Question 1 (20 marks/20 minutes)

Good Factoring is reliant on loose coupling between subsystems and tight internal cohesion within a subsystem.

First, briefly describe what loose coupling between subsystems refers to. (1 mark each concept up to a maximum of 5 marks)

Second, briefly describe what tight internal cohesion within a subsystem refers to. (1 mark each concept up to a maximum of 5 marks)

Third, briefly provide the reasons why the notions of loose coupling and internal cohesion are useful to us. (1 mark each concept up to a maximum of 10 marks)

Section B (30 marks)

All the questions in this section relate to your major projects during the semester.

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.

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” .

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)

Question 2 (10 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.

(10 marks, 1 mark per correct activity)

Section C (50 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)

Question 2 (18 marks/25 minutes)

Thinking about your MYOB assignment, evaluate MYOB’s Billing/Debtors/Cash            System module in terms of each aspect listed in the following table. In your response, include an appropriate example to support your evaluation. This question continues, over.

(6 marks for each aspect, i.e., one mark per appropriate evaluation point up to 4 marks for each aspect, and 2 marks for each relevant example supporting the evaluation points)

Question 3 (5 marks/10 minutes)

Match the two lists, below, by placing the capital letter from List 1 in each of the cells preceding the five descriptions in List 2 to which they best relate.

One description in List 2 can be answered with 2 matches from List 1. Therefore, you should have 2 letters left over from List 1.

List 1: Concepts

A.   Application (i.e., automated) control.

B.   Corrective control.

C.   Control environment.

D.   Input validity.

E.   Input completeness.

F.    Input accuracy

G.   Update completeness.

H.   Efficient use of resources.