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Accounting Information Systems:

Essential Concepts and ApplicationsFourth Edition by Wilkinson, Cerullo, Raval,

and Wong-On-Wing

Chapter 14: Systems

Development

Slides Authored bySomnath Bhattacharya, Ph.D.

Florida Atlantic University

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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

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Approaches to Systems

Development

Top-Down versus Bottom-up

In-House versus Outsourcing

Re-engineering

Prototyping

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Objectives of Strategic

Systems Planning

Integrate the information system developmentwith the firms overall planning processesEnsure orderly development of systems

projects, making efficient use of availableresourcesRecognize changing priorities and newly arising

conditions as well as increasing informational

demandsIncorporate improvements in informationtechnology as they become relevant to thefirms needs and promise greater benefits thanthe cost outlays

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Survey of the Present

System

Scope

Data Types and Sources

Behavioral IssuesCommunicate openly with the persons

to be affected by the system project

Encourage participation by the affected personsthroughout the survey

Emphasize the positive aspects of the project andexplain that the resulting system can better meet theusers needs

Reduce the fears of employees and managers by

establishing and publicizing fair personnel policies

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A Checklist for Analyzing

Information Systems - I

Are tasks and responsibilities clearly defined andassigned?Are tasks and responsibilities distributed

effectively among employees and organizationalunits?Are the policies and procedures understood and

followed?

Does the productivity of the clerical employeesappear to be satisfactorily high?Do the various organizational units cooperate

and coordinate well in maintaining smooth flowsof data?

Figure 14-8

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Does each product achieve its intendedobjective?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


Information Systems - II

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Information Systems - III

Are physical operations adequately planned andcontrolled?Is the capacity of the information system

sufficient to handle the average volumes of datawithout large backlogs?Are the peak volumes of data handled

adequately?

How easily does the system adapt toexceptional occurrences and growth in use?How necessary is each document?Is each document suitably designed for efficient

use?Figure 14-8 Continued

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

harmonize with the formal flows?Figure 14-8 Continued

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A List of Information

Systems Capabilities

Efficient and hence economical operationsAdequate capacity for expected growth

Timeliness in responding to inquiries andproviding reportsReliability of system hardware and softwareAccurate, up-to-date, and relevant information

Security of the data and system facilitiesFlexibility and adaptability to changes and newdemandsSimplicity, and hence user-friendliness

Figure 14-9

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One-time Costs for a New or Improved

Computer-based Information System - I

System Design CostsDetailed design

Programming

System Installation and Conversion CostsSystem and program testing

File conversion

Retraining of displaced employees

Training of newly hired analysts, programmers, andoperators

Inefficiencies caused by learning new equipment andprocedures

Figure 14-15

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Computer-based Information System - II

System Site Preparation CostsConstruction 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 asfalse flooring, file storage vault, and special lighting

Figure 14-15 Continued

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Computer-based Information System - III

System Hardware CostsCentral 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


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Computer-based Information System - IV

System Software CostsOperating system, utility routines, compilers

Data communications softwareApplication program packages

Data management software packages

Decision model software packages

Outside computer time-sharing rentals


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Recurring Costs Related to a Computer-

Based Information System - I

Computer Operations Costs

Salaries for computer supervisors, operators,technicians, data-entry clerks, librarians, securityguards, and others

Supplies, including forms, paper, ribbons, and tape

Utilities, including power, water, and telephone

Rentals of computer hardwareSoftware purchases and upgrades

Communications equipment and services

Backup equipment and services

Figure 14-16

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Recurring Costs Related to a Computer-

Based Information System - II

Information System Maintenance CostsSalaries for systems analysts, programmers, repair

technicians, and others

Replacement parts and upgrades

Printing costs for documentation

Information System Administration CostsSalaries of systems management, data-base

administrator, internal auditors, secretaries, andothers

Insurance

Taxes

Space and building occupancy costs


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Typical Conceptual Design

Specifications - I

System Components

Output

Features

Name

Purpose

Distribution to users

Contents

General format

Frequency or triggerTimeliness

Output medium

Figure 14-17

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Specifications - II

System Components

Data base

FeaturesFile or table name

File or table type

File size

Contents of record or table

Record or table layout

File organization methodStorage medium

Data characteristics

Updating frequency

Data structureFigure 14-17 Continued

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Specifications - III

System Components

Data processing

Features

Sequence of steps or

runs

Processing modes,

cycles, volumes

Modes of data

communicationProcessing capabilities

at each physical

location


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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 methodFigure 14-17 Continued

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Specifications - V

System Components

Control and security

Features

Type

Purpose

Specific system

components affected

method of correcting

error or establishingsecurity


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Systems Acquisition

Options

Purchasing versus leasing

Single vendors versus multiple vendors

In-house system versus outsourcingcomputing services

In-house software development versuscommercial software packages

Types of commercial software

General accounting systems

Turnkey software systems

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Advantages of Commercial

Software

Products available without lengthydevelopmental periods

Soundly designed and well-testedand thus efficient and reliable

Reasonable pricing

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Limitations of Commercial

Software

Generalized in nature

Acquiring firm is dependent on the

software vendor for supportand maintenance andupgrades

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The Sequence in Designing

System Components

Design Controls

& Security Measures

DesignInformation

Outputs

Designdata base

Design DataProcessing

Operations

Design

Data Inputs

Figure 14-19

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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 componentsAvoid design excesses

Apply sound methodology

Figure 14-20

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System Justification & Selection in the

Systems Development Life Cycle

Systems

Planning

Systems

Analysis

Systems

Design

Systems

Operations

Determinationof DesignFeasibility

Solicitation ofHardware and

Software Proposals

Evaluation ofSystem

Proposals

Selection ofSystem Hardwareand Software

Systems Justification & Selection

Figure 14-21

A Li t f R

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A List of Resource

Specifications - I

Systems Design Specifications

Output

Data-baseProcessing

Input

Control & security

Figure 14-22

A Li t f R

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A List of Resource

Specifications - II

Hardware SpecificationsProcessor speeds and capabilitiesSecondary storage capacities and access

capabilities

Input-output speeds and capabilitiesCompatibility featuresModularity featuresError detection and correction techniquesData communication capabilitiesSpecial features, such as multiprogramming and

virtual storagemaximum allowable downtime as a percentage of

total time


A Li t f R

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A List of Resource

Specifications - III

Software SpecificationsProgramming languages and compilersUtility packages

Application packagesOperating system capabilitiesData management packages

System Support SpecificationsProgramming assistance

Training programsTest facilities and time availableBackup facilitiesMaintenance assistance


T h i f P l

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Techniques for Proposal

Evaluation

The benchmark problem technique

Simulation model technique

Weighted-Rating analysistechnique

S t I l t ti

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Systems Implementation:

Preliminary Actions

Establish implementationplans and controls

Gantt chart

Network diagrams

Recognize behavioral concerns

Review the organization of

the project team

Complete arrangement for selectedsystem resources

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Implementation Activities - I

Personnel selection and training

Physical site preparation

Detailed system designOutput design

Database design

Input designProcessing design

Controls design

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Application software development

Coding

Structured programmingSoftware testing

Desk checking

String testingSystem testing

Acceptance testing

Implementation Activities - II

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Standards development

System components

PerformanceDocumentation

Documentation

File conversion

Implementation Activities - III

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System conversion: cutover

Direct conversion approach

Parallel operation approachModular conversion approach

Phased conversion approach

User signoff

Implementation Activities - IV

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Systems Operations

Fine tuning

Post-implementation evaluationTo assess the degree to which the

objectives of the system project have been met

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

To evaluate the project teams performance, both in

terms of a quality product and adherence to theproject schedule and work plan

To serve as the basis for improving future systemsdevelopments and accuracy of cost and benefitestimates

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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

DepartmentTaskProjectComputer System

Performance Evaluation Systems* Personnel performance by

Clerks & OperatorsSystems professionalsSystems managers

* Equipment performance* Information system performance

EfficiencyEffectiveness

Cost accounting

& control reportsPerformance

reportsFigure 14-27


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Copyright 2000 John Wiley & Sons, Inc. All rights reserved.

Reproduction or translation of this work beyond that permitted in

Section 117 of the 1976 United States Copyright Act without the express

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John Wiley & Sons, Inc. The purchaser may make back-up copies forhis/her own use only and not for distribution or resale. The publisher

assumes no responsibility for errors, omissions, or damages, caused by

the use of these programs or from the use of the information contained

herein.


Essential Concepts and ApplicationsFourth Edition by Wilkinson, Cerullo,

Raval, and Wong-On-Wing

901331_Elmasri_6e_Ch01

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