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Midterm Exam 300 Points

ACCT4540/5540 Jim Marlatt


Accounting Information Systems Fall
2010

Sample Solution

I will assess your answers against a key and the quality of the work of your
peers. Unnecessary and/or redundant information will negatively impact
your score. Strive to be CLEAR, CONCISE AND COMPLETE.

Make sure to provide a specific example to support each answer.

Use only the space provided to answer each question. Do not write in the
margins, make sure your font is big enough to read easily (the font used for
the exam questions is a good reference).

Use the back of page five as scratch paper, this information will not be
reviewed or graded.

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Not following the above instructions will negatively impact your
score.Question 1 (50 points): What role do accountants play in todays information
intensive organizations?

It is the accountants role to help make sure the organization is capturing, processing
and reporting relevant, reliable, complete, timely, understandable, and verifiable
information from/to internal and external users to help them make better decisions.

By starting with business objectives, performing risk assessments, modeling relevant


business processes and modeling the database, accountants (with help from others) can
identify what information to collect, how to store it and who to share it with.

The accountants help make sure this information has value by being aligned with the
organizations goals (to help the organization achieve these goals).

In todays information intensive organizations, its not about capturing more information,
its about capturing the right information and sharing it with the right people at the right
time. An overload of information often results in the quality of decisions declining.

Example: An accountant might draw a process map for an important process like
accounts receivable to help identify ways to reduce their average age, identify
customers who consistently pay late, etc.

Question 2 (50 points): How can an accounting information system provide management
with information for better decision-making?

An accounting information system captures data at the source using a set of interrelated
components (supply-chain, manufacturing, accounts payable, general ledger, human
resources, etc.) which collects financial and non-financial information from internal and
external sources.

An accounting information system automates a set of interrelated business processes


which capture data via a transaction (e.g. customer order), processes, stores and
reports the transaction(s) in detail and summary based on a set of rules that have been
pre-defined in the system.

By using a variety of insight/tools including business objectives/KPIs, risk assessments,


process maps and data models, accountants can help ensure the accounting information
system is capturing, processing, storing and reporting information that has value to the
organization.

Example: Using todays modern accounting information systems, rather than defining
specific reports for users, users can be provided with access to the information stored
there based on their role and responsibilities in the organization. The users can then
utilize various query/reporting tools to produce reports that answer their own questions
as needed.
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Question 3 (70 points): How do you determine what processes to map and what to
include in those process maps?

In order to make improvements to work being done in the business, you must first
understand what is being done (as-is processes) and identify ways to improve it (to-be
processes). Process maps help identify non-value added work. The processes to map
are determined by the scope of the project. What to include in the process map is
determined by the scope of the process.

Process maps describe events which are important to the business (as defined by
business objectives/KPIs), the resources affected by these events and the agents who
participate in these events. These process maps also help identify risks and the
corresponding controls to address these risks.

Example: A customer purchases gas using the payment processing function at the pump.
The current process accepts the credit card as long as it was not flagged by the credit
card processing company (over credit limit, stolen, etc.). Unfortunately more than 1% of
all transactions are later contested by credit card holders, reducing profits by a
significant amount. The existing process is modeled and it is determined that thieves
are able to create physical cards using stolen credit card information, but in most cases
dont have access to the cardholders address. A new process is created which requires
the credit cardholder to enter a zip code as part of the payment approval process, which
reduces the percent of contested charges by more than 80%.

Question 4 (70 points): How is a relational database used to collect and analyze
information?

A relational database is comprised of the following components:

Entities anything about which the organization wants to collect and report information (e.g. customers)
Attributes represent information about the entity (e.g. customer name, address, etc. Together these
attributes form records.
Relationships identify how entities relate to one another. For example, the entity customer relates to
another entity customer orders (answers the question, which orders are from which customer?)
Primary key each record must be unique in order to maintain data integrity. For example in the
customer table, a specific customer should only be represented once using a primary key to control this
(customer id).
Foreign key - is used to connect related entities to one another. For example, the primary key customer
id is placed in the order table for each order from that customer.

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The relational database allows for many benefits including:

Data integrity by storing information in separate entities and making sure data is represented only once
in the system, this allows data to be inserted, updated and deleted with minimal redundancy and
inconsistencies.
Data sharing it is easier to share data with multiple applications and users.
Data reporting and flexibility the database can be searched easily to answer business questions,
produce reports, etc. These queries and reports can be reused or revised as needed by users.

Question 5: Using the data model on page 5, answer the following questions:

a. (30 points) Write the SQL query to answer the question For each date, list the orders received on that
date.

Select Orders.orderdate, Orders.orderid

From Orders

Group by orders.orderdate, orders.orderid;

b. (30 points) Which tables would need to be queried in order to answer the question - List the suppliers
company name for all products that customers have ordered during the last two weeks.

Suppliers

Suppliers_Products

Products

Order_Details

Orders