Chapter 23 Testbank

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Chapter 23 - testbank
Financial Accounting (University of Houston-Victoria)
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Accounting Information Systems, 15e (Romney)

Chapter 23 AIS Development Strategies
1 Describe how organizations purchase application software, vendor services, and hardware.
1) Identify the statement below that is false with regards to the development of an AIS.
A) A newly designed AIS always meets user needs for a time period.
B) Changes to the AIS are often difficult to make after requirements have been frozen into
specifications.
C) The development process can take so long that the system no longer meets company needs.
D) Users are sometimes unable to specify their needs adequately.
Answer: A
Concept: Purchasing software
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
2) When canned software is used for systems acquisition, the conceptual design phase of the
systems development life cycle (SDLC)
A) becomes a make-or-buy decision.
B) is combined with the physical design phase.
C) remains unchanged.
D) becomes a "turn-on, turn-off" decision.
Answer: A
Difficulty: Easy
3) When canned software is used for systems acquisition, the physical design phase of the
systems development life cycle (SDLC)
A) does not involve designing and coding, although modifications may still need to be made.
B) is combined with the conceptual design phase.
C) involves designing and coding, although modifications may still need to be made.
D) remains unchanged.
Answer: A
Difficulty: Easy
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4) When canned software is used for systems acquisition, the implementation and conversion
phase of the systems development life cycle (SDLC)
A) involves the documentation step.
B) requires the company to have trained IS personnel.
C) requires the develop and test software step.
D) involves both A and C.
Answer: D
Difficulty: Easy
5) When canned software is used for systems acquisition, the maintenance aspect of the
operations and maintenance phase of the systems development life cycle (SDLC)
A) is more costly.
B) is often difficult to predict.
C) is usually the responsibility of the vendor.
D) requires trained personnel.
Answer: C
Difficulty: Easy
6) When a systems vendor provides both the software and hardware needed to run a system as a
package, this is known as
A) a turnkey system.
B) cloud computing.
C) an application service package.
D) canned software.
Answer: A
Difficulty: Moderate
7) When a systems vendor provides software via the Internet and gives the user accesses to the
software remotely via the Internet, this is known as
A) a turnkey system.
B) cloud computing.
C) an application service package.
D) canned software.
Answer: C
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8) Identify one major drawback that is frequently associated with canned software.
A) A commercial software development company develops it.
B) Canned software is sold on the open market to a broad range of users with similar
requirements.
C) Canned software may not meet all of a company's information or data processing needs.
D) Canned software may offer easy availability and lower costs.
Answer: C
Difficulty: Easy
9) Which statement is true regarding canned software and the systems development life cycle
(SDLC)?
A) Canned software cannot be modified to meet unique user needs.
B) Companies that buy, rather than develop, AIS software can still follow the systems
development life cycle (SDLC) process.
C) Most canned software meets all of a company's information or data processing needs.
D) The systems development life cycle (SDLC) process does not apply to purchasing canned
software.
Answer: B
Difficulty: Easy
10) The reasons for ________ are to simplify the decision-making process, reduce errors,
provide time savings, and avoid potential disagreements.
A) leasing
B) outsourcing
C) prototyping
D) sending out a request for a proposal
Answer: D
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11) When a request for proposal (RFP) is solicited based on ________, total costs are usually
lower, and less time is required for vendor preparation and company evaluation.
A) specific equipment needs
B) general software needs
C) exact hardware and software specifications
D) system efficiency
Answer: C
Difficulty: Easy
12) Information provided to potential vendors on a Request For Proposal (RFP) should include
A) a budget for software and hardware.
B) detailed specifications for the AIS.
C) a timeframe required for completion of the project.
D) a high-level need for the AIS.
Answer: B
13) ________ is a performance evaluation approach that evaluates systems based on the
weighted score of criteria and points.
A) Benchmarking
B) Point scoring
C) Prototyping
D) Requirements costing
Answer: B
Difficulty: Easy
14) ________ is a method of comparing systems by executing an input, processing, and output
task on different computer systems and evaluating the results.
A) Benchmarking
B) Point scoring
C) Prototyping
D) Requirement costing
Answer: A
Difficulty: Easy
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15) ________ is a method of comparing systems based on the cost of all required features; when
software does not meet all requirements, the cost of developing unavailable features is estimated
and added to its cost.
A) Benchmarking
B) Point scoring
C) Requirement costing
D) Prototyping
Answer: C
Difficulty: Easy
16) ________ and ________ are approaches to evaluating vendor proposals that do not
incorporate dollar estimates of costs or benefits.
A) Benchmark problem; point scoring
B) Point scoring; requirements costing
C) Requirements costing; benchmark problem
D) Point scoring; prototyping
Answer: B
17) The more information a company provides vendors in its request for proposal, the better the
chances of receiving a system that meets the organization's requirements. Which of the below
statements identifies why errors may decrease?
A) All responses are in the same format and based on the same information.
B) Both parties possess the same expectations and pertinent information is captured in writing.
C) The chances of overlooking important factors are reduced.
D) The same information is provided to all vendors.
Answer: C
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18) What is the first step a company should take when evaluating requests for proposals?
A) Carefully compare proposals against the proposed AIS requirements.
B) Determine how much of a given proposal meets the desired AIS requirements.
C) Eliminate proposals that are missing important information or fail to meet minimum
requirements.
D) Invite vendors to demonstrate their systems.
Answer: C
Difficulty: Easy
19) The ________ method calculates and compares the processing times of different AIS to
compare system performance.
A) benchmark problem
B) mandatory requirements
C) point scoring
D) requirements costing
Answer: A
20) What is a drawback to using the requirement costing method of software and hardware
evaluation?
A) Dollar estimates of costs and benefits are not included.
B) Intangible factors such as reliability and vendor support are overlooked.
C) The weights and points used are assigned subjectively.
D) There is no drawback to using the requirements costing method.
Answer: B
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21) Carmie Iria, the director of a systems project committee, has received management approval
for the implementation of a new accounting information system. After sending out an RFP to
multiple vendors, the committee settled on purchasing a system from Optibase, a vendor who
will provide the company with all of the required hardware and software. Carmie's committee
has opted to purchase
A) canned software.
B) a turnkey system.
C) an outsourced system.
D) cloud computing.
Answer: B
AACSB: Reflective Thinking
22) Carmie Iria, the director of a systems project committee, has received management approval
for the implementation of a new accounting information system. After sending out an RFP to
multiple vendors, the committee settled on purchasing a system from Sysys, a vendor who will
provide a standard software package and post-sale technical support. Carmie's committee has
decided to go with
A) canned software.
D) an end-user developed system.
Answer: A
23) What is a benchmark problem?

A) A difficulty encountered when attempting to bring an accounting information system up to
industry best practices.
B) A method used to compare the efficiency of alternative accounting information systems.
C) The cost-benefit tradeoff defined by the relationship between increased costs and increased
benefits from a system.
D) A method used to test the compatibility of a new accounting information system with existing
hardware and software.
Answer: B
Difficulty: Challenging
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24) Which of the following is a method for comparing alternative vendor proposals for
development of an accounting information system when the vendors differ with regard to their
ability to meet the project criteria?
A) Point scoring.
B) Resource clearing.
C) Requirements costing.
D) Multi-objective optimization.
Answer: A
Difficulty: Easy
25) Describe the difficulties that could be encountered when developing an AIS.
Answer: Demand for development resources is very high and can backlog AIS projects for
several years. The development process can be lengthy. System developers may not understand
the company's business, and consequently the new system may not always meet user's needs. The
time taken to develop an AIS may make it obsolete when the new system is ready to launch.
Users may not be able to articulate their demands adequately, and therefore they may be
dissatisfied with the finished product. Changes to the AIS are difficult to make beyond a certain
point, so the AIS remains in a state of "perpetual development" and flux.
26) What are the three methods to obtain a new information system? What is a turnkey system?
Answer: The three methods to obtain a new information system are purchasing new software,
developing software in-house (either by development staff or by the system end-users
themselves), or hiring an outside company to create a system. A turnkey system is a software and
hardware package, which is complete and ready to be used "at the turn of a key." Vendors for
turnkey systems primarily specialize in a particular industry.
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27) Explain the concept of an application service provider.

Answer: An application service provider (or ASP) is a third-party provider of software to
organizations. An ASP is Web-based, providing delivery of software to its clients over the
Internet. An organization that uses an ASP "rents" the software, thus eliminating the tasks of
buying, installing, and maintaining the software. Among the advantages to using this approach as
opposed to the outright purchase of software is a reduction of software costs and administrative
overhead, automated software upgrades, scalability as the organization itself grows, global
access to information, access to skilled IT personnel, and ability to focus on core competencies
rather than IT requirements.
28) Identify the ways an organization can gain full advantage of using a Request For Proposal
(RFP).
Answer: The more information an organization provides in its RFP, the better its chances are of
receiving a system that meets its requirements. It is important to include detailed specifications
for the new AIS, including required applications, inputs, outputs, files, databases, frequency and
ways of updating files and creating queries, and any unique characteristics or requirements. It is
also essential that the RFP distinguishes between what are mandatory requirements and what are
"desirable but not essential" requirements.
29) What are the advantages and disadvantages of custom software and of canned software for
meeting application software needs?
Answer: Custom software: tailored to needs; potential competitive advantage; and better control
over the process: expensive; difficult to write; error prone; and time consuming. Canned
software: easy to acquire; fast to acquire; inexpensive; good documentation; updates are
inexpensive; and can be tested: not tailored to needs; not as efficient as custom software; does
not develop in-house expertise in creation; and developer may go out of business.
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30) Who is typically responsible for installing turnkey systems?

A) An organization's IT department.
B) The vendor who provides the system.
C) A third-party hired by the system vendor.
D) Both the organization's IT department and the vendor who provides the system.
Answer: B
31) ________ are one example of a cloud computing solution.

A) Application service providers
B) Turnkey vendors
C) SDLC implementations
D) Canned software providers
Answer: A
32) Identify one of the benefits associated with procuring software from application service
providers.
A) Lower cost.
B) Scalability.
C) Greater effectiveness.
D) Faster processing speed.
Answer: A
33) When an organization seeks to modify canned software, it is best when ________ because
unauthorized modifications may make the program unreliable.
A) the vendor modifies the software
B) the intended end-user modifies the software
C) programmers with software experience modify the software
D) the organization's IT modifies the software
Answer: A
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34) Moneka Jones is the CIO for Noela Incorporated. Moneka wants to replace the firm's
existing system, but wants to leave the technical issues to the vendor because she is not well-
informed on the latest technologies. When preparing an RFP, Moneka most likely should
A) disclose exact hardware and software specifications.
B) disclose specific performance objectives and requirements.
C) disclose general software requirements.
D) disclose general performance objectives and requirements.
Answer: B
35) Moneka Jones is the CIO for Noela Incorporated. Moneka wants to replace the firm's
existing system. However, she wants to spend as little time as possible preparing and evaluating
RFPs. When preparing an RFP, Moneka should probably
A) disclose exact hardware and software specifications.
B) disclose specific performance objectives and requirements.
C) disclose general software requirements.
D) disclose general performance objectives and requirements.
Answer: A
36) A Deloitte & Touche survey found that most chief information officers do not expect to
replace their current systems with commercially available packages.
Answer: FALSE
Difficulty: Easy
37) Explain the importance of using a request for proposal.

Answer: Using an RFP is important because it: 1. Saves time. The same information is provided
to all vendors, eliminating repetitive interviews and questions. 2. Simplifies the decision-making
process. All responses are in the same format and based on the same information. 3. Reduces
errors. The chances of overlooking important factors are reduced. 4. Avoids potential for
disagreement. Both parties possess the same expectations, and pertinent information is captured
in writing.
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38) RFPs for exact hardware and software specifications have higher total costs and require more
time to prepare and evaluate.
Answer: FALSE
2 Explain how information system departments develop custom software.
1) Which approach systems acquisition is generally costly and labor-intensive?

A) Canned software.
B) Custom software.
C) Modified canned software.
D) Turnkey software.
Answer: B
Concept: Custom software development
Difficulty: Easy
2) There are frequently many canned software packages available. However, many companies
choose to develop their own software. Why?
A) An organization may have unique requirements that are not addressed by canned software
packages.
B) Canned software packages are often less expensive than software developed in house.
C) The organization's size and complexity necessitate the in-house development of software.
D) A and C above are correct.
Answer: D
Difficulty: Easy
3) Which of the following is not a guideline that should be used to select an outside, custom-
system developer?
A) The outside developer should have an in-depth understanding of how the company conducts
its business.
B) The outside developer should have experience in the company's industry.
C) The outside developer should possess a good understanding of business in general.
D) The outside developer should be able to complete the system independently, without requiring
frequent contact to ask questions.
Answer: D
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4) Firms should consider developing custom software only if

A) it will be used for critical functions like accounts receivable.
B) it will contribute to development of a significant competitive advantage.
C) the firm has the necessary expertise available in-house.
D) the available canned software is very expensive.
Answer: B
5) What guidelines should be followed when contracting with an outside developer to create
custom software?
Answer: Carefully select a developer by checking into references and inquiring about reputation
and past experiences from other organizations. Sign a contract with clearly defined areas of
responsibility for the developer. Plan and monitor each step by designing each step of the project
in detail, and making frequent checkpoints for monitoring the project. Maintain effective
communication with the developer. Control all costs and minimize cash outflow until the project
has been completed and is accepted.
6) Discuss how an organization can develop custom software.

Answer: Custom software can be developed and written in-house. Many organizations develop
their own software because their requirements are unique, or their size and complexity
necessitate the creation of a custom package. Specific applications or functions can often be
developed in-house by end-users. End-users can use spreadsheet or database software programs
to create reports, perform "what-if" analysis, prepare depreciation schedules, or prepare budgets.
Alternatively, third-party developers can be contracted to develop custom software for an
organization. Custom software should only be developed when it results in a distinct, competitive
advantage to the organization.
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7) Although Gillette uses canned software in its business operations, it does so with the intention
of creating a competitive advantage. Identify how Gillette aims to gain a greater competitive
advantage from using canned software.
A) From deciding how the software should be used.
B) From deciding what software should be used.
C) From the cost savings it gains by using canned software.
D) From deciding when software should be used.
Answer: A
8) Why does Pepsi create most of the software it uses in business operations?
A) Pepsi does not trust canned software.
B) Using canned software actually cost Pepsi more than using custom software.
C) Pepsi could not find canned software sophisticated enough to meet its needs.
D) There is no canned software available in Pepsi's industry.
Answer: C
9) Which of the following is not an appropriate for task end users to perform?
A) Performing statistical analyses.
B) Preparing schedules and lists.
C) Retrieving information from databases.
D) Updating database records.
Answer: D
10) What is the basic function of a help desk?

A) Control access to corporate data.
B) Provide technical maintenance and support.
C) Train end users and assist with application development.
D) All of the above are basic functions of a help desk.
Answer: D
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11) ________ refers to involving users in the development, control, and deployment of
information systems.
A) Amateur user computing (AUC)
B) Competitive intra-organization systems development approach (CIOSDA)
C) End-user computing (EUC)
D) Novice information systems development (NISD)
Answer: C
Difficulty: Easy
12) Identify the system below that end users should not be allowed to develop.
A) A payroll processing program.
B) A program that performs "what-if" statistical modeling.
C) Developing an application using prewritten software such as a spreadsheet or database
system.
D) Preparing a schedule or list such as a depreciation schedule.
Answer: A
13) Identify one of the primary risks associated with end-user computing below.
A) IS personnel will not have enough work to do if users develop their own systems.
B) Systems that have not been adequately tested may be implemented.
C) System costs may skyrocket.
D) System development time may increase substantially.
Answer: B
Difficulty: Easy
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14) Which of the following about end-user computing is true?

A) System users know best what they need, so should be able to create their own applications.
B) End-users, while knowledgeable about their job, are not trained to create systems
applications, and should not be allowed to do so.
C) It is inefficient and costly to ask the IS department to create basic applications that only a few
users need to use.
D) In most companies, the IS department doesn't want end-users to create their own applications,
for fear IS won't have enough work to do.
Answer: A
15) A second-line help desk operator would most likely

A) handle complicated queries requiring research.
B) provide callers with scripted answers.
C) use expert systems to resolve issues.
D) handle less complicated queries requiring research.
Answer: A
16) End-user computing is likely to result in a(n)

A) well tested system.
B) well documented system.
C) rapidly developed system.
D) efficient system.
Answer: C
Difficulty: Easy
17) Where is the responsibility for the development of end-user computing applications typically
placed?
A) End users.
B) Help desk.
C) Front-line analysts.
D) Second-line technicians.
Answer: A
Difficulty: Easy
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18) Describe the purposes of a help desk.

Answer: A help desk consists of analysts and technicians that encourage, support, coordinate,
and control end-user activities. Some of the duties and activities of the help desk includes the
following: Hot-line assistance to solve problems. Clearinghouse for information, coordination,
and assistance. Training, maintenance, and support center for the software and hardware.
Application development assistance center. Approval point for development and implementation
standards for hardware and software purchases, documentation and application testing, and
security issues. Controlling access to corporate data by using access matrix controls, etc.
Evaluating new end-user hardware and software products.
19) Describe end-user computing and the advantages and risks involved.
Answer: End-user computing is the hands-on development, use, and control of computer-based
information systems by users. The suitable applications are: Producing simple reports and
answers to one-time queries by accessing the company database. Sensitivity, statistical, or "what-
if" analysis. Using spreadsheets or database software to analyze data. Preparing schedules and
lists such as depreciation schedules, accounts receivable aging, and loan amortizations. User
computing has seen an explosive growth because: Users realized that computers can be used to
meet more and more information needs. Increased access to data created many new uses and
needs for information. One prediction is that end-user computing may account for 75% to 95%
of all information processed in the near future. Advantages of end-user computing: The user is
involved in the creation, control, and implementation of the software; systems tend to meet user
needs; programs can be created timely; end-users creating programming can free up IS
resources; and programs tend to be versatile and easy to use. Disadvantages of end-user
computing: Logic and development errors; inadequately tested applications; inefficient systems;
poorly controlled and documented systems; systems incompatibilities; duplication of systems
and data; and wasted resources and increased costs.
20) End-user development is inappropriate for which types of systems?

A) Systems that process a large number of transactions.
B) Systems that need to be developed rapidly.
C) Systems that must be easy to use.
D) Organizations that have large IT departments.
Answer: A
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21) Identify the system below that is likely to be most appropriate for end-user development.
A) An accounts receivable system.
B) A general ledger system.
C) An inventory system.
D) A loan amortization spreadsheet program.
Answer: D
22) Identify the system below that is likely to be most appropriate for end-user development.
A) An accounts receivable system.
B) A general ledger system.
C) An inventory system.
D) A system that helps with sensitivity analysis.
Answer: D
23) The IT department should be given control of end-user computing (EUC).

Answer: FALSE
Difficulty: Easy
24) End-user computing can eliminate many of the analyst-programmer communication

problems associated with the traditional program development.
Answer: TRUE
Difficulty: Easy
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25) If recent trends in end-user computing (EUC) persist, EUC will represent ________ of all
information processing by the end of 2020.
A) 15% - 24%
B) 20% - 49%
C) 50% - 74%
D) 75% or more
Answer: D
26) Why are end-user created systems often poorly documented?

A) Users often do not know how to document systems properly.
B) Users often consider systems documentation to be unimportant.
C) Users often believe it is too expensive to properly document systems.
D) Users are often unaware they need to properly document systems.
Answer: B
27) Who should maintain control of access to date in a user-created system with proper controls?
A) The end-users.
B) Management.
C) The IT department.
D) A help desk.
Answer: D
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3 Explain why organizations outsource their information systems, and evaluate the benefits and
risks of this strategy.
1) How does outsourcing improve an organization's utilization of assets?

A) By allowing a company to eliminate its IS department, which will reduce its payroll costs.
B) By allowing the company to sell assets to outsourcers and improve their cash position.
C) By eliminating the expense of keeping up with the latest technology and, thus, eliminate the
drain on cash reserves.
D) Both B and C above are correct.
Answer: D
Concept: Information system outsourcing
Difficulty: Easy
2) Which of the following is not a benefit of outsourcing?

A) Access to greater expertise and more advanced technology.
B) Ability to gain greater control.
C) Improved development time.
D) Lower costs.
Answer: B
3) The risk of losing a fundamental understanding of a company's AIS needs and the strategic
users of an AIS as a result of outsourcing is referred to as
A) focus reduction.
B) loss of control.
C) reduced competitive advantage.
D) unfulfilled goals.
Answer: C
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4) The risk of the potential high cost to reverse outsourcing is referred to as

A) focus reduction.
B) locked-in system.
C) reduced competitive advantage.
D) unfulfilled goals.
Answer: B
5) Why might outsourcing cause employee resistance?

A) Outsourcing often allows a company to better use its assets and scarce resources.
B) Outsourcing can lower a company's overall IS costs.
C) Outsourcing often facilitates downsizing.
D) Outsourcing helps eliminate the peaks and valleys of system usage.
Answer: C
Difficulty: Easy
6) The unauthorized disclosure of sensitive information is an example of what risk associated

with outsourcing?
A) A locked-in system.
B) A loss of control.
C) A reduced competitive advantage.
D) Inflexibility.
Answer: B
Difficulty: Easy
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7) Benathir Donathat, director of the project committee, has received approval from management
for implementation of a new accounting information system. After putting out an RFP, the
committee settled on a Web-based application service provider that will manage all hardware and
software required by the system, with fees based on usage. The committee decided to go with
A) canned software.
D) an end-user developed system.
Answer: C
Difficulty: Easy
8) Sabella Cycles declared bankruptcy in 2013 and has since closed 5 outlets, or approximately
25% of its locations. Sabella needs to reduce the costs of operating the firm's information
systems. To accomplish this, Sabella might decide to
A) replace the existing system with one of a smaller scale.
B) customize the existing system.
C) outsource system operations.
D) purchase a canned software system.
Answer: C
9) In which of the following cases is outsourcing likely to be the best solution to the firm's data
processing needs?
A) Peterson International is a trenchcoat wholesaler to retailers around the world. Sixty percent
of sales orders are taken during the months of August and September. Peterson needs a system to
manage online ordering and fulfillment.
B) Battlegoat Investment Strategies manages investors' portfolios and provides services to
wealthy customers. The firm needs a system that will pull together selected investment data from
a variety of sources and that allows account managers to prepare customized reports.
C) Yachtman Limited is in the business of buying businesses, managing them for a few years,
then selling them for a profit. The firm requires a flexible system that will allow it to manage the
types of businesses it controls.
D) Desalinas LLC, manages the construction of desalinization plants. It needs a system that will
allow it to manage the construction process from bid to billing.
Answer: A
10) Describe outsourcing and identify the two types of outsourcing agreements.
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Answer: Outsourcing is the hiring of an outside company to handle all or part of a company's
data processing activities. There are two main types of outsourcing agreements: Mainframe
outsourcing and Client/server or desktop outsourcing. Mainframe outsourcing is when the
outsourcer buys the client's equipment, hires the client's employees, and operates on the client's
site or connects the system to the outsourcer's computer. Client/server or desktop outsourcing is
when a particular service, segment of business, function, or PC support is outsourced.
11) Discuss how information system outsourcing can provide the organization with both a
business solution and asset management.
Answer: Many companies have come to view information system outsourcing as not merely an
IS solution but a true business solution. Outsourcing has become a plausible business solution
because it allows the organization to focus and put its concentration into its core competencies.
This transfer of IS responsibilities can be liberating to the organization, as it frees up more
resources to devote to the mainstay of its business efforts. The viewpoint is that a company
should be allowed to do what it does best; so, the outsourcer is better at IS operations and
management, while the organization is better in its areas or core competencies. Many
organizations treat outsourcers as business partners, working closely to meet the strategic
business objectives of the organization. An additional benefit of IS outsourcing is asset
management. Many organizations tie up millions of dollars in their IS efforts, and the attempt to
keep up with technological improvements can create a steady drain on cash reserves and other
organizational resources. One way to significantly improve an organization's cash position and
reduce annual expenses is to sell off IS assets, or lease them to the outsourcing organization. This
can have positive benefits for both the organization and outsourcing vendor as well, as it helps
the organization with cash and expense management, and can provide an outsource vendor with
the equipment (and even people) it needs to properly service its client.
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12) WorldWide Supermarket, a grocery store with 5,000 locations around the world surprised
financial markets by announcing that it was selling all of its computers to CompuService and
hiring the firm to operate and manage the supermarket's system. WorldWide Supermarket just
engaged in which type of outsourcing agreement?
A) A locked-in agreement.
B) A mainframe agreement.
C) A client/server agreement.
D) A cloud computing agreement.
Answer: B
13) All of the following are reasons a company might choose to outsource its systems operations
and maintenance except
A) increased flexibility.
B) increased innovation.
C) reduce costs.
D) foster competition.
Answer: B
14) According to a survey discussed in your textbook, what percentage of outsourcing

experiences have been labeled as "disasters" by company executives?
A) 5%.
B) 17%.
C) 33%.
D) 50%.
Answer: B
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15) According to your textbook, what percentage of outsourcing agreements have been described
as failure or as major disappointments?
A) 5% - 10%.
B) 10% - 25%.
C) 25% to 50%.
D) Greater than 50%.
Answer: C
16) According to a survey discussed in your textbook, what percentage of companies outsourced
some or all of their information systems?
A) 5%.
B) 25%.
C) 50%.
D) Greater than 50%.
Answer: D
17) Which or the following does not typically cause outsourcing failures?
A) Lukewarm company buy-in.
B) Blind imitation of competitors.
C) Ill-defined outsourcing agreements.
D) Downsizing.
Answer: D
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18) Describe the advantages and disadvantages of outsourcing.

Answer: There are a number of significant advantages to outsourcing: 1. A business solution.
Outsourcing is a viable strategic and economic business solution that allows companies to
concentrate on core competencies. 2. Asset utilization. Organizations improve their cash position
and reduce expenses by selling assets to an outsourcer. 3. Access to greater expertise and better
technology. 4. Lower costs. 5. Less development time. Experienced industry specialists develop
and implement systems faster and more efficiently than in-house staff. Outsourcers also help cut
through systems development politics. 6. Elimination of peaks-and-valleys usage. Seasonal
businesses require significant computer resources part of the year, and little the rest of the year.
7. Facilitation of downsizing. Companies that downsize often have an unnecessarily large AIS
function.
Companies that outsource often experience some of the following drawbacks: 1.Inflexibility.
Many contracts are for 10 years. If a company is dissatisfied or has structural changes, the
contract is difficult or costly to break. 2. Loss of control. A company runs the risk of losing
control of its system and its data. 3. Reduced competitive advantage. Companies may lose sight
of how their AIS produces competitive advantages. Outsourcers are not as motivated as their
clients to meet competitive challenges. Companies can mitigate this problem by outsourcing
standard business processes (payroll, cash disbursements, etc.) and customizing those that
provide competitive advantages. 4. Locked-in system. It is expensive and difficult to reverse
outsourcing. A company may have to buy new equipment and hire a new data processing staff,
often at prohibitive costs. 5. Unfulfilled goals. Critics claim some outsourcing benefits, such as
increased efficiency, are a myth. 6. Poor service. Common complaints are that responsiveness to
changing business conditions is slow or nonexistent and migration to new technologies is poorly
planned. 7. Increased risk. Outsourcing business processes can expose a company to significant
operational, financial, technology, strategy, personnel, legal, and regulatory risks.
4 Explain how business process management, prototyping, agile development, and computer-
aided software engineering can help improve system development.
1) Business Process Management views business processes as

A) strategic organizational assets.
B) a series of small tasks to be closely managed.
C) related activities that, once perfected, should be managed on an exception basis.
D) subsets of organizational strategy that should not be owned by any specific person or
department.
Answer: A
Concept: Methods for improving systems development
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2) Which of the following is not an element of managing a business process "end to end"?
A) Identifying process experts to oversee specific functions across units.
B) Designating a process owner.
C) Setting performance standards.
D) Establishing control and monitoring processes.
Answer: A
3) Which of the following is not true about business process management (BPM) and enterprise
resource planning (ERP) systems?
A) ERP systems encompass all functions and processes in an organization, but BPM systems are
implemented at process or unit levels in an organization.
B) BPM systems are process-centered, but ERP systems are data-centered.
C) Organizations can use both ERP and BPM systems at the same time.
D) ERP and BPM systems rely heavily on technology for communication and coordination.
Answer: A
4) Which of the following is not one of the ways in which a Business Process Management
System can improve internal control?
A) Innovative technology allows access and authorization controls to be programmed at the
transaction level.
B) Documents or transactions that require approval can be electronically routed to a manager.
C) Process rules are used to alert users when actions must be taken.
D) All actions and processes are monitored and documented in a process log for periodic review.
Answer: A
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5) Describe each of the four important principles underlying Business Process Management
(BPM).
Answer: Business processes can produce competitive advantages through innovative
processes and technology to respond to changing consumer, market and regulatory demands
before competitors are able to respond. Business processes must be managed end to end,
meaning a process owner should have responsibility to set performance standards, control and
monitor processes, and communicate with other functional units. Business processes should be
agile, which emphasizes continuous improvement and adaptability. Business processes must be
aligned with organizational strategy and needs to be effective and efficient.
6) Business process management (BPM) evolved from business process reengineering (BPR)
because BPR had such a high success rate that firms wanted to expand it to cover all aspects of a
firm's business process operations.
Answer: FALSE
Difficulty: Easy
7) Which of the following is a one-time event that can yield dramatic performance
improvements?
A) Business process reengineering (BPR).
B) Business process management (BPM).
C) Business process innovation (BPI).
D) Business process diagramming (BPD).
Answer: A
Difficulty: Easy
8) Which of the following technology allows for a continuous approach to improve and to
optimize business processes?
A) Business process reengineering (BPR).
B) Business process management (BPM).
C) Business process innovation (BPI).
D) Business process diagramming (BPD).
Answer: B
Difficulty: Easy
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9) Which of the following is a system that automates and facilitates business process
improvements throughout the system development life cycle?
A) Business process reengineering system (BPRS).
B) Business process innovation system (BPIS).
C) Business process management system (BPMS).
D) Business process diagramming system (BPDS).
Answer: C
Difficulty: Easy
10) Identify a key advantage of a business process management system (BPMS) as compared to
an event-based system.
A) Ease of use.
B) Increase processing speed.
C) Cost saving.
D) Built in audit trail.
Answer: D
11) The basic premise of ________ is that it is easier for people to express what they like or
dislike about an existing system than to imagine what they would like in a system.
A) modified software
B) outsourcing agreements
C) prototyping
D) turnkey systems
Answer: C
Difficulty: Easy
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12) Which statement below regarding prototyping is false?

A) Prototypes are considered "first drafts," which are quickly built and intended to be discarded
when the real system is finished.
B) Developers who use prototyping still go through the systems development life cycle.
C) Prototypes help developers and end users make conceptual and physical design decisions.
D) Prototyping allows developers to condense and speed up parts of the analysis and design
phases.
Answer: A
13) The first step in developing a prototype emphasizes

A) developing a good prototype into a fully functional system.
B) speed and low cost rather than efficiency of operation.
C) that users identify changes to be made in an iterative process.
D) what output should be produced rather than how it should be produced.
Answer: D
Difficulty: Easy
14) Identify the system below where development would not likely benefit from treating a
prototype.
A) Decision support systems.
B) Executive information systems.
C) Expert systems.
D) Systems that cross a number of organizational boundaries.
Answer: D
15) Identify one disadvantage in prototyping.

A) Developers may shortchange the testing and documentation process.
B) Errors are likely to be detected and eliminated early in the development process.
C) Prototyping may be less costly than other approaches.
D) Prototyping usually produces a better definition of user needs than other approaches.
Answer: A
Difficulty: Easy
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16) Firms should consider preparing a software prototype if the software

A) will be used for a critical function like accounts receivable.
B) automates an unstructured or semi-structured task.
C) can be produced using expertise available in-house.
D) is available as a canned package.
Answer: B
17) Firms should consider preparing a software prototype if the application

A) will be used for a critical function like inventory management.
B) automates a structured task.
C) can be produced using outside developers.
D) inputs and outputs are not clearly defined.
Answer: D
18) As part of the bidding process required for bidding on providing a new software system to
Kinect Incorporated, Thorton Wilder prepared diagrams that represent input and output
screenshots. These diagrams are an example of
A) CASE.
B) an operational prototype.
C) a RFP.
D) a nonoperational prototype.
Answer: D
19) As part of the bidding process required for bidding on providing a new software system to
Kinect Incorporated, Thorton Wilder prepared a functional program that simulated the new
system's input and output interface. This program is an example of
A) CASE.
B) an operational prototype.
C) a RFP.
D) a nonoperational prototype.
Answer: B
Difficulty: Easy
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20) Describe prototyping and identify when prototyping is appropriate. Identify the steps
involved in prototyping. Discuss the advantages and disadvantages of prototyping.
Answer: Prototyping is the development of a simplified working model (prototype) of an
information system. It is a "first draft," that is quickly and inexpensively built and provided to
users for testing. Prototyping is appropriate if: There is uncertainty about the existing AIS. The
questions to ask are unclear. The final AIS is not clearly visualized. Speed is an issue. There is a
high likelihood of failure. The system is a decision support system, executive information
system, expert system, or information retrieval system. Suitable when the system involves
experimentation and trial-and-error development. Suitable when the system requirements evolve
as the system is used. Prototyping is not appropriate if: The system is large or complex and
serves major organizational components or crosses a number of organizational boundaries. Steps
in developing a prototype: Identify basic system requirements based on users' needs for what
output should be produced. Develop initial prototype emphasizing speed and low cost instead of
efficiency of operation and demonstrate it for users. Make changes needed as identified by users,
may take several iterations. Develop and use the user-approved system.
Advantages of prototyping: Better definition of user needs. Higher user involvement and
satisfaction; faster development time; fewer errors; more opportunity for changes; and less costly
to the organization. Disadvantages of prototyping: significant user time; less efficient use of
system resources; incomplete system development; inadequately tested and documented systems;
negative behavioral reactions; never-ending development.
21) Prototyping is often appropriate when

A) there is a low level of uncertainty.
B) it is clear which questions need to be addressed.
C) there is a high likelihood of failure.
D) there are limited financial resources available.
Answer: C
22) Which is not a problem with CASE technology?

A) cost
B) incompatibility
C) lack of system documentation
D) unmet expectations
Answer: C
Difficulty: Easy
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23) Which of the following were CASE tools not designed to do?
A) replace skilled designers
B) plan, analyze, design, program, and maintain an information system
C) automate important aspects of the software development process
D) enhance the efforts of managers in understanding information needs
Answer: A
Difficulty: Easy
24) Which of the following is an advantage of CASE?

A) It exhibits a high degree of cross-system compatibility.
B) It is an inexpensive technology that is accessible to small businesses.
C) Documentation is generated automatically.
D) It enhances the congruence between user expectations and the final system.
Answer: C
25) Describe computer-aided software (or systems) engineering (CASE) and identify the
advantages and disadvantages of CASE?
Answer: CASE refers to an integrated package of computer-based tools that automate important
aspects of the software development process. CASE tools can be used to plan, analyze, design,
program, and maintain an information system. CASE tools do not replace skilled designers, but
they provide effective support for all phases of the SDLC. Advantages — Improved productivity,
improved program quality, cost savings, improved control procedures, and simplified
documentation. Disadvantages — Incompatibility, cost, and unmet expectations.
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26) Describe the conditions that favor the use of prototyping.

Answer: The conditions that favor the use of prototyping include: 1. Users' needs are not
understood, change rapidly, or evolve as the system is used. 2. System requirements are hard to
define. 3. System inputs and outputs are not known. 4. The task to be performed is not well
structured. 5. Designers are uncertain about what technology to use. 6. The system is crucial and
needed quickly. 7. The risk associated with developing the wrong system is high. 8. User
reactions are especially important development considerations. 9. Many design strategies must
be tested. 10. The design staff has little experience developing the system or application. 11. The
system will be used infrequently (processing efficiency is not a major concern).
27) Many systems development projects requirements do not change because users often have a
good understanding of all the things they want the software to do.
Answer: FALSE
28) A guiding philosophy and a set of principles for developing information systems in an
unknown, rapidly changing environment is called
A) agile development.
B) scrum methodology.
C) scrum development.
D) user stories.
Answer: A
29) A software development methodology where a team works together in an intense but
relatively short iterative and incremental scrum process to reach a common development goal,
with team members meeting daily in face-to-face communication, until development is
concluded is called
D) user stories.
Answer: B
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30) A process that embraces customers frequently changing their minds about what they need or
want and with the focus on flexibility, responding to new requirements, adapting to evolving
changes in technology, and quickly delivering a system the customer can evaluate is called
D) user stories.
Answer: C
31) A description of something a user wants to include in the system written by the product
owner is called
D) user stories.
Answer: D
32) A software development methodology designed to produce higher-quality software more

productively by taking the beneficial elements and best practices of traditional software
development to "extreme" levels is called
A) extreme prototyping.
B) extreme development.
C) extreme processing.
D) extreme programming.
Answer: D
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33) The four phases of the unified process software development framework are
A) inception, transition, construction, and elaboration.
B) inception, transition, elaboration, and construction.
C) inception, construction, elaboration, and transition.
D) inception, elaboration, construction, and transition.
Answer: D
34) Describe the important characteristics of extreme programming (XP).

Answer: Some of the more important characteristics of extreme programming include: 1. Uses
two-person programming teams. 2. Recognizes that changes to systems requirements are a
normal and accepted occurrence in software development that should be expected and planned
for as time passes and system needs are better understood. XP embraces changes and abandons
the idea that a stable set of requirements can be produced during the initial planning phase of
development. 3. Uses short development cycles, culminating in frequent software releases, so
that there are many checkpoints that allow new customer requirements to be introduced. Makes
many small, incremental changes, rather than a few big changes, allowing the customer more
control over the software development process. It reduces the cost of changes and improves
development productivity. 4. Starts with the simplest solution and only adds extra functionality
as needed. Trying to design and code uncertain or complex future requirements might delay
crucial features and risks spending resources on features that might not be needed or desired. 5.
Uses code to communicate thoughts about complex or hard to understand programming
problems. Often, clear and concise code can better explain a problem than a written or oral
description of the problem. Other programmers can give feedback on this code by coding their
thoughts about the problem. 6. Requires programmers to listen to customer needs and understand
their business processes so they can provide customer feedback about the technical aspects of
how a problem can or cannot be solved. 7. Tests extensively every piece of code that is written
before developing additional features to eliminate as many coding flaws as possible. 8. Requires
frequent and prompt communication and feedback between customers, developers, and testers.
Customers communicate their needs and help develop the acceptance tests that occur every few
weeks so they can easily correct design flaws and steer development. Developers estimate the
costs and the time required to implement new requirements and communicate them to customers.
Developers need feedback from testers to correct errors or weaknesses found during testing. 9.
Organizes system logic to prevent system dependencies so that changes in one part of the system
will not affect other parts of the system.
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Financial Accounting (University of Houston-Victoria)

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Accounting Information Systems, 15e (Romney)

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23) What is a benchmark problem?

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27) Explain the concept of an application service provider.

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30) Who is typically responsible for installing turnkey systems?

31) ________ are one example of a cloud computing solution.

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37) Explain the importance of using a request for proposal.

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2 Explain how information system departments develop custom software.

1) Which approach systems acquisition is generally costly and labor-intensive?

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4) Firms should consider developing custom software only if

6) Discuss how an organization can develop custom software.

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10) What is the basic function of a help desk?

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14) Which of the following about end-user computing is true?

15) A second-line help desk operator would most likely

16) End-user computing is likely to result in a(n)

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18) Describe the purposes of a help desk.

20) End-user development is inappropriate for which types of systems?

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23) The IT department should be given control of end-user computing (EUC).

24) End-user computing can eliminate many of the analyst-programmer communication

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26) Why are end-user created systems often poorly documented?

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1) How does outsourcing improve an organization's utilization of assets?

2) Which of the following is not a benefit of outsourcing?

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4) The risk of the potential high cost to reverse outsourcing is referred to as

5) Why might outsourcing cause employee resistance?

6) The unauthorized disclosure of sensitive information is an example of what risk associated

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14) According to a survey discussed in your textbook, what percentage of outsourcing

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18) Describe the advantages and disadvantages of outsourcing.

1) Business Process Management views business processes as

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12) Which statement below regarding prototyping is false?

13) The first step in developing a prototype emphasizes

15) Identify one disadvantage in prototyping.

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16) Firms should consider preparing a software prototype if the software