Reference no: EM132807411

HI5019 Strategic Information Systems for Business and Enterprise - Holmes Institute

Learning Outcome 1. Critically evaluate the purpose and role of accounting information systems in today's business environment.

Learning Outcome 2. Articulate the various transaction cycles, financial reporting, management reporting systems and e-commerce systems to technical and non-technical stakeholders.

Learning Outcome 3. Evaluate systems development methodologies and the role of accountants in system development projects.

Learning Outcome 4. Appraise the risks inherent in computer-based systems/ERP, including the role of ethics and the various internal control processes that need to be in place.

Learning Outcome 5. Critically evaluate the range of cultural, security, privacy and ethical issues facing individuals and organisations as a result of information systems.

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. The tutorial questions are available in the Tutorial Folder, for each week, on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills, and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial question for weeks 1 to 11 inclusive and submit these answers in a single document.

Question 1

ABC Limited is a manufacturing firm with a workforce of more than 100 employees. Mr Peter has recently joined the firm as the account payable clerk. Miss Emma is the accounting department head, and she is concerned about the cash disbursement system. Therefore, she has asked Mr Peter to analyse the firm's cash disbursement system and identify the internal control weaknesses from the system. Following is the description of the cash disbursement system.

In the temporary file, the account payable clerk receives the supplier's invoice and reconciles it with the purchase order. The accounts payable clerk records the purchase in the purchases journal from the clerk's computer terminal and records the liability by adding a record to accounts payable subsidiary ledger. The clerk then updates the inventory control and accounts payable control accounts in the general ledger. The purchases order and invoice are later filed in the department.

Each day, the clerk visually searches the accounts payable subsidiary ledger from the computer terminal for invoices that are due to be paid. The clerk prepares the cheque and records it in the digital cheque register. The negotiable portion of the cheque is mailed to the supplier, and a cheque copy is filed. The clerk then closes the liability in the accounts payable subsidiary ledger and updates the accounts payable control and cash accounts in the general ledger.

Required: Analyse the internal control weakness in the system.

Question 2

XYZ Limited is a clothing wholesaler that sells the name-brand clothing to department stores and boutique dress shops. Figure on Page No 4 describes the credit sales procedures of XYZ Limited. In particular, the Figure describes different business activities of four departments, including (1) Sales Department, (2) Accounting Department, (3) Warehouse/Shipping, and (4) Mailroom. Further, these activities are elaborated below.
The sales department received the customer orders by fax and email. You should be aware that these sales orders are usually unstandardized sales order (recall our discussion on the revenue cycle during the interactive tutorial for week 4). The sales clerk, who works on commission, performs the following tasks:
• approves the credit sales,
• calculates commission and discounts, and
• records the sales in the sales journal from the PC in the sales department.

After entering these records, the sales clerk then prepares three documents, including (1) a sales order,
(2) a customer invoice, and (3) a packing slip. These documents are forwarded to the department of accounting for further processing.

The accounting clerks received these documents and updates the account receivable subsidiary ledger. After updating this subsidiary ledger, the accounting clerk forwards the invoice to the customer. According to the prevailing standards, the accounting clerk forwards the sales order and packing slip to the warehouse/shipping department. Based on this given information, the warehouse/shipping clerk arranges the inventory and sends the inventory along with the packing slip to the carrier for shipment to the customer. Finally, the clerk updates the inventory subsidiary ledger and files the sales order in the department.

Cash receipts from customers go to the mailroom, which has one supervisor overseeing 32 employees performing similar tasks:

• a clerk opens the envelope containing the customer check and remittance advice,
• inspects the check for completeness,
• reconciles it with the remittance advice, and
• sends the remittance advice and check to the accounting department.

The accounting department clerk reviews the remittance advice and the checks, updates the AR subsidiary ledger, and records the cash receipt in the cash receipts journal. At the end of the day, the clerk updates the AR control, cash, and sales accounts in the general ledger to reflect the day's sales and cash receipts.

Required:
a) Describe the uncontrolled risk associated with this system as it is currently designed.
[Word Limit: Up to 200 words]
b) For each risk, describe the specific internal control weakness (s) in the system that causes or contributes to the risk.
[Word Limit: Up to 300 words]

Question 3

a) During the Week 2 Interactive Tutorials, we discussed the role of an active board of directors' audit committee from different aspects. In the light of that discussion, explain the importance of an active board of directors' audit committee to an organisation.
[Words Limit: Up to 200 words]

b) The given system flowchart elaborates the business activities involved in different departments, including (1) Sales Department, (2) Accounting Department, (3) Warehouse, (4) Shipping Department, and (5) Billing Department. The bottom part of this Figure indicates that the Sales Department sends the sales invoice to the Billing Department. Here, it is assumed that this sales invoice only contains non-financial information. For instance, the customer and quantity details. We have discussed the control weakness and the risk associated with these control weaknesses during the Week 4 interactive tutorials. Based on these control weaknesses and the associated risk, what types of frauds are possible in this business environment.
[Word Limit: Up to 200 words]

Question 4

After finishing your accounting degree, you joined an accounting firm. This is a medium-size accounting firm with a reasonable range of clients. You are in an engagement meeting with one of your clients, and your client's management raises some concerns. In particular, the management is concerned that the audit tests that you perform will disrupt operations. Your client has recently implemented a data warehouse. The management suggests that you draw the data for analytical reviews and substantive testing from the data warehouse instead of the operational database. Further, the management points out that operational data are copied weekly into the data warehouse, and all data you need are contained there.

Required: Based on the given scenario, outline your response to the management's proposal and mention any concerns you might have.

Question 5

The flowchart on Page No 7 illustrates the business activities of four departments, including (1) Production Planning and Control, (2) Work Centres, (3) Inventory Control, and (4) Cost Accounting. Examine these activities and determine any control threats. In particular, discuss the control problems, the possible dangers, and any corrective procedures you would recommend.
[Word Limit: Up to 300 words]

Part (b).
There is an ongoing debate on the elimination of receiving functions. One strand of accountants argues that the receiving department should be eliminated. Conversely, another strand of accountants is in favour of receiving department. Discuss the objective of eliminating the receiving function. Also, discuss the accounting and audit problems need to be resolved.
[Word Limit: Up to 200 words]

Question 6

After finishing Bachelor of Commerce, Miss Emma completed her Master of Computer Sciences (MCS) and started her career as a network engineer in XYZ Limited, Melbourne. She worked for six months in XYZ Limited. Unfortunately, she was fired from the firm last year. Due to the competitive market conditions, she could not find any position as a network engineer.

In 2018, she moved to Brisbane in search of a job. She was desperately working for the job when one of her roommates informed her about a vacant position for the post of account payable clerk in the ABC Limited. Miss Emma was successful in her interview, and she joined the ABC Limited as an account payable clerk. However, she did not disclose her technology background. Early on, Miss Emma established a reputation as a hard-working, enthusiastic, and reliable employee. She often works late and is dedicated to doing an excellent job. Her late-night presence in the company became a common occurrence that was at first appreciated by her boss, and then virtually went unnoticed. Overall, Miss Emma is considered the most hard-working employee of the company.

While working late, Miss Emma used her computer skills to install a sniffer program on the intranet to capture employee IDs and passwords. This information was beneficial for Miss Emma since she could play many roles and establish herself as a vendor, receiving clerk, cash disbursement clerk, and general ledger clerk. With this authority and her legitimate role of AP clerk, Miss Emma implemented a vendor fraud scheme, which she has been perpetrating for over a year for $150,000 to ABC Limited.

Required: Describe the controls that could have prevented Miss Emma from perpetrating this fraud.

Attachment:- Information Systems for Business and Enterprise.rar