outlay costs are deducted from discounted cash flows to obtain net present value. A positive NPV indicates favorable economic feasibility.  Internal Rate of Return (IRR): IRR is the effective interest rate that results in an NPV of zero. This effective interest rate is compared with a company’s desired rate of return (sometimes it can be the cost of capital). A project with the highest IRR will be selected when this method is used for evaluation purposes.

Page Ref: 587

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

87) Discuss the relative advantages and disadvantages of the four different methods for gathering data during a systems survey.

Answer:  Interviews: Advantages of this method include: answers to “why” questions; a way to build relationships; analysts can easily probe and ask follow-up questions; and analysts can build acceptance for the project. Disadvantages to interview include: time consumed, expense to conduct, and the information given is subject to personal biases and opinions of those interviewed. Questionnaires: The advantages to using questionnaires are: anonymity from respondents can yield candid answers; much information can be obtained in a short time period; they are generally inexpensive; and a questionnaire gives the respondent time to think about answers, which may produce answers of a high quality. Disadvantages include: lack of any follow up or probing on a personal level; since the questionnaire is anonymous, the analyst cannot clarify questions; sometimes questionnaires are viewed as impersonal, and they may often be ignored or not completed carefully. Observation: Advantages of observation include verification of how systems actually work and better understanding of the system. Disadvantages include: time consumed; they are expensive and difficult to interpret, the observed people may alter their behavior. Systems Documentation. The advantages of system documentation are that such documentation may provide a good description of how the system should work, and generally documentation is easy to read. The disadvantages to system documentation are: that it can be time consuming to obtain and analyze; it may not be available or it may be incomplete; and it may not show how system really works if it has not been maintained on a regular basis.

Page Ref: 592

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

88) Identify and describe the five types of feasibility that must be considered throughout the system development life cycle.

Answer:  These five types of feasibility are technical, operational, legal, scheduling, and economic.

Technical feasibility asks the question of whether the planned system can be developed and implemented using the technology that exists today.

Operational feasibility focuses on the question of whether the organization possesses the human resources capable of designing, implementing, and operating the proposed system, and whether people can actually use the system and will use the system.

Legal feasibility deals with issues of federal and state law compliance, administrative agency regulations, and any contractual obligations the company may have.

The focus of scheduling feasibility is the question of whether the system can be developed and implemented within the time allotted.

Economic feasibility tackles questions of whether the system benefits will outweigh the time, money, and resources used to develop it. Capital budgeting models are used to evaluate the costs versus benefits of a system. The capital budgeting techniques of a payback period, the net present value (NPV) of cash flows, and the internal rate of return (IRR) can be incorporated as part of the economic feasibility component of the feasibility study.

Page Ref: 586

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

89) What are some of the reasons why behavioral problems occur when a new AIS is introduced?

Answer:  Personal characteristics and background of the users involved or impacted by the change. The manner in which change is introduced may have greater impact than the actual change itself. Experience with prior changes that went poorly may make employees wary of new anticipated changes. Any lack of top management support may raise an issue of endorsement for such changes. Communication can be a problem when no explanation is given to employees about a change. Biases and natural resistance to change may occur due to emotional attachments to duties or coworkers. Disruptive nature of the change process can place additional burdens on workers. People may have a fear of the unknown and uncertainty about accompanying changes.

Page Ref: 588

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

90) For each of the following items, discuss which of the four data gathering methods would be most appropriate and why.

a. Eliciting 300 employees’ opinions on a new incentive program to replace the current bonus program.

b. Identifying how the credit approval process for new customers is supposed to be conducted and by whom.

Answer: 

a. Eliciting opinions from a large population on a potentially emotionally charged topic is best handled with a questionnaire. You can ask the same questions from a large number of employees; you will get candid responses, particularly if you respect anonymity; the questionnaire would be relatively quick and inexpensive to create and analyze responses.

b. Identifying how a process is supposed to be done is best handled by reviewing documentation about the process. Flowcharts, data flow diagrams, process diagrams, job descriptions, organizational charts, and training manuals would all provide information about the design of the credit approval process.

Page Ref: 593

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Reflective Thinking

Chapter 21  

1) Which statement below regarding the development of an AIS is false?

A) A newly designed AIS always meets user needs for a time period.

B) Changes to the AIS are often difficult to make after requirements have been frozen into specifications.

C) The development process can take so long that the system no longer meets company needs.

D) Users are sometimes unable to specify their needs adequately.

Answer:  A

Page Ref: 613

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

2) When canned software is used for systems acquisition, the conceptual design phase of the SDLC

A) involves a make-or-buy decision.

B) is combined with the physical design phase.

C) is eliminated.

D) is the same.

Answer:  A

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

3) When canned software is used for systems acquisition, the physical design phase of the SDLC

A) does not involve designing and coding, although modifications may be made.

B) is combined with the conceptual design phase.

C) is eliminated.

D) is the same as for developing custom software.

Answer:  A

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

4) When canned software is used for systems acquisition, the implementation and conversion phase of the SDLC does not

A) involve the documentation step.

B) require the company to have trained IS personnel.

C) require the develop and test software step.

D) include A and C above.

Answer:  D

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

5) When canned software is used for systems acquisition, the maintenance aspect of the operations and maintenance phase of the SDLC

A) is more costly.

B) is not necessary and is eliminated.

C) is usually the responsibility of the vendor.

D) requires trained personnel.

Answer:  C

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

6) Software development companies write commercial software that can be used by a variety of organizations. Sometimes these companies combine both software and hardware together to sell as one package. Such a package is commonly referred to as

A) a turnkey system.

B) a value-added system.

C) an application service package.

D) canned software.

Answer:  A

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

7) What is a major problem with “canned software”?

A) A commercial software development company has developed it.

B) Canned software is sold on the open market to a broad range of users with similar requirements.

C) Canned software may not meet all of a company’s information or data processing needs.

D) Canned software may offer easy availability and lower costs.

Answer:  C

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

8) Which statement is true regarding canned software and the SDLC?

A) Canned software cannot be modified to meet unique user needs.

B) Companies that buy, rather than develop, AIS software can still follow the SDLC process.

C) Most canned software meets all of a company’s information or data processing needs.

D) The SDLC process does not apply to purchasing canned software.

Answer:  B

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

9) The reasons for ________ are to simplify the decision-making process, reduce errors, provide timesavings, and avoid potential disagreements.

A) leasing

B) outsourcing

C) prototyping

D) sending out a request for a proposal

Answer:  D

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

10) Total costs are usually lower, and less time is required for vendor preparation and company evaluation, when requests for proposal are solicited based on

A) exact equipment needs.

B) generalized software needs.

C) specific hardware and software specifications.

D) None of the above are correct.

Answer:  C

Page Ref: 615

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

11) Information provided on a Request For Proposal given to vendors should include

A) a budget for software and hardware.

B) detailed specifications for the AIS.

C) timeframe required for completion of the project.

D) All of the above are correct.

Answer:  B

Page Ref: 615

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

12) The system performance evaluation approach that evaluates systems based on the weighted score of criteria and points totaled is called

A) benchmark problem.

B) point scoring.

C) prototyping.

D) requirements costing.

Answer:  B

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

13) The approaches to evaluating vendor proposals that do not incorporate dollar estimates of costs or benefits are known as

A) benchmark problem and point scoring.

B) point scoring and requirement costing.

C) requirement costing and benchmark problem.

D) All methods mentioned above include dollar estimates.

Answer:  B

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

14) A request for proposal sent to software vendors is an important tool since it can reduce errors. Which statement below supports this reason?

A) All responses are in the same format and based on the same information.

B) Both parties possess the same expectations and pertinent information is captured in writing.

C) The chances of overlooking important factors are reduced.

D) The same information is provided to all vendors.

Answer:  C

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

15) What is the first step a company should take when evaluating requests for proposals?

A) Carefully compare proposals against the proposed AIS requirements.

B) Determine how much of a given proposal meets the desired AIS requirements.

C) Eliminate proposals that are missing important information or fail to meet minimum requirements.

D) Invite vendors to demonstrate their systems.

Answer:  C

Page Ref: 615

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

16) The ________ method calculates and compares the processing times of different AIS to compare system performance.

A) benchmark problem

B) mandatory requirements

C) point scoring

D) requirements costing

Answer:  A

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

17) What is a drawback to using the requirement costing method of software and hardware evaluation?

A) Dollar estimates of costs and benefits are not included.

B) Intangible factors such as reliability and vendor support are overlooked.

C) The weights and points used are assigned subjectively.

D) There is no drawback to using the requirements costing method.

Answer:  B

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

18) A costly and labor-intensive approach to systems acquisition is creating

A) canned software.

B) custom software.

C) modified software.

D) turnkey software.

Answer:  B

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

19) Which of the following is not appropriate for end user development?

A) performing statistical analyses

B) preparing schedules and lists

C) retrieving information from databases

D) updating database records

Answer:  D

Page Ref: 618

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

20) What is the basic function of a help desk?

A) control access to corporate data

B) provide technical maintenance and support

C) train end users and assist with application development

D) All of the above are basic functions of a help desk.

Answer:  D

Page Ref: 619

Objective:  Learning Objective 3

Difficulty :  Difficult

AACSB:  Analytic

21) Why do so many organizations develop their own software, when many canned software packages are available?

A) An organization may have unique requirements.

B) Canned software packages are often less expensive than software developed in house.

C) The organization’s size and complexity necessitates the in-house development of software.

D) A and C above are correct.

Answer:  D

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

22) Which of the following is not a guideline used to select an outside developer for custom system?

A) The outside developer should have an in-depth understanding of how the company conducts its business.

B) The outside developer should have experience in the company’s industry.

C) The outside developer should possess a good understanding of business in general.

D) The outside developer should be able to complete the system independently, without requiring frequent contact to ask questions.

Answer:  D

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

23) What term is used to refer to users becoming involved in the hands-on development, control, and employment of information systems?

A) amateur user computing (AUC)

B) competitive intra-organization systems development approach (CIOSDA)

C) end-user computing (EUC)

D) novice information systems development (NISD)

Answer:  C

Page Ref: 617

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

24) End-user development is inappropriate for some types of systems. What is an example of a system that end users should not be allowed to develop?

A) a payroll processing program

B) a program that performs “what-if” statistical modeling

C) developing an application using prewritten software such as a spreadsheet or database system

D) preparing a schedule or list such as a depreciation schedule

Answer:  A

Page Ref: 618

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

25) What is an important risk to be considered when allowing end users to develop a system?

A) IS personnel may not have enough work to do.

B) Systems are implemented that have not been adequately tested.

C) Systems are usually easy to use and modify.

D) Users control development process and decide what systems are created and implemented.

Answer:  B

Page Ref: 618

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

26) Which of the following about end-user computing is true?

A) System users know best what they need, so should be able to create their own applications.

B) End-users, while knowledgeable about their job, are not trained to create systems applications, and should not be allowed to do so.

C) It is inefficient and costly to ask the IS department to create basic applications that only a few users need to use.

D) In most companies, the IS department doesn’t want end-users to create their own applications, for fear IS won’t have enough work to do.

Answer:  A

Page Ref: 618

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

27) What would be one duty of second-line help desk personnel?

A) handling complicated queries requiring research

B) provide callers with scripted answers

C) using expert systems to quickly find answers

D) None of the duties listed above pertain to second-line help desk personnel.

Answer:  A

Page Ref: 619

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

28) How does outsourcing improve an organization’s utilization of assets?

A) by allowing a company to completely eliminate its IS department, which will reduce its payroll costs

B) by allowing the company to sell assets to outsourcers and improve their cash position

C) by eliminating the expense of keeping up with the latest technology and, thus, eliminate the drain on cash reserves

D) Both B and C above are correct.

Answer:  D

Page Ref: 620

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

29) Which of the following is not a benefit of outsourcing?

A) access to greater expertise and more advanced technology

B) greater control

C) improved development time

D) lower costs

Answer:  B

Page Ref: 621

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

30) A company that has outsourced its AIS function can lose a fundamental understanding of its AIS needs and the strategic uses of AIS with the passing of time. What is this risk called?

A) focus reduction

B) loss of control

C) reduced competitive advantage

D) unfulfilled goals

Answer:  C

Page Ref: 621

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

31) Which advantage of outsourcing, given below, may tend to cause resistance on the part of in-house IS staff and other organization employees?

A) Outsourcing allows a company to better use its assets and scarce resources.

B) Outsourcing can lower a company’s overall IS costs.

C) Outsourcing facilitates downsizing.

D) Outsourcing helps eliminate the peaks and valleys of system usage.

Answer:  C

Page Ref: 620

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

32) The risk of outsourcing concerned with unauthorized disclosure of sensitive information is the risk of

A) a locked-in system.

B) a loss of control.

C) a reduced competitive advantage.

D) inflexibility.

Answer:  B

Page Ref: 621

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

33) Business Process Management views business processes as

A) strategic organizational assets.

B) a series of small tasks to be closely managed.

C) related activities that, once perfected, should be managed on an exception basis.

D) subsets of organizational strategy that should not be owned by any specific person or department.

Answer:  A

Page Ref: 622

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

34) Which of the following is not an element of managing a business process “end to end”?

A) identifying process experts to oversee specific functions across units

B) designating a process owner

C) setting performance standards

D) establishing control and monitoring processes

Answer:  A

Page Ref: 622

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

35) Which of the following is not true about business process management (BPM) and enterprise resource planning (ERP) systems?

A) ERP systems encompass all functions and processes in an organization, but BPM systems are implemented at process or unit levels in an organization.

B) BPM systems are process-centered, but ERP systems are data-centered.

C) Organizations can use both ERP and BPM systems at the same time.

D) ERP and BPM systems rely heavily technology for communication and coordination.

Answer:  A

Page Ref: 622

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

36) Which of the following is not one of the ways in which a Business Process Management System can improve internal control?

A) Innovative technology allows access and authorization controls to be programmed at the transaction level.

B) Documents or transactions that require approval can be electronically routed to a manager.

C) Process rules are used to alert users when actions must be taken.

D) All actions and processes are monitored and documented in a process log for periodic review.

Answer:  A

Page Ref: 622

Objective:  Learning Objective 5

Difficulty :  Difficult

AACSB:  Analytic

37) The basic premise of ________ is that it is easier for people to express what they like or dislike about an existing system than to imagine what they would like in a system.

A) modified software

B) outsourcing agreements

C) prototyping

D) turnkey systems

Answer:  C

Page Ref: 623

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

38) Which statement below regarding prototyping is false?

A) Prototypes are considered “first drafts,” which are quickly built and intended to be discarded when the real system is finished.

B) Developers who use prototyping still go through the systems development life cycle.

C) Prototypes help developers and end users make conceptual and physical design decisions.

D) Prototyping allows developers to condense and speed up parts of the analysis and design phases.

Answer:  A

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

39) What is the emphasis of the first step involved in developing a prototype?

A) develop a good prototype into a fully functional system

B) speed and low cost rather than efficiency of operation

C) users identify changes to be made in an iterative process

D) what output should be produced rather than how it should be produced

Answer:  D

Page Ref: 623

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

40) The development of which type of system listed below would not benefit from the creation of a prototype?

A) decision support systems

B) executive information systems

C) expert systems

D) systems that cross a number of organizational boundaries

Answer:  D

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

41) What is a disadvantage to prototyping?

A) developers may shortchange the testing and documentation process

B) errors are likely to be detected and eliminated early in the development process

C) prototyping may be less costly than other approaches

D) prototyping usually produces a better definition of user needs than other approaches

Answer:  A

Page Ref: 625

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

42) Which is not a problem with CASE technology?

A) cost

B) incompatibility

C) lack of system documentation

D) unmet expectations

Answer:  C

Page Ref: 626

Objective:  Learning Objective 7

Difficulty :  Easy

AACSB:  Analytic

43) Which of the following were CASE tools not designed to do?

A) replace skilled designers

B) plan, analyze, design, program, and maintain an information system

C) automate important aspects of the software development process

D) enhance the efforts of managers in understanding information needs

Answer:  A

Page Ref: 625

Objective:  Learning Objective 7

Difficulty :  Easy

AACSB:  Analytic

44) Benathir Donathat, director of the project committee, has received approval from management for implementation of a new accounting information system. After putting out an RFP, the committee settled on a vendor that will deliver all hardware and software required on a lease basis. The committee decided to go with

A) canned software.

B) a turnkey system.

C) an outsourced system.

D) an end-user developed system.

Answer:  B

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

45) Benathir Donathat, director of the project committee, has received approval from management for implementation of a new accounting information system. After putting out an RFP, the committee settled on a Web-based application service provider that will manage all hardware and software required by the system, with fees based on usage. The committee decided to go with

A) canned software.

B) a turnkey system.

C) an outsourced system.

D) an end-user developed system.

Answer:  C

Page Ref: 619

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

46) Benathir Donathat, director of the project committee, has received approval from management for implementation of a new accounting information system. After putting out an RFP, the committee settled on a vendor that will provide an industry standard software package and post-sale technical support. The committee decided to go with

A) canned software.

B) a turnkey system.

C) an outsourced system.

D) an end-user developed system.

Answer:  A

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

47) Firms should consider developing custom software only if

A) it will be used for critical functions like accounts receivable.

B) it will contribute to development of a significant competitive advantage.

C) the firm has the necessary expertise available in-house.

D) the available canned software is very expensive.

Answer:  B

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

48) End-user computing is likely to result in a(n)

A) well tested system.

B) well documented system.

C) rapidly developed system.

D) efficient system.

Answer:  C

Page Ref: 618

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

49) What is a benchmark problem?

A) A difficulty encountered when attempting to bring an accounting information system up to industry best practices

B) A method used to compare the efficiency of alternative accounting information systems

C) The cost-benefit tradeoff defined by the relationship between increased costs and increased benefits from a system

D) A method used to test the compatibility of a new accounting information system with existing hardware and software

Answer:  B

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Difficult

AACSB:  Analytic

50) Which of the following is a method for comparing alternative vendor proposals for development of an accounting information system when the vendors differ with regard to their ability to meet the project criteria?

A) Point scoring

B) Resource clearing

C) Requirements costing

D) Multi-objective optimization.

Answer:  A

Page Ref: 616

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

51) Where is the responsibility for the development of end-user computing applications typically placed?

A) End users

B) Help desk

C) Information Technology Services Department

D) Programmers

Answer:  A

Page Ref: 617

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

52) Callow Youth Clothing (CYC) declared bankruptcy in 2007 and has since closed 27 stores, which amounts to over half of its retail outlets. One of the conditions specified for emergence from bankruptcy is a reduction in the cost of operating the firm’s accounting information system. Which of the following may be recommended?

A) Replace the existing system with one of a smaller scale.

B) Customize the existing system.

C) Outsource system operations.

D) Purchase a canned software system.

Answer:  C

Page Ref: 620

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Reflective Thinking

53) Software as a Service (SaaS) refers to Web-based computing services provided by a(an)

A) application service provider (ASP).

B) Internet service provider (ISP).

C) end-user system (EUS).

D) help desk.

Answer:  A

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

54) Firms should consider preparing a software prototype if the software

A) will be used for a critical function like accounts receivable.

B) automates an unstructured or semi-structured task.

C) can be produced using expertise available in-house.

D) is available as a canned package.

Answer:  B

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Difficult

AACSB:  Analytic

55) Firms should consider preparing a software prototype if the application

A) will be used for a critical function like inventory management.

B) automates a structured task.

C) can be produced using outside developers.

D) inputs and outputs are not clearly defined.

Answer:  D

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

56) Which of the following is an advantage of CASE?

A) It exhibits a high degree of cross-system compatibility.

B) It is an inexpensive technology that is accessible to small businesses.

C) Documentation is generated automatically.

D) It enhances the congruence between user expectations and the final system.

Answer:  C

Page Ref: 626

Objective:  Learning Objective 7

Difficulty :  Moderate

AACSB:  Analytic

57) As part of the development process for a new job bidding software system for Halide Construction, LLC, Jon Chelide prepared and distributed diagrams that represent input and output screenshots. The diagrams are an example of

A) CASE.

B) an operational prototype.

C) a RFP.

D) a nonoperational prototype.

Answer:  D

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Moderate

AACSB:  Analytic

58) As part of the development process for a new job bidding software system for Halide Construction, LLC, Jon Chelide prepared and distributed functional programs that simulate the system’s input and output interface. These programs are an example of

A) CASE.

B) an operational prototype.

C) a RFP.

D) a nonoperational prototype.

Answer:  B

Page Ref: 624

Objective:  Learning Objective 6

Difficulty :  Easy

AACSB:  Analytic

59) In which of the following cases is outsourcing likely to be the best solution to the firm’s data processing needs?

A) Sad Clown Pajamas produces and wholesales clothing products to retailers worldwide. Eighty percent of its sales orders are taken during the months of October and November. Sad Clown requires a system that will manage online ordering and fulfillment.

B) Modest Expectations Investment Services manages highly diverse portfolios and provides personal services to high income investors worldwide. The firm needs a system that will pull together selected investment data from a large variety of sources and allow account managers to prepare customized reports for customers.

C) J.D. Yacht is in the business of buying businesses, managing them for no more than two years, and then selling them at a profit. The firm requires a flexible system that will allow them to effectively manage the various types of businesses it controls.

D) Halide Construction, LLC, manages the design and construction of desalinization plants and requires a system that will allow it to manage the process from bid to billing.

Answer:  A

Page Ref: 620

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Reflective Thinking

60) Describe the difficulties that could be encountered when developing an AIS.

Answer:  Demand for development resources is very high and can backlog AIS projects for several years. The development process can be lengthy. System developers may not understand the company’s business, and consequently the new system may not always meet user’s needs. The time taken to develop an AIS may make it obsolete when the new system is ready to launch. Users may not be able to articulate their demands adequately, and therefore they may be dissatisfied with the finished product. Changes to the AIS are difficult to make beyond a certain point, so the AIS remains in a state of “perpetual development” and flux.

Page Ref: 613

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

61) What are the three methods to obtain a new information system? What is a turnkey system?

Answer:  The three methods to obtain a new information system are purchasing new software, developing software in-house (either by development staff or by the system end-users themselves), or hiring an outside company to create a system. A turnkey system is a software and hardware package, which is complete and ready to be used “at the turn of a key.” Vendors for turnkey systems primarily specialize in a particular industry.

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

62) What guidelines should be followed when contracting with an outside developer to create custom software?

Answer:  Carefully select a developer by checking into references and inquiring about reputation and past experiences from other organizations. Sign a contract with clearly defined areas of responsibility for the developer. Plan and monitor each step by designing each step of the project in detail, and making frequent checkpoints for monitoring the project. Maintain effective communication with the developer. Control all costs and minimize cash outflow until the project has been completed and is accepted.

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

63) Describe the purposes of a help desk.

Answer:  A help desk consists of analysts and technicians that encourage, support, coordinate, and control end-user activities. Some of the duties and activities of the help desk includes the following: Hot-line assistance to solve problems. Clearinghouse for information, coordination, and assistance. Training, maintenance, and support center for the software and hardware. Application development assistance center. Approval point for development and implementation standards for hardware and software purchases, documentation and application testing, and security issues. Controlling access to corporate data by using access matrix controls, etc. Evaluating new end-user hardware and software products.

Page Ref: 619

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

64) Describe outsourcing and identify the two types of outsourcing agreements.

Answer:  Outsourcing is the hiring of an outside company to handle all or part of a company’s data processing activities. There are two main types of outsourcing agreements: Mainframe outsourcing and Client/server or desktop outsourcing. Mainframe outsourcing is when the outsourcer buys the client’s equipment, hires the client’s employees, and operates on the client’s site or connects the system to outsourcer’s computer. Client/server or desktop outsourcing is when a particular service, segment of business, function, or PC support is outsourced.

Page Ref: 619-620

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

65) Describe computer-aided software (or systems) engineering (CASE) and identify the advantages and disadvantages of CASE?

Answer:  CASE refers to an integrated package of computer-based tools that automate important aspects of the software development process. CASE tools can be used to plan, analyze, design, program, and maintain an information system. CASE tools do not replace skilled designers, but they provide effective support for all phases of the SDLC. Advantages  Improved productivity, improved program quality, cost savings, improved control procedures, and simplified documentation. Disadvantages  Incompatibility, cost, and unmet expectations.

Page Ref: 625-626

Objective:  Learning Objective 7

Difficulty :  Moderate

AACSB:  Analytic

66) Explain the concept of an application service provider.

Answer:  An application service provider (or ASP) is a third-party provider of software to organizations. An ASP is Web-based, providing delivery of software to its clients over the Internet. An organization that uses an ASP “rents” the software, thus eliminating the tasks of buying, installing, and maintaining the software. Among the advantages to using this approach as opposed to the outright purchase of software is a reduction of software costs and administrative overhead, automated software upgrades, scalability as the organization itself grows, global access to information, access to skilled IT personnel, and ability to focus on core competencies rather than IT requirements.

Page Ref: 614

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

67) Identify the ways an organization can gain full advantage of using a Request For Proposal (RFP).

Answer:  The more information an organization provides in its RFP, the better its chances are of receiving a system that meets its requirements. It is important to include detailed specifications for the new AIS, including required applications, inputs, outputs, files, databases, frequency and ways of updating files and creating queries, and any unique characteristics or requirements. It is also essential that the RFP distinguishes between what are mandatory requirements and what are “desirable but not essential” requirements.

Page Ref: 615

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

68) Discuss how an organization can develop custom software.

Answer:  Custom software can be developed and written in-house. Many organizations develop their own software because their requirements are unique or their size and complexity necessitate the creation of a custom package. Specific applications or functions can often be developed in-house by end-users. End-users can use spreadsheet or database software programs to create reports, perform “what-if” analysis, prepare depreciation schedules, or prepare budgets. Alternatively, third-party developers can be contracted to develop custom software for an organization. Custom software should only be developed when it results in a distinct, competitive advantage to the organization.

Page Ref: 617

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

69) What are the advantages and disadvantages of custom software and of canned software for meeting application software needs?

Answer:  Custom software: tailored to needs; potential competitive advantage; and better control over the process: expensive; difficult to write; error prone; and time consuming. Canned software: easy to acquire; fast to acquire; inexpensive; good documentation; updates are inexpensive; and can be tested: not tailored to needs; not as efficient as custom software; does not develop in-house expertise in creation; and developer may go out of business.

Page Ref: 614, 618

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

70) Describe end-user computing and the advantages and risks involved.

Answer:  End-user computing is the hands-on development, use, and control of computer-based information systems by users. The suitable applications are: Producing simple reports and answers to one-time queries by accessing the company database. Sensitivity, statistical, or “what-if” analysis. Using spreadsheets or database software to analyze data. Preparing schedules and lists such as depreciation schedule, accounts receivable aging, and loan amortizations. User computing has seen an explosive growth because: Users realized that computers can be used to meet more and more information needs. Increased access to data created many new uses and needs for information. One prediction is that end-user computing may account for 75% to 95% of all information processed in the near future. Advantages of end-user computing: The user is involved in the creation, control, and implementation of the software; systems tend to meet user needs; programs can be created timely; end-users creating programming can free up IS resources; and programs tend to be versatile and easy to use. Disadvantages of end-user computing: Logic and development errors; inadequately tested applications; inefficient systems; poorly controlled and documented systems; systems incompatibilities; duplication of systems and data; and wasted resources and increased costs.

Page Ref: 617-619

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

71) Describe prototyping and identify when prototyping is appropriate. Identify the steps involved in prototyping. Discuss the advantages and disadvantages of prototyping.

Answer:  Prototyping is the development of a simplified working model (prototype) of an information system. It is a “first draft,” that is quickly and inexpensively built and provided to users for testing. Prototyping is appropriate if: There is uncertainty about the existing AIS. The questions to ask are unclear. The final AIS is not clearly visualized. Speed is an issue. There is a high likelihood of failure. The system is a decision support system, executive information system, expert system, or information retrieval system. Suitable when the system involves experimentation and trial-and-error development. Suitable when the system requirements evolve as the system is used. Prototyping is not appropriate if: The system is large or complex and serves major organizational components or crosses a number of organizational boundaries. Steps in developing a prototype: Identify basic system requirements based on users’ needs for what output should be produced. Develop initial prototype emphasizing speed and low cost instead of efficiency of operation and demonstrate it for users. Make changes needed as identified by users, may take several iterations. Develop and use the user-approved system. Advantages of prototyping: Better definition of user needs. Higher user involvement and satisfaction; faster development time; fewer errors; more opportunity for changes; and less costly to the organization. Disadvantages of prototyping: significant user time; less efficient use of system resources; incomplete system development; inadequately tested and documented systems; negative behavioral reactions; never-ending development.

Page Ref: 623-625

Objective:  Learning Objective 6

Difficulty :  Difficult

AACSB:  Analytic

72) Discuss how information system outsourcing can provide the organization with both a business solution and asset management.

Answer:  Many companies have come to view information system outsourcing as not merely an IS solution but a true business solution. Outsourcing has become a plausible business solution because it allows the organization to focus and put its concentration into its core competencies. This transfer of IS responsibilities can be liberating to the organization, as it frees up more resources to devote to the mainstay of its business efforts. The viewpoint is that a company should be allowed to do what it does best; so the outsourcer is better at IS operations and management, while the organization is better in its areas or core competencies. Many organizations treat outsourcers as business partners, working closely to meet the strategic business objectives of the organization. An additional benefit of IS outsourcing is asset management. Many organizations tie up millions of dollars in their IS efforts, and the attempt to keep up with technological improvements can create a steady drain on cash reserves and other organizational resources. One way to significantly improve an organization’s cash position and reduce annual expenses is to sell off IS assets, or lease them to the outsourcing organization. This can have positive benefits for both the organization and outsourcing vendor as well, as it helps the organization with cash and expense management, and can provide an outsource vendor with the equipment (and even people) it needs to properly service its client.

Page Ref: 620

Objective:  Learning Objective 4

Difficulty :  Difficult

AACSB:  Analytic

73) Describe each of the four important principles underlying Business Process Management (BPM).

Answer:  Business processes can produce competitive advantages through innovative processes and technology to respond to changing consumer, market and regulatory demands before competitors are able to respond. Business processes must be managed end to end, meaning a process owner should have responsibility to set performance standards, control and monitor processes, and communicate with other functional units. Business processes should be agile, which emphasizes continuous improvement and adaptability. Business processes must be aligned with organizational strategy and needs to be effective and efficient.

Page Ref: 621-622

Objective:  Learning Objective 5

Difficulty :  Moderate

AACSB:  Analytic

Chapter 22  

1) Developing a general framework for implementing user requirements and solving problems identified in the analysis phase occurs in which phase of the SDLC?

A) conceptual systems design

B) implementation and conversion

C) operations and maintenance

D) physical design

Answer:  A

Page Ref: 641

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

2) Who is responsible for evaluating the design alternatives and selecting the one that best meets the organization’s needs?

A) design team

B) implementation committee

C) steering committee

D) systems analysts

Answer:  C

Page Ref: 641

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

3) Which of the following lists represent the sequence of elements in developing the conceptual design specifications?

A) input, data storage, processing procedures and operations, and output

B) input, output, data storage, and processing procedures and operations

C) output, data storage, input, and processing procedures and operations

D) processing procedures and operations, input, data storage, and output

Answer:  C

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

4) The project team wants to find the most efficient way to collect data in order to prepare a report on sales per store. Which element in design specifications will deal with the decision?

A) data collection

B) input

C) output

D) processing procedures

Answer:  B

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

5) One of the purposes of the ________ is to guide physical systems design activities.

A) conceptual systems design report

B) physical systems design report

C) program design

D) systems analysis report

Answer:  A

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

6) The decision about how often to produce a certain report is part of which conceptual design specification element?

A) data storage

B) input

C) output

D) processing procedures and operations

Answer:  C

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

7) Which of the following is not a reason for preparing the conceptual systems design report?

A) It can be used to guide physical systems design activities.

B) It communicates how management and user information needs will be met.

C) It discusses the design alternatives that were not selected for the project.

D) It helps the steering committee assess system feasibility.

Answer:  C

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

8) Which consideration below is not considered important to output design?

A) format

B) location

C) medium

D) source

Answer:  D

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

9) All of the following reports have pre-specified content and format except

A) demand reports.

B) scheduled reports.

C) special-purpose analysis reports.

D) triggered exception reports.

Answer:  C

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

10) For file and database design, it is advantageous to have

A) all data in compatible format.

B) easy access to the system.

C) a printout of the data dictionary.

D) copies of necessary reports.

Answer:  A

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

11) Physical input design considerations include

A) which transactions to enter.

B) layout of source documents.

C) types of data input and optimal input methods.

D) cost of collecting and storing data.

Answer:  C

Page Ref: 645

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

12) Program design

A) spans all five stages of the system development life cycle.

B) includes writing computer code.

C) includes debugging logic errors.

D) is described by all the above.

Answer:  D

Page Ref: 645-646

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

13) Which of the following statements below is correct about modules of computer code created during program design?

A) Modules interact with each other directly and also through the control module.

B) Modules interact with each other directly.

C) Modules interact with only the control module.

D) Modules primarily, but not always, interact with the control module.

Answer:  C

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

14) Which of the following statements is true?

A) Structured programming divides programs into well-defined segments to reduce complexity.

B) Structured programming is used to debug logic errors in programs.

C) Structured programming is accomplished by using a flowchart to guide design.

D) Structured programming pieces together standard code strings into a completed program.

Answer:  A

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

15) Which of the following is not a consideration in procedures and controls design?

A) Are customer data stored in alphabetical order in a master file?

B) Are payments made only to legitimate vendors?

C) Are data processed and stored accurately?

D) Can the system be modified without affecting system availability?

Answer:  A

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Difficult

AACSB:  Analytic

16) The accountant wants to make sure that all cash disbursements are made only to legitimate vendors. Which of the following control considerations will deal with this concern?

A) security

B) accuracy

C) authorization

D) validity

Answer:  D

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

17) The sales department wants to make sure that all customer inquiries are answered in real-time. Which of the following controls design considerations will deal with this concern?

A) security

B) authorization

C) accuracy

D) audit trail

Answer:  D

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

18) At what point in the systems development life cycle does the company determine how the conceptual AIS design is to be implemented?

A) the conceptual design phase

B) the implementation and conversion phase

C) the physical design phase

D) the systems analysis phase

Answer:  C

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

19) What is the most time-consuming activity in the physical design stage of the systems development life cycle (SDLC), or perhaps even in the entire SDLC process?

A) controls design

B) input design

C) output design

D) program design

Answer:  D

Page Ref: 645

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

20) Which of the following is a consideration during file and database design?

A) form size

B) format

C) medium

D) organization

Answer:  C

Page Ref: 645

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

21) ________ is the process of installing hardware and software and getting the AIS up and running.

A) Conceptual design

B) Physical design

C) Systems analysis

D) Systems implementation

Answer:  D

Page Ref: 648

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

22) The first step in program design is to

A) determine user needs.

B) develop a plan.

C) hire program users.

D) write program instructions.

Answer:  A

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

23) Flowcharts, record layouts, decision tables, and related items are part of

A) determining user needs.

B) documenting the program.

C) testing the program.

D) training program users.

Answer:  B

Page Ref: 647

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

24) Effective AIS training involves

A) instruction on new hardware and software.

B) orientation to new policies and operations.

C) planning and scheduling so it occurs before system testing and conversion.

D) All of the above are correct.

Answer:  D

Page Ref: 649

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

25) Step-by-step reviews of procedures or program logic early in the system design that focus on inputs, files, outputs, and data flows are called

A) acceptance tests.

B) operating tests.

C) processing of test transactions.

D) walk-throughs.

Answer:  D

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

26) One process used to uncover and eliminate program errors is known as

A) black box testing.

B) debugging.

C) desk checking.

D) white box testing.

Answer:  B

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

27) What is used as the basis for management to make a “go/no go” decision regarding whether to proceed from the physical design phase to the implementation and conversion phase of the systems development life cycle?

A) conceptual system design report

B) physical systems design report

C) systems design report

D) implementation planning design report

Answer:  B

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

28) Who is responsible for identifying such risk factors in an implementation plan?

A) implementation team

B) steering committee

C) systems analysis team

D) systems development team

Answer:  A

Page Ref: 648

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

29) Within the implementation planning and conversion phase of the systems development life cycle, analysts must ________ before they can ________.

A) complete documentation; test software programs

B) install and test software; test software programs

C) test software programs; test the system

D) test the system; select and train personnel

Answer:  C

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

30) In which phase of the systems development life cycle would changing tax rates in a software program be accomplished?

A) maintenance

B) operations

C) program design

D) implementation

Answer:  A

Page Ref: 652

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

31) Several types of documentation must be prepared for a new system. The type of documentation that includes the files and databases accessed and file retention requirements is called

A) development documentation.

B) operations documentation.

C) reference documentation.

D) user documentation.

Answer:  B

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

32) What type of system test determines whether a program is operating as designed?

A) acceptance test

B) debugging

C) process test data

D) walk-through

Answer:  C

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

33) What type of system test uses copies of real transaction and file records?

A) acceptance test

B) debugging

C) process test data

D) walk-through

Answer:  A

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

34) In what type of conversion are old and new systems operated simultaneously for a period of time?

A) direct conversion

B) parallel conversion

C) phase-in conversion

D) pilot conversion

Answer:  B

Page Ref: 651

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

35) Implementing a new system at a branch location before company-wide adoption is called

A) direct conversion.

B) parallel conversion.

C) phase-in conversion.

D) pilot conversion.

Answer:  D

Page Ref: 652

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

36) Which of the following activities is not part of data conversion?

A) changing data content

B) moving file servers

C) changing file formats

D) moving files to a new storage medium

Answer:  B

Page Ref: 652

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

37) What type of conversion terminates the old system as soon as the new system is ready?

A) direct conversion

B) parallel conversion

C) phase-in conversion

D) pilot conversion

Answer:  A

Page Ref: 651

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

38) Which of the following describes a phase-in conversion?

A) Both the old and new AIS are operated simultaneously.

B) Elements of the old AIS are replaced gradually with elements of the new AIS.

C) The new AIS is introduced into a segment, rather than the whole organization.

D) The old AIS is terminated as the new AIS is introduced.

Answer:  B

Page Ref: 652

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

39) Which of the following is the final step in the data conversion process?

A) data conversion

B) testing the system

C) documentation of conversion activities

D) monitoring of the system after data conversion

Answer:  C

Page Ref: 652

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

40) Which factor is not investigated during the post-implementation review?

A) accuracy

B) benefits

C) completion

D) costs

Answer:  C

Page Ref: 652

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

41) Which of the following is the final activity in the systems development life cycle?

A) monitoring of the system

B) ongoing maintenance activities

C) preparation of the post-implementation review report

D) user acceptance of the post-implementation review report

Answer:  D

Page Ref: 653

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

42) An analyst who asks the question, “Does the system produce actual and complete data?” is investigating what postimplementation factor?

A) accuracy

B) compatibility

C) goals and objectives

D) reliability

Answer:  A

Page Ref: 652

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

43) Which of the following is not one of the ways data may need to be modified during data conversion?

A) Resolve data inconsistencies

B) Validate new files

C) Identify files to be converted

D) Remove unnecessary fields from data files

Answer:  D

Page Ref: 652

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

44) Walk-throughs are system tests that involve

A) managers observing the operation of the system by “walking through” the IT department.

B) processing hypothetical data that are designed to identify errors in the system.

C) processing copies of real transactions in order to determine whether or not the system meets requirements.

D) a thorough review of the procedures and program logic of the system.

Answer:  D

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

45) Acceptance tests involve

A) managers observing the operation of the system by “walking through” the IT department.

B) processing hypothetical data that are designed to identify errors in the system.

C) processing copies of real transactions in order to determine whether or not the system meets requirements.

D) a thorough review of the procedures and program logic of the system.

Answer:  C

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

46) Processing test data involves

A) managers observing the operation of the system by “walking through” the IT department.

B) processing hypothetical data that are designed to identify errors in the system.

C) processing copies of real transactions in order to determine whether or not the system meets requirements.

D) a thorough review of the procedures and program logic of the system.

Answer:  B

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

47) Which of the following is not one of the types of documentation that should be prepared for a new system?

A) Management

B) Operations

C) User

D) Development

Answer:  A

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

48) Subdividing program code into small, well-defined modules is

A) called debugging.

B) known as structured programming.

C) part of program maintenance.

D) done during testing.

Answer:  B

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

49) Performing revisions to existing program code is an example of

A) debugging.

B) structured programming.

C) program maintenance.

D) walk through.

Answer:  C

Page Ref: 647

Objective:  Learning Objective 4

Difficulty :  Easy

AACSB:  Analytic

50) Chuck in ITS got a call from Phil in Marketing. “Chuck, you know that inventory report I had you guys prepare for me last year? Well, I need you to run it again and send it over in hard copy. Thanks.” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

Answer:  D

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

51) Phil in Marketing got a call from Chuck in ITS. “Phil, the system just generated a stock-out report. I wanted to give you a heads up. I’m sending it right over.” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

Answer:  C

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

52) Chuck in ITS got a call from Phil in Marketing. “Chuck, I need you to do something for me. Query sales data for the first quarter and pull out all of the invoices that include the snow blower discount. I need a count and the total amount of the discount. Thanks.” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

Answer:  B

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

53) Phil in Marketing got a call from Fred at regional headquarters. “Phil, I just got the quarterly sales report for your district. You beat your quota again, you son of a gun!” This is an example of a

A) scheduled report.

B) special-purpose analysis report.

C) triggered exception report.

D) demand report.

Answer:  A

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Easy

AACSB:  Analytic

54) Which of the following is the most costly and least risky method of converting from one system to another?

A) Direct

B) Parallel

C) Pilot

D) Phase-in

Answer:  B

Page Ref: 651

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

55) Which of the following is the least costly and most risky method of converting from one system to another?

A) Direct

B) Parallel

C) Pilot

D) Phase-in

Answer:  A

Page Ref: 651

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

56) How can accountants help in the systems development life cycle (SDLC) process?

Answer:  Accountants must first understand the development process, and then realize that they can make a valuable contribution to the development process in several ways. As users, accountants can specify their needs and help explain such needs to the development team. As members of the development team, they can provide valuable input throughout the design and development process. As auditors, they can perform attest functions with a greater working knowledge and enhanced skill sets. Accountants should keep the project on track by evaluating and measuring benefits, monitoring costs, and helping to maintain the timetable.

Page Ref: 582, 583, 647

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Reflective Thinking

57) What factors does a steering committee consider when evaluating different system designs?

Answer:  How well does the design meet organizational and systems objectives? How well does the design meet users’ needs? How economically feasible is the design in terms of costs versus benefit? What are the advantages and disadvantages of the design? Do the advantages outweigh the disadvantages?

Page Ref: 641-643

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

58) What are the purposes of a conceptual systems design report?

Answer:  The purposes of this report are to a) guide physical systems design activities, b) communicate how management and user information needs will be met, and c) help the steering committee assess system feasibility.

Page Ref: 643

Objective:  Learning Objective 1

Difficulty :  Easy

AACSB:  Analytic

59) Describe at least four considerations during controls design.

Answer:  Controls design ensures the effectiveness, efficiency, and accuracy of the AIS. The important concerns to be addressed are: validity of transactions  authorization of input, storage, and output activities  accuracy of input and processing activities  security access to system  numerical control pre-numbering and accounting of all documents  audit trail - tracing of transactions from source documents to final output and vice versa  availability of the system when needed – maintainability so the system can be modified without affecting availability or security  integrity

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

60) What is systems implementation? How do you plan for it?

Answer:  Systems implementation is the process of installing hardware and software and getting the AIS in place and in use. Systems planning consists of: Implementation tasks and person(s) responsible for tasks. Setting expected completion dates. Cost estimates and variances. Identify risk factors that decrease likelihood of successful implementation. Strategies for coping with risk factors.

Page Ref: 648

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

61) Describe the different types of documentation that should be prepared for a new system.

Answer:  Development documentation includes system description; copies of output, input and file and database layouts; program flowcharts; test results; and user acceptance forms. Operations documentation includes operating schedules; files and databases accessed; and equipment, security and file retention requirements. User documentation includes procedures manuals and training materials.

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

62) Describe the different methods of testing a system.

Answer:  Walkthroughs, which involve systematic reviews of procedures or program logic at different phases during the SDLC. In the early stages of the design process, the focus is inputs, outputs, and files. In the later stages, the focus is on program logic and structure. Processing test transactions to determine whether a program operates as designed. Different types of hypothetical transactions are processed to see if the controls catch various types of errors. Acceptance tests, which use real transactions and file records. Users develop the acceptance criteria and make the final acceptance or rejection decision.

Page Ref: 650

Objective:  Learning Objective 3

Difficulty :  Easy

AACSB:  Analytic

63) Describe the post-implementation review activity.

Answer:  A post-implementation review ensures that the new AIS meets planned objectives. Any problems uncovered during the review are brought to the attention of the management and the necessary adjustments are made. When review is complete, prepare a report. The acceptance of the post-implementation review report by users concludes the systems development process. Control of the AIS now passes on to the data processing department.

Page Ref: 653

Objective:  Learning Objective 4

Difficulty :  Moderate

AACSB:  Analytic

64) What output design considerations should be analyzed as part of the physical system design phase?

Answer:  Two things must be considered regarding system output. First, who will use the output? Why do users need this type of output, and what decisions will be made based on such output? Second, the medium of the output must be addressed. What medium should be used? Should the output be on paper, computer screen, stored as a voice response file, placed on diskette, microfilm, or some possible combinations of these mediums? These are two important considerations that can either “make or break” a system in terms of its successful use. Other considerations are: What format (table, graph, etc)? Should preprinted forms be used? Where should the output be sent? Who should have access to the output? How often should the output be produced? Lengthy output should be preceded by an executive summary and a table of contents.

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

65) Describe structured programming.

Answer:  Structured programming refers to programs that are subdivided into small, well-defined modules with the goal of reducing complexity and enhancing reliability and modifiability. Each module should interact with a control module rather than with each other. Proper structured programming dictates that each module should have only one entry and exit point to facilitate testing and modification.

Page Ref: 646

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

66) Describe the conceptual systems design phase and identify the elements of conceptual design specifications?

Answer:  The conceptual systems design phase involves the development of the general framework for implementing user requirements and solving problems identified in the analysis phase. Conceptual design elements include the following elements: Output specifications to meet users’ information needs. Data storage specifications based on reports that need to be produced, the manner in which data are stored (sequential, random, etc.), the type of database to use, and appropriate field sizes. Input specification after output is identified so that the “when, where, and how” of data input are appropriate for the types of output needed. Processing procedures and operations specifications are determined after the sequencing and processes for input and data storage are known.

Page Ref: 641

Objective:  Learning Objective 1

Difficulty :  Moderate

AACSB:  Analytic

67) What is the objective of output design? What are the output design considerations? What are the various categories of outputs?

Answer:  Output design: The objective is to determine the nature, format, content, and timing of printed reports, documents, and screen displays.

Design considerations: Use  who will use, why is it needed, what is needed for use. Medium  paper, screen, diskette. Format  tables, graphs, narratives. Preprinted  e.g., purchase orders, checks. Location  where sent. Access  by whom and to what. Detail  summary, table of contents, headings. Timeliness  how often.

Categories of output are: Scheduled reports are prespecified and formatted and prepared regularly. Special-purpose analyses are not prespecified or formatted, but are prepared when management requests data to evaluate an issue. Triggered exception reports are prespecified and formatted and prepared in event of abnormal conditions. Demand reports are prespecified and formatted and prepared when requested.

Page Ref: 644

Objective:  Learning Objective 2

Difficulty :  Moderate

AACSB:  Analytic

68) Describe the approaches to system conversion.

Answer:  Direct conversion is used when the old system is of no value or is not comparable to the new system. This type of conversion carries a high risk of failure. Parallel conversion protects the company from error, but it is costly and stressful to process transactions twice. Phase-in conversion results in gradual changes over time that also allows resources to be acquired over time. However, creating temporary interfaces is costly and gradual changes take time and come at greater expense. Pilot conversion implements the system in just one part of the organization that allows problems to be corrected before the system is completely adopted. However, the costs of interfaces and running both systems are a disadvantage.

Page Ref: 651-652

Objective:  Learning Objective 3

Difficulty :  Moderate

AACSB:  Analytic

69) Write one question that should be asked about each of the controls design considerations.

Answer:  There are several controls design considerations to be addressed in this phase of the SDLC. Validity, authorization, accuracy, access, numerical control, and providing an audit trail are the major items, which must be taken into account in physical design. Validity would address a question such as, “Are all system interactions valid?” Authorization could be examined by asking, “Are input, processing, storage, and output activities authorized by the appropriate managers?” Accuracy can be analyzed by asking, “Is input verified to ensure accuracy and what controls are in place to ensure that data passed between processing activities is not lost?” When dealing with access issues, the analyst should ask if there is adequate control over accessing data, and ask the important question, “How is a hacker denied access to a data file?” Asking the question, “Are documents pre-numbered to prevent errors or intentional abuse?” can provide insight about numerical controls. Finally, to provide appropriate audit trails, the analyst should ask the question, “Can transaction data be traced from source documents to final output, and vice versa?” It is imperative that controls design be properly implemented in this phase of the SDLC to ensure the success of launching the system and its ongoing use. Also, availability and integrity.

Page Ref: 648

Objective:  Learning Objective 2

Difficulty :  Difficult

AACSB:  Reflective Thinking

70) Describe the eight basic steps in program design.

Answer:  Generally speaking, developers use an eight-step method to develop and test software programs. As part of the systems implementation phase of the SDLC, it is important that these steps faithfully are followed by the development team. 1) The team should consult with users and write an agreement about software requirements as a way to determine user needs. 2) Next, a development plan should be created and documented. 3) The overall approach and major processing tasks should be identified on a high level before proceeding to levels of greater detail. At that point the activity of writing program instructions can begin. 4) After program code has been written, the next step is to test the program. This can be achieved in part through debugging and desk checking, along with other types of testing. 5) The next thing to be done is to document the program, since this will explain how the program works and assist analysts in correcting and resolving errors. 6) Training program users is the beginning of the end of the test phase. Program documentation developed in step five will be used at this time. 7) The seventh step is to install and use the system. At this point the program can be used and program maintenance can take place as needed. 8) Use and modify the system. Revise existing programs (called program maintenance).

Page Ref: 645-646

Objective:  Learning Objective 2

Difficulty :  Difficult

AACSB:  Analytic