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Assessment item 3 Risks and Controls and Business Intelligence Length: maximum of 1,800 words Submission method options: Alternative submission method Task Steven and Angela were impressed with the DFD you prepared for City Adventures. They were, however, concerned, with the number of apparent internal control issues within their sales and cash collection process. Steven and Angela has tasked you with reviewing the cash collection processes of the company and researching the potential implementation of Business Intelligence (BI). Steven and Angela have provided you with an overview of the cash collection process based on interviews with key staff (available in Interact). Using the information provided to you and undertaking research as required, prepare a business report for the owners including the following: 1. Identification of; · internal control weaknesses in City Adventures cash collection process; (2.5 marks) · the impact these weaknesses could have on the organisation; (2.5 marks) · specific internal controls which could be implemented by City Adventures in the coming weeks to mitigate the risks posed by the internal control weaknesses you have identified. The owners do not want theoretical controls suggested. They want practical controls that they can implement. (5 marks) [ Note: all three (3) parts of question one (1) must be included as a table in your report] 2. An overview of BI, including a discussion of digital dashboards. (2 marks) 3. A comprehensive analysis of how BI would impact on; · management decision making within the organisation. (3 marks) · the role of the management accounting team within the organisation. (3 marks) 2 Marks will be allocated for the presentation of your work, including you executive summary, conclusion, use of professional language and application of APA referencing. This assessment task will assess the following learning outcome/s: · be able to explain the impact of information technology on the nature and development of accounting. · be able to analyse organisational processes for risk, and design appropriate control mechanisms to mitigate identified risk. Presentation back to top Your assignment needs to be presented as a business report to the owners. A business report includes; · a cover page addressed to your desired audience; · an executive summary (refer to the note below regarding an executive summary); · a table of contents (linked to the headings in the report); · headings and sub headings clearly identify what is being discussed; · a conclusion, including recommendations as required; and · referencing (using APA style). Note: an Executive Summary is not an introduction. An Executive Summary should be an overview of the entire report, including recommendations, and no longer than one (1) page in length. This may be the only page read by busy managers. Marks will be deducted where you have exceeded the word count for your Assignment. The word count does not include your: · cover page; · executive summary; · table of contents; · tables of figures; and · referencing (in text citations and reference list). Requirements back to top APA must be used to reference all sources you have used for your assignment. The CSU Library site provides an on-line guide to APA style referencing. This is the referencing style adopted by the School of Accounting and Finance. The guide can be found at: https://apps.csu.edu.au/reftool/ Review the rules regarding plagiarism and if you are not sure contact your lecturer or student learning skills advisor for advice. There is no excuse for presenting the work of others as your own; this includes cutting and pasting material from the web without properly referencing the source. Your assignment must be submitted via Turnitin in word format only (not in pdf). As a CSU student you are entitled to a free copy of Microsoft Office 2013 Suite. Details to find out further information can be found below under 'Online Submission'. Any difficulties in submitting your assignments online electronically using Turnitin should be immediately reported by email. Include your name and student number in the header or footer of all documents submitted. Retain a copy of your assignment for your records. Answer for Question 01 from the text book ( should be connect with the case study) PowerPoint Presentation Company Background City Adventures has grown s igni f icant ly in the last 2 years and now has a turnover of $2.2m per annum. The main responsibility for the company’s accounting and financial reporting is in the hands of the company’s Finance Director, Celeste. Celeste and the Head of Operations report directly to the Owners of City Adventure. Owners Organisation Chart Note not all position are shown Finance Director Head of Operations Accounts Receivable Manager Head of Sales Financial Accountant AR Specialist x3 Master Data Specialist x2 Sales Managers x5 General Accounting Team x 5 Over the past two years the company has undergone significant growth resulting in major changes within the company’s operating environment with turnover of some key personnel. As a result of the c h a n g e s , several employees were assigned new tasks, which in some cases, has led to blurred responsibilities over some sub-processes. City Adventures have some unsubstantiated concerns regarding fraudulent behavior in the company’s accounting department in recent months. 2 Considering the concerns regard ing fraud, recent organizational changes and the evolving operating environment, City Adventures is interested in evaluating the risks and the current state of internal controls in its revenue process. Modified Organisation Chart Owners Steven and Angela Finance Director Celeste Head of Operations Accounts Receivable Manager May Head of Sales Michael AR Specialists Master Data Specialists Sales Manager - George + 4 others Interview with several of these staff are included below. 3 Finance Director - Celeste Celeste joined City Adventures in June last year. She has three direct reports, including you the Financial Accountant. She has overall responsibility for the Sales and Finance functions of City Adventures and works closely with the Head of Operations to ensure that strategic goals of City Adventures are realised. 4 Back to Organisation Chart Master Data Specialists The Master Data Team consists of 2 master data specialists, James and Alison. Their responsibilities include setting up new customers into company’s operative systems and making changes to the existing master data. Alison provided the following overview of customer master maintenance at City Adventures. “The basic customer data is derived from the sales contracts (Business ID, payment method, address, contacts etc.) and entered into the billing system as a new customer profile. After this, a pricing template is created (if the customer prices differ from the standard price list) and linked to the customer profile. Creation of the price template is probably the riskiest phase of the customer data set-up since a lot of detailed data is manually entered into the system. Also, the system view is pretty “heavy”, making it easy to accidentally misplace data.” “At present, the data is not reviewed after the initial input unless a specific reason occurs… Going through all the data would probably be irrational in terms of cost – benefit ratio.” Inquiries were also made about the responsibilities and documentation of the customer set-up process. According to Alison, the set-up process is centralized to her, James and May, the Accounts Receivable (AR) manager, no others are authorized to create new customer profiles. 5 Back to Organisation Chart Master Data Specialists Alison was asked about changes to master data and average users’ access rights, especially with respect to modification of price lists. Her response was as follows: “I think that basically everyone with an access to the system is capable of changing the basic information, such as billing address, contact information etc. However, I believe that the access rights are restricted so that only selected people can alter the price lists and reference structures… There is an official policy with respect to changes to customer data, and it’s been communicated to everyone. Whenever a person recognizes a need to update master data, they inform us through email and we make the changes… Emails are not archived in a specific manner.” As a final point, James was asked whether the billing system was utilizing any automatic data quality tools. His comments were: “There is a standard format in which the customer data is entered into system, but not all active fields are relevant. The person entering the data has to be aware of the irrelevant fields as the system really doesn’t provide any guidance for the user... An automatic audit tool exists to prevent duplicate customer entries.” 6 Back to Organisation Chart Accounts Receivable Manager - May The responsibility of accounts receivable is divided between the Finance Director and the Accounts Receivable (AR) Manager, who supervises a team of 3 AR Specialists. The Finance Director’s main responsibility is to ensure that no credit losses occur, and deal with urgent matters. The AR Manager oversees the AR process in general and the AR Specialists handle the everyday routines for the most part. May sends the Finance Director an age-distributed list of credit customers' open receivables at the end of every quarter. Celeste reviews the customer-specific balances and decides whether any immediate actions are required. For example, if a small customer has a large amount of unpaid purchases, it may be necessary to contact the customer in order to avoid excessive credit risk exposure (due to credit limit issues) and possibly set credit hold until the existing balance has been paid off. If a customer has overdue payments that haven’t been paid regardless of reminders it may be necessary to call the customer and inquire about possible issues. May is responsible for following up these customers