SUGGESTED ANSWERS TO DISCUSSION QUESTIONS

4.1 Databases are possible because of their database management system (DBMS). As shown in Figure
4.2, the DBMS is a software program that sits between the actual data stored in the system and the
application programs that use the data. As shown in Figure 4.4, this allows users to separate the way
they view the data (called the logical view) from the way the data is actually stored (the physical
view). The DBMS interprets the users' requests and retrieves, manipulates, or stores the data as
needed. The two distinct views separate the applications from the physical information, providing
increased flexibility in applications, improved data security, and ease of use.

In a database system, the manager will rarely need to understand or be familiar with the physical view
of the data. Nor, in most instances, will the internal auditor and the programmer as most everything
they do involves the logical view of the data.

If accountants understand logical data structures and the logical view of the data, they are better able
to manage, use, and audit a database and its data.

4.2 A major difference between spreadsheets and databases is that spreadsheets are designed primarily
to handle numeric data, whereas databases can handle both text and numbers. Consequently, the query
and sorting capabilities of spreadsheets are much more limited than what can be accomplished with
a DBMS that has a good query language.

Accountants’ familiarity with spreadsheets might hinder their ability to design and use relational
DBMS because many links in spreadsheets are preprogrammed and designed in, whereas a well-
designed relational database is designed to facilitate ad-hoc queries.

Accountants’ familiarity with spreadsheets sometimes leads them to use a spreadsheet for a task that
a database could handle much better. Over the years, the Journal of Accountancy has published a
number of very good articles on how to use databases and when to use databases and when to use
spreadsheets. These articles can be found on the Journal’s website: http://www.journalofaccountancy.com/

4.5 Bad data costs businesses over $600 billion a year. Some people estimate that over 25% of business
data is inaccurate or incomplete. In addition, incorrect database data can lead to bad decisions,
embarrassment, and angry users. The text illustrated this with the following examples:

 For quite some time, a company sent half its catalogs to incorrect addresses. A manager finally
investigated the large volume of returns and customer complaints and corrected the customer
addresses in the database. He saved the company $12 million a year.
 Valparaiso, Indiana used the county database to develop its tax rates. After mailing the tax
notices, it was discovered that a $121,900 home was valued at $400 million. Due to the $3.1
million property tax revenue shortfall, the city, the school district, and governmental agencies
had to make severe budget cuts.

Managing data is not going to get any easier as the quantity of data generated and stored doubles
every 18 months.

4.6 Virtually all mainframes and servers use database technology, and database use in personal computers
is growing rapidly. Most accountants are involved with databases through data entry, data processing,
querying, or auditing. They also develop, manage, or evaluate the controls needed to ensure database

1
Ch. 4: Relational Databases

integrity. Databases provide organizations with the following benefits:

 Data integration. Master files are combined into large “pools” of data that many application
programs access. An example is an employee database that consolidates payroll, personnel, and
job skills master files.
 Data sharing. Integrated data are more easily shared with authorized users. Databases are easily
browsed to research a problem or obtain detailed information underlying a report. The FBI, which
does a good job of collecting data but a poor job of sharing it, is spending 8 years and $400
million to integrate data from their different systems.
 Minimal data redundancy and data inconsistencies. Because data items are usually stored only
once, data redundancy and data inconsistencies are minimized.
 Data independence. Because data and the programs that use them are independent of each other,
each can be changed without changing the other. This facilitates programming and simplifies
data management.
 Cross-functional analysis. In a database system, relationships, such as the association between
selling costs and promotional campaigns, can be explicitly defined and used in the preparation of
management reports.

SUGGESTED ANSWERS TO THE PROBLEMS

4.2 a. A database administrator defines the logical structure of the database

The DDL - this is the language used to define the database.
b. The controller requests a cost accounting report containing a list of all employees being
paid for more than 10 hours overtime in a given week.
The DQL - this is an example of a query.
c. A programmer develops a program to update the fixed-assets records stored in the
database.
The DML - this is the language used to actually process transaction data and update the
database.
d. The human resources manager requests a report noting all employees who are retiring
within five years.
The DQL - another example of a task that involves querying the database.
e. The inventory serial number field is extended in the inventory records to allow for
recognition of additional inventory items with serial numbers containing more than
10 digits.
The DDL and the DML - the former to alter the structure, the latter to make the change.
f. A user develops a program to print out all purchases made during the past two weeks.
The DQL – this listing can be produced by a query.
g. An additional field is added to the fixed-asset records to record the estimated salvage
value of each asset.
The DDL and the DML - the former to add the field, the latter to enter data in it.

4.3 a.
Table Name Primary Key Foreign Keys Other Attributes
Inventory Item Number Description
Quantity on Hand
 Purchases Purchase order number Vendor number Date of purchase
Purchasing Agent Total amount of purchase
(employee number)
Purchases- Item number Quantity purchased
Inventory Purchase order number Unit cost (actual)
Extended amount
Vendor Vendor number Vendor name
Vendor address
Employees Employee number Employee name

Extended amount and Total amount of purchase do not have to be stored in the database as they can be
calculated from other values. Extended amount is Quantity purchased x Unit cost. Total amount of
purchase is the sum of all the extended amounts for all items on a particular purchase order.

4.8
INVOICE TABLE
Invoice# (PK) Date OrderDate CustomerID (FK)

INVOICE-INVENTORY TABLE
Invoice# (PK/FK) Item# (PK/FK) Quantity

CUSTOMER TABLE
CustomerID (PK) CustomerName

ITEM TABLE
Item# (PK) Description
Note: PK-Primary Key, FK – Foreign Key, PK/FK – Primary Key/Foreign Key

4.9
PART TABLE
Part # (PK) Description Unit Price

PURCHASE ORDER TABLE

Purchase Order # (PK) Vendor # (FK) Purchase Order Date

VENDOR TABLE
Vendor # (PK) Vendor Name Vendor Address

PURCHASE-PART TABLE
Purchase Order # (PK/FK) Part # (PK/FK) Quantity Ordered
Note: PK-Primary Key, FK – Foreign Key, PK/FK – Primary Key/Foreign Key

4.11
1. b, c 6. a, c
2. b, d 7. a, c, d
3. c, e. 8. a, b, d
4. b, d 9. b, e
5. c, e