ACC 564 Assignment 4 Changing the AIS

(1)

Changing the AIS Changing the AIS

Professor Daniel Acheampong Professor Daniel Acheampong

ACC 564 Accounting Information Systems ACC 564 Accounting Information Systems

December 16, 21! December 16, 21!

(2)

Trusted by over 1 million members

Try Scribd FREE for 30 days to access over 125 million titles without ads or interruptions!

Start Free Trial

Cancel Anytime.

(3)

Change the AIS Change the AIS

An efficient accounting information system can help an organi"ation create an a#$antage An efficient accounting information system can help an organi"ation create an a#$antage among competitors% As technology an# information security techni&ues a#$ance, an acco

among competitors% As technology an# information security techni&ues a#$ance, an acco untingunting information system m

information system may nee# up#ating% ay nee# up#ating% 'or an organi"ation to pr'or an organi"ation to protect their assets otect their assets an# financialan# financial information, their accounting inform

information, their accounting information system (ill ation system (ill nee# to impro$e also% nee# to impro$e also% A#e&uateA#e&uate accounting information system (hich is reliable can eliminate ris) an# pro$i#e information accounting information system (hich is reliable can eliminate ris) an# pro$i#e information security% *hen an organi"ation has better internal controls, it ma)es them lo(er ris)s an# ha$e security% *hen an organi"ation has better internal controls, it ma)es them lo(er ris)s an# ha$e more opportunity for lo(er

more opportunity for lo(er borro(ing (ith cre#itors% borro(ing (ith cre#itors% +reat internal control set+reat internal control sets up goo#s up goo# corporate go$ernance in an organi"ation%

corporate go$ernance in an organi"ation%

If an organi"ation ma)es the #ecision to change or #e$elop a ne( accounting information If an organi"ation ma)es the #ecision to change or #e$elop a ne( accounting information system, it may incur issues or e$en fail%

system, it may incur issues or e$en fail% Accor#ing to omney - Steinbart, companies ha$eAccor#ing to omney - Steinbart, companies ha$e e.perience# the follo(ing

e.perience# the follo(ing #ifficulties (hen #e$eloping an AIS/#ifficulties (hen #e$eloping an AIS/

•

• De$elopment re&uests are so numerous that pro0ects are De$elopment re&uests are so numerous that pro0ects are bac)logge# for years%bac)logge# for years% •

• sers #isco$er that the ne( AIS #oes not meet their nee#s%sers #isco$er that the ne( AIS #oes not meet their nee#s% •

• De$elopment ta)es so long the system no longer meets company nee#s%De$elopment ta)es so long the system no longer meets company nee#s% •

• sers #o not a#e&uately specify their nee#s because they #o not )no( (hat theysers #o not a#e&uately specify their nee#s because they #o not )no( (hat they

nee# or they cannot communicate the nee#s to systems #e$elopers% nee# or they cannot communicate the nee#s to systems #e$elopers%

•

• Changes are #ifficult to ma)e after re&uirements are fro"en%Changes are #ifficult to ma)e after re&uirements are fro"en%

he failure of an accounting

he failure of an accounting information system can be #etrimental to a business an#information system can be #etrimental to a business an# costly%

costly% 3lue Cross 3lue Shiel# spent 2 million #ollars on a soft(are #e$elopment for a ne(3lue Cross 3lue Shiel# spent 2 million #ollars on a soft(are #e$elopment for a ne( system%

system% he system faile# the system faile# to (or) properly inclu#ing sen#ing chec)s to o (or) properly inclu#ing sen#ing chec)s to a none.istent to(n an#a none.istent to(n an# o$er pai# 6 million for

o$er pai# 6 million for #uplicate billing% #uplicate billing% 'rom (hat I ha$e researche#, the 'rom (hat I ha$e researche#, the system faile# forsystem faile# for the follo(ing reasons/

(4)

(5)

An implementation plan consists of implementation tas)s, e.pecte# completion #ates, An implementation plan consists of implementation tas)s, e.pecte# completion #ates, cost estimates, an# (ho is responsible for each tas) omney

cost estimates, an# (ho is responsible for each tas) omney - Steinbart, 2127% *hen an- Steinbart, 2127% *hen an organi"ation #eci#es a ne( accounting system is nee#e#, a plan shoul# be #e$elope#% he plan organi"ation #eci#es a ne( accounting system is nee#e#, a plan shoul# be #e$elope#% he plan shoul# start (ith (hat the organi"ation nee#s from the system, (hat internal controls are

shoul# start (ith (hat the organi"ation nee#s from the system, (hat internal controls are re&uire#, an# proper m

re&uire#, an# proper maintenance once system iaintenance once system is implemente#% s implemente#% 8$ery organi"ation 8$ery organi"ation hashas constraints on (hat an accounting information system (ill be able

constraints on (hat an accounting information system (ill be able to han#le (hen implemente#%to han#le (hen implemente#% A str

A strategy (ith the implementation inclu#ing the e.aategy (ith the implementation inclu#ing the e.amination of the e.isting system shoul#mination of the e.isting system shoul# alle$iate some of those constraints% 8n# users shoul# be eng

alle$iate some of those constraints% 8n# users shoul# be engage# an# ha$e age# an# ha$e input in theinput in the implementation process to ensure the en# pro#uct is u

implementation process to ensure the en# pro#uct is usable%sable% 9anagement must set a stan#ar# for employees in

9anagement must set a stan#ar# for employees in an organi"ation on the importance ofan organi"ation on the importance of an accounting information system an# its maintenance% he

an accounting information system an# its maintenance% he human element, (hich is often thehuman element, (hich is often the most significant problem a company encounters in implementing a system, can be impro$e# by most significant problem a company encounters in implementing a system, can be impro$e# by obser$ing the follo(ing gui#elines omney - Steinbart, 2127/

obser$ing the follo(ing gui#elines omney - Steinbart, 2127/

•

• :btain management support%:btain management support% •

• 9eet user nee#s9eet user nee#s •

• In$ol$e usersIn$ol$e users •

• Allay fears, an# stress ne( opportunitiesAllay fears, an# stress ne( opportunities •

• A$oi# emotionalismA$oi# emotionalism •

• Pro$i#e trainingPro$i#e training •

• ee.amine performance e$aluationee.amine performance e$aluation •

• ;eep communication lines open;eep communication lines open •

• est the systemest the system •

• ;eep the system simple, an# humani"e it;eep the system simple, an# humani"e it •

• Control users< e.pectationsControl users< e.pectations

9any of the users (ill fin# these items time consuming but it

(6)

(7)

ne( system re#uces chaos an# f

ne( system re#uces chaos an# frustration% rustration% *hen users are not *hen users are not a#e&uately traine#, the companya#e&uately traine#, the company (ill not achie$e the e.pecte#

(ill not achie$e the e.pecte# benefits an# return on its in$estment omney - Steinbart, 2benefits an# return on its in$estment omney - Steinbart, 2127%127% 3lue Cross 3lue Shiel# e.perience# user input

3lue Cross 3lue Shiel# e.perience# user input error (hich contribute# to the hun#re#s oferror (hich contribute# to the hun#re#s of chec)s that (ere maile# to a

chec)s that (ere maile# to a to(n that #i# not e.ist% Prior to implementing the to(n that #i# not e.ist% Prior to implementing the ne( system, anyne( system, any users shoul# ha$e been traine# on t

users shoul# ha$e been traine# on the system an# also utilhe system an# also utili"e# in the testing% i"e# in the testing% he users coul#he users coul# ha$e i#entifie# the issues (ith incomplete #ata being entere# an# helpe# #e$elope# a control ha$e i#entifie# the issues (ith incomplete #ata being entere# an# helpe# #e$elope# a control (hich (oul# ha$e re&uire# $ali#

(hich (oul# ha$e re&uire# $ali# information%information%

Any ne( system must be teste# prior to being

Any ne( system must be teste# prior to being place# in pro#uction an# a$aplace# in pro#uction an# a$ailable for use%ilable for use% e

esting all soft(are to ensure that the ne( soft(are is compatible (ith e.isting har#(are sting all soft(are to ensure that the ne( soft(are is compatible (ith e.isting har#(are oror soft(are an# #etermine (hether the har#(are an# soft(are can han#le the nee#e# $olume of soft(are an# #etermine (hether the har#(are an# soft(are can han#le the nee#e# $olume of transactions Arens el al%, 217%

transactions Arens el al%, 217% *i*ith 3lue Cross 3lue Shiel#, their system (as releasth 3lue Cross 3lue Shiel#, their system (as release#e# (ithout being teste# #ue to the

(ithout being teste# #ue to the #e$elopers< #e$elopers< promise of #eli$ering the system (ithin 1= months%promise of #eli$ering the system (ithin 1= months% Documents, an# reports, user input, controls, operating an#

Documents, an# reports, user input, controls, operating an# processing proce#ures, capacityprocessing proce#ures, capacity limits, reco$ery proce#ures, an# computer programs shoul# all be teste# in realistic

limits, reco$ery proce#ures, an# computer programs shoul# all be teste# in realistic circumstances omney - Steinbart, 2127%

circumstances omney - Steinbart, 2127% he tas) of implementing a ne(

he tas) of implementing a ne( system can be #aunting an# system can be #aunting an# it re&uires preparation an#it re&uires preparation an# time% I un#erstan# this because in my

time% I un#erstan# this because in my employment (ith a pre$ious company, ne( accountingemployment (ith a pre$ious company, ne( accounting system (as implem

system (as implemente#% ente#% he planning of the #esign, implhe planning of the #esign, implementation an# operation of theementation an# operation of the system (as an almost 15 month process% *ith this system, the #e$elopers spent time (ith each system (as an almost 15 month process% *ith this system, the #e$elopers spent time (ith each user that (oul# use a #ifferent section of the system to fully un

user that (oul# use a #ifferent section of the system to fully un #erstan# ho( they use# the#erstan# ho( they use# the system%

(8)

(9)

'inally (ith this last attempt an# proper testing, an efficient accounting system (as #e$elope# 'inally (ith this last attempt an# proper testing, an efficient accounting system (as #e$elope# an# the company increase# pro#ucti$ity% Se$eral employees commen#e# the success of the ne( an# the company increase# pro#ucti$ity% Se$eral employees commen#e# the success of the ne( system (as because of the numerous hours spent

system (as because of the numerous hours spent testing an# ma)ing sure the system (astesting an# ma)ing sure the system (as a#e&uate for the business nee#s%

a#e&uate for the business nee#s%

9anagement has the responsibility of ma)ing the p

9anagement has the responsibility of ma)ing the proper #ecisions pertaining to theroper #ecisions pertaining to the controls of their organi"ation an# its accounting information systems% In the case of

controls of their organi"ation an# its accounting information systems% In the case of a systema system failure, senior management

failure, senior management has a has a high le$el high le$el of responsibility% *of responsibility% *ith this responsibility, someith this responsibility, some managers may place pressure on #e

managers may place pressure on #e$elopers to e.pe#ite the system% It is important for managers$elopers to e.pe#ite the system% It is important for managers to be present an# accou

to be present an# accountable for the system pro0ect from the beginning% 3ut ntable for the system pro0ect from the beginning% 3ut a##e# pressure cana##e# pressure can set the system for failure so, they nee# to be clear an# concise on (hat the system nee#s are an# set the system for failure so, they nee# to be clear an# concise on (hat the system nee#s are an# ha$e realistic e.pectations% A

ha$e realistic e.pectations% A ne( accounting system (ill ha$e problems an# ne( accounting system (ill ha$e problems an# setbac)s (hen insetbac)s (hen in the #esign, implementation an# operation phase,

the #esign, implementation an# operation phase, but if management is supporting each but if management is supporting each section,section, there (ill be success%

there (ill be success%

9ost managers are not going to u

9ost managers are not going to un#erstan# the technical #e$elopment of the n#erstan# the technical #e$elopment of the system butsystem but it is important

it is important to )eep them inform of to )eep them inform of (hat is happening in each phase of (hat is happening in each phase of the system% the system% If theIf the #e$elopers in the 3lue Cross 3lue Shiel# case

#e$elopers in the 3lue Cross 3lue Shiel# case (oul# ha$e fully un#erstan# ho( the (oul# ha$e fully un#erstan# ho( the system (assystem (as going to be use#, they coul# ha$e possibly

going to be use#, they coul# ha$e possibly pre$ente# the system failurpre$ente# the system failure% e% he poor #esign of the poor #esign of thehe system (as the most significant failure% 3lue Cross coul# ha$e as)e#

system (as the most significant failure% 3lue Cross coul# ha$e as)e# for a realistic time line forfor a realistic time line for the system to be teste# an# implemente#% If they ha# they may not ha$e lost !5,

the system to be teste# an# implemente#% If they ha# they may not ha$e lost !5, policyhol#ers (ho (ere frustrate# (ith the ina#e&uate system%

policyhol#ers (ho (ere frustrate# (ith the ina#e&uate system% An organi"ation can implement bes

(10)

(11)

costing, target costing or #irect costing reports in the costing function 3ragg, 2>

costing, target costing or #irect costing reports in the costing function 3ragg, 2> 7% 3est7% 3est practices can help an organi"ation to align themsel$es properly (ith their str

practices can help an organi"ation to align themsel$es properly (ith their strategic plans% heyategic plans% hey can also help eliminate transaction errors (ithin an accoun

can also help eliminate transaction errors (ithin an accounting system to further increaseting system to further increase efficiencies% he reason is that best practices ha$e such a large impact on

efficiencies% he reason is that best practices ha$e such a large impact on o$erall efficiencies,o$erall efficiencies, they unleash a large number of e.

they unleash a large number of e.cess people (ho can then cess people (ho can then (or) on other strategic issues, as(or) on other strategic issues, as (ell as re#uce a compan

(ell as re#uce a company?s cash re&uirements, releasing more cash for in$estment in strategicy?s cash re&uirements, releasing more cash for in$estment in strategic targets 3ragg, 2>7%

targets 3ragg, 2>7%

I ha$e i#entifie# the follo(ing four practices an

I ha$e i#entifie# the follo(ing four practices an organi"ation can use to assist in successorgani"ation can use to assist in success of a system implementation/

of a system implementation/

•

• user in$ol$ementuser in$ol$ement •

• e.ecuti$e management supporte.ecuti$e management support •

• clear statement of re&uirementsclear statement of re&uirements •

• realistic e.pectationsrealistic e.pectations

As I mentione# earlier, management has thoroughly support the ne( system an# its As I mentione# earlier, management has thoroughly support the ne( system an# its implementation% 9anagers (ill nee# to be in$ol$e#

implementation% 9anagers (ill nee# to be in$ol$e# in #esign, implementation, an# operation ofin #esign, implementation, an# operation of the accounting information system% heir presence (ill reassure e$eryone in the

the accounting information system% heir presence (ill reassure e$eryone in the organi"ation thatorgani"ation that the system (ill increase pro#ucti$ity an# employees (ill be more (illing to a#apt to the change% the system (ill increase pro#ucti$ity an# employees (ill be more (illing to a#apt to the change% ser in$ol$ement is a $ital section of the testing of

ser in$ol$ement is a $ital section of the testing of the system an# also its operation% he usersthe system an# also its operation% he users (ill ha$e the responsibility of reporting an# i#entifying any issues (ith the

(ill ha$e the responsibility of reporting an# i#entifying any issues (ith the system aftersystem after implementation%

implementation% :$er the life of a :$er the life of a typical system, !@ of typical system, !@ of the (or) ta)es place #uringthe (or) ta)es place #uring #e$elopment, an# >@ is spent

#e$elopment, an# >@ is spent on soft(are mo#ifications an# up#ates omney - Steinbarton soft(are mo#ifications an# up#ates omney - Steinbart 2127%

(12)

(13)

Cancel Anytime.

CHANGE

CHANGE THE THE AIS AIS 77

accounting system is in place (ith the proper

accounting system is in place (ith the proper controls, it (ill typically i#entify inefficiencies ofcontrols, it (ill typically i#entify inefficiencies of other #epartments% I#entifying inefficiencies (ithin a business an# helps a company to re#uce other #epartments% I#entifying inefficiencies (ithin a business an# helps a company to re#uce them (hile increasing profits%

them (hile increasing profits% A A (ell#e$elope# accounting system allo(s an organi"ation to(ell#e$elope# accounting system allo(s an organi"ation to a#apt to consumer, mar)et an# regulatory #eman#s%

a#apt to consumer, mar)et an# regulatory #eman#s%

:rgani"ations nee# to be resourceful in #e$eloping an# implementing a reliable :rgani"ations nee# to be resourceful in #e$eloping an# implementing a reliable accounting system% In or#er to fully accomplish this, a foun

accounting system% In or#er to fully accomplish this, a foun#ation of principles (ill nee# to be#ation of principles (ill nee# to be establishe#%

establishe#% I39 #e$elope# 1 principlesB orI39 #e$elope# 1 principlesB organi"ations can utili"e in or#er gani"ations can utili"e in or#er to successfullyto successfully implement a fi

implement a financial management system% nancial management system% 'rom those pri'rom those principles, I choose nciples, I choose three that (ilthree that (ill helpl help a company in their efforts to ha$e an effecti$e accounting information system%

a company in their efforts to ha$e an effecti$e accounting information system%

he first is to simplify processes in your organi"ation by streamlining business he first is to simplify processes in your organi"ation by streamlining business

processes% 8.cessi$e business processes can create a complicate# an# con$olute# system that is processes% 8.cessi$e business processes can create a complicate# an# con$olute# system that is

more #ifficult to use than your pre$ious system% If a more complicate#

more #ifficult to use than your pre$ious system% If a more complicate# system is create#, itsystem is create#, it coul# (aste time an#

coul# (aste time an# #ecrease efficiencies% A #ecrease efficiencies% A #ecrease in efficiency (ill al(ays lea# #ecrease in efficiency (ill al(ays lea# to coststo costs (hich #iminish profits% e.t, commit resources to the entire process of changing

(hich #iminish profits% e.t, commit resources to the entire process of changing oror implementing a ne( system%

implementing a ne( system% he last thing an organi"ation (ants to #o is run out of money orhe last thing an organi"ation (ants to #o is run out of money or people% Changing an accounting information system can be costly but ha$ing the appropriate people% Changing an accounting information system can be costly but ha$ing the appropriate

human resources on the pro0ect is 0ust as important%

(14)

Cancel Anytime.

CHANGE

of i#entifying ho( the sy

of i#entifying ho( the system has impacte# the orstem has impacte# the organi"ation an# their #uties% gani"ation an# their #uties% he re$ie( coul#he re$ie( coul# also fin# other areas of the system (hich nee# further mo#ification%

also fin# other areas of the system (hich nee# further mo#ification% In a##ition to the re$ie( by

In a##ition to the re$ie( by the users, a re$ie( of the specifications pro$i#e# bthe users, a re$ie( of the specifications pro$i#e# by they the #e$elopers (ill help ensure t

#e$elopers (ill help ensure the re&uire# (or) (as complete#% he re&uire# (or) (as complete#% he full process of he full process of #esigning#esigning an# implementing a ne( system ta)es months if

an# implementing a ne( system ta)es months if not years% It is (ise to go bac) annot years% It is (ise to go bac) an# re$ie( (hat# re$ie( (hat the organi"ation re&ueste# an# compare those

(15)

Cancel Anytime.

CHANGE

eferences eferences

Arens, A%, 8l#er, % E%, - 3easley, 9% 21% Au#iting an# assurance ser$ices/ 21

Arens, A%, 8l#er, % E%, - 3easley, 9% 21% Au#iting an# assurance ser$ices/ 21 customcustom e#ition 1!th e#%7% pper Sa##le i$er, E/ Pearson

e#ition 1!th e#%7% pper Sa##le i$er, E/ Pearson 3ragg, Ste$en 9% 2>% Accounting 3est Practices% 5th e#%

3ragg, Ste$en 9% 2>% Accounting 3est Practices% 5th e#% Fobo)en, E/ Eohn *iley - SonsFobo)en, E/ Eohn *iley - Sons Inc%

Inc%

omney, 9%3%, Steinbart, P%

omney, 9%3%, Steinbart, P%E% 212% Accounting Information Systems% 12th E% 212% Accounting Information Systems% 12th e#% pper Sa##e#% pper Sa##lele i$er, E/ Pearson%