HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HA2042 Accounting Information Systems Individual Assignment Assessment Details and Submission Guidelines Trimester T2 2019 Unit Code HA2042 Unit Title...

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HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HA2042 Accounting Information Systems Individual Assignment Assessment Details and Submission Guidelines Trimester T2 2019 Unit Code HA2042 Unit Title Accounting Information Systems Assessment Type Individual assignment Assessment Title Case Study – Adam & Co Purpose of the assessment (with ULO Mapping) Students are required to:  Understand and explain the place of an accounting information system in the context of the organisational structure and operating practices. (ULO 2)  Identify, analyse and compare different types of accounting information systems. (ULO 3)  Use different methodologies to evaluate various accounting information systems. (ULO 4) Weight 20% of the total assessments Total Marks 20 Word limit Not more than 2,000 words Due Date Week 10, Friday 5:00 pm (AEST) Submission Guidelines  All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.  The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.  Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style. Page 2 of 5 HA2042 Accounting Information Systems Individual Assignment Assignment Specifications Background You are recently employed as a business analyst at Adam & Co, a Perth-based wholesaler of industrial supplies. Adam & Co sources its inventories from manufacturers in China, Thailand and Vietnam. The company has a centralised accounting system with networked terminals at different locations. Adam & Co’s expenditure cycle procedures are described as follow: Purchases System The process begins when the purchasing clerk checks the inventory subsidiary ledger at his/her computer terminal each morning. When the quantity of an item is deemed to be too low, the clerk selects a vendor from the valid vendor file and prepares a digital purchase order. The clerk prints two hard copies: one copy is sent to the vendor, and the other is filed in the purchasing department. Digital purchase order record is added to the purchase order file. When the goods arrive in the receiving department, the receiving clerk inspects them and reconciles the items against the information in the digital purchase order and the packing slip. The clerk then manually prepares two hard copies of the receiving reports. One of these accompanies the goods to the inventory warehouse, where the clerks shelves the goods and updates the inventory subsidiary ledger from his/her computer terminal. The clerk then files the receiving report in the department. The other copy of the receiving report is sent to the accounts payable department, where the accounts payable clerk files it until the supplier’s invoice arrives. When the accounts payable clerk receives the invoice he pull the receiving report from the temporary file, prints a hard copy of the digital purchase order, and reconciles the three documents. At this time, the clerk updates the digital accounts payable subsidiary ledger, the accounts payable control account and the inventory control account in the general ledger from his terminal. The clerk then sends the invoice, receiving report, and the purchase order copy to the cash disbursement department. Cash Disbursements System Upon the receipt of the documents from the accounts payable department, the cash disbursements clerk files the documents until their payment due date. On the due date, the clerk prepares a cheque for the invoiced account, when is sent to the treasurer who sign it and mail the cheque to the vendor. The cash disbursements clerk then updates the cheque register, accounts payable subsidiary ledger, and the accounts payable control account from his/her computer terminal. Finally, the receiving clerk files the invoice, purchase order copy, receiving report, and cheque copy in the department. Payroll System Adam & Co’s employees record their hours worked on time cards every day. Their supervisors review the time cards for correctness and submit them to the payroll department at the end of each week. Using a computer terminal connected to the central payroll system, which is located in the data processing department, the payroll clerk inputs the time card data, prints hard copies of the pay cheques, print two copies of the payroll register, and posts to digital employee records. The payroll clerk files the time cards in the payroll department and sends the employee pay cheques to the various supervisors for review and distribution to their respective department employees. The payroll clerk then sends one copy of the payroll register to the accounts payable department, and files the other with the time cards in the payroll department. Page 3 of 5 HA2042 Accounting Information Systems Individual Assignment The accounts payable clerk reviews the payroll register and manually prepares a disbursement voucher. The clerk sends the voucher and the payroll register to the general ledger department. The accounts payable clerk then writes a cheque for the entire payroll and deposits it in the imprest account at the bank. Finally the clerk files a copy of the cheque in the accounts payable department. Once the general ledger clerk receives the voucher and payroll register, the clerk posts to the general ledger from the department computer terminal and files the voucher and payroll register in the department. Required Prepare a report to the Managing Director to evaluate the processes, risks and internal controls for its expenditure cycle. In your report, you need to include the following items:  System flowchart of purchases system  System flowchart of cash disbursements system  System flowchart of payroll system  Description of internal control weakness in each system and risks associated with the identified weakness Assignment Structure The report should include the following components:  Assignment cover page clearly stating your name and student number  A table of contents, executive summary  A brief introduction or overview of what the report is about.  Body of the report with sections to answer the above issues and with appropriate section headings  Conclusion  List of references The report should be grounded on relevant literature and all references must be properly cited and included in the reference list. Marking criteria Marking criteria Weighting System flowchart of purchases system 4% System flowchart of cash disbursements system 4% System flowchart of payroll system 4% Description of internal control weakness in each system and risks associated with the identified weakness 4% Presentation 2% Research quality 2% TOTAL Weight 20% Page 4 of 5 HA2042 Accounting Information Systems Individual Assignment Marking Rubric Excellent Very Good Good Satisfactory Unsatisfactory System flowchart of purchases system /4 Present a system flowchart that correctly depict the whole purchases system. Present a system flowchart that correctly depict the whole purchases system with minor errors. Present a system flowchart that depict the purchases system with some errors and/or omissions. Present a system flowchart that depict the purchases system with errors and/or omissions throughout the diagram. Present a system flowchart that does not properly represent the purchases system. System flowchart of cash disbursements system /4 Present a system flowchart that correctly depict the whole cash disbursements system. Present a system flowchart that correctly depict the whole cash disbursements system with minor errors. Present a system flowchart that depict the cash disbursements system with some errors and/or omissions. Present a system flowchart that depict the cash disbursements system with errors and/or omissions throughout the diagram. Present a system flowchart that does not properly represent the cash disbursements system. System flowchart of payroll system /4 Present a system flowchart that correctly depict the whole payroll system. Present a system flowchart that correctly depict the whole payroll system with minor errors. Present a system flowchart that depict the payroll system with some errors and/or omissions. Present a system flowchart that depict the payroll system with errors and/or omissions throughout the diagram. Present a system flowchart that does not properly represent the payroll system. Description of internal control weakness in each system and risks associated with the identified weakness /4 Present an excellent discussion of internal control weakness in each system and risks associated with the identified weakness. Present a very good discussion of internal control weakness in each system and risks associated with the identified weakness. Present a good discussion of internal control weakness in each system and risks associated with the identified weakness with minor errors and/or omissions. Present a reasonable discussion of internal control weakness in each system and risks associated with the identified weakness with errors and omissions. Present a weak or inadequate discussion of internal control weakness in each system and risks associated with the identified weakness. Page 5 of 5 HA2042 Accounting Information Systems Individual Assignment Presentation /2 Report included all elements and was very well presented. Writing flowed clearly and sections were linked very effectively. Referencing was exemplary. English was used very effectively and was error-
Answered Same DaySep 16, 2021HA2042

Answer To: HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HA2042 Accounting Information Systems Individual...

Sarabjeet answered on Sep 17 2021
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Executive Summary
Adam & Co, a wholesaler of industrial products in Perth. Adam & Co purchases inventories from the manufacturers in China, Thailand and Vietnam. The business has centralized accounting system with network terminals in different locations. This report will analyze Adam & Co. Expenditure cycle. The report highlights some of the weaknesses of the internal control of the risk-related spending system. These risks include financial losses, debt a
ccumulation, loss of reputation, etc., which are harmful to the business.
Contents
Executive Summary    2
Introduction    4
Purchases system: System Flowchart    4
Purchase system internal control weakness    6
Cash Disbursements System: System Flowchart    9
Cash disbursement system internal control weaknesses    10
Payroll System: System Flowchart    12
Payroll system internal control weaknesses    13
Conclusion    14
References    15
Introduction
As business scales expand, information management and decision making based on such data becomes more complex. The company system needs to be reviewed to make decision making easier from simple low-level decisions to strategic plans developed by top management. The report is administered by the general manager to assess the process, risks and internal controls of its expenditure cycle. With the exception of the smallest companies, most companies use computerized systems, also known as electronic data processing systems. This report includes the following items: system flow chart of the procurement system; system flow chart of the cash payment system; system flow chart of the payroll system; description of the weaknesses of each system's internal control and the risks associated with the identified weaknesses
Purchases system: System Flowchart
(
Purchases
Inventory check
XYZ Product required
Vendor
Received
Warehouse
Accounts Payable
Vendor selection
Digital purchase order (PO) created
2 hard copies printed
PO1
PO2
Selected vendor
File
Invoice
I
Packing slip
Reconcile and preparation of two hard copies of Receiving Reports (RR1 &RR2)
RR1
RR2
RR2
+ goods
Update inventory
RR filed temporarily
PO
Reconcile
PO
RR
Invoice
Cash disbursement
Update accounts
PO
RR
Invoice
)
Purchase system internal control weakness
Small business operators and owners know the requirement for the internal controls as well as develop easy systems to implement in their businesses. Whether the company is an independent operator or has various workers, the introduction of internal controls will make sure that business operations are more efficient, resources are not lost, or unpleasant surprises are reduced. The first drawback that is apparent in the system is the lack of purchase approval rights, which may result in unnecessary purchases or personal purchases by staff (Fauzi and Setyawan, 2018). The financial theft of the company due to excessive and unfair costs is an imminent risk of this approach. Based on the information provided in the case study, it appears that there is no segregation of authorized purchases based on purchase cost. The most significant control activities involves separation of duties, correct authorization of activities and transactions, appropriate documentation moreover records, actual control of records and assets, and independent inspection of performance. This is a serious flaw combined with a complete lack of approval authority, which provides a large amount of power to the accounts receivable staff who can abuse it to order personal items or steal in the name of product purchases. There are no new studies on suppliers offering competitive prices, better quality and/or shorter lead times (Yazawa, 2015). There may be partiality or collusion where the employee receives the benefits of a continuous order, gifts and/or rebates from the supplier. Separation of duties needs different individuals to be responsible for the different factors of the relevant activities, especially those that involve approval, record keeping or custody.
Small businesses are most vulnerable to fraud as they often do not have helpful internal controls. Businesses can also paralyze companies and try to make up for every possible surprise. But by eliminating the opportunities and motivations of fraud and theft, and ensuring that the right system is in place to stop the error and quickly identify errors and anomalies, you can stop the fraud first, if it fails, and take corrective action to reduce the loss. Many activities are under the supervision and control of accounts payable staff, and to some extent are the supervision and control of the receiving staff. The accounts payable staff controls the supplier's selection, order placement, update invoice file, update account payable ledger, furthermore inventory control accounts in general ledger (Hong and Lee, 2015). The consignee checks the goods, checks the items against the data in digital purchase orders and packing list, prepares to receive the report, and updates the inventory subsidiary ledger. The accounts payable staff who submitted the report in the...
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