Risks and Controls and SDLC Value: 20% Due date: 30-Apr-2018 Return date: 21-May-2018 Length: Variable Submission method options Alternative submission method Task Question 1. Risks and Controls (10...

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Answered Same DayApr 30, 2020ACC200Charles Sturt University

Answer To: Risks and Controls and SDLC Value: 20% Due date: 30-Apr-2018 Return date: 21-May-2018 Length:...

Abr Writing answered on May 01 2020
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RISK AND CONTROL AND SDLC
Risks and Controls and SDLC
Introduction
Internal controls are considered to be essential for achieving the long lasting success in the organisation. The internal control helps the organisation to maintain its all operations as per the plans that have been formulated by the organisation. But in every syst
em there remains some potential weakness that hampers the functioning of the system. Thus, the system Development Lifecycle (SDLC) is one such technique that aims at improving the problems and difficulties that arise while implementing a particular system and its various phases. Thus, the current assignment mainly deals with risk and their effective control and how the System Development Lifecycle improves the various systems in organisation for better efficiency.
Part 1: Risks and Controls
Solution 1: Internal control weakness in the Strings Revenue Cycle
According to the case study given in the current assignment, there can be identified certain internal control weakness in the revenue cycle of String Pty Ltd. The major internal control weakness can be seen in the form of insufficient management of sales as it is evident from the fact that the unrealized credit sales of the company is 17% which is considered to be too high and pose greater risk in future. These are mainly because of some large online customers that have ordered company’s product for the first time but either have refused or denied from obtaining the delivery of the products and the merchandise (Ellis, 2012).
Further, another weakness in the internal control system of Strings revenue cycle includes its payment policy which can cause risk to future business. The payment policy of the company is that the customer makes the payment within 21 days of the invoicing of the bill, along with a special discount of 2% to those customers who make a quick payment within the 5 days of the delivery of the product. As per the report of the CFO, only half of the customers who purchase products from the company on a regular basis opt for this option. Thus, the other half’s payment remains in doubt as they might extend the payment period from 21 days to any number of months.
Solution 2: Potential impacts of the above mentioned weakness on the organisation
The Strings Pty Ltd. experienced a number of effects from the internal control weakness. The major impacts can be seen in the form of errors in the sale made by the company as in the recent times the sales of the company have significantly increased which led to improper management of the sales of different customers. Wrong sales were made to wrong customer. Further, the other impacts include delay in shipping of the items as there was no proper maintenance of stock and the stock was also misplaced in the warehouse of the company. The company maintains a perpetual form of inventory system but since two years the company has not conducted physical counting of the inventory (Vijayakumar & Nagaraja, 2012).
The company’s financial position would be adversely affected by observing its rate of uncollected sales which is 17% because this higher rate would mean a major portion of the company’s sales is uncertain to meet in monetary terms. Also, this would impact the company’s trust on online mode of selling as the uncollected sales are mainly from the online orders and as there is...
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