1.

Discuss what is meant by the statement, ‘‘The accounting system is a conceptual flow of information
that represents the physical flows of personnel, raw materials, machinery, and cash through the
organization.’’

2. Do you think transaction processing systems differ significantly between service and manufacturing
industries? Are they equally important to both sectors?

3. Discuss how the elements of efficiency, effectiveness, and flexibility are crucial to the design of an
information system.

4. Why is it important to organizationally separate the accounting function from other functions of the
organization?

5. If accountants are viewed as providers of information, then why are they consulted as system users in
the systems development process?

6. Discuss the flow of cash through the transaction cycles. Include in your discussion the relevant
subsystems and any time lags that may occur.

7. Discuss the role of the conversion cycle for service and retailing entities.

8. Are large batch sizes preferable to small batch sizes? Explain.

9. Discuss why an understanding of legacy system technologies is of some importance to auditors.

10. Discuss some of the problems associated with general ledger systems that do not have data coding
schemes.