Section A (10 Marks)

Question 1 (10 marks/10 minutes)

We need to be able to describe systems to assist with development, to assist with use, and to assist with maintenance. To that end, diagrams provide a concise, semi-formal  way of describing a system. Data flow diagrams are an important tool in the                   development of information systems. Below are descriptions of Context diagrams,       Physical Data Flow Diagrams, and Logical Data Flow Diagrams. Please fill in the missing words in the spaces provided.

(10 marks. Each correct word is worth 1 mark)

Context Diagrams are top-level, least-detailed diagrams of an information system. They provide the system’s context in relation to the data flows ____ and _____ of the system and _____ and _____ of the external entities.

Physical Data Flow Diagrams describe graphically the system’s internal and external  entities (things), and the data flows into and out of these entities. Physical Data Flow Diagrams depict _____, _____, and by _____ a system’s processes are accomplished, however they do not indicate _____ was done.

Logical Data Flow Diagrams represent the system’s processes, and the flows of data into and out of those processes. _____ tasks are being accomplished is the domain of the      logical data flow diagram and these tasks remain relatively ________.

Section B (40 marks)

Section B, Question 1 (20 marks/20 minutes)

The following is an article from the Sydney Morning Herald on 27 January 2021. Please read the article and then answer the four (4) questions relating to the fraud affecting

National Australia Bank.

Former NAB chief of staff sentenced to

eight years’ jail over kickback scheme

January 27, 2021 — 2. 11pm

A former chief of staff to National Australia Bank CEOs will spend more than four years behind bars after fraudulently approving inflated invoices in return for kickbacks worth more than $5 million.

Between 2013 and 2017, Rosemary Rogers accepted payments from Human Group chief               executive Helen Rosamond bankrolling lavish domestic and international holidays for herself and her extended family, along with the purchase and renovation of a holiday home, plus two boats  and a luxury car.

She pleaded guilty last year to multiple charges of dishonestly obtaining financial advantage by deception and being an agent corruptly receiving a benefit.

In the NSW District Court on Wednesday, Rogers was sentenced to a maximum of eight years in  jail, with a non-parole period of four years and nine months, after what acting Judge Paul Conlon described as a “particularly difficult sentencing exercise” .

In sentencing, Judge Conlon ran through the details of 64 charges against her, including 27            counts of corruptly receiving a benefit, each of which carries a maximum sentence of seven years in prison, and which bore a total value of $5,540,600.

Rogers was able to commit the fraud in her role as chief of staff to former NAB bosses Andrew   Thorburn and his predecessor Cameron Clyne, whereby she approved invoices from the Sydney- based events and human resources company Human Group without scrutiny from NAB.

The invoices were prepared by Ms Rosamond, whom Judge Conlon said had developed such a     close relationship with Rogers that they would meet frequently for lunch despite living in Sydney and Melbourne respectively. In texts, the women used the phrases “bestie” and “sister from        another mother” to refer to each other. They would also exchange gifts, including jewellery.

Then there were the bribes. Among them, a $1.5 million cheque went towards a $3.8 million       luxury home in Williamstown, an upmarket suburb in Melbourne’s inner-west. The funds from   that cheque came from a $2.2 million invoice Rogers approved ostensibly for the on-boarding of former NSW premier Mike Baird, who joined the bank in 2017, six weeks after stepping down     from his role as the state’s top politician.

The court heard the actual cost of on-boarding Mr Baird was $60,000. Human Group “had           nothing to do with the on-boarding of Mr Baird and the offender knew that,” Judge Conlon said.

The judge said it was “absolutely staggering” that such fraudulent invoices “were not detected by some appropriate system for internal auditing by NAB” .

All it took was for Human Group to submit invoices that were “devoid of detail” and “the offender would merely approve courtesy of her delegated authority,” he said.

Instead of meaningful detail, the invoices would be assigned with often obscure project names. The $2.2 million invoice was labelled “Project Eagle”, in reference to the code name given to Mr Baird during his recruitment process.

Payments covering holidays to the United States and Europe for Rogers and her extended family were labelled “Project USA” and “Project Europe”, while a $4000 birthday celebration in Sydney was titled “Project Outlaw” .

More than $620,000 was paid to Rogers for a holiday to the US with eight others – covering their flights and accommodation, chartering a private jet, luxury cruises and chauffeurs during stops in New York, Washington and Hawaii. During the Europe trip, Ms Rosamond covered more than       $180,000 worth of expenses.

She also paid for a $46,000 boat in 2014, and later, in 2016, its $115,000 replacement – with the original boat traded in for $30,000.

A $172,000 BMW SUV was paid for, as was a $91,000 caravan.

It took a letter from an anonymous whistle-blower in December 2017 for NAB to discover and    begin to pursue Rogers. In the meantime, Human Group had made more than $44 million out of its contract with the bank, which was its only client from 2015 onwards.

The court heard that while members of Rogers’ family had reimbursed her for some of the US     trip, she did not pass that money back to Human Group. The same occurred when Rogers’ family paid her back for parts of other trips bankrolled by Ms Rosamond.

Judge Conlon said it was clear from Rogers’ spending that it was indicative of “greed, personal gain and self-gratification” .

But while he said Rogers’ offending was above mid-range in its seriousness, he accepted her      expressions of remorse “are indeed genuine” and found her good prior character and prospects for rehabilitation constituted exceptional circumstances.

NAB chief legal counsel Sharon Cook said the bank had assisted police throughout the investigation and is “pleased this part of the matter is now resolved” .

Since becoming aware of the issue, NAB has “made changes to strengthen controls in our        organisation, including changing delegations and introducing additional checks on expenses,” she said. “We are taking court action to recover the proceeds of the alleged fraud.”

Ms Rosamond will face atrial next year involving separate charges for her alleged involvement. Neither Mr Thorburn, Mr Clyne nor Mr Baird is accused of any wrongdoing.

Questions:

(a)        From  the  information  provided  in  the  article,  explain  how  the  fraud  actually

worked (4 marks)

(b)        Discuss what the fundamental control problem was at National Australia Bank (6 marks)

(c) Aside from the controls NAB is implementing, i.e., changing delegations and checks on expenses, suggest and describe two further controls to avoid this fraudulent situation happening again.(6 marks)

(d)        For  each  suggested  control  in  (c)  above,  indicate  whether  it  is  preventive, detective, and/or corrective in nature. (4 marks)

Answer Section B, Question 1(a), Question 1(b), Question 1(c), and Question 1(d) here:

Section B, Question 2 (20 marks/15 minutes)

Based on the following small extract from Polis Grocers Inc., fill in the missing activities in the table of Entities and Activities presented below. (2 marks per correct activity labelled)

Section C (70 marks)

Question 1 (12 marks/15 minutes)

With regard to the Inventory process control goals of effectiveness of operations, efficiency of operations, and resource security,

(a)   Give two (2) example controls for each of the three process control goals.

(6 marks)

(b)   For each of the three process control goals, select one example control from

your answer to (a).  Explain how the control supports the production planning process, and the risks to the production process if such a control was not in     place.

(6 marks – 2 marks for each explanation of how the production planning process is supported and the risks to the production process if the control was not in place)

Answer Section C, Question 1(a) and Question 1(b) here:

Question 2 (24 marks/20 minutes)

Thinking about your MYOB CSF assignment and the MYOB evaluation grids, evaluate MYOB’s Sales/Order Entry module in terms of each aspect listed in the table below. In your response, include an appropriate example to support your evaluation. This question continues, over.

(8 marks for each aspect, i.e., 1 mark per appropriate evaluation point up to 5 marks for each aspect, and 3 marks for each relevant example supporting the evaluation points)

Question 3 (10 marks/10 minutes)

Following is a list of eight generic control goals (A-H), followed by eight descriptions of either process failures (i.e., control goals not met) or instances of successful control     plans (i.e., plans that helped to achieve controls goals).

List the numbers 1 through 8 in the table below. Each number represents one of the described situations on the page below.  In the table, next to each number, place the capital letter of the control goal that best matches the situation described.

Hint: Some letters may be used more than once in each situation. Conversely, some letters may not be used at all.

goals:

A.   Ensure effectiveness of operations

B.   Ensure efficient employment of resources

C.   Ensure security of resources

D.   Ensure input validity

E.   Ensure input completeness

F.   Ensure input accuracy

G.   Ensure update completeness

H.   Ensure update accuracy

Situations:

1.   Instead of preparing deposit slips by hand, Kaley Company has them generated by the computer. The company does so to speed up the   deposit of cash (speedy deposit being an objective at Kaley).

2.   In a typical cash receipt process, one of the earliest processes is to              endorse each customer’s check with the legend, for example, “for deposit only to Cost and Effect Company.”

3.   Levers Corporation recorded as sales some shipments of disk drives       between their warehouses. These disks drives had not been ordered by anyone and were still the property of Levers.

4.   Diffusion Co. prepares customer sales order on a multipart form, one copy of which is sent to its building department, where it is placed in a                 temporary file pending shipping notification. Each morning, a billing clerk  reviews the file of open sales orders and investigates with the shipping      department any missing shipping notices for orders entered 48 hours (or   more) earlier.

5.   An accounts payable clerk at C&C Company enters vendor invoices into     the computer. When the invoices for the particular day were entered, the computer noted that vendor invoice 12345 appeared twice. The computer rejected the second entry (i.e., the duplicate, the invoice with the same number).

6.   In entering the invoices mentioned in situation 5, the data for the         payment terms was missing from invoice 12349 and therefore was not keyed into the computer.

7.   Referring to situation 4, once a shipping notice is received in the billing department, the first step in preparing the invoice to send to the           customer is to compare the unit prices shown on the sales order with a standard price list kept in the billing department.

8.   At Falcon Company, the accounts receivable master data are updated at  the end of each day from payment data contained on the cash receipts     event data store. At the completion of the update run, the difference        between total dollar value of accounts receivable before and after the      update run is compared to the total dollars of payments being processed.

(10 marks)

Question 4 (24 marks/30 minutes)

Relative to IT Governance, four important areas are listed, below. Please briefly describe the goal of each area of IT Governance and for each IT Governance area give one              example of the consequences if the goal is not achieved. This question continues, over.

(6 marks for each area, i.e., up to 3 marks per goal description, and up to 3 marks for each relevant example of the consequence of the goal not being achieved)