Test bank accounting information system by turner 06 chapter

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ACCOUNTING INFORMATION SYSTEMS
CONTROLS AND PROCESSES
TURNER / WEICKGENANNT
CHAPTER 6: IT Governance
TEST BANK - CHAPTER 6 - TRUE / FALSE
1. IT governance is an issue for executives and top management. Lower level managers and the
board of directors are outsiders in the process.
2. In order to meets it obligation of corporate governance, the board of directors must oversee
IT.
3. In order to match company strategy to IT systems, the company needs to have an IT
governance committee and a formal process to select, design, and implement IT systems.
4. Either the IT governance or the system development life cycle are necessary in the strategic
management of IT systems.
5. Once the system development life cycle has determined the priority it places on IT systems,
the IT governance committee will manage the development, implementation, and use of the
systems.
6. The IT governance committee should constantly assess the long-term strategy of the company
and determine the type of IT systems to purchase, develop and use.
7. The systems development life cycle is responsible for the oversight and management of the IT
governance committee.
8. Accounting software was often not available in the early days of computers which required
that the organization would develop, program, and implement their in-house accounting
software.
9. Once the systems development life cycle (SDLC) is complete, it is not necessary to restart the
cycle unless something is brought to the attention of the IT governance committee to indicate
that another cycle is required.
10. It is likely that the IT governance committee will go back through the phases of the SDLC to
design new and improved IT systems.
11. In the modern IT environment, it is necessary for an organization to follow each of the steps

in the SDLC in the order presented.
12. The exact steps in the SDLC and/or their sequence are not as important as is the need to
formalize and conduct those steps completely and consistently.
13. The IT governance committee will be constantly monitoring the IT system to look for fraud
and system abuse.


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14. If the operational feasibility determines that the operation will require new training of
employees, then the proposed upgrade or modification should be rejected.
15. The economic feasibility study would answer the question about whether the benefits of the
proposed IT system outweigh the costs.
16. When the IT governance committee uses both the strategic match and the feasibility study,
they will be better able to prioritize proposed changes to the IT systems.
17. When the IT governance committee has made the decision as to which IT upgrades and/or
modifications are to made, their job is complete.
18. Data collection in the system survey step of systems analysis involves documentation review
only.
19. The purpose of observation in the system survey is to enable the project team to gain an
understanding of the processing steps within the system.
20. During a documentation review, the team would examine only relevant documentation of the
proposed upgrade or modification.
21. In order to gain a complete understanding of the system under study, the project team should
seek the opinions and thoughts of those who use the system in addition to observation and
documentation review.
22. The face-to-face nature of an interview is advantageous due to the fact that the interviewer
can clear up any misunderstandings as they occur and can follow up with more questions,
depending on the response of the interviewee.
23. One advantage of the interview process is efficiency.

24. One advantage to the use of questionnaires is that they can be answered anonymously, which
allows the respondent to be more truthful without fear of negative consequences.
25. The determination of user requirements is often discovered through the use of observation
and documentation review.
26. The analysis phase is the critical-thinking stage of systems analysis.
27. IT and business process reengineering have mutually enhancing relationships. The business
processes should be supported by the IT capabilities.
28. Business process reengineering takes place at the systems design stage of the SDLC.
29. The last step of the systems analysis phase is to prepare a systems analysis report that will be
delivered to the IT governance committee.


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30. The steps within the design phase of the SDLC is the same, whether the organization intends
to purchase software or to design the software in-house.
31. In general, purchased software is more costly but more reliable than software designed inhouse.
32. While it is not necessary to hire a consulting firm, many organizations find that the special
expertise of consulting firms is most beneficial in the design and implementation of accounting
system software.
33. When in the systems design phase and creating an in-house accounting software, the
feasibility aspect is the same as in the systems planning stage.
34. In general, designs that require more complex technology have a higher feasibility than
designs with less complex technology.
35. When a company is revising systems, there are intangible benefits that are difficult to estimate
in dollars. These intangible benefits should be included in the project team’s report.
36. Because the users of reports need the reports on an ongoing basis as part of their jobs, it is
critical to have user feedback in the design of the details of the output reports.
37. In general, the manual input method is less error prone that the electronic methods.
38. In the detailed design phase, all of the individual steps within a process must be identified and

designed.
39. The internal controls within a system must be designed in the implementation stage.
40. It would not be necessary for the programming staff to have interaction with the accounting
staff during the systems implementation process, as all systems design was previously
completed.
41. Software should never be implemented before it is tested.
42. It is essential that accountants oversee the data conversion from the old system to the new
system to make sure that all accounting data is completely and correctly converted.
43. The file or database storage for the new accounting system may not be different from the old
system.
44. The longest and most costly part of the SDLC is the operation and maintenance.
45. During the operation phase of the IT system, it is necessary that management receive regular
reports that will enable management to determine whether IT is aligned with business
strategy and meeting the objectives of the IT system.


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46. Once the SDLC has identified which types of IT systems are appropriate for the company, the
IT governance committee becomes the mechanism to properly manage the development,
acquisition, and implementation of the IT system.
47. Each organization may approach IT governance in a different manner, but each organization
should establish procedures for IT governance.
48. The AICPA Trust Principles failed to include any reference to the internal control structure of
the IT systems.
49. Diligent adherence to the SDLC process, by management, is part of fulfilling its ethical
obligations of stewardship and fraud prevention.
50. As the result of the passage of the Sarbanes-Oxley Act, CPA firms have unlimited ability to
provide non-audit services to their audit clients.
ANSWERS TO TEST BANK – CHAPTER 6 – TRUE / FALSE:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

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11.
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19.
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F
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21.
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25.
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27.
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30.

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31.
32.
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38.
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40.

F
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41.
42.

43.
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47.
48.
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50.

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TEST BANK - CHAPTER 6 - MULTIPLE CHOICE
51. The process of determining the strategic vision for the organization, developing the long-term
objectives, creating the strategies that will achieve the vision and objections, and implementing
those strategies is referred to as
A. IT Governance
B. Strategic Governance
C. Strategic Management
D. IT Management
52. A structure of relationships and processes to direct and control the enterprise in order to achieve
the enterprise’s goals by adding value while balancing risk versus return over IT and its

processes is called:
A. IT Governance
B. Strategic Governance
C. Strategic Management
D. IT Management


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53. To fulfill the management obligations that are an integral part of IT governance, management
need not focus on:
A. Aligning IT strategy with the business strategy
B. Hiring an acceptable IT manager
C. Measuring IT’s performance
D. Insisting that an IT control framework be adopted and implemented
54. Which of the following is not one of the approaches used to achieve the management of an IT
control framework?
A. Information Systems Audit and Control Association control objectives for IT
B. The International Organization for Standardization 17799, Code of Practice for Information
Security Management
C. The Information Technology Infrastructure Library
D. Sarbanes-Oxley Act section on IT Controls
55. A group of senior managers selected to oversee the strategic management of IT is called:
A. IT Strategic Committee
B. IT Governance
C. Chief Information Officer (CIO)
D. IT Management
56. The formal process that many organizations use to select, design, and implement IT systems is
the:
A. Systems Development Life Cycle

B. Control Objectives for IT
C. Practice for Security Management
D. Information Technology Development
57. The IT governance committee is made up of many different individuals within the organization.
Which of the following would not be one of those individuals?
A. Chief Information Officer
B. Chief External Auditor
C. Chief Executive Officer
D. Top Managers from User Departments
58. The evaluation of long-term, strategic objectives and prioritization of the IT systems in order to
assist the organizations in achieving its objectives is called:
A. Systems Planning
B. Systems Analysis
C. Systems Design
D. Systems Implementation
59. The
A.
B.
C.
D.

phases of the SDLC include all of the following except:
Systems Planning
Systems Implementation
Systems Analysis
Systems Purchasing


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60. This phase of SDLC involves the planning and continuing oversight of the design,
implementation, and use of the IT systems.
A. Systems Analysis
B. Systems Implementation
C. Systems Planning
D. Systems Design
61. The study of the current system to determine the strengths and weaknesses and the user needs
of that system is called:
A. Systems Analysis
B. Systems Design
C. Systems Planning
D. Systems Implementation
62. This phase of SDLC requires the collection of data about the system and the careful scrutiny of
those data to determine areas of the system that can be improved.
A. Systems Planning
B. Systems Implementation
C. Systems Analysis
D. Systems Purchasing
63. The creation of the system that meets user needs and incorporates the improvements identified
by the systems analysis phase is called:
A. Systems Planning
B. Systems Design
C. Systems Analysis
D. Operation and Maintenance
64. The set of steps undertaken to program, test, and activate the IT system as designed in the
system design phase is called:
A. Systems Planning
B. Systems Implementation
C. Systems Design
D. Systems Analysis

65. The regular, ongoing, functioning of the IT system and the processes to fix smaller problems, or
bugs, in the IT system is called:
A. Systems Analysis
B. Systems Planning
C. Operation and Maintenance
D. Systems Implementation
66. During this phase of the SDLC, management should request and receive ongoing reports about
the performance of the IT system.
A. Operation and Maintenance
B. System Analysis
C. Systems Design
D. Systems Planning


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67. The expanded SDLC presented in the textbook expands the processes within the system design
phase. This is necessary because:
A. It necessary for most companies to create their own software.
B. The design phase needs to include the programming activities of self-created software.
C. There is usually more than one software or system type that will meet the needs of the
organization.
D. Many organizations require a change in the type of operating system along with any
changes in software.
68. The Evaluation and Selection cycle of the expanded SDLC would not include which of the
following steps?
A. Design or buy the system selected.
B. Identify the alternative system approaches.
C. Evaluate the fit of each of the alternatives to company needs.
D. Implement the alternative selected.

69. The process of matching alternatives system models to the needs identified in the system
analysis phase is called:
A. Conceptual Design
B. Systems Analysis
C. Systems Planning
D. Evaluation and Selection
70. The process of assessing the feasibility and fit of each of the alternative conceptual approaches
and selecting the one that best meets the organization’s needs is termed:
A. Conceptual Design
B. Evaluation and Selection
C. Systems Analysis
D. Systems Implementation
71. The process of designing the outputs, inputs, user interfaces, databases, manual procedures,
security and controls, and documentation of the new system is referred to as:
A. Conceptual Design
B. Software Selection
C. Systems Design
D. Detailed Design
72. When attempting to prioritize IT projects, the IT governance committee needs to consider:
A. The assessment of IT systems and their match to strategic organizational objectives.
B. The feasibility of each of the requested modifications or upgrades.
C. Both of the above.
D. None of the above.


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73. A company has stated that the main strategic objective is to improve the accounts payable
function within the organization. There are limited resources for IT upgrades and modifications.
The IT governance committee has received IT update requests from the public relations

department, human services, and vendor satisfaction department. Given this information, which
would be the likely be the first upgrade implemented?
A. Public relations would be first because it would include all areas of the business - vendors,
employees, and customers.
B. Vendor satisfaction would be first because it would be most in line with the strategic
objective of the company.
C. Human services would be the first because the employees are the ones who are most
affected by changes in the IT departments.
D. It is not possible to make a decision without further information.
74. The need to match IT systems to organizational objectives emphasizes the need for the IT
governance committee to include top management as its members because:
A. These managers establish strategic objectives and are in the best position to assess the fit
of the IT systems to those objectives.
B. These managers are in a position to allocate resources and or time to the projects.
C. Both of the above
D. None of the above
75. The realistic possibility of affording, implementing, and using the IT systems being considered is
referred to as:
A. Feasibility
B. Rationality
C. Sequentiality
D. Ranking
76. The assessment of the realism of the possibility that technology exists to meet the need
identified in the proposed change to the IT system is called:
A. Operational Feasibility
B. Economic Feasibility
C. Schedule Feasibility
D. Technical Feasibility
77. The assessment of the realism of the possibility that the current employees will be able to
operate the proposed IT system is referred to as:

A. Operational Feasibility
B. Economic Feasibility
C. Schedule Feasibility
D. Technical Feasibility
78. The
as:
A.
B.
C.
D.

assessment of the costs and benefits associated with the proposed IT system is referred to
Operational Feasibility
Economic Feasibility
Schedule Feasibility
Technical Feasibility


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79. The assessment of the realistic possibility that the proposed IT system can be implemented
within a reasonable amount of time is called:
A. Operational Feasibility
B. Economic Feasibility
C. Schedule Feasibility
D. Technical Feasibility
80. Typical steps within the systems analysis phase of the SDLC would not include which of the
following?
A. Preliminary Investigation
B. Survey of the Current System

C. Economic Feasibility
D. Determination of User Information Needs
81. The purpose of this step in the systems analysis phase is to determine whether the problem or
deficiency in the current system really exists and to make a “go” or a “no-go” decision.
A. Survey of the Current System
B. Determination of User Information Needs
C. Business Process Reengineering
D. Preliminary Investigation
82. A detailed study of the current system to identify weaknesses to improve upon and strengths
that should be maintained is referred to as:
A. Preliminary Investigation
B. System Survey
C. Process Reengineering
D. Determination of User Information Needs
83. Watching the steps that employees take as they process transactions in the system is referred
to as:
A. Investigation
B. Interrogation
C. Observation
D. Interview
84. The detailed examination of documentation that exists about the system to gain an
understanding of the system under study is called a(n):
A. Documentation Review
B. Systems Audit
C. System Survey
D. Records Observation
85. Face-to-face, verbal questioning of users of an IT system to determine facts or beliefs about the
system are called:
A. Interrogation
B. User Review

C. Interviews
D. System Survey


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86. This type of question is designed such that the format and range of the answer is known ahead
of time.
A. Structured Question
B. Oral Question
C. Unstructured Question
D. Range Question
87. This type of question is completely open ended, and the respondent is free to answer in any
way that he / she feels addresses the question.
A. Structured Question
B. Oral Question
C. Unstructured Question
D. Range Question
88. A written, rather than an oral, form or questioning of users to determine facts or beliefs about a
system is referred to as a(n):
A. Interview
B. Questionnaire
C. Interrogation
D. System Survey
89. The purpose of this phase is to question the current approaches in the system and to think
about better ways to carry out the steps and processes of the system.
A. Systems Analysis
B. Systems Survey
C. Analysis of Systems Survey
D. Preliminary Investigation

90. The fundamental rethinking and radical redesign of business processes to bring about dramatic
improvements in performance is called:
A. Business Process Reengineering
B. Process Redesign
C. Business Analysis and Design
D. Business Process Design and Analysis
91. The many sets of activities within the organization performed to accomplish the functions
necessary to continue the daily operations are referred to as:
A. Business Systems
B. Business Processes
C. Business Activities
D. Business Functions
92. The systems analysis report, which is sent to the IT governance committee, will inform the
committee of all of the following, except:
A. The results of the systems survey
B. User needs determination
C. Detailed design
D. Recommendations regarding the continuation of the project


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93. This document is sent to each software vendor offering a software package that meets the user
and system needs and is sent to solicit proposals.
A. Requested Software Package
B. Request for Proposal
C. System Software Request
D. Software Vendor Needs
94. When a vendor returns a request for proposal, it will include all of the following, except:
A. Match of the system and user needs

B. Description of the software
C. The technical support it intends to provide
D. Prices for the software
95. After all of the RFPs have been received, either the IT governance committee or the project
team will evaluate the proposals in order to select the best software package. Things that must
be considered would include:
A. The match of the system and the user needs to the features of the software
B. Testimonials from other customers who use the software
C. Reputation and reliability of the vendor
D. All of the above
96. This phase of the systems design for in-house development of software involves the identifying
the alternative approaches to systems that will meet the needs identified in the system analysis
phase.
A. Request for proposal
B. Conceptual design
C. Systems concept
D. Systems analysis
97. The process of assessing the feasibility and fit of each of the alternative conceptual approaches
and selecting the one that best fits the organization’s needs is called:
A. Conceptual Design
B. Systems Design
C. Evaluation and Selection
D. Systems Implementation
98. During this process, the project team must consider the number of employees, their capabilities
and expertise, and any supporting systems necessary to operate each alternative design.
A. Operational feasibility
B. Technical feasibility
C. Economic feasibility
D. Schedule feasibility
99. The purpose of this analysis is to determine which of the alternative designs is the most cost

effective.
A. Operational feasibility
B. Technical feasibility
C. Economic feasibility
D. Schedule feasibility


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100. In this feasibility, the project team must estimate the total amount of time necessary to
implement the each alternative design.
A. Operational feasibility
B. Technical feasibility
C. Economic feasibility
D. Schedule feasibility
101. The purpose of this phase of systems design is to create the entire set of specifications
necessary to build and implement the system.
A. Detailed design
B. Evaluation and selection
C. Operational design
D. Detailed analysis
102. In the detailed design stage of systems design it is necessary that the various parts of the
system be designed. The parts of the system to be designed at this point would include all of
the following, except:
A. Outputs
B. Inputs
C. Program Code
D. Data Storage
103. Reports and documents, such as income statements, aged accounts receivable reports, checks,
and invoices are referred to as:

A. Outputs of the system
B. Data storage
C. Internal controls
D. Inputs of the system
104. The forms, documents, screens, or electronic means used to put data into the accounting
system are called:
A. Outputs of the system
B. Data storage
C. Internal controls
D. Inputs of the system
105. Which of the following is not a method of data input?
A. Keying in data with a keyboard from data on a paper form
B. Electronic data interchange
C. Bar code scanning
D. Viewed on the screen
106. There are many different types of documentation necessary to operate and maintain an
accounting system. These types of documentation include all of the following, except:
A. Flowcharts
B. Operator Manuals
C. Output Examples
D. Entity Relationship Diagrams


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107. A system conversion method in which the old and the new systems are operated simultaneously
for a short time.
A. Direct cutover conversion
B. Phase-in conversion
C. Pilot conversion

D. Parallel conversion
108. A system conversion method in which on a chosen date the old system operation is terminated
and all processing begins on the new system.
A. Direct cutover conversion
B. Phase-in conversion
C. Pilot conversion
D. Parallel conversion
109. A system conversion method in which the system is broken into modules, or parts, which are
phased in incrementally and over a longer period.
A. Direct cutover conversion
B. Phase-in conversion
C. Pilot conversion
D. Parallel conversion
110. A system conversion method in which the system is operated in only one or a few sub-units of
the organization.
A. Direct cutover conversion
B. Phase-in conversion
C. Pilot conversion
D. Parallel conversion
111. When the manager of the primary users of the system is satisfied with the system, an
acceptance agreement will be signed, the enforcement of which makes it much more likely that
project teams will seek user input and that the project team will work hard to meet user needs.
A. System Conversion
B. Post-Implementation Acceptance
C. User Review
D. User Acceptance
112. A review of the feasibility assessments and other estimates made during the projects, the
purpose of which is to help the organization learn from any mistakes that were made and help
the company avoid those same errors in the future.
A. System Design Life Cycle

B. Post-Implementation Review
C. User Acceptance
D. System Conversion Review


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113. During the operation of an IT system, it is necessary that regular reports are received by
management to monitor the performance of the system. These reports would include all of the
following, except:
A. IT Security and Number of Security Problems
B. IT Customer Satisfaction
C. Downtime of IT System
D. User Acceptance of the IT System
114. Which of the following is not a major purpose served by the continual and proper use of the IT
governance committee and the SDLC?
A. The fulfillment of ethical obligations
B. The strategic management process of the organization
C. The conversion of the system
D. The internal control structure of the organization
115. The careful and responsible oversight and use by management of the assets entrusted to
management is called:
A. IT Governance
B. Stewardship
C. Fiduciary Control
D. System Access
116. Employee Ethical considerations, related to IT governance, would include which of the
following?
A. Maintain a set of processes and procedures that assure accurate and complete records.
B. Confidentiality for those who serve on the project teams.

C. Not to disclose proprietary information from the company to clients.
D. Carefully consider the impact of system changes and to be ethical in the manner in which
the changes are processed.
117. When an organization hires consultants to assist with any phase or any phases of the SDLC,
there are at least four ethical obligations. Which of the following is not one of those
obligations?
A. Bid the engagement fairly, and completely disclose the terms of potential cost increases.
B. Bill time accurately to the client and do not inflate time billed.
C. Do not oversell unnecessary services or systems to the client.
D. Make an honest effort to participate, learn the new system processes, and properly use the
new system.
118. Which of the following relationships would be allowed for a CPA firm?
A. Offering IT consulting services and completing the external audit.
B. Completing the external audit and maintaining the bookkeeping work.
C. Internal audit outsourcing and financial information systems design and implementation.
D. Providing fairness opinions and completing the external audit.


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ANSWERS TO TEST BANK – CHAPTER 6 – MULTIPLE CHOICE:
51.
52.
53.
54.
55.
56.
57.
58.
59.

60.
61.
62.
63.
64.

C
A
B
D
B
A
B
A
D
C
A
C
B
B

65.
66.
67.
68.
69.
70.
71.
72.
73.

74.
75.
76.
77.
78.

C
A
C
D
A
B
D
C
B
C
A
D
A
B

79.
80.
81.
82.
83.
84.
85.
86.
87.

88.
89.
90.
91.
92.

C
C
D
B
C
A
C
A
C
B
C
A
B
C

93.
94.
95.
96.
97.
98.
99.
100.
101.

102.
103.
104.
105.
106.

B
A
D
B
C
A
C
D
A
C
A
D
D
C

107.
108.
109.
110.
111.
112.
113.
114.
115.

116.
117.
118.

D
A
B
C
D
B
D
C
B
B
D
C

TEST BANK - CHAPTER 6 – END OF CHAPTER QUESTIONS:
119. IT governance includes all but which of the following responsibilities?
A. Aligning IT strategy with the business strategy
B. Writing programming code for IT systems
C. Insisting that an IT control framework be adopted and implemented
D. Measuring IT’s performance
120. Which phase of the system development life cycle includes determining user needs of the IT
system?
A. Systems planning
B. Systems analysis
C. Systems design
D. Systems implementation
121. Which of the following is not part of the system design phase of the SDLC?

A. Conceptual design
B. Evaluation and selection
C. Parallel operation
D. Detailed design
122. Which of the following feasibility aspects is an evaluation of whether the technology exists to
meet the need identified in the proposed change to the IT system?
A. Technical feasibility
B. Operational feasibility
C. Economic feasibility
D. Schedule feasibility


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123. The
A.
B.
C.
D.

purpose of the feasibility study is to assist in
Selecting software
Designing internal controls
Designing reports for the IT system
Prioritizing IT requested changes

124. Within the systems analysis phase of the SDLC, which of the following data collection methods
does not involve any feedback from users of the IT system?
A. Documentation review
B. Interviews using structured questions

C. Interviews using unstructured questions
D. Questionnaires
125. A request for proposal (RFP) is used during the
A. Phase-in period.
B. Purchase of software
C. Feasibility study
D. In-house design
126. Which of the following steps within the systems implementation phase could not occur
concurrently with other steps, but would occur at the end?
A. Employee training
B. Data conversion
C. Software programming
D. Post-implementation review
127. Each of the following are methods for implementing a new application system except:
A. Direct cutover
B. Parallel
C. Pilot
D. Test
128. A retail store chain is developing a new integrated computer system for sales and inventories in
its store locations. Which of the following implementation methods would involve the most risk?
A. Direct cutover
B. Phased-in implementation
C. Parallel running
D. Pilot testing
129. The use of the SDLC for IT system changes is important for several reasons. Which of the
following is not part of the purposes of the SDLC processes?
A. As a part of strategic management of the organization
B. As part of the internal control structure of the organization
C. As part of the audit of an IT system
D. As partial fulfillment of management’s ethical obligations

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130. Confidentiality of information is an ethical consideration for which of the following party or
parties?
A. Management
B. Employees
C. Consultants
D. All of the above.
ANSWERS TO TEST BANK - CHAPTER 6 – END OF CHAPTER QUESTIONS
119.
120.
121.
122.

B
B
C
A

123.
124.
125.
126.

D
A
B
D

127.
128.
129.
130.

D
A
C
D

TEST BANK - CHAPTER 6 – SHORT ANSWER QUESTIONS
131. At the beginning of the chapter, the real world example of Allstate’s IT expenditure is
mentioned. Prior to the implementation of their IT Governance Committee, "whoever spoke the
loudest or whoever had the biggest checkbook," got to select IT Projects. What do you think
the problems were with this kind of approach?
Answer: There would be no long-term strategy in how they spent money on IT projects.
Therefore, it would be less likely that the company is buying and using the type of IT systems
that support what the company wished to accomplish in the long-term.
132. Why is it important that IT systems be aligned with the business strategy?
Answer: IT systems are critical systems that support and enhance business processes and
business strategy. If the IT systems do not support the business strategy, the company will find
it much more difficult to achieve the long-term goals.
133. Why would IT Governance include measuring the performance of IT Systems?
Answer: IT Governance is the proper management of IT. Without monitoring the performance of
IT, there is no feedback to determine whether it is meeting the needs of the company, and
meeting the objectives it was intended to achieve.
134. What is the difference between technical feasibility and operational feasibility?
Answer: Technical feasibility examines whether technology exists to accomplish the objectives in a
proposed IT system. Operational feasibility is an examination of whether the organization could

operate the proposed IT systems, given the limitations of the personnel and resources within the
company.
135. How does the analysis of feasibilities in the Systems Planning help to prioritize system changes?
Answer: A feasibility analysis may eliminate some proposed IT systems as not feasible. Of those
remaining under consideration, the feasibility analysis helps determine which proposed IT systems
are most feasible. Thus, those that are more feasible would have a higher priority and those that
are less feasible have a lower priority.


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136. What is the advantage of studying the current system within the Systems Analysis phase?
Answer: It is easier to determine how to improve the efficiency and effectiveness of a system if
that system is well understood. A study of the current system helps determine which areas need
improvement.
137. During the systems analysis phase, which two data collection methods help determine user
requirements?
Answers: Interviews and questionnaires both solicit information or opinions from users. These
methods allow users to have input in determining system requirements.
138. What are the advantages of purchased software when compared to software developed inhouse?
Answer: Purchased software is usually less costly, more reliable, and has a shorter
implementation time.
139. Why might it be important follow some or all of the SDLC phases for purchased software?
Answer: Even when software is purchased, it often must be modified or customized. The SDLC
phases help organize and manage those steps to modify or customize the software.
140. How is conceptual design different from detailed design?
Answer: The detailed design is much later in the process and creates the entire set of
specifications necessary to build and implement the system. The conceptual design is earlier and
is much more general in nature. It establishes alternative conceptual designs.
141. Within the System Design phase, what is the purpose of the Evaluation and Selection?

Answer: The purpose is to assess the feasibility of each alternative conceptual design and to
select the alternative design that best fits the organization’s needs.
142. Which part of the System Design phase would include designing rows and columns of output
reports? Why is it important to design reports?
Answer: The detailed design part of system design includes creating the details of output reports.
Output reports include the information that users need to accomplish their jobs and without
properly designed outputs, they cannot efficiently do these jobs.
143. What is the purpose of software testing?
Answer: The purpose is to uncover problems in the system that would lead to erroneous
accounting data.
144. How are accountants involved in data conversion?
Answer: Accountants should do two things in data conversion. The first is to oversee the data
conversion to make sure all data are completely and accurately converted. Accountants should
also reconcile the converted data with the old data to insure it was accurately converted. They
would compare control totals of the old and converted data to accomplish the reconciliation.
145. Why is a direct cutover conversion risky?
Answer: It is risky because the old system is no longer in operation, and therefore, the old system
cannot be used as a backup system in the event of errors or problems with the new system.


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146. Why is parallel conversion costly?
Answer: It consumes more time and money because it requires running two systems at the same
time.
147. Why is user acceptance important?
Answer: The project team is more likely to solicit and use feedback from users if they know that
users must sign off on the new system. In other words, the project team cannot say their job is
finished until the user sign off occurs.
148. Why is post-implementation review undertaken?

Answer: It is undertaken to help those involved in the SDLC to learn from any mistakes they
made during the process.
149. How does the SDLC serve as an internal control?
Answers: It is an internal control in the sense that it helps ensure that IT systems meet
organizational needs and that the development and implementation of new IT systems is properly
controlled.
150. What ethical obligations do employees have as IT systems are revised?
Answer: Employees should make an honest effort to participate as requested in the SDLC, learn
new system processes that result, and properly use the new systems and processes.
TEST BANK - CHAPTER 6 – SHORT ESSAY
151. Describe the role that the Board of Directors should play in IT governance.
Answer: The board must oversee all aspects of IT in the organization. They must articulate and
communicate the direction for IT, stay aware of development, investments, and costs in IT. They
should receive and review reports on major IT projects and regular performance reports, and
ensure that there are suitable resources and infrastructure available.
152. Two feasibility studies occur during the SDLC; one during Systems Planning, and one during
Systems Design. Describe the differences between these two feasibility studies.
Answer: In the systems design phase, the feasibility study more detailed and the scope is
different. At this part of the system design phase, the alternative system conceptual designs have
been narrowed to one alternative. Thus, the feasibility study focuses on the details of that one
design. The estimates of the technology needed, the operational requirements, the costs, and
the implementation schedule can be more precise. In the systems planning phase, the purpose is
to assess the feasibility of several alternative conceptual designs and to narrow the alternative
conceptual designs.
153. There are four methods of data collection used in the study of the current system; observation,
documentation review, interviews, and questionnaires. Compare and contrast these four
methods.
Answer: In observation and documentation review, the project team views strengths and
weaknesses of the system from their own perspective and they are not asking for user feedback.
Interviews and questionnaires are methods to ask for user input. Interviews are face-to-face and

verbal in the collection of user feedback. Questionnaires can be anonymous and written. Both
interviews and questionnaires can be structured or unstructured.


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154. Describe the purpose of Business Process Reengineering during the System Design phase.
Answer: During the system design phase, the changes inherent in a new IT system may require
changes in the underlying business processes. BPR is as radical rethinking and redesign of a
business process to take advantage of the speed and efficiency of computers. BPR allows the
company to make sure they are leveraging the capabilities of IT to improve the efficiency of the
business processes.
155. There are four methods of system conversion; parallel, direct cutover, pilot, and phase-in.
Describe these four methods and how they differ.
Answer: A parallel conversion is the operation of both the old system and the new system for a
limited period of time. A direct cutover occurs when the new system begins as of a certain date
and the old system is discontinued on that same date. In a pilot conversion, the new system is
implemented in a subunit or subunits within the organization. The old system would continue in
other parts of the organization. In a phase-in conversion, the new system is introduced in
modules, rather than the entire system at once. In comparing the four methods, the direct
cutover is the most risky and the parallel is least risky. The pilot and phase-in approaches may
take a longer total time to achieve a conversion to the entire new system across the organization.
156. Operation and maintenance is the longest and costliest part of the SDLC. Describe why this
would be true.
Answer: When a company has completed the SDLC and implemented a new system, the intent is
to operate it for a few years to capture the benefits of the new system. Therefore maintaining
and operating the system may last for several years and therefore, be the most costly part also.
157. Describe how IT performance reports are important in IT Governance.
Answer: Regular monitoring of the IT system is necessary to ensure that the system is meeting its
objectives and performing as expected. If management never received performance reports it

would be difficult to know whether they needed to improve or revise the system.
158. What is the underlying purpose of the restrictions on CPA firms in Section 201 of the Sarbanes
Oxley Act?
Answer: These restrictions are intended to increase the independence of CPA firms that provide
audit services for companies. The concern was that if a company receives fees from a client for
consulting work, they may be less independent of the client’s wishes and more likely to allow
clients to provide misleading accounting information to the investing public.


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TEST BANK - CHAPTER 6 - PROBLEMS
159. Mega Corporation just became a public corporation when shares of stock were sold to the public
three months ago. A new board of directors has been appointed to govern the corporation.
Assume that you will be giving a presentation to the board on their responsibilities for IT
systems. Write a report that could be delivered to the board.
Answer:
The board of directors of a company has a set of very important responsibilities related to IT
systems. As top management of the company, the board must take responsibility to ensure that
the organization has processes that align IT systems to the strategies and objectives of the
company. To carry out this responsibility, the board must do certain functions, or ensure there
are processes to carry out the following functions:
Align IT strategy with the business strategy
Cascade strategy and goals down to lower levels of the organization
Provide structures that facilitate implementation of strategy and goals
Insist that an IT control framework be adopted and implemented
Measure and review IT performance
The more detailed activities needed to carry out these board responsibilities are as follows:
*
*

*
*

Articulate and communicate long-term strategy
Stay aware of latest developments in IT
Insist that IT be a regular agenda item at board meetings
Stay aware of the company’s investments, and competitors
investments in IT
* Ensure the senior IT official’s reporting level is appropriate to the role
of IT.
* Ensure the board has a clear view of the risks and returns of current
or proposed IT systems
* Receive and review regular reports on the progress of IT projects,
and on IT performance.
* Ensure adequate resources, skills, and infrastructures to meet
strategic goals for IT systems
If the board of directors focuses on these activities, it will help the board to ensure that IT
systems do support long-term strategic objectives of the company.


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160. Blutarch MultiMedia Stop is a regional retailer of consumer electronics with warehouses and
stores located in several large cities in California. The board and top management of Blutarch
are considering updating their accounting, inventory, and retail sales software and hardware.
Their current systems are approximately 15 years old. Assume that you have been hired as a
consultant to guide them through the process of upgrading their systems. Write a document
that could be presented to the Board of Directors that summarizes the SDLC.
Answer:
Memorandum

To: Board of Directors
From: Jennifer Starnes, IT Consultant
Re: Systems Development Life Cycle
This memo is intended to provide an executive summary on the System Development Life Cycle and
the importance of it for your company.
IT systems are crucial to the success and profitability of Blutarch. To enhance long-term
performance, the company must choose and use the IT systems that best support the company’s
goals and objectives. To ensure you are selecting and using the most effective IT systems, you
should follow a systematic and formal process to select, design, and implement IT systems. A
failure to follow a systematic and formal process in selecting and implementing IT systems is likely to
lead to a mismatch between Blutarch strategic objectives and the capabilities of the IT systems.
One popular way of using a systematic and formal process is to follow a System Development Life
Cycle (SDLC) method. The SDLC is a set of systematic phases and steps to follow in selecting,
designing, and implementing IT systems. Given limited funds and time, following an SDLC process is
a planned and controlled method of ensuring a proper match between Blutarch IT needs and the IT
system implemented.
The phases of the SDLC are: systems planning; systems analysis; systems design; systems
implementation; and operation and maintenance. These phases occur in the sequence given as a
planned and controlled approach to implementing new IT systems. The following are brief
descriptions of each of these phases.
Systems planning involves examining the long-term objectives of your company and based on these
objectives, planning and prioritizing the type of IT systems that can help you achieve those
objectives. For example, if your company’s objective is to minimize inventory levels in your
warehouses, you are likely to need IT systems that give you real-time and accurate information about
inventory levels, and you are likely to need IT systems that help you predict or forecast sales of the
various inventory items.
Systems analysis is the study of the current IT system to determine its strengths and weakness, and
to get user feedback about the needs in a new IT system.
Systems design is the creation of the system that meets user needs as and improves the weaknesses
of the old IT system. In other words, the data collected and analyzed in the systems analysis phase

will guide the design of the new IT system.


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Answer to 160 (continued)
Systems implementation is the set of steps undertaken to program, test, and activate the IT system
that was designed during the systems design phase.
Operation and maintenance is the regular, ongoing functioning of the IT system and the process to
fix smaller errors or problems in the IT system.
Following these phases, in this order, will help you to have IT systems that best match your
company’s needs.
161. Assume that you are the project team manager that is engaged in a Systems Analysis. The
company is a large, national retailer with several stores and warehouses located throughout the
United States. The corporate headquarters are in Atlanta, Georgia, and substantially all major
accounting takes place at the corporate headquarters. Describe how you would use the various
data collection techniques of observation, documentation review, interviews, and questionnaires.
Answer:
Observation and documentation review are both methods that allow a project team to better
understand the IT system without soliciting input from users. That is, these methods do not interrupt
the work of users, but they only uncover strengths and weaknesses in the IT system that are evident
to the project team. These two methods would be used at the corporate headquarters by the project
team. It may be necessary for the project team to also visit and observe at a couple of stores and a
couple of warehouses. However, it would not be necessary, or would it be cost effective, to visit all
stores and all warehouses.
Interviews and questionnaires both solicit feedback from users. Due to the number of stores and
warehouses, it would be more effective to send surveys to these locations for certain users to
complete. At the corporate headquarters, it would be possible to use both interviews and
questionnaires. Because of the time consuming nature of interviews, they would be used on the
smaller set of managers who use the IT system. The questionnaires would be used to survey the

larger group of users who are not managers.


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162. Ceemco is a small, privately owned manufacturing company in Cincinnati, Ohio. Ceemco
manufactures custom products as well as store display products to sell to other companies such
as retailers. Using an Internet search engine, do a search using the search terms of Ceemco
and Cincinnati. Examine the kind of manufacturing the company does. Once you have
completed that, examine an accounting software site such as www.2020software.com or
www.accountingsoftware411.com. Complete the following:
a. Describe the process Ceemco should undertake to determine which accounting software might be
the best fit for the company.
Answer: For a small company of this size, they are not likely to have an IT staff that could assist
with an SDLC process to develop specifications for any software systems needed. The more likely
approach would be to hire a consulting firm to help select and install an accounting software
system.
b. Although you do not know much about the company, develop a list of requirements you believe
accounting software should have for Ceemco to consider the software as a viable alternative.
Answer: Since they produce many different categories of products (store displays, metal
fabrication, plastic parts fabrication, medical case carts, HVAC products such as radiators, retail
products such as window ornaments) they are very likely to have an extensive array of raw
material inventories and the need to track many different types of work-in-process. Therefore,
the most critical need may be for manufacturing and inventory tracking modules. The software
would also need basic accounting modules such as accounts receivable, accounts payable, and
general ledger. It is not possible to determine whether they do their own payroll or outsource
payroll. If they do payroll in-house, they would need a payroll module. They sell the windowornament products online, so there would be a need for an e-commerce module. There is no
mention of locations other than two in Cincinnati. Therefore, they may have no need of a system
that handles international currencies.
c. Choose an accounting software from your Web search above and describe why you believe it is a

good match for Ceemco.
Answer: There is no correct answers to this question, but there are some answers that would be
incorrect. For example, Quickbooks would not have the power necessary for this business. Also,
enterprise level systems such as SAP or Oracle would be too expensive for a company such as
Ceemco. Products such as MAS 200, MAS 500, Dynamics GP, or ACCPAC would be more
appropriate.


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163. There are several approaches to applying an SDLC methodology to IT system change. Using an
Internet search engine, search for these terms: SDLC, waterfall, JAD (Joint Application
Development), RAD (Rapid Application Development), Build and Fix, and Spiral Model. For
example, you might try entering these search terms: SDLC waterfall. Write a brief definition of
these various approaches to the System Development Life Cycle.
Answer: The student answer to this will vary depending on which web sites they use and when
they access web sites. A sample answer is provided.
The SDLC waterfall approach is the oldest approach to system development. In a waterfall
approach, there is a sequence of steps and the output of one sequence becomes the input for the
next step. The method described in this chapter is a waterfall approach.
Joint Application Development (JAD) is intended to reduce development time and to increase
customer (end user) satisfaction with the system. It is a method that involves a series of
meetings with the end users or clients that will use the system. These meetings with end users are
called JAD sessions.
Rapid Application Development (RAD) usually involves object-oriented programming, a method
that encourages the reuse of programmed modules. RAD includes: 1) workshops or focus groups
to gather requirements, 2) Protoyping, and testing off those prototypes, 3) Strict time limits on
each development phase that delays immediate fixes and defers these improvements to the next
prototype, and 4) Less formality in team communications.
The Build and Fix method is very open-ended and can be very risky. The method does not have

formal steps such as in the waterfall method. In this method, a system is simply built (code is
written) and then it is fixed until the customer is happy with it.
In the Spiral approach, an initial model of the system is developed and then successively refined
with input from end users. The development of each successive version of the system is
undertaken using the carefully controlled steps in the SDLC waterfall approach. In addition, after
each development of each successive version, a risk assessment is undertaken to determine
whether it is worthwhile to move to the next development version, or to stop.
The web sites used for this solution are:
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