Morrigan Department Stores is a chain of department stores in Australia, New Zealand, Canada, and the United States that sells clothing, shoes, and similar consumer items in a retail setting. The top managers and their staff members meet once a year at the international meeting. This year’s meeting was in Hawaii—a geographical midpoint for them—and several accounting managers participated in a round-table discussion that went as follows: Roberta Gardner (United States): One of our biggest problems in our Auckland office is the high cost and seemingly constant need to upgrade our hardware and software. Every time our government changes the tax laws, of course, we must acquire software that reflects those changes. But why do we need new hardware too? All this discussion of “64-bit machines” is a mystery to me, but the IT department says the hardware in the old machines quickly become outdated. Donalda Shadbolt (New Zealand): I’ll say! If you ask me, all these upgrades are costly, time consuming, and even counter-productive. I do a lot of work on spreadsheets, for example, and constantly ask myself: “Why do I have to spend hours relearning how to format a simple column of numbers in the newest version of Excel?” It takes time and effort, it’s frustrating, and in the end, I’ve spent hours relearning skills that I already know how to do in the older version. Linda Vivianne (Canada): I know what you mean, but the newer hardware is faster, cheaper, and more capable than the old machines. Hard drives have moving parts in them, for example, and they eventually wear out. The newer software runs under the newer operating systems, which are also more competent and have more built-in security such as antivirus software. Ed Ghymn (Australia): I agree with you, Linda, but I think a lot of these new capabilities are more hype than real. If the security software was competent, we wouldn’t need all those patches and upgrades in the first place. And why must we upgrade so often, just to get newer capabilities that most of us don’t even need? Alex McLeod (Australia): I don’t think anyone can stop the march of progress. I think the real problem is not the upgrades to new software, but the fact that our company expects us to learn it without proper training. Personally, I don’t buy my boss’s argument that “you’re a professional and should learn it on your own.” Linda Vivianne (Canada): I’m also beginning to realize just what advantages there are in outsourcing some of our accounting applications to cloud service providers. That won’t solve all our problems because we all still need word processing and spreadsheet capabilities, but at least we can let cloud providers deal with the software upgrades for our accounting software. Given how dispersed we are, that might also make it easier for us to consolidate our financial statements at year’s end too. Requirements 1. Do you think that Roberta Gardner’s description of “64-bit machines” is accurate? Why or why not? Explain your reasons in detail, drawing upon additional Internet discussions to help you answer this question. 2. Summarize some of the arguments against upgrading hardware and software at Morrigan Department Stores. It is OK to mention additional, reasonable arguments that are not mentioned in the case. 3. Summarize the arguments for upgrading hardware and software at the Morrigan Department Stores. Again, it is OK to mention additional, reasonable arguments that are not included in the case. 4. Do you agree with Ed Ghymn’s argument that many upgrades are “more hype than real?” Why or why not? 5. Many software vendors such as Microsoft, Adobe, and Apple ship software packages with both known and unknown defects in them. Do you feel that it is ethical for them to do so? Why or why not? 6. Do you agree or disagree with the argument made in this case that many hardware and/or software upgrades are unnecessary? Why or why not? 7. Do you agree with Alex McLeod’s statement that a company should formally train its employees every time it upgrades its software? If not, do you agree with his boss that professionals should learn to use at least some software upgrades on their own? Explain your answer in detail. 8. Do you think it was necessary for the participants to physically meet at one location? Couldn’t they simply hold a virtual meeting over the Internet? Explain your answer in detail.
> What is Hadoop? Why do organizations use it?
> What is online analytical processing? What are examples of OLAP software?
> What is the ETL process? What are its steps?
> What is Hadoop’s Map Reduce? How does it help Hadoop process data? Why is Map Reduce’s system sometimes superior to the data transmissions of older systems?
> How is big data growing? What new data are now available that were not traditionally used by accounting systems in the past? How is this data growth challenging the way accountants perform their jobs?
> What do we mean by “unstructured data?” Do you believe that this term is accurate, or would you prefer some other term for it?
> What are the four V’s that describe big data? What does each “V” mean?
> What are Halo and Helix? How do they help auditors perform their jobs better?
> How are data analytics helping auditors with assurance and compliance testing? How is this different from what they did a few years ago?
> How does Hadoop’s data storage system differ from those of traditional system? In what ways are such a system of data storage superior to storing data on a centralized database?
> Recall from Cases 15-17 and 15-18 in Chapter 15 that the Furry Friends Foundation is a nonprofit organization that finds homes for abandoned animals. The foundation has created a relational database to help it store data mor
> Some employees only need to retrieve database information—not edit it or enter new data. Because forms are convenient for displaying the data for an entire record in a single screen, organizations also use forms for outputs rather than
> Create the form in Figure 16-16 and then add a sub form to it that shows purchase orders for each vendor. Figure 16-17 provides a suggested format. To accomplish this task, follow these steps: (1) start with the Vendor form in design mode, (2) click on t
> The BSN Company requires a form with which to view its existing suppliers conveniently and also to create records for new suppliers. Figure 16-16 contains a suggested format for this form. Requirements: 1. Using the Vendors table in the BSN database tha
> Discuss the historical drivers for the development of IT auditing as a profession. What factors do you foresee influencing the field of IT auditing in the next decade? What do you feel are the greatest challenges facing IT auditors?
> North Beach College was founded as a small, liberal arts school just 3 years ago. Since that time, the institution has grown to the point where parking on campus is difficult and parking in illegal areas is common. Accordingly, the Board of Directors has
> The payroll department at the Benjamin Department Store has defined the following record structure for employee records. All fields are required. The employee number serves as the primary key. Work phone extensions are alw
> Recall from Case 15-17 that the Furry Friends Foundation is a nonprofit organization that finds homes for abandoned animals. The foundation has recently computerized some of its operations by storing its accounting data in a
> The Furry Friends Foundation (FFF) is a non profit organization that finds homes for abandoned animals that are suitable for adoption. FFF began operations with a bequest from a wealthy gentleman who lived his life taking ca
> Business has been growing at BSN Bicycles, and the store owners have been using their Access database to store information about their customers. Now that the store is a little more established, the owners are thinking more about how best to attract more
> Kick and Swing Inc. is a wholesaler of sporting goods equipment for retailers in a local metropolitan area. The company buys sporting goods equipment direct from manufacturers and then resells them to individual retail stores in the regional area. The ra
> Quick Jolt Electronics manufactures and sells specialized electronic components to customers across the country. The tables in Figure 14-19 illustrate some of the records in its accounting databases. Thus, for example, the “Sales by Inv
> Clooney and Bullock is large manufacturer of trophies that is headquartered in Boston, Massachusetts. The Entity–Relationship diagram in Figure 14-18 shows a simplified version of the company’s process for purchasing and paying for equipment and supplies.
> Ian’s Place sells pet supplies to dog and cat owners. To sell its products, the marketing department requires sales personnel to call on the pet store retailers within their assigned geographic territories. Salespeople have an application on their mobile
> Kerr Cosmetics distributes cosmetic products to large retailers across the country. The firm was started in 1975 by its first president, Stephen Kerr, who still serves as chairman of the board. Over the years, the company has grown in size and complexity.
> Jose Rodriguez was the only internal auditor of a medium-sized communications firm. The company used a computer for most of its accounting applications, and recently, several new software packages had been implemented to handle the increased volume of the
> Viva Vacations operates in Tampa, Florida. The company sells time shares and also manages residential properties that it rents to vacationers. Due to the large dip in the real-estate market the last few years, most of its recent income has come from its
> Wright Company employs a computer-based data processing system for maintaining all company records. The current system was developed in stages over the past 5 years and has been fully operational for the last 24 months. When the system was being designed
> Prado Roberts Manufacturing is a medium-sized company with regional offices in several western states and manufacturing facilities in both California and Nevada. The company performs most of its important data processing tasks, such as payroll, accounting
> The Dinteman Company is an industrial machinery and equipment manufacturer with several production departments. The company employs automated and heavy equipment in its production departments. Consequently, Dinteman has a large repair and maintenance dep
> The approval rules for reimbursing those faculty members at Upstate University who attend professional conferences are somewhat complicated and, in the opinion of most, “hardly generous.” For example, the maximum allowed for breakfast, lunch, or dinner i
> The Filzen Company sells construction supplies to building contractors, mostly on a wholesale basis. The company has been in business for over 30 years. The current owner is Joshua Filzen, although the company was originally founded by his father, James
> Jenny Smith owns Classic Photography Inc., a company that restores photos for its clients and creates electronic images from the restored photos. The company also frames restored photos and creates sophisticated custom artworks. Artworks include material
> The Berridge Company is a discount tire dealer that operates 25 retail stores in a metropolitan area. The company maintains a centralized purchasing and warehousing facility and employs a perpetual inventory system. All purchases of tires and related sup
> Big Fun Toys is a retailer of children’s toys. The accounts-payable department is located at the company headquarters in Boston, Massachusetts. The department consists of two full-time clerks and one supervisor. They are responsible for processing and pa
> The Department of Taxation of one state is developing a new computer system for processing state income tax returns of individuals and corporations. The new system features direct data input and inquiry capabilities. Identification of taxpayers is provide
> Describe how an auditor might use through the-computer techniques such as test data, an integrated test facility, parallel simulation, or validation of computer programs to accomplish audit objectives relative to accounts payable.
> The Mountain Top Resort Community is an elegant, thriving four-season resort and community of over 1,200 single family homes, 1,000 time-share units, and a multimillion-dollar ski business. Guests visiting the resort can enjoy the indoor/outdoor water pa
> Download the following Excel spreadsheet from the textbook website: www.Findafraud.xls. These data include sales transactions and credits for a retail store. You are concerned that the store is attempting to manipulate its revenue. Use your spreadsheet s
> HMC continues to be profitable. Although Denise and Lloyd Rowland mapped several business processes 5 years ago to determine whether HMC should work on process improvements or consider business process reengineering, they never really finished that effort
> Mount Pleasant Community College (MPCC) is a medium-sized academic institution that employs about 200 full-time faculty and 250 staff personnel. There are 11,439 students enrolled at the college for the 2017–2018 school year. The Purchase Process. The co
> The Caribbean Club is one of the Virgin Island’s hottest night spots. It’s a great place for locals to meet after work and relax with friends, it’s a popular destination for tourists who stay on the island, and it’s always on the list of fun entertainmen
> Food Court Inc. (FCI) is a business in Boston, Massachusetts, that offers meal plans to college students. Students, or their families, buy debit cards with fixed amounts that they can use to purchase food at more than 50 local restaurants. FCI sells the c
> Brazos Valley, Inc. (BVI), a medical device manufacturing firm, has a small systems staff that designs and writes BVI’s customized software. Until recently, BVI’s transaction data were transmitted to an outside organization for processing on its hardware.
> Recall, in Chapter 11, the first case was about Hammaker Manufacturing (HM), a company that decided to work with a consultant to computerize much of their operations. HM has grown substantially and must upgrade its information systems. The company is deve
> In the early twentieth century, there was an ambitious young man named Arthur, who started working at a company in Chicago as a mailroom clerk. He was a hard worker and very smart, eventually ending up as the president of the company, the James H. Rhodes
> The Chesapeake Grocery Store is a small local grocery that only carries fresh produce, poultry, and meat that are grown or raised in the 50-mile radius of the grocery. The store also carries other typical grocery items (such as packaged and canned goods)
> IT auditors need people skills as well as technical skills. One such skill is the ability to interview effectively. Discuss some techniques or tools that might help an interviewer get the best information from an interviewee, including sensitive informat
> The West End Boutiques company was founded by Libbie Williams in 1990 with a single store in College Station, Texas, and the company now has 21 shops located in the triangle of Dallas, San Antonio, and Austin, Texas. Libbie was an accounting major in col
> The Accounting Technology website at https:// www.accountingtoday.com/technology contains articles on information technology of interest or use to accountants. Examples include “New chatbot uses AI to answer tax inquiries,” “The hidden figures behind auto
> Examine the data encryption technique illustrated in Figure 2-11. Use a displacement value of “8” to encrypt the following message. Hint: This task becomes easy if you use an Excel spreadsheet and V Look Up formulas that reference a table of letters and
> Go to the AICPA website at http://www.aicpa .org. What are the top 10 information technologies for the current year? How do these items compare with the list in Figure 3-1? Is it common for new items to appear, or do you think this list is “stable” from
> Design tables to store the following attributes (make sure that all tables are in third normal form). Student name, student phone, classes taken by student, student address, class number, class time, class room, students’ grades for each class.
> An advertisement for a desktop microcomputer says that it includes a 500-gigabyte hard drive. Exactly how many bytes is this?
> Which of the following holds the most data? a. 1 DVD disk b. 1 Hard disk (capacity: 500 gigabytes) c. 10 CD-ROMs
> Bennet National Bank’s credit card department issues a special credit card that permits credit card holders to withdraw funds from the bank’s ATMs at any time of the day or night. These machines are actually smart terminals connected to the bank’s centra
> Use your Internet browser and preferred search engine to find a company that provides financial and accounting outsourcing (FAO) services. What services does this company provide? Find a second company and compare its services with those of the first compan
> Design tables to store the following attributes (make sure that all tables are in third normal form): Customer name, customer address, customer phone, and names of customers’ children.
> As machine learning and artificial intelligence tools become more sophisticated, they are being adopted more and more for detecting fraudulent activity. Using your favorite search engine, find an example of a fraud or other white collar crime that was dete
> Do individuals engage in outsourcing? If you answered yes, give some examples.
> Literally thousands of business process management (BPM) solutions are available to help managers accomplish tasks in a more effective, efficient manner. Assume that you work in a payroll processing function and your supervisor asked you to select a BPM s
> An employee at Andrienne Hill Cosmetics believes that Access reports are a throwback to a former age when printed outputs were more common. Today, he said that they are no longer needed. Do you agree?
> Search the Web for unusual and interesting uses of RFID tags. Find at least two that are unusual and share those in class.
> Access 2016 now enables users to store calculated fields as normal fields in database tables. Do you think they should?
> What is an entity–relationship (E-R) diagram? What can you determine about an organization from examining an E-R diagram?
> What are database cardinalities? Give some examples of cardinalities for an accounting application other than sales.
> Backwater University is a small technical college that is located miles from the nearest town. As a result, most of the students who attend classes there also live in the resident dormitories and purchase one of three types of meal plans. The “Full Plan”
> Interview a sample of auditors from professional service firms in your area. Ask them whether or not they plan to offer any of the assurance services suggested by the AICPA. Also, find out if they offer services other than financial auditing and taxation. D
> Can you find an example (other than the one described in Case-in-Point 9.6) of a firm that is using lean production concepts that are supported by lean accounting? How are they doing?
> What are the four symbols used in data flow diagrams? What does each mean?
> Visit a local business or search online and collect some examples of source documents used in an AIS. For each source document you collect, discuss its purpose(s). Are different source documents required for manufacturing firms versus merchandising organi
> Flowcharting is both an art and a science. Guidelines can be used to make better flowcharts. What are these guidelines for document, system, and data flow diagram flowcharts?
> This chapter describes how to create tables and records in Microsoft Access. What other database management systems are available? Use the Internet to learn more about these systems.
> Take a survey of the students in your class to find out what jobs their parents hold .How many are employed in manufacturing? How many are employed in service industries? How many could be classified as knowledge workers?
> Choose three or four issues of one of these journals: Journal of Accountancy, Internal Auditor, Strategic Finance, and Management Accounting. Next, count the number of articles that are related to IT. In addition, make a list of the specific technology di
> What words were used to form each of the following acronyms? a. ABC b. AICPA c. AIS d. CFO e. CISA f. CITP g. CPA h. CPM i. ERP j. FASB k. HIPAA l. ISACA m. IT n. KPI o. SAR p. SEC q. SOX r. VAR s. XBRL
> Continuous auditing has the potential to reduce labor costs associated with auditing. It also can provide audit assurance closer to the occurrence of a transaction, which improves the reliability of frequent or real-time financial reports. Using an Intern
> Savage Motors sells and leases commercial automobiles, vans, and trucks to customers in southern California. Most of the company’s administrative staff work in the main office. The company has been in business for 35 year
> Information systems auditors sometimes use tools or information they can download from the Internet. These tools or information may include software, audit guides, or computer security advisories. Locate some examples from the Internet of audit tools, au
> Visit www.isaca.org, the website for the Information Systems Audit and Control Association. Investigate the Certified Information Systems Auditor (CISA) credential. Describe the purpose of the credential and the types of auditing CISAs perform.
> The Espy Company recently had an outside consulting firm perform an audit of its information systems department. One of the consultants identified some business risks and their probability of occurrence. Estimates of the potential losses and estimated cont
> Use the Customers table in the BSN database that accompanies this book and the Report Wiz-ard to create the report in Figure 16-14. Note that you will have to reformat and perhaps reposition several labels, and add both labels and a graphic in the header
> Using the Customers table in the BSN database that accompanies this book, and following the directions in this chapter, create the report in Figure 16-8. Note that you will have to reformat and perhaps reposition several labels, and add both labels and a
> If you have not done so already, use the Customers table in the BSN database that accompanies this book and the directions in this chapter to create the form in Figure 16-1. Make sure that you reformat the default positions of the various textboxes as sh
> Using the Customers table in the BSN database that accompanies this book, and following the directions in this chapter, create the form in Figure 16-1. Make sure that you reformat the default positions of the various textboxes as shown in the ï¬
> Provide a short explanation of the difference between each of the following sets of terms: a. bound control versus unbound control b. design mode versus run mode c. ◀ symbol versus ▶ symbol on a form’s navigation bar d. form versus subform e. normal data
> A database report has seven major sections. a. Identify each one and provide a short explanation of each section. b. Identify a report that a database application might generate, and indicate what data might be found in each section of the report for you
> A form’s navigation bar has five symbols on it. Identify each one and indicate its use.
> Barra Concrete specializes in creating driveways and curbs for the residential market. Its accounting software uses exclusive OR (XOR) operations to convert the individual bits of a plaintext message into ciphertext. The rules are as follows: In other
> Consider the employee record in Figure 15-4, which illustrates the data structure of an employee table. Given the importance of this information, it is likely that the database developer would install validation tests to ensure its accuracy. Some possibl
> The information in Figure 15-18 is for the employees of the Marcia Felix Corporation. a. Use a DBMS software package to create a database for this figure. b. What is the average pay rate for these employees? c. What is the average pay rate
> Use the Web to find current examples of data warehousing software. Why do companies create data warehouses, and what are some accounting uses of such warehouses?
> The Query Corporation employs the individuals listed in Figure 15-17. Use Access or another DBMS as required by your instructor to create a database of this information and then perform the following queries. a. List all employees in Department 5. b. Lis
> Create a Salesperson table and a Customer Order table. The salesperson table should include the salesperson number, first name, last name, commission rate, and date of last sale. The customer order table includes the order number, customer
> Bonadio Electrical Supplies distributes electrical components to the construction industry. The company began as a local supplier 15 years ago and has grown rapidly to become a major competitor in the north central United States. As the business grew and
> The quotation at the beginning of this chapter suggested that very few checks are made to check the database is not doing things it should not be doing.” What are some things that accounting database should not do? Compile a list of items, and for each o
> Give some examples of attributes you would include in a Customer table. Would you use one data field or two for the customer name? Why?
> Draw an entity–relationship diagram for the following: An accounting firm holds recruiting events for college students. At these events, recruiters are seeking students with particular skills.
> Draw an entity–relationship diagram for the following: Sales of inventory are made to customers by salespeople. After the sale, cash is received by cashiers.
> The Anderson Manufacturing Company (AMC) is located in Las Vegas, Nevada, and manufactures specialty parts for high-end sports cars. The company currently has an accounting information system, but over time, has found that it would like its system to do
