Download Opening vignette

1. Reading review questions
a.
What is a data flow diagram? How are data flow diagrams used in accounting
information systems? A data flow diagram is a graphical representation of an
information system; it focuses on the flow of data, regardless of form, between
business processes, external entities and databases. DFDs are used in accounting
information systems to gain a shared understanding of how the AIS functions;
they can also serve as the basis for database design.
b.
List and discuss the four symbols used in the development of data flow
diagrams. Give an example of each symbol in an AIS context. Processes are
symbolized with a circle; they are numbered and labeled with a verb phrase, such
as “collect cash.” Data flows are symbolized with straight lines; they are labeled
with noun phrases that describe the data they represent, such as “completed
purchase order.” Data stores, or databases, are depicted with two parallel straight
lines; their descriptors include items like “employee database.” Finally, external
entities are symbolized with rectangles; they represent people / groups /
organizations outside the system boundary, such as the IRS.
c.
What rules / conventions should accountants follow when creating DFDs?
DFDs should be clear and easy to read. Data flows should be labeled with noun
phrases, while processes are labeled with verb phrases. In addition, DFDs must
be balanced; that is, items should not disappear or appear between levels.
Additional DFD conventions are discussed in the chapter.
d.
Define the following terms as they relate to the material presented in this
chapter: relational database, table, primary key, foreign key, field, record,
query. A relational database is a collection of objects designed to collect data,
analyze it and report information to decision makers. A table is the primary
object in a relational database. Tables contain fields (columns) and records
(rows), and should be normalized for efficiency and effectiveness. A primary key
is a field in a table that uniquely identifies each record in the table, such as a
transaction number. A foreign key is a primary key posted in another table; for
example, a customer number would be a primary key in the customer table and a
foreign key in the sales table. A query is a well-structured question designed to
extract information from a database. Queries store instructions, not results; each
time a query is run, it looks at the current data in the database.
e.
Respond to the questions for this chapter’s opening vignette.
6-1
© McGraw-Hill Companies, 2010
i. What is a “model-driven brainstorming session?” A brainstorming
session is a meeting in which people throw out ideas as potential solutions
for a problem. A model-driven brainstorming session, then, would be
such a meeting where the discussion was informed by some type of
model—like a flowchart or data flow diagram of an accounting system.
ii. How could a data flow diagram be used for risk identification? As with
flowcharts, identifying risks from a DFD takes practice. Since a DFD
gives a picture of an information system, analysts could potentially spot
weaknesses from it; from those weaknesses, they could talk about risks.
Consider the DFD in Figure 6.2, where Process 1.0 is “Select preliminary
classes.” What are the risks associated with that process? They might
include lack of class availability and / or selecting classes without
appropriate prerequisites.
iii. In what other ways could a data flow diagram be used in accounting
information systems? As noted in the Bradford article listed in the chapter
references, DFDs are used in practice for at least four purposes: to
describe business processes, to evaluate a current system, to design or
change a system and to assess the internal control environment.
2. Reading review problem
a. List the symbols included in data flow diagrams. Explain the meaning of each
symbol. DFDs include four symbols. Rectangles represent external entities;
circles represent processes. Databases are symbolized with a set of parallel lines.
Arrows denote data flows.
b. For each symbol, suggest two examples you would expect to find in Home
Depot’s data flow diagram.
i. External entities: banks, wire transfer payees.
ii. Processes: Approve wire request; Calculate net cash position.
iii. Databases: wire request database, general ledger.
iv. Data flows: wire payment data, bank data.
c. Explain the concepts of “leveling” and “balancing” as they relate to data flow
diagrams. Data flow diagrams are prepared in levels, each depicting more detail
about a specific process than the level before it. The context diagram shows the
least detail, representing the entire process in a single circle. After the context
diagram comes the Level Zero diagram. Processes in the Level Zero diagram can
be decomposed in Level One diagrams (and so on). A leveled set of data flow
diagrams is balanced if it preserves elements between the levels.
6-2
© McGraw-Hill Companies, 2010
3. Making choices and exercising judgment
Bumble Beasley is a recently enrolled accounting major at your university. In a
conversation about accounting information systems, he said: “I don’t know why we
have to learn about flowcharts and data flow diagrams. One documentation technique
should be enough; besides, both techniques give basically the same information if you
know how to read them.” Do you agree or disagree with Bumble? Why? Learning
both techniques is necessary since both are used in practice. In addition, the two do not
necessarily provide the same information, even when accurately interpreted. For
example, flowcharts may depict documents and areas of responsibility, whereas DFDs
focus more on data and business processes.
4. Field exercises
Because the field exercises involve original research and will vary significantly from
student to student, I’m not including any suggested solutions to them. If your students
produce particularly outstanding responses and you’d like to send them to me, I’ll post
them on the book’s web site. Let me know if this lack of suggested responses to field
exercises is a major inconvenience for you.
5. Data flow diagram creation
a. The Geek Squad (www.geeksquad.com) offers a variety of telephone, in-office and
in-home computer services. When a call for assistance comes into their 800
number, the Geek Squad determines its geographical origin and routes the call to
an agent in the area. The agent confers with the customer by phone, determining
the nature of the problem and the type of service desired. The agent will also find
out if the customer has previously done business with Geek Squad. The agent will
respond to the customer’s request and report the problem’s resolution to the
corporate office. The corporate office bills the customer and collects payment; a
fixed fee is remitted to the local agent based on the type and nature of the service
call. Point your web browser to the Geek Squad web site to get more information
about their operations. Then, prepare a Context Diagram, Level Zero Diagram
and one Level One Diagram for Geek Squad.
6-3
© McGraw-Hill Companies, 2010
Geek Squad
Context Diagram
Local agent
Geographic
information
Fixed fee
Sales /
collection
process
Resolution data
Service request
Billing
informatio
n
Customer
Payment
Geek Squad
Level Zero Diagram
Fixed fee
Local
agent
Geographic
information
1.0
Route
call.
Resolution
data
2.0
Bill
client.
Service request
Billing
info
3.0
Collect
payment
Payment
Customer
6-4
© McGraw-Hill Companies, 2010
Geek Squad
Level One Diagram
1.2
Select
office.
Geographic
data
Local agent
Origin data
1.1
Determine
origin.
Service request
Customer
b.
Every year, the Institute of Management Accountants sponsors a student case
competition to help students build their technical, analytical and communication
skills. In the student case competition, the IMA solicits cases from accounting
faculty; an IMA committee chooses the best case and publishes it in an issue of
Strategic Finance. Teams of students prepare videotaped responses to the case
and submit them to the IMA. The videotaped presentations are evaluated, and
team with the best presentation in each geographic region presents their case “in
person” to a panel of judges at the IMA annual meeting. The team with the best
presentation receives an award; all teams presenting at the annual meeting
receive an engraved plaque with the members’ names on it. The IMA maintains a
database of case topics and authors; it also keeps a record of the name and
university affiliation of all teams submitting videotapes as well as the status of
those submissions. (For more information about the IMA student case
competition, point your web browser to www.imanet.org.) Consider the
preceding narrative, and prepare a leveled set of data flow diagrams (Context,
Level Zero and Level One).
6-5
© McGraw-Hill Companies, 2010
IMA case competition
Context diagram
Awards
Student teams
Accounting
faculty
Case responses
Published case
Case ideas
Case
competition
system
Regional results
National results
Judging panel
IMA student case competition
Level Zero diagram
1.0
Solicit
ideas
Cal for ideas
Judging panel
Accounting
faculty
National
results
Awards
Case ideas
Selected case
2.0
Select &
publish
case
Student teams
Case database
Published case
Case responses
3.0
Receive &
sort
responses
Regional
results
Sorted responses
4.0
Select
regional
winners.
Regional
results
5.0
Conduct
national
competitio
n
6-6
© McGraw-Hill Companies, 2010
IMA case competition
Level One diagram
Published
case
Case
responses
c.
3.1
Receive
responses
Copied
tapes
3.2
Sort by
region
Sorted
responses
Consider the narratives presented in Chapter 5 for Cori’s Catering Service and
University Bookstore. Use those narratives to prepare a leveled set of data flow
diagrams.
Cori’s Catering Service
Context diagram
Client
Order
Estimate
Contract
Sales /
collection
process
Catering
order
Cash
6-7
© McGraw-Hill Companies, 2010
Cash
Catering order
5.0
Collect
payment.
Client
Order
Initial
estimate
1.0
Receive
order.
Signed
contract
Revised
estimate
Contract
Final order
2.0
Prepare
estimate.
4.0
Deliver
order.
Final
contract
Final
estimate
3.0
Prepare
contract.
Cori’s Catering Service
Level Zero diagram
Cori’s Catering Service
Level One diagram
Client
Final order
Initial
estimate
2.1
Verify
initial
amounts &
prices.
Revised
estimate
2.2
Finalize
amounts &
prices.
Final estimate
6-8
© McGraw-Hill Companies, 2010
University Bookstore
Context diagram
Departmental
representative
Book requisition
form
Purchase
order
Publisher
Books
Textbook
ordering
system
Invoice
Payment
University Bookstore
Level Zero diagram
Payment
Departmental
representative
Invoice
Book
requisition form
4.0
Pay invoice.
Publishers
Books
1.0
Consolidate
requisitions.
Purchase
orders
Copied purchase
orders
Receiving
report
Consolidated
requisitions
2.0
Prepare
purchase
orders.
3.0
Prepare
receiving
report.
6-9
© McGraw-Hill Companies, 2010
University Bookstore
Level One diagram
Copied purchase
orders
Invoice
4.1
Match
documents
Receiving report
Matched
documents
Payment
4.2
Pay invoice.
6. Critiquing database tables
Bumble Beasley attempted to design a database to capture data about inventory
purchases. He thought it would be easier to create one table with all the data, rather
than separate tables for different data items. The table he created contained the
following fields:
6-10
© McGraw-Hill Companies, 2010
Vendor phone
Purchasing agent ID
Vendor ID
Purchasing agent home address
Inventory description
Cost per item
Vendor area code
Invoice total (number of items X cost per item)
Vendor state
Vendor address
Vendor city
Purchasing agent last name
Transaction date
Vendor ZIP
Payment terms (e.g., 2 / 10, n / 30)
Inventory ID
Purchasing agent first name
Transaction number
Quantity purchased
a.
Is Bumble’s database table in normal form? Discuss. The table is not in normal
form. Because it contains so much data, it will have both repeating groups and
redundancies. In addition, the table violates 3NF by containing fields unrelated to
its primary key. And, the table contains derivable data (invoice total) which
should be calculated through a query.
b.
How many normalized database tables would be required for the data? The
database would need five normalized tables for the data: vendor, inventory,
purchasing agent, purchases and purchases / inventory (a junction table).
c.
Group the data into the required number of normalized database tables. Specify
a primary key for each table.
Vendor table: Vendor ID, vendor address, vendor city, vendor state, vendor ZIP,
vendor area code, vendor phone
Inventory table: Inventory ID, inventory description (Note: this table could also
include “cost per item,” if the amount was relatively stable. It might also include
a “vendor id” field for the primary supplier.)
Purchasing agent table: Purchasing agent ID, purchasing agent last name,
purchasing agent first name, purchasing agent home address (Note: the home
address field should be broken up into its separate components.)
Purchases table: Transaction number, [purchasing agent ID], [vendor ID],
transaction date
Purchases / inventory table: Transaction number, inventory ID, cost per item,
quantity purchased
7. Creating database tables (Your instructor may want you to use Access or some
other relational database software to complete this problem.)
a.
Create at least two database tables for each Level One data flow diagram you
created in Problem 5.
iv. Geek Squad
6-11
© McGraw-Hill Companies, 2010
1. Customer table: Customer number, last name, first name, address,
city, state, zip, area code, phone, date of first call
2. Intake table: Transaction number, [customer number], [referral
office code], intake date, resolution details
v. IMA student case competition
1. Receive response table: Response code, date received, school
name, regional code
2. Regional judges table: Judge ID, judge last name, judge first name,
school name, school address, regional code
vi. Cori’s Catering Service
1. Client table: Client code, client last name, client first name, client
address, city, state, zip, area code, phone, date of first order
2. Order table: Order #, [client code], order date, initial estimate, final
estimate
vii. University bookstore
1. Receiving table: Receiving report #, date, employee code,
[publisher]
2. Receiving / item table: [Receiving report #], item code, quantity
received
b.
In most states, the Department of Motor Vehicles keeps records of individual
driver’s licenses and vehicle license plates. Create two database tables that
capture relevant information for the DMV; information in the driver’s license
table would include, but not be limited to, an individual’s name, license number
and birth date. Information in the vehicle license plate table would include, but
not be limited to, the license plate number and information about the vehicle
itself. What foreign key(s) would you use to link the two tables together?
viii. Driver’s license table: License number, driver first name, driver last name,
driver date of birth, driver restrictions, date of first issuance, license type,
address, city, state, zip
ix. License plate table: License plate number, vehicle ID, manufacturer,
model, year, color, [license number]
c.
Robert Half International (www.roberthalf.net) pairs up potential employees
with companies seeking accountants and other financial information
professionals. Their web site states: “With 325 offices and 55 years of
experience, Robert Half is the world's first and largest specialized financial
recruiting firm, placing quality candidates at all levels.” Point your web
browser to the company’s web site, and click the link for Robert Half United
States. What information does Robert Half collect on new job seekers?
Organize that information into a database table. Applicant identification
number, date applied, applicant last name, applicant first name, applicant address,
6-12
© McGraw-Hill Companies, 2010
city, state, zip, area code, phone number, e-mail address, highest college degree
earned, major, university, professional certifications & licenses, software
competencies.
8. Crossword puzzle
1
P
2
P
R
3
F O U R
I
4
L
5
O
M
C
I
6
V E R B
F
7
V
C O N T E X T
E
R
S
I
S
V
8
L
E
M
E
X
A
E
9
D A T A S T O R E
E
R
10
N O U N
A
L
Created with EclipseCrossword — www.eclipsecrossword.com
9. Terminology
Please match each item on the left with the most appropriate item on the right.
1.
g
6.
e
2.
c
7.
i
3.
f
8.
h
4.
d
9.
j
5.
b
10.
a
6-13
© McGraw-Hill Companies, 2010
10. Multiple choice questions
11.
1. b.
6. a
2. a
7. c
3. d
8. a
4. a
9. c
5. b
10. b
Statement evaluation
1. b A context diagram will include data stores if indicated by the particular case.
2. b Although “downwardly compatible,” normal forms aren’t necessarily “upwardly
compatible.” In other words, a 3NF table is, by definition, also in 1NF and 2NF. A 2NF
table maybe in 3NF, but not necessarily.
3. b A salesperson may be an external entity, depending upon how the system boundary
is defined.
4. b Which documentation tool is “better” depends upon the task at hand.
5. b If the form is appropriately designed, it can be used to look up information in a table.
6. a
7. a
8. a
9. a
10. c
6-14
© McGraw-Hill Companies, 2010