AIM 4343 Accounting Information for Decision Analysis

Fall 2005

Instructor

Rong Huang
Ph.D. Candidate
Accounting and Information Management
School of Management
The University of Texas at Dallas
Office: SOM 4.232
Ph: 972-883-2334
Fax: 972-883-6811
E-Mail: rxh012600@utdallas.edu
Office Hours: Wednesdays 2-5 PM.

Course Objectives

The use of information systems (IS) and technology presents unique opportunities and
challenges for managers of modern enterprises. Understanding the costs, benefits, risks
and accounting implications of information systems and technology for their
organizations would help managers effectively initiate, plan, control and evaluate IS and
technology projects.

Many issues and decisions surrounding the management of information systems and
technology can be effectively analyzed using a quantitative approach. Traditional
analytical tools such as cost-benefit analysis, quantitative risk assessment, scenario
analysis, regression, cost-volume-profit analysis, discounted cash flow analysis, real
options analysis etc., can be effectively adapted towards this purpose. This course is
intended to help students apply these quantitative methods towards managerial decision-
making in settings involving information systems and technology.

Two aspects of the course that will be particularly emphasized to enhance the learning
experience include: (1) case study approach, which presents real-world settings involving
information systems and techno logy, and (2) numerical assignments, which provide
ample opportunities for detailed discussions. The purpose of such a two-tiered course
structure is to help students develop both broadened perspectives and specialized hands-
on knowledge and skills.

Instruction Method

The course will rely on problem solving as the main pedagogical tool. It will be
supplemented with the case method for some topics. A typical class session will involve
a lecture and discussion about the topic under consideration, a description of the
accounting and other methodological issues involved, hands on problem solving of the
numerical exercise assigned for the session and a preview of the subsequent topic.
You are expected to come to class fully prepared to discuss the day’s assignments,
readings and cases. Being prepared to discuss the assignments means having read the
assignment in detail and making a preliminary attempt at organizing the data provided
and understanding the decision context. Being prepared to discuss the readings and cases
means having read the readings, cases and exhibits personally and having organized a set
of notes you can draw on during the class. Regular class attendance is absolutely
essential and will form a substantial portion of the class participation grade. I will take
attendance starting from the class of 8/19/05.

Students who want to do well in this course should, throughout the semester on a
consistent basis, assiduously follow the routine of reading (before class), listening and
participating (during class) and reflecting (on the material after class). Students who
have followed such a routine on a consistent basis have always performed significantly
better than those who did not adopt a systematic approach.

During the semester, I will supplement the cases and readings with additional notes and
exercises. These additional notes and exercises will be posted in WebCT. School of
Management prohibits the distribution of handouts in class. It is your responsibility to
download and print these notes and extra problems and bring them to class.
It is absolutely necessary that you periodically check WebCT so that you are up to date
with all the course materials posted on the web.

Required Materials:

A coursepack containing cases and readings is available from the University bookstore/
Off campus Books.

Grading:

Quizzes (5x5) 25%

Attendance/Class Participation 10%
Homework Assignments 15%
Exam 1 25%
Exam 2 25%

Quizzes:

There will be five quizzes. The primary objective behind the quizzes is to ensure that
you are working on the course material on a consistent basis throughout the semester. No
makeup quizzes will be given. Each quiz will be about 20-30 minutes in duration.

Class Participation:

Regular class attendance and participation is essential for you to have a rewarding
learning experience in this course. The class participation grade will be based on
attendance, preparation, familiarity with the cases and reading materials, relevance and
insight reflected in classroom questions and commentary. An important criterion is your
contribution to the creation of a positive learning environment.

Homework Assignments:

I will provide these assignments to you two weeks before they are due. You can form
groups not exceeding three members for this purpose. Your submissions should be typed
or word-processed.

Exams:

There will be two exams, a midterm exam and a final exam. Please note the exam dates
and make your travel/vacation/wedding plans accordingly. The exams are not
cumulative and they will each be about 120-150 minutes long. They will test your
knowledge of the material covered in the lectures, assignments, readings and cases. No
make-up exams will be given except under extenuating circumstances arising from
medical or family emergencies.

Academic Honesty:

All students are expected to behave in accordance with academic integrity. Strict
adherence to the Policy on Cheating as stated in the Regents’ Rules and Regulations, part
One, Chapter VI, Section 3, Subsection 3.2, subdivision 3.22 is expected. This policy
reads:

Students are expected to be above reproach in all scholastic activities. Students who
engage in scholastic dishonesty are subject to disciplinary penalties, including the
possibility of failure in the course and dismissal from the university. Scholastic
dishonesty includes but is not limited to cheating, plagiarism, collusion, submission for
credit of any work or materials that are attributable in whole or in part to another person,
taking an examination for another person, any act designed to give unfair advantage to a
student or the attempt to commit such acts.

Course Schedule:

The class schedule for the course is provided in the next few pages.
 Class Schedule and Te aching Plan

(CP – Available in Coursepack; WEB – should be downloaded from WebCT)

Module 1 (8/19/05)

Lecture:
Cost Benefit Analysis for Technology Management -Introduction to course (WEB)

Should be ready to discuss:

1) Atlantic Insurance Group (WEB)
2) Tax-on-Web (WEB)

Module 2 (8/26/05)

Lecture:
Product recall decisions (WEB)

Should be ready to discuss:

The Intel Pentium Chip Controversy (A) (CP)

Module 3 (9/2/05)

Lecture:
Accounting for software development costs (FASB No. 86) and Adventurous Computer
Games Case (WEB)

Should be ready to discuss:

Adventurous Computer Games (CP)

Quiz I

Module 4 (9/9/05)

Lecture:
Evaluating an IT outsourcing decision— Prestige Telephone Company (WEB)

Should be ready to discuss:

Prestige Telephones (CP)

Module 5 (9/16/05)

Lecture:
Quantifying benefits from high quality cost management systems (WEB)

Should be ready to discuss:

Sandeesk (WEB)

Supplementary readings:
1) Instructions for simple regression ZIP file (WEB)
2) Instructions for multiple regression Word document (WEB)

Quiz II

Module 6 (9/23/05)

Lecture:
Quantifying benefits from investing in forecasting systems (WEB)

Should be ready to discuss:

Dell Call Center (WEB)

Module 7 (9/30/05)

Lecture:
Evaluating the impact of Enterprise Resources Planning (ERP) systems (WEB)

Should be ready to discuss:

Cisco Systems, Inc: Implementing ERP (CP)
Tektronix (WEB)

Supplementary readings:
ERP article (WEB)

Quiz III

Module 8 (10/7/05)

Exam 1

Module 9 (10/14/05)

Lecture:
Quantifying benefits from supply chain management systems (WEB)

Should be ready to discuss:

Snap First (WEB)
Module 10 (10/21/05)

Lecture:
Quantifying value of expert information (WEB)

Should be ready to discuss:

Decision Analysis: HBS 9-894-004 (CP)
Supplementary exercises (WEB)

Quiz IV

Module 11 (10/28/05)

Lecture:
Quantifying value of expert information (WEB)

Should be ready to discuss:

ZipZap Corporation (WEB)

Module 12 (11/4/05 and 11/11/05)

Lecture:
Justifying investments in technology and IT assets (WEB)

Should be ready to discuss:

Rosen Manufacturing (WEB)
Vignette (WEB)
Wells Fargo Online Financial Services (B) (CP)

Module 13 (11/11/05 and 11/18/05)

Lecture:
Valuation of entrepreneurial technology firms (WEB)

Should be ready to discuss:

Digital Everywhere, Inc. (CP)

Quiz V

Exam 2 – 12/2/05
 AIM 4343 – Accounting Information for Decision Analysis

Cousepack Details

Cases:

1) The Intel Pentium Chip Controversy (A): HBS Case 9-196-091

2) Adventurous Computer Games, Inc: HBS Case 9-199-020
3) Prestige Telephone Company: HBS Case 9-197-097
4) Cisco Systems -- Implementing ERP: HBS Case 9-699-022
5) Wells Fargo Online Financial Services (B): HBS Case 9-199-019
6) Digital Everywhere, Inc: HBS Case 9-298-099

Readings:

1) Decision Analysis: HBS 9-894-004