BUSI2148 ACCOUNTING INFORMATION SYSTEMS
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BUSI2148-E1
ACCOUNTING INFORMATION SYSTEMS
1.
(A) In the system development life cycle, the steering committee decides how they will implement the system development after the design stage. The success of the implementation, however, depends on the coordination between various factors and actors, including the system developer (or vendor), management, and employees.
Required:
Explain the key success factors for system implementation.
[30 marks]
(B) In contrast to the central database, where information is stored in one place, decentralised database allows a sharing of information between different participants in the system. A recent technology of blockchain allows a decentralised database where different participants can continuously update information of business transaction.
Required:
Explain how blockchain technology can improve information system in the business process.
[20 marks] [Total marks: 50]
2. Elizabeth Taylor owns Picture Revival limited, a company that restores pictures for its customers and creates electronic images from the restored pictures. The company also frames restored pictures and creates sophisticated custom artworks. Artworks include materials such as glass and frames that are purchased from local suppliers. In addition to supplies for displays, the company purchases office supplies and packaging materials from several vendors.
Picture Revival uses an off-the-shelf accounting software package to prepare internal documents and reports. As employees note a need for supplies and materials, they send an email to Elizabeth, who acts as the office manager and company accountant. Either Elizabeth or her assistant Sophia enters order information into the accounting system and creates a purchase order that is faxed to the supplier. Elizabeth or Sophia may also call the supplier if there is something special about the product ordered.
When ordered materials and supplies arrive, either Elizabeth or Sophia checks the goods received against a copy of the purchase order and enters the new inventory into the computer system. Elizabeth pays bills twice each month, on the first and the fifteenth. She checks the computer system for invoices outstanding and verifies that the goods have been received. She then enters any information needed to produce printed cheques from the accounting system. Picture Revival mails cheques and printed remittance advices (portions of the vendor bill to be returned) to suppliers.
(A) Create a flowchart for the purchase and payment processes.
[35 marks]
(B) Discuss the advantages and disadvantages of flowchart in recording business process.
[15 marks] [Total marks: 50]
3. A study by Ragland and Ramachandran (2014) in the Journal of Accounting Education found that spreadsheet excel is one of the most common analytical tools used by accountant. For those in public accounting, proficiency in spreadsheet excel is especially important given the volume of data from client’s enterprise resource planning system that they have to analyse.
Required:
From your understanding, discuss (with examples) the importance and its application of spreadsheet excel and spreadsheet modelling in the business context?
[Total mark: 50]
4.
“Alpha market” is a small network of food retail stores. They have some stores in your city as well. You are a young consultant part of a well-known consulting firm and the company has asked you to help them identify one or more control procedures (either general or application controls, or both) that would guard the company against each of the following errors or problems.
a) An “Alpha market” employee was issued a check in the amount of £-150.05 because he had not worked the second week of October 2020, but his payroll deductions were automated for each week.
b) The department dealing with sales and accounts receivable entered 100 checks to the computer system for processing. The computer processed only 98 checks while two of them were not processed. At the end of the month the client was surprised when he realized these two checks did not appear as already paid.
c) The date of a customer payment was registered as 2002 instead of 2020.
d) One of the employers of “Alpha market” working in the accounts-payable department had the company pay for bakery products form his brother’s bakery and after that he wrote off them as “damaged goods”. In fact the goods had never arrived and they were just fictitious goods.
(A) Identify one or more control procedures (either general or application controls, or both) that would guard the company against each of the following errors or problems.
[40 marks]
(B) The manager of the “Alpha market” company realizes that there have been some problems lately specially with the accounts payable system. Referring also to the last problem mentioned above (in d), advise the manager on how his internal auditor might use through- the computer techniques (test data, an integrated test facility, parallel simulation, or validation of computer programs) to accomplish audit objectives relative to accounts payable.
[10 marks] [Total marks: 50]
Answers
1.
(A) The students can refer to Ahmad and Cuenca (2013) to discuss the key success factors in the system implementation.
The students can distinguish the importance of organisational factors and operational factors. Among organisational factors, the importance of project management, business process reengineering, management support and commitment, appropriate use of consultants can be highlighted. Among operational factors, the importance of steering committee, management expectation, vendor’s software tools, software training, data analysis can be explained.
(B) Using the decentralised data storage, blockchain can facilitate the data flow between customers, business and suppliers seamlessly. Each mutual participants can verify the transaction, which is automatically updated in the database, and share the up-to-date information. As the business information is sensitive to the participants, the private blockchain can be set up to only allowed participants to share information. Such a decentralised database can allow the participants to have a big picture of their supply chains and can predict the needs and timing of the supplies for efficient operation.
2.
(A)
(B) The students can refer to Bradford, Richtermeyer, and Roberts (2007) to discuss the advantages and disadvantages of flowchart. Among many possible advantages, students can explain ease of preparation, ease of understanding, and conceptual soundness as potential advantages. For disadvantages, students can explain the inadequacy for complicated processes and limited usefulness as potential disadvantages.
3.
|
The answer should covers discussion of the importance and the application of spreadsheet excel & spreadsheet modelling in the business context by different function, including accounting function. In particular, the answer may include (but not limit to) follow points: popularity of spreadsheet excel/modelling, usefulness of excel functions; importance and contribution of spreadsheet excel/modelling relating different business processes. For example: - Student can discuss the popularity of spreadsheet excel: for example, in 2012, it is estimated that 55 million American workers used spreadsheets. In many organizations, spreadsheets are used to measure organizational performance at the very highest levels of organizational decision-making. - The spreadsheet excel is used for different purposes (planning, budgeting, forecasting) with different business processes, such as: sale management, inventory management, cash management, etc. - More discussion (with examples) in detail of how excel can be used for those purposes and business processes. For example: spreadsheet modelling can be used to forecast sale, financial performance and cash performance based on what-if analysis. This information will support organizations in planning for future operation. - Different excel functions can be used by managerial accountant, from basic mathematic functions (add, subtract, multiply, divide) to more advanced functions: if, countif, sumif, Vloookup, Hlookup, pivot table, or statistic functions: regression, solver, etc. - Spreadsheet excel is used to record and store information/data (such as business transactions), so it is easy for business to check and track information or to monitor the operation of the business. - Spreadsheet is also used to report and analyse the information for decision making, using different functions (from basic to advance as mentioned some examples above) or visualization functions (charts and graphs), managerial accountant can provide more information for decision makers. - Spreadsheet excel can used in combination with other software, such as accounting software or ERP system to extract, manage and process data into useful information to support decision making. - Some examples regarding specific organizations or business use spreadsheet excel and spreadsheet modelling to make decision can be given/discussed. |
4.
1. “Alpha market” is a small network of food retail stores. They have some stores in your city as well. You are a young consultant part of a well-known consulting firm and the company has asked you to help them identify one or more control procedures (either general or application controls, or both) that would guard the company against each of the following errors or problems.
a) An “Alpha market” employee was issued a check in the amount of £-150.05 because he had not worked the second week of October 2020, but his payroll deductions were automated for each week.
This is a programming error. The program should also be tested first with a test deck. The program should
not be permitted to withhold deductions in excess of earnings and a sign test would be useful.
b) The department dealing with sales and accounts receivable entered 100 checks to the computer system for processing. The computer processed only 98 checks while two of them were not processed. At the end of the month the client was surprised when he realized these two checks did not appear as already paid.
A batch control total should be used.
c) The date of a customer payment was registered as 2002 instead of 2020.
An edit test ofreasonableness should be used.
d) One of the employers of “Alpha market” working in the accounts-payable department had the company pay for bakery products form his brother’s bakery and after that he wrote off them as “damaged goods”. In fact the goods had never arrived and they were just fictitious goods.
The creation of vendor records for suppliers eligible for payments should require an authorization procedure.
This controls against the creation of dummy companies. Also, the existence of damaged merchandise
should be confirmed by more than one person; for example, through a supervisory control. Finally, an
informal knowledge of the employer may have provided clues to his fraud.
The manager of the “Alpha market” company realizes that there have been some problems lately specially with the accounts payable system. Referring also to the last problem mentione
2021-12-28