1. Why is it important to organizationally separate the accounting function from other functions of the organization?
2. What is the most likely system acquisition method—in-house, turnkey, backbone, or vendor-supported—for each of the following situations?
• A plumbing supply company with 12 employees that sells standard products to wholesale customers in a local community needs a system to manage its affairs.
• A major oil company with diverse holdings, complex oil leases, and esoteric accounting practices needs a system that can coordinate its many enterprises.
• A municipal government needs a system that complies with standard government accounting practices but can be integrated with other existing systems.
3. The REA model is based on the premise that “business data must not be preformatted or artificially constrained and must reflect all relevant aspects of the underlying economic events.” What does this mean and how is it applied?
4. ERP systems are composed of a highly integrated set of standardized modules. Discuss the advantages and potential disadvantages of this approach.