HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment Assessment Details and Submission Guidelines Trimester T1 2020 Unit...

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HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment Assessment Details and Submission Guidelines Trimester T1 2020 Unit Code HI5019 Unit Title Strategic Information Systems for Business and Enterprise Assessment Type Individual assignment Assessment Title Case Study – Paradise Industries Purpose of the assessment (with ULO Mapping) Students are required to:  Critically evaluate the purpose and role of accounting information systems in today’s business environment (ULO 1).  Articulate the various transaction cycles, financial reporting, management reporting systems and e-commerce systems to technical and non-technical stakeholders (ULO 2).  Appraise the risks inherent in computer-based systems/ERP, including the role of ethics and the various internal control processes that need to be in place (ULO 4). Weight 20% of the total assessments Total Marks 20 Word limit Not more than 2,500 words Due Date Week 7, Friday 5:00 pm (AEST) Submission Guidelines  All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.  The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.  Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style. Page 2 of 5 HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment Assignment Specifications Background After working at several accounting and consultancy firms for more than a decade, you have recently decided to start your own consultancy business. A friend of your wife introduces you to Paradise Industries, a manufacturer of high-precision machine tools based at Adelaide. Paradise Industries employs a centralised computer system with distributed terminals in the departments. The company recently have a number of operational problems and the managing director of the company has engaged you to assess its systems and processes. Expenditure Cycle When an inventory item falls to the recorder point, a purchase requisition is automatically generated and printed on the terminal in the purchasing department. The purchasing clerk select suppliers and prepare a purchase order. One copy of the purchase order is sent to the supplier and another copy is sent to the receiving department. The purchasing clerk then adds a record to the open/closed purchase order file through an update program in the data processing department. When the receiving clerk receives the delivery from the supplier, the clerk reconciles the items with the packing slip and the purchasing order. After the reconciliation, the receiving clerk prepares a hard-copy receiving report recording the quantity and quality of the goods received. One copy of the receiving report accompanies the items to the warehouse and another copy is filed in the receiving department. Using the department terminal, the receiving clerk adds a record to the digital receiving report file. The system then automatically closes the purchase order. Upon receiving the items, the warehouse clerk updates the inventory subsidiary ledger through the terminal in the warehouse. When the supplier’s invoice arrives, the accounts payable clerk adds a record to the supplier invoice file, which in turn triggers the system to automatically set up a liability in the accounts payable subsidiary ledger based on the financial information contained in the invoice. The system then automatically updates all affected general ledger accounts. The computer system scans the accounts payable subsidiary ledger every day for items due to be paid and print the cheque. The cheque is sent to the supplier and a copy is sent to cash disbursements where it is filed. The system then adds a record to the cheque register file and removes the liability in the accounts payable subsidiary ledger. Finally, the system automatically updates the general ledger accounts. Conversion Cycle The production process is triggered by a quarterly forecast of expected sales, which goes to the production planning and control clerk. From the clerk’s terminal, the production planning and control clerk updates the digital production schedule to include the batches of products to be produced during the next quarter. Drawing upon the bill of materials and routing sheet files, the system automatically prepares the digital work orders move tickets and material requisitions and sends them to the work centre supervisor’s terminal on a weekly basis. The work centre supervisor accesses the digital documents and print hard-copy work orders, move tickets and material requisitions. The supervisor distributes the move tickets and two copies of the material requisitions to each work centre in the production process. Page 3 of 5 HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment Staff members submit the two copies of material requisitions to the warehouse in exchange for the materials. If additional materials are needed beyond the standard quantity, the supervisor issues additional material requisitions. As the production is completed in each work centre, the staff members send the move ticket to cost accounting to the mark the completion of that phase of the production batch. Staff members also record labour time spent on each batch on hard-copy job cards, which they send to cost accounting. Finally, upon completion of the batch, the work centre supervisor closes the open work order file. The warehouse clerk files one copy of the material requisition and updates the materials inventory file from the terminal in the warehouse office. The clerk then sends a second copy of the material requisition to cost accounting. At the end of the day, the clerk prepares a digital journal voucher and posts it to the general ledger control accounts. The cost accounting clerk accesses the digital work orders and set up a work-in-process account for the production batch. The clerk also receives move tickets, job tickets, and material requisitions throughout the production process and use the documents to post in work-in-process subsidiary ledger. At the end of each day, the cost accounting clerk prepares a digital journal voucher and posts to general ledger control accounts to reflect the status of work-in-process and to record transfers of work-in-process to finished good inventory. Required Prepare a report to the managing director of Paradise Industries to evaluate the processes, risks and internal controls for Paradise Industries’ expenditure and conversion cycle. In your report, you need to include the following items:  System flow chart of expenditure cycle  System flow chart of conversion cycle  Analysis of physical internal control weaknesses in the expenditure cycle  Analysis of the risks exist in the conversion cycle and the changes needed to reduce the risks Assignment Structure The report should include the following components:  Assignment cover page clearly stating your name and student number  A brief introduction of what the report is about  Body of the report with appropriate section headings  Conclusion  List of references The report should be grounded on relevant literature and all references must be properly cited and included in the reference list. Marking criteria Marking criteria Weighting System flow chart of expenditure cycle 2% System flow chart of conversion cycle 2% Analysis of physical internal control weaknesses in the expenditure cycle 3% Analysis of the risks exist in the conversion cycle and the changes needed to reduce the risks 9% Presentation 2% Research quality 2% TOTAL Weight 20% Page 4 of 5 HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment Marking Rubric Excellent Very Good Good Satisfactory Unsatisfactory System flow chart of expenditure cycle /2 Present a system flow chart that correctly depict the whole expenditure cycle. Present a system flow chart that correctly depict the whole expenditure cycle with minor errors. Present a system flow chart that depict the expenditure cycle with some errors and/or omissions. Present a system flow chart that depict the expenditure cycle with errors and/or omissions throughout the diagram. Present a system flow chart that does not properly represent the expenditure cycle. System flow chart of conversion cycle /2 Present a system flow chart that correctly depict the whole conversion cycle. Present a system flow chart that correctly depict the whole conversion cycle with minor errors. Present a system flow chart that depict the conversion cycle with some errors and/or omissions. Present a system flow chart that depict the conversion cycle with errors and/or omissions throughout the diagram. Present a system flow chart that does not properly represent the conversion cycle. Analysis of physical internal control weaknesses in the expenditure cycle /3 Present an excellent analysis of physical internal control weakness in the expenditure cycle. Present a very good analysis of physical internal control weakness in the expenditure cycle. Present a good analysis of physical internal control weakness in the expenditure cycle. Present a reasonable analysis of physical internal control weakness in the expenditure cycle. Present a weak or inadequate analysis of physical internal control weakness in the expenditure cycle. Analysis of the risks exist in the conversion cycle and the changes needed to reduce the risks /9 Present an excellent discussion the risks exist in the conversion cycle and the changes needed to reduce the risks. Present a very good discussion of the risks exist in the conversion cycle and the changes needed to reduce the risks. Present a good discussion of
Answered Same DayApr 30, 2021HI5019

Answer To: HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HI5019 Strategic Information Systems for Business and...

Lawrence answered on May 10 2021
140 Votes
Assignment
Introduction:
For this assessment report, we have analysed the critical business processes and information systems of Paradise Industries. We have done a detailed analysis of the expenditure cycle of the company. Based on this critical analysis we have prepared a detailed flow chart of the expenditure cycle. Following the findings in the business processes involved in the expenditure cycle, we hav
e done a detailed analysis of physical internal control weaknesses in the expenditure cycle. Based on the understanding of various business processes involved in the conversion cycle of Paradise Industries, we have created a detailed flow chart of the conversion cycle. As a business consultant to Paradise Industries, we have also done a detailed risk analysis of the current processes that exist in the conversion cycle and the necessary steps needed to reduce those risks.
Body:
1) System Flowchart of Expenditure Cycle:
Receiving clerk receives delivery
Update Program in data processing department
Purchase Department
Receiving Department
Supplier
Prepare PO
Start
Selection of Suppliers by Purchase Department
Printed on Terminal in Purchase Department
Purchase Requisition Generated
Inventory
Adds record to the open/closed Purchase Order
Hard copy report on quantity and quality
Reconcile with PO and packing slip
Items to warehouse
Receiving Department
System automatically closes PO
Receiving clerk
Adds record to digital receiving report file
Using warehouse terminal
Using department terminal
Supplier Invoice Arrives
Updates Inventory Subsidy Ledger
Copy of Cheque

Copy of Cheque

Automatic setup liability

A/P subsidiary ledger
A/P clerk adds record to supplier invoice
Cash Disbursements
Due to paid and print cheque

Scan everyday
System Automatic updates all affected general ledgers
System removes liability

2) System Flowchart of Conversion Cycle:
Start
Updates Digital Production Schedule
Production Planning and Control Clerk
Quarterly forecast of sales
Drawing upon Bill of Materials and routing sheets system automatically prepares
Two copies

Weekly basis

Digital Work Orders move tickets and material requisitions
Each work center
Print hard copy work orders, move tickets, material requisitions
Work Centre’s Supervisor Terminal
Send move ticket after production complete, hard copy job cards

Cost Accounting
Second copy of material requisition

Copy of material requisitions

Warehouse Clerk
Each work center
Updates material inventory file
Files one copy of material requisition

Materials

    
More requisitions in case of shortage

Work Centre’s Supervisor Terminal
Digital Journal Voucher

General Ledger Control Accounts
Upon completion of batch

Status of work-in-process, record transfers of work in process to finished goods inventory

Setup work in process account, by accessing digital work orders

Closes open work order
Production Batch
Cost Accounting Clerk
Digital Voucher Journal, posts to

Move tickers, MR, job tickets
Work in Process subsidiary ledger
3) Analysis of physical internal control weaknesses in the expenditure cycle:
Some of the risks identified in the expenditure cycle are that of unauthorized inventory purchases, receiving wrong product items, or the incorrect quantities of the items. In case of damaged goods there are no proper controls to address such a scenario. The sending of purchase orders is manual, which means that there can be an error or loss of information in the process. Too much dependency on the purchase clerk to handle and record the open/closed purchase orders and updating the program in the data processing department. This task should be automated and keeping it manual affects the chances of error and duplication of data. Incorrect recording the purchase and cash disbursement transactions in journals and accounts is also a possibility with current system. (Purchase Control, 2019) In physical control we will discuss further into more classes of activities.
a) Ordering Weaknesses:
There are various gaps in the ordering...
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