Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information...
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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
Transcript of Fourth Edition by Wilkinson, Cerullo, Raval, and Wong-On-Wing€¦ · Accounting Information...
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
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
Approaches to Systems
Development
Top-Down versus Bottom-up
In-House versus Outsourcing
Re-engineering
Prototyping
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
Advantages of Commercial
Software
Products available without lengthy developmental periods
Soundly designed and well-tested and thus efficient and reliable
Reasonable pricing
Limitations of Commercial
Software
Generalized in nature
Acquiring firm is dependent on the software vendor for support and maintenance and upgrades
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
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
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
A List of Resource
Specifications - I
Systems Design Specifications
Output
Data-base
Processing
Input
Control & security
Figure 14-22
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
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
Techniques for Proposal
Evaluation
The benchmark problem technique
Simulation model technique
Weighted-Rating analysis technique
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
Implementation Activities - I
Personnel selection and training
Physical site preparation
Detailed system design
Output design
Database design
Input design
Processing design
Controls design
Application software development
Coding
Structured programming
Software testing
Desk checking
String testing
System testing
Acceptance testing
Implementation Activities - II
Standards development
System components
Performance
Documentation
Documentation
File conversion
Implementation Activities - III
System conversion: cutover
Direct conversion approach
Parallel operation approach
Modular conversion approach
Phased conversion approach
User signoff
Implementation Activities - IV
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
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
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Accounting Information Systems:
Essential Concepts and Applications
Fourth Edition by Wilkinson, Cerullo,
Raval, and Wong-On-Wing
