002499 ACCOUNTING SYSTEMS AND DATA ANALYTICS
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002499 ACCOUNTING SYSTEMS AND DATA ANALYTICS
ECOMMRCE 1000
QUESTION 1
(1) Give three examples each of the advantages and the disadvantages of an ERP system with a centralized database. How can you increase the chance of a successful ERP implementation?
[8 marks]
(2) Explain four advantages of using relational databases. Illustrate with examples.
[6 marks]
(3) What is information integrity? Illustrate your answer using examples.
[4 marks]
[Total mark – Question 1 = 16 marks]
QUESTION 2
(1) Ajax Manufacturing installed a new barcode based inventory tracking system in its warehouse. To close the books each month on a timely basis, the six people who work in the warehouse must scan each item in a 36-hour period while still performing their normal duties. During certain months, when inventory expands to meet seasonal demands, the scan takes as many as 30 hours to complete. In addition, the scanners do not accurately record some inventory items that require low operating temperatures. A recent audit brought to management’s attention that the inventory records are not always accurate. Which aspect(s) of feasibility did Ajax fail to consider prior to installing the inventory tracking system.
[6 marks]
(2) Why is documentation important to accounting information systems? Why should accountants be interested in AIS documentation?
[6 marks]
(3) Systems analysis is often performed by a project team composed of a systems analyst, a management accountant, and other knowledgeable and helpful people. What is the accountant’s role in systems analysis?
[6 marks]
[Total mark – Question 2 = 18 marks]
QUESTION 3
(1) Distinguish between document flowcharts, system flowcharts, data flow diagrams, and program flow charts. How are they similar? How are they different?
[4 marks]
(2) Describe four control procedures that organisations should have in place to ensure that only authorised users access the system and that user access is limited according to their responsibilities.
[4 marks]
(3) What are some of the consequences to a company that makes a poor decision in selecting a new AIS?
[2 marks]
(4) Explain how the principle of separation of duties is violated in each of the following situations. Also, suggest one or more procedures to reduce the risk and exposure highlighted in each example.
(a) A payroll clerk recorded a 40-hour workweek for an employee who had quit the
previous week. He then prepared a paycheck for this employee, forged her signature, and cashed the check.
(b) An employee of the finishing department walked off with several parts from the
storeroom and recorded the items in the inventory ledger as having been issued to the assembly department.
. [8 marks]
[Total mark – Question 3 = 18 marks]
QUESTION 4
Businesses often modify or replace their financial information system to keep pace with their growth and take advantage of improved IT. This requires a substantial time and resource commitment. When an organisation changes its AIS, a systems analysis takes place.
(1) Explain the purpose and reasons for surveying an organisation’s existing system.
[4 marks]
(2) Explain the activities commonly performed during systems analysis.
[6 marks]
(3) Systems analysis is often performed by a project team composed of a systems analyst, a management accountant, and other knowledgeable and helpful people. What is the accountant’s role in systems analysis?
[6 marks]
[Total mark – Question 4 = 16 marks]
QUESTION 5
Mary Smith is the bookkeeper for Dave’s Distributing Company, a distributor of soft drinks and juices. Because the company is rather small, Mary performs all daily accounting tasks herself. Dave, the owner of the company, supervises the warehouse/delivery and front office staff, but he also spends much of his time jogging and skiing.
For several years, profits were good, and sales grew faster than industry averages. Although the accounting system was working well, bottlers were pressuring Dave to computerize. With a little guidance from a CPA friend and with no mention to Mary, Dave bought a new computer system and some accounting software. Only one day was required to set up the hardware, install the software, and convert the files. The morning the vendor installed the computer system, Mary’s job performance changed dramatically. Although the software company provided two full days of training, Mary resisted learning the new system. As a result, Dave decided she should run both the manual and computer systems for a month to verify the new system’s accuracy.
Mary continually complained that she lacked the time and expertise to update both systems by herself. She also complained that she did not understand how to use the new computer system. To keep accounts up to date, Dave spent two to three hours a day running the new system himself. Dave found that much of the time spent running the system was devoted to identifying discrepancies between the computer and manual results. When the error was located, it was usually in the manual system. This significantly increased Dave’s confidence in the new system.
At the end of the month, Dave was ready to scrap the manual system, but Mary said she was not ready. Dave went back to skiing and jogging, and Mary went on with the manual system. When the computer system fell behind, Dave again spent time catching it up. He also worked with Mary to try to help her understand how to operate the computer system.
Months later, Dave was very frustrated because he was still keeping the computer system up to date and training Mary. He commented, “I’m sure Mary knows how to use the system, but she doesn’t seem to want to. I can do all the accounting work on the computer in two or three hours a day, but she can’t even do it in her normal eight-hour workday. What should I do?”
(1) What do you believe is the real cause of Mary’s resistance to computers?
[4 marks]
(2) What events may have contributed to the new system’s failure?
[4 marks]
(3) In retrospect, how should Dave have handled the accounting system computerization?
[4 marks]
(4) A hard decision must be made about Mary. Significant efforts have been made to train her, but they have been unsuccessful. What would you recommend at this point? Should she be fired? Threatened with the loss of her job? Moved somewhere else in the business? Given additional training?
[4 marks] [Total mark – Question 5 = 16 marks]
QUESTION 6
(1) Sara Jones owns a rapidly growing retail store that faces stiff competition due to poor customer service, late and error-prone billing, and inefficient inventory control. To continue its growth, its AIS must be upgraded but Sara is not sure what it wants the AIS to accomplish. Sara has heard about prototyping but does not know what it is or whether it would help. How would you explain prototyping to Sara? Include an explanation of its advantages and disadvantages as well as when its use is appropriate. What is the difference between authentication and authorisation?
[8 marks]
(2) Clint Grace has been business over 30 years and has definite ideas about how his ten retail stores should be run. He is financially conservative and is reluctant to make expenditures that do not have a clear financial payoff. Store profitability has declined sharply and customer dissatisfaction is high. Store managers never know how much inventory is on hand and when purchases are needed until a shelf is empty. Clint asks you to determine why profitability has declined and to recommend a solution. You determine that the current AIS is inefficient and unreliable and that company processes and procedures are out of date. You believe the solution is to redesign the systems and business processes using BPM. What are some challenges you might face in redesigning the system? How will you present your recommendations to Clint? What are the limitations, if any, of relying on the results of penetration tests to assess the overall level of security?
[8 marks]
[Total mark – Question 6 = 16 marks]
2022-05-30