Question 1 [Words Limit: Up to 400 words] a) Internal controls play an important role in reducing the risks of fraudulent activities in any organization. Further, advanced technology helps accountants...

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Question 1 [Words Limit: Up to 400 words] a) Internal controls play an important role in reducing the risks of fraudulent activities in any organization. Further, advanced technology helps accountants in reducing fraud. Explain how an advanced technology transaction processing system reduces fraudulent activities from any organizing. [Word Limit: Up to 200 words] b) Refer to the given system flowchart, and we have discussed the control weakness and the risk associated with these control weaknesses. Based on these control weaknesses and the associated risk, what types of frauds are possible in this business environment. [Word Limit: Up to 200 words] Question 2 [Words Limit: Up to 400 words] The flowchart below illustrates two alternative inventory ordering methods. Answer part 1 to 3 based on this flowchart. Required: 1. Some organizations prefer using alternative two. What are the advantages of using alternative two instead of the alternative one? Be specific. 2. What is the difference between purchase requisition and purchase order? 3. Under what circumstances can you envision management using alternative one rather than alternative two? 4. Some accountants argue that the receiving department should be eliminated. Discuss the objective of eliminating the receiving function. What accounting/audit problems need to be resolved. Question 3 [Words Limit: Up to 300 words] HARDA Limited employs 650 workers in ten different departments. These workers work in various capacities, including the manufacturing workers, technician, and janitorial workers. Each department has a supervisor who is responsible for supervising departmental activities. In addition to supervising operations, the supervisors of the departments are responsible for recruiting, hiring, and firing workers within their areas of responsibility. The organization attracts casual labour and experiences a 20 to 30 per cent turnover rate in employees per year. Employees clock on and off the job each day to record their attendance on time cards. Each department has its clock machine located in an unattended room away from the main production area. Each week, the supervisors gather the time cards, review them for accuracy, and sign and submit them to the payroll department for processing. Besides, the supervisors submit personnel action forms to reflect newly hired and terminated employees. From these documents, the payroll department signs the paychecks, which are drawn on the general cash account, and sends them to the department supervisors for distribution to the employees. A payroll register is sent to the cash disbursements department where it is filed. Required: a) Discuss the risks for payroll fraud in the HARDA Limited payroll system. b) What controls would you implement to reduce the risks? [4 Marks] Question 4 [Words Limit: Up to 300 words] Marketing system provides some useful insights regarding the sales order. Different departments use this information. For instance, the production process uses this information to forecast the expected sale for next month. The production clerk uses this to create an online production schedule. From this schedule, the system automatically prepares weekly online work orders to be used by the production department. The production supervisor assesses the work orders from his terminal and prepares the necessary paper-based move tickets and materials requisitions. Then, the move tickets and two copies of the materials requisitions are distributed to each work centre. Later, work centre employees submit the two copies of the materials requisitions to the warehouse in exchange for materials and sub-assemblies. If additional new materials are needed beyond the standard quantity, the supervisor issues additional materials requisitions. Work centre employees record their work hours on paper-based job cards and send them to the accounting department. After the production is completed in a work centre, the move ticket is submitted to the accounting department. Upon the completion of a production batch, the production supervisor closes the open work order file. The warehouse manager files one copy of the materials requisition and updates the materials inventory file in the computer in her office. The manager then sends a second copy of the materials requisition to the accounting department. At the end of the day, the manager prepares a digital journal voucher and post it to the general ledger control account. The accounting clerk assesses the work orders and set up a work-in-process account for a production batch. Throughout the production period, the clerk also receives move tickets, job tickets, and materials requisitions, which he uses to post to the work-in-process account. At the end of each day, the accounting clerk prepares a digital journal voucher and post it to the general ledger control account to reflect the status of work-in-process and to record transfers of work-in-process to finished goods inventory. Required: Analyse the risks associated with the following business processes of a manufacturing company. Question 5 [Words Limit: Up to 350 words] You are working in a mid-size company for the last couple of years. Recently you are promoted as a Chief Information Officer (CIO) and excited to perform your new role efficiently. David Savage, Chief Operation Officer (CEO) of your company has decided to implement an Enterprise Resource Planning (ERP) system. David Savage has met with a consulting ERP firm based on a recommendation from a friend at his club. During a recent meeting, David Savage introduced the chief consultant, who was charming, was personable, and seemed very knowledgeable. The CEO’s first instinct was to sign a contract with the consultant, but he decided to hold off until he had received your input. Required: David Savage asked you to write a memo presenting the issues and the risks associated with consultants. Further, outline a set of procedures that could be used as a guide in selecting a consultant. Question 6 [Words Limit: Up to 350 words] a) The acronym TELOS which provides guidance for accessing project feasibility. The term stands for technical, economic, legal, operational and schedules feasibility. Discuss these feasibilities briefly. And elaborate cost-benefit analysis under economic feasibility. b) Accountants should be involved in the detailed design and implementation of the system development life cycle. Comment on the statement.