Question 1 [Words Limit: Up to 400 words] a) Internal controls play an important role in reducing the risks of fraudulent activities in any organization. Further, advanced technology helps accountants...

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Question 1 [Words Limit: Up to 400 words] a) Internal controls play an important role in reducing the risks of fraudulent activities in any organization. Further, advanced technology helps accountants in reducing fraud. Explain how an advanced technology transaction processing system reduces fraudulent activities from any organizing. [Word Limit: Up to 200 words] b) Refer to the given system flowchart, and we have discussed the control weakness and the risk associated with these control weaknesses. 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 2 [Words Limit: Up to 400 words] The flowchart below illustrates two alternative inventory ordering methods. Answer part 1 to 3 based on this flowchart. Required: 1. Some organizations prefer using alternative two. What are the advantages of using alternative two instead of the alternative one? Be specific. 2. What is the difference between purchase requisition and purchase order? 3. Under what circumstances can you envision management using alternative one rather than alternative two? 4. Some accountants argue that the receiving department should be eliminated. Discuss the objective of eliminating the receiving function. What accounting/audit problems need to be resolved. Question 3 [Words Limit: Up to 300 words] HARDA Limited employs 650 workers in ten different departments. These workers work in various capacities, including the manufacturing workers, technician, and janitorial workers. Each department has a supervisor who is responsible for supervising departmental activities. In addition to supervising operations, the supervisors of the departments are responsible for recruiting, hiring, and firing workers within their areas of responsibility. The organization attracts casual labour and experiences a 20 to 30 per cent turnover rate in employees per year. Employees clock on and off the job each day to record their attendance on time cards. Each department has its clock machine located in an unattended room away from the main production area. Each week, the supervisors gather the time cards, review them for accuracy, and sign and submit them to the payroll department for processing. Besides, the supervisors submit personnel action forms to reflect newly hired and terminated employees. From these documents, the payroll department signs the paychecks, which are drawn on the general cash account, and sends them to the department supervisors for distribution to the employees. A payroll register is sent to the cash disbursements department where it is filed. Required: a) Discuss the risks for payroll fraud in the HARDA Limited payroll system. b) What controls would you implement to reduce the risks? [4 Marks] Question 4 [Words Limit: Up to 300 words] Marketing system provides some useful insights regarding the sales order. Different departments use this information. For instance, the production process uses this information to forecast the expected sale for next month. The production clerk uses this to create an online production schedule. From this schedule, the system automatically prepares weekly online work orders to be used by the production department. The production supervisor assesses the work orders from his terminal and prepares the necessary paper-based move tickets and materials requisitions. Then, the move tickets and two copies of the materials requisitions are distributed to each work centre. Later, work centre employees submit the two copies of the materials requisitions to the warehouse in exchange for materials and sub-assemblies. If additional new materials are needed beyond the standard quantity, the supervisor issues additional materials requisitions. Work centre employees record their work hours on paper-based job cards and send them to the accounting department. After the production is completed in a work centre, the move ticket is submitted to the accounting department. Upon the completion of a production batch, the production supervisor closes the open work order file. The warehouse manager files one copy of the materials requisition and updates the materials inventory file in the computer in her office. The manager then sends a second copy of the materials requisition to the accounting department. At the end of the day, the manager prepares a digital journal voucher and post it to the general ledger control account. The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger control account to reflect the status of work-in-process and to record transfers of work-in-process to finished goods inventory. Required: Analyse the risks associated with the following business processes of a manufacturing company. Question 5 [Words Limit: Up to 350 words] You are working in a mid-size company for the last couple of years. Recently you are promoted as a Chief Information Officer (CIO) and excited to perform your new role efficiently. David Savage, Chief Operation Officer (CEO) of your company has decided to implement an Enterprise Resource Planning (ERP) system. David Savage has met with a consulting ERP firm based on a recommendation from a friend at his club. During a recent meeting, David Savage introduced the chief consultant, who was charming, was personable, and seemed very knowledgeable. The CEO’s first instinct was to sign a contract with the consultant, but he decided to hold off until he had received your input. Required: David Savage asked you to write a memo presenting the issues and the risks associated with consultants. Further, outline a set of procedures that could be used as a guide in selecting a consultant. Question 6 [Words Limit: Up to 350 words] a) The acronym TELOS which provides guidance for accessing project feasibility. The term stands for technical, economic, legal, operational and schedules feasibility. Discuss these feasibilities briefly. And elaborate cost-benefit analysis under economic feasibility. b) Accountants should be involved in the detailed design and implementation of the system development life cycle. Comment on the statement.
Answered Same DayOct 14, 2021

Answer To: Question 1 [Words Limit: Up to 400 words] a) Internal controls play an important role in reducing...

Harshit answered on Oct 16 2021
126 Votes
Unit Code: HI5019
Unit Name: Strategic Information System For Business And Enterprise
CONTENT
    SERIAL NO.
    TOPICS
    PAGE NO
    1
    Answer to Q1
    3
    2
    Answer to Q2
    4
    3
    Answer to Q3
    5
    4
    Answer to Q4
    6-7
    5
    Answer to Q5
    8
    6
    Answer to Q6
    9
    7
    Reference
    10
ANSWER TO QUESTION 1
An advanced technology transaction processing system reduce fraudulent activities of an organizing in following ways:
· With the help of this advanced technology trans
action processing system, the effect of misrepresentation in an organisation can be reduce. Therefore, benefiting the organisation.
· It help as a storage system. It help in storing documents and records of the companies which contain important and confidential information. Thus, there is no possibility of duplication of records.
· The advanced technology processing system helps in backup and recovery also. Therefore, there is no fear of loss of information and backup for each new changes happening in the framework can be done with the help of this advanced technology processing system. Therefore, it eradicate chance of loss of information and records.
· It offer a greater degree of assurance when a person tries to adjust the alike transaction or to obtain a similar transaction (Bentley-Goode, K.A., Newton, N.J. and Thompson, A.M., 2017). This is because these systems are controlled and operated by authorized persons or customers.
b) With the help of the flowchart, the various types of fraud which are possible in the business environment based on control weakness and associated risk are:
· In order to boost their sales, the company can prepare fake sales invoices. It order to show that sales occurred, company can also create a fake shipping document. This can also be done by increasing the price of goods and under-pricing the cost of service. Therefore, accelerating revenue recognition.
· Business fraud can also be created by company not using IT. It is very important for the companies to maintain digital copies of the documents and records which can help in preventing fraud and not letting handover important documents to anyone.
· Another possibility is the loss of goods. This can happen in case of theft of goods from the warehouse, false inventory, and shipping counts.
· Payroll fraud is also a classic type of fraud. Example of such kind of fraud are: Example- lying about work hours, asking for an advance without paying back. Thus, by false wage pay, false expense claim, or creating a separate fraud account such fraud can be committed.
· Manipulation of the financial statement is another way. This is commonly done by understating the liabilities and overstating the assets and revenue.
Answer to Question 2
(1) It is safe for the organization to keep all customer-related data and transaction limit in the data processing department as it will backup and recovery all the data unlike in Alternative1. Also this alterative will help in achieving efficiency of the company and thus help in further growth of the company. Moreover, this alternative is less complex compared to Alternative1. This is because we are doing the same method for the purchase copy in the data processing then transferring the data to purchase. But in alternative2 we are doing this twice. Therefore, Organization prefer using alternative 2 instead of Alternative1.
(2)The difference between purchase requisition and purchase order are:
    PURCHASE REQUISITION
    PURCHASE ORDER
    It is an internal document
    It is an external document
    Purchase requisition is a process where one department takes permission from another department before buying goods are service.
    Purchase order simply means to order products or services from outside the organisation which means from external sources.
    First an purchase requisition is made follow up by purchase order
    Purchase order is made after purchase requisition.
    The content of the purchase requisition form is the name and department of the requester, date of request, name of the vendor, reason for purchase, purchase requisition number, item description, and quantity
    Whereas, the purchase order form contains the name of the company, quantity, price of good per unit, delivery date, billing detail, payment term, purchase order number, and relevant stakeholder signature.
(3)While dealing in alternative 2 blind copy, account pay, file copy and purchase order are reviews whereas in Alternative1 only the transaction list is review. It is important to consider the size of the enterprise and type of product in sensitive situation otherwise it is unnecessary to review all these things. Therefore, it is important that otherwise, company workflow can be disorganized with consequence ranging from minor losses to senior consequence.
(4)...
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