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Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing Chapter 14: Systems Development Slides Authored by Somnath Bhattacharya, Ph.D. Florida Atlantic University
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Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

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Page 1: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Accounting Information Systems:

Essential Concepts and Applications

Fourth Edition by Wilkinson, Cerullo, Raval,

and Wong-On-Wing

Chapter 14: Systems

Development

Slides Authored by Somnath Bhattacharya, Ph.D. Florida Atlantic University

Page 2: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Interaction of Systems

Development with Accounting

1) Assigning both the controller and the information

systems manager to the steering committee

2) Assigning accountants to systems project teams

3) Assigning persons who are knowledgeable in both

accounting and information technology to serve as

coordinators between the accounting and information

systems functions

4) Establishing an internal audit group, staffed by

accountants and systems-oriented auditors

5) Establishing data control groups within accounting

departments

Page 3: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Approaches to Systems

Development

Top-Down versus Bottom-up

In-House versus Outsourcing

Re-engineering

Prototyping

Page 4: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Objectives of Strategic

Systems Planning

Integrate the information system development with the firm’s overall planning processes

Ensure orderly development of systems projects, making efficient use of available resources

Recognize changing priorities and newly arising conditions as well as increasing informational demands

Incorporate improvements in information technology as they become relevant to the firm’s needs and promise greater benefits than the cost outlays

Page 5: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Survey of the Present

System

Scope

Data Types and Sources

Behavioral Issues Communicate openly with the persons

to be affected by the system project

Encourage participation by the affected persons throughout the survey

Emphasize the positive aspects of the project and explain that the resulting system can better meet the users’ needs

Reduce the fears of employees and managers by establishing and publicizing fair personnel policies

Page 6: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A Checklist for Analyzing

Information Systems - I

Are tasks and responsibilities clearly defined and assigned?

Are tasks and responsibilities distributed effectively among employees and organizational units?

Are the policies and procedures understood and followed?

Does the productivity of the clerical employees appear to be satisfactorily high?

Do the various organizational units cooperate and coordinate well in maintaining smooth flows of data?

Figure 14-8

Page 7: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Does each product achieve its intended objective?

Are redundant processing operations being performed? How necessary is the result accomplished by

each operation?

Do unnecessary delays occur in obtaining and/or processing data?

Do any operations cause bottlenecks in the flow of data? Are the number of errors that occur in each

operation minimized? Figure 14-8 Continued

A Checklist for Analyzing

Information Systems - II

Page 8: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A Checklist for Analyzing

Information Systems - III

Are physical operations adequately planned and controlled?

Is the capacity of the information system sufficient to handle the average volumes of data without large backlogs?

Are the peak volumes of data handled adequately?

How easily does the system adapt to exceptional occurrences and growth in use?

How necessary is each document? Is each document suitably designed for efficient

use?

Figure 14-8 Continued

Page 9: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A Checklist for Analyzing

Information Systems - IV

Are all copies of documents necessary? Can reports be prepared easily from the files

and documents? Does unnecessary duplication occur in files,

records, and reports? Are files easily accessible and kept up-to-date? Are sound performance standards developed

and kept up-to-date? Is data processing equipment being used

effectively? Is the system of internal control adequate? Do the informal flows of data and information

harmonize with the formal flows? Figure 14-8 Continued

Page 10: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A List of Information

Systems Capabilities

Efficient and hence economical operations

Adequate capacity for expected growth

Timeliness in responding to inquiries and providing reports Reliability of system hardware and software

Accurate, up-to-date, and relevant information

Security of the data and system facilities

Flexibility and adaptability to changes and new demands Simplicity, and hence user-friendliness

Figure 14-9

Page 11: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

One-time Costs for a New or Improved

Computer-based Information System - I

System Design Costs Detailed design

Programming

System Installation and Conversion Costs System and program testing

File conversion

Retraining of displaced employees

Training of newly hired analysts, programmers, and operators

Inefficiencies caused by learning new equipment and procedures

Figure 14-15

Page 12: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

One-time Costs for a New or Improved

Computer-based Information System - II

System Site Preparation Costs Construction of wiring and piping systems

Construction of electrical power supply

Construction of air-conditioning system

Construction of sprinkler system

Construction of other miscellaneous facilities, such as false flooring, file storage vault, and special lighting

Figure 14-15 Continued

Page 13: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

One-time Costs for a New or Improved

Computer-based Information System - III

System Hardware Costs Central processing unit

Additional processors

Secondary storage devices

Input-output devices

Data communications equipment

Terminals

Peripheral equipment, such as key-to-disk devices

Transportation of equipment

Figure 14-15 Continued

Page 14: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

One-time Costs for a New or Improved

Computer-based Information System - IV

System Software Costs Operating system, utility routines, compilers

Data communications software

Application program packages

Data management software packages

Decision model software packages

Outside computer time-sharing rentals

Figure 14-15 Continued

Page 15: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Recurring Costs Related to a Computer-

Based Information System - I

Computer Operations Costs

Salaries for computer supervisors, operators,

technicians, data-entry clerks, librarians, security guards, and others

Supplies, including forms, paper, ribbons, and tape

Utilities, including power, water, and telephone

Rentals of computer hardware

Software purchases and upgrades

Communications equipment and services

Backup equipment and services

Figure 14-16

Page 16: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Recurring Costs Related to a Computer-

Based Information System - II

Information System Maintenance Costs Salaries for systems analysts, programmers, repair

technicians, and others

Replacement parts and upgrades

Printing costs for documentation

Information System Administration Costs Salaries of systems management, data-base

administrator, internal auditors, secretaries, and others

Insurance

Taxes

Space and building occupancy costs

Figure 14-16 Continued

Page 17: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Typical Conceptual Design

Specifications - I

System Components

Output

Features

Name

Purpose

Distribution to users

Contents

General format

Frequency or trigger

Timeliness

Output medium

Figure 14-17

Page 18: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Typical Conceptual Design

Specifications - II

System Components

Data base

Features File or table name

File or table type

File size

Contents of record or table

Record or table layout

File organization method

Storage medium

Data characteristics

Updating frequency

Data structure Figure 14-17 Continued

Page 19: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Typical Conceptual Design

Specifications - III

System Components

Data processing

Features

Sequence of steps or

runs

Processing modes,

cycles, volumes

Modes of data

communication

Processing capabilities

at each physical

location

Figure 14-17 Continued

Page 20: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Typical Conceptual Design

Specifications - IV

System Components

Data input

Features

Name

Purpose

Source

Method of collecting data

Volume (peak and

average)

Contents (data elements)

General format

Data entry method Figure 14-17 Continued

Page 21: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Typical Conceptual Design

Specifications - V

System Components

Control and security

Features

Type

Purpose

Specific system

components affected

method of correcting

error or establishing

security

Figure 14-17 Continued

Page 22: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Systems Acquisition

Options

Purchasing versus leasing

Single vendors versus multiple vendors

In-house system versus outsourcing computing services

In-house software development versus commercial software packages

Types of commercial software

General accounting systems

Turnkey software systems

Page 23: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Advantages of Commercial

Software

Products available without lengthy developmental periods

Soundly designed and well-tested and thus efficient and reliable

Reasonable pricing

Page 24: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Limitations of Commercial

Software

Generalized in nature

Acquiring firm is dependent on the software vendor for support and maintenance and upgrades

Page 25: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

The Sequence in Designing

System Components

Design Controls

& Security Measures

Design

Information

Outputs

Design

data base

Design Data

Processing

Operations

Design

Data Inputs

Figure 14-19

Page 26: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A List of Design Principles

Foster system objectives

Incorporate reasonable tradeoffs

Focus on functional requirements

Serve multiple purposes

Relate to users’ concerns

Provide a tailored product

Integrate system modules and components

Avoid design excesses

Apply sound methodology

Figure 14-20

Page 27: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

System Justification & Selection in the

Systems Development Life Cycle

Systems

Planning

Systems

Analysis

Systems

Design

Systems

Operations

Determination of Design Feasibility

Solicitation of Hardware and

Software Proposals

Evaluation of System

Proposals

Selection of System Hardware

and Software

Systems Justification & Selection

Figure 14-21

Page 28: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A List of Resource

Specifications - I

Systems Design Specifications

Output

Data-base

Processing

Input

Control & security

Figure 14-22

Page 29: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A List of Resource

Specifications - II

Hardware Specifications Processor speeds and capabilities Secondary storage capacities and access

capabilities Input-output speeds and capabilities

Compatibility features Modularity features Error detection and correction techniques

Data communication capabilities Special features, such as multiprogramming and

virtual storage maximum allowable downtime as a percentage of

total time

Figure 14-22 Continued

Page 30: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A List of Resource

Specifications - III

Software Specifications Programming languages and compilers Utility packages Application packages Operating system capabilities Data management packages

System Support Specifications Programming assistance Training programs Test facilities and time available Backup facilities Maintenance assistance

Figure 14-22 Continued

Page 31: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Techniques for Proposal

Evaluation

The benchmark problem technique

Simulation model technique

Weighted-Rating analysis technique

Page 32: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Systems Implementation:

Preliminary Actions

Establish implementation plans and controls

Gantt chart

Network diagrams

Recognize behavioral concerns

Review the organization of the project team

Complete arrangement for selected system resources

Page 33: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Implementation Activities - I

Personnel selection and training

Physical site preparation

Detailed system design

Output design

Database design

Input design

Processing design

Controls design

Page 34: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Application software development

Coding

Structured programming

Software testing

Desk checking

String testing

System testing

Acceptance testing

Implementation Activities - II

Page 35: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Standards development

System components

Performance

Documentation

Documentation

File conversion

Implementation Activities - III

Page 36: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

System conversion: cutover

Direct conversion approach

Parallel operation approach

Modular conversion approach

Phased conversion approach

User signoff

Implementation Activities - IV

Page 37: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

Systems Operations

Fine tuning

Post-implementation evaluation To assess the degree to which the

objectives of the system project have been met

To spot any additional modifications that might be needed in the newly designed system

To evaluate the project team’s performance, both in terms of a quality product and adherence to the project schedule and work plan

To serve as the basis for improving future systems developments and accuracy of cost and benefit estimates

Page 38: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

A Framework Pertaining to the Control

of System-Related Resources

Measurement of Resource Usage

* Personnel Time Reporting Systems

* Computer-oriented Monitoring

Systems

* Effectiveness Monitoring Systems

Chargeback Systems * Chargeback Rates * Usage Measurements by Department Task Project Computer System

Performance Evaluation Systems * Personnel performance by Clerks & Operators Systems professionals Systems managers * Equipment performance * Information system performance Efficiency Effectiveness

Cost accounting

& control reports Performance

reports

Figure 14-27

Page 39: Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information Systems: Essential Concepts and Applications Fourth Edition by Wilkinson, Cerullo, Raval,

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herein.

Accounting Information Systems:

Essential Concepts and Applications

Fourth Edition by Wilkinson, Cerullo,

Raval, and Wong-On-Wing