Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Question

Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Edition 7ISBN: 978-1111219512

Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Edition 7ISBN: 978-1111219512

Exercise 7

Spreadsheet Assignment
A type of computer fraud that has been perpetrated at several banks and financial institutions is referred to as the salami technique, so named because it "slices" away tiny pieces of data. All calculated interest amounts are rounded down, and the fraction of a cent shaved from each computation is transferred to an account belonging to the perpetrator (or an accomplice), who is usually an applications developer in the information services department.
Consider the following account balances from a representative sample of one-tenth of 1 percent of the population of accounts at the Third National Bank:
$Spreadsheet Assignment A type of computer fraud that has been perpetrated at several banks and financial institutions is referred to as the salami technique, so named because it slices away tiny pieces of data. All calculated interest amounts are rounded down, and the fraction of a cent shaved from each computation is transferred to an account belonging to the perpetrator (or an accomplice), who is usually an applications developer in the information services department. Consider the following account balances from a representative sample of one-tenth of 1 percent of the population of accounts at the Third National Bank: Required: a. Prepare a spreadsheet to calculate the approximate amount stolen over the course of 1 year if the bank pays 5.5-percent annual interest, compounded monthly. Assume that no additional deposits were made to the accounts and no withdrawals of interest or principal were made. One approach to setting up your spreadsheet is shown below for the month of January. You will need to key in the appropriate formulas or functions to derive the amounts for the last four columns. Use the spreadsheet's round-down function for the Rounded Interest column. January Data: Your completed table for January should be similar to the following table: January Data: To calculate the data for February, copy the rows for January to the blank rows below the data for January and label the copied data February Data. In the February data, delete the contents of the cells in the Balance column. For the balance of account 1, enter a formula to add the January balance of account 1 to the rounded interest amount for account 1 in January. Copy this formula to calculate the balances for accounts 2 through 10. Also, in the February data, modify the Cumulative Amount Transferred in the first row to include the total cumulative amount transferred in January. To calculate the data for March, copy the rows for February to the blank rows below the data for February. No changes need to be made for the March data except for the label, which should be March Data. Repeat what you did for March for April through December. b. What changes to the facts stated in the assignment would result in larger profits to the perpetrator? Do the sizes of the account balances influence the profitability of the scheme?$
Required:
a. Prepare a spreadsheet to calculate the approximate amount stolen over the course of 1 year if the bank pays 5.5-percent annual interest, compounded monthly. Assume that no additional deposits were made to the accounts and no withdrawals of interest or principal were made.
One approach to setting up your spreadsheet is shown below for the month of January. You will need to key in the appropriate formulas or functions to derive the amounts for the last four columns. Use the spreadsheet's round-down function for the Rounded Interest column.
January Data:
$Spreadsheet Assignment A type of computer fraud that has been perpetrated at several banks and financial institutions is referred to as the salami technique, so named because it slices away tiny pieces of data. All calculated interest amounts are rounded down, and the fraction of a cent shaved from each computation is transferred to an account belonging to the perpetrator (or an accomplice), who is usually an applications developer in the information services department. Consider the following account balances from a representative sample of one-tenth of 1 percent of the population of accounts at the Third National Bank: Required: a. Prepare a spreadsheet to calculate the approximate amount stolen over the course of 1 year if the bank pays 5.5-percent annual interest, compounded monthly. Assume that no additional deposits were made to the accounts and no withdrawals of interest or principal were made. One approach to setting up your spreadsheet is shown below for the month of January. You will need to key in the appropriate formulas or functions to derive the amounts for the last four columns. Use the spreadsheet's round-down function for the Rounded Interest column. January Data: Your completed table for January should be similar to the following table: January Data: To calculate the data for February, copy the rows for January to the blank rows below the data for January and label the copied data February Data. In the February data, delete the contents of the cells in the Balance column. For the balance of account 1, enter a formula to add the January balance of account 1 to the rounded interest amount for account 1 in January. Copy this formula to calculate the balances for accounts 2 through 10. Also, in the February data, modify the Cumulative Amount Transferred in the first row to include the total cumulative amount transferred in January. To calculate the data for March, copy the rows for February to the blank rows below the data for February. No changes need to be made for the March data except for the label, which should be March Data. Repeat what you did for March for April through December. b. What changes to the facts stated in the assignment would result in larger profits to the perpetrator? Do the sizes of the account balances influence the profitability of the scheme?$
Your completed table for January should be similar to the following table:
January Data:
$Spreadsheet Assignment A type of computer fraud that has been perpetrated at several banks and financial institutions is referred to as the salami technique, so named because it slices away tiny pieces of data. All calculated interest amounts are rounded down, and the fraction of a cent shaved from each computation is transferred to an account belonging to the perpetrator (or an accomplice), who is usually an applications developer in the information services department. Consider the following account balances from a representative sample of one-tenth of 1 percent of the population of accounts at the Third National Bank: Required: a. Prepare a spreadsheet to calculate the approximate amount stolen over the course of 1 year if the bank pays 5.5-percent annual interest, compounded monthly. Assume that no additional deposits were made to the accounts and no withdrawals of interest or principal were made. One approach to setting up your spreadsheet is shown below for the month of January. You will need to key in the appropriate formulas or functions to derive the amounts for the last four columns. Use the spreadsheet's round-down function for the Rounded Interest column. January Data: Your completed table for January should be similar to the following table: January Data: To calculate the data for February, copy the rows for January to the blank rows below the data for January and label the copied data February Data. In the February data, delete the contents of the cells in the Balance column. For the balance of account 1, enter a formula to add the January balance of account 1 to the rounded interest amount for account 1 in January. Copy this formula to calculate the balances for accounts 2 through 10. Also, in the February data, modify the Cumulative Amount Transferred in the first row to include the total cumulative amount transferred in January. To calculate the data for March, copy the rows for February to the blank rows below the data for February. No changes need to be made for the March data except for the label, which should be March Data. Repeat what you did for March for April through December. b. What changes to the facts stated in the assignment would result in larger profits to the perpetrator? Do the sizes of the account balances influence the profitability of the scheme?$
To calculate the data for February, copy the rows for January to the blank rows below the data for January and label the copied data "February Data." In the February data, delete the contents of the cells in the Balance column. For the balance of account 1, enter a formula to add the January balance of account 1 to the rounded interest amount for account 1 in January. Copy this formula to calculate the balances for accounts 2 through 10. Also, in the February data, modify the Cumulative Amount Transferred in the first row to include the total cumulative amount transferred in January.
To calculate the data for March, copy the rows for February to the blank rows below the data for February. No changes need to be made for the March data except for the label, which should be "March Data." Repeat what you did for March for April through December.
b. What changes to the facts stated in the assignment would result in larger profits to the perpetrator? Do the sizes of the account balances influence the profitability of the scheme?

Explanation

Verified

a.
Prepare a spread sheet
For instance,...