QUESTION 2

You are a systems consultant for Ernst, Price, and Deloitte, CPAs. At your country clubs annual golf tournament, Frank Fender, an automobile dealer, describes a proposal from Turnkey Systems and asks for your opinion. The commercial software system will handle inventories, receivables, payroll, accounts payable, and general ledger accounting. Turnkey personnel would install the $40,000 system and train Fenders employees. Select the disadvantages of using a turnkey system with commercial software for the organizations accounting system.

		Software modification may not be available or covered.
		Costs are reduced since it is not necessary to match software with hardware meaning that it is less likely that various items of hardware and software will be incompatible.
		Lack of control over design.
		Less expensive than internally built systems and the commercial software may be better priced.
		Increased vulnerability to continuity of the vendors business.
		Software or hardware may not be completely suited to companys needs.
		Takes less time and human resources to develop and run.
		One-source support for the entire system. The vendor cannot pass the responsibility for a problem off on someone else. A single vendor may also facilitate system start-up and conversion as well as training on how to use the system.
		Experts are available for both the commercial software and hardware.
		Warranties are usually available.