Student Number: (enter on the line below)
Student Name: (enter on the line below)
HA2042
ACCOUNTING INFORMATION SYSTEMS
FINAL ASSESSMENT
TRIMESTER 3, 2021
Assessment Weight: 50 total marks
Instructions:
• All questions must be answered by using the answer boxes provided in this paper.
• Completed answers must be submitted to Blackboard by the published due date and time.
Please ensure you follow the submission instructions at the end of this paper.
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit.
Question 1 (11 marks)
As an Accounting Information System expert, you provide consultancy services to various clients in Australia. MPS Limited is one of your clients, and Miss Angela, the head of its accounting department, is concerned about the revenue cycle’s business processes and data related operations. Therefore, she has recently contacted you to evaluate their revenue cycle. You asked Miss Angela to provide the system flowchart of the business activities involved in their revenue cycle. Miss Angela has prepared the following Figure 1: System Flowchart for you.
Figure 1. System Flowchart of the Revenue Cycle Activities
Required:
a) Describe potential internal control weaknesses in the above activities of MPS Limited.
[4.5 Marks. Word Limit: Up to 150 words]
ANSWER a): ** Answer box will enlarge as you type
b) Assignment help – Discuss the potential risks associated with the internal control weaknesses identified in Section (A) above. [4.5 Marks. Word Limit: Up to 150 words]
ANSWER b):
c) Based on Section (B) above, what types of frauds are possible. Hint: we have discussed different types of frauds in the interactive tutorial and lectures. Your discussion should be based on these contents. [2 Marks. Word Limit: Up to 150 words]
ANSWER c):
Question 2 (11 marks)
Mr Smith has been working hard for the last ten years in MarksPush Limited, and he has requested frequently his immediate boss and other concerned officers to consider himself for the promotion. Even though some other junior workers are promoted, the promotion requests of Mr Smith are always ignored. Finally, Mr Smith decided to resign since he thought he was not fairly treated and therefore not promoted. He has secured a similar job in XYZ Limited, one of MarksPush Limited’s competitors, based on his qualification and competency. Mr Smith understands that the IT department of MarksPush Limited is not efficient, and there are no defined procedures for the account and passwords of terminated employees. Mr Smith further confirmed that his account and password for MarksPush Limited were still active. Using these details, Mr Smith accessed, copied and brought many innovative engineering designs from MarksPush Limited to XYZ Limited.
Required:
a) Based on the given information, identify and explain the type of fraud that has taken place. [4 Marks. Word Limit: Up to 150 words]
ANSWER a):
b) What must have motivated the employee to commit the fraud? Explain your answer.
[4 Marks. Word Limit: Up to 150 words]
ANSWER b):
c) List and explain in detail two contributing factors to the type of fraud that had taken place. [3 Marks. Word Limit: Up to 100 words]
ANSWER c):
Question 3 (7 marks)
Smith and Sons Limited has a flat-file processing system. The information-processing facility of the company is extensive. Different applications, such as order processing, production planning, inventory management, accounting systems, payroll, and marketing systems, use separate tape and disk files. You were running an accounting consultancy and considered the best consultant on the accounting information system. Therefore, Smith and Sons Limited has recently hired your consulting firm to investigate the possibility of switching to a database management system.
Required: Based on the above information, prepare a memo to the top management team at Smith and Sons Limited explaining the advantages of a database management system (DBMS). Also, discuss the necessity of a database administrator and the job functions this person would perform.
[Word Limit: Up to 400 words]
ANSWER:
Question 4 (7 marks)
Mr Paul finished his accounting qualification in the early 2000s, and he joined AISL Corporation as an accountant. After delivering his services for over two decades, he is a highly regarded employee of the AISL Corporation. His loyalty to the company is reflected in his dedication to his job as a general accounting clerk. From which he has not taken a vacation in almost 15 years. Because of his commitment and long tenure, he has acquired many related responsibilities, which has allowed the AISL Corporation to reduce its workforce through attrition, control salary expenses, and become more efficient and competitive. In particular, Mr Paul is performing the following tasks.
Mr Paul receives copies of credit sales orders from the sales department. He accessed the AR subsidiary ledger from her office computer and recorded the AR from these documents. He then records the sales in the sales journal and posts the transactions to the general ledger accounts. Cash receipts in payment of customer accounts receivable come directly to his office. He records the cash receipts in the GL cash and AR accounts and updates the AR subsidiary ledger. He then endorses the checks -for deposit only- and deposits them in the bank at the end of each day.
Required:
a) Based on the above information, identify any control problems in the procedures of AISL Corporation. [3 Marks. Word Limit: Up to 150 words]
ANSWER a):
b) Based on the control problems identified in Section (A) above, what sorts of fraud are possible in this system? [2 Marks. Word Limit: Up to 150 words]
ANSWER b):
c) What controls are needed to reduce the risk of fraud? [2 Marks. Word Limit: Up to 150 words]
ANSWER c):
Question 5 (7 marks)
ABC Limited has recently observed some growth in their sales. The company has managed its expenditure cycle activities through a paper and pencil-based system. In response to this rapid growth, the company decided to configure a new expenditure cycle using the basic technology. The head of the accountant is mainly concerned about the business activities of the following departments:
• Purchasing Department;
• Receiving Department; and
• Account Payable Department.
These business activities are presented in Figure 2 below.
Figure 2.
Required:
a) Based on the above information, discuss the uncontrolled risks associated with the system as currently configured? [4 Marks. Word Limit: Up to 150 words]
ANSWER a):
b) Describe the controls that need to be implemented into the system to mitigate the risks in the given scenario. [3 Marks. Word Limit: Up to 150 words]
ANSWER b):
Question 6 (7 marks)
HARDA Fashion sells ready-to-wear fashion clothes to teenagers. It might be essential to note that the company has a 20-store chain concentrated in emerging economies. Each store has an experienced full-time staff consisting of a manager and an assistant manager. The full-time staff is paid a fixed salary. The full-time staff is assisted by a cashier and a sales assistant who have comparatively less experience. The cashier and sales assistant are paid hourly wages plus the commission based on sales volume. Unfortunately, all business activities are managed manually with a paper-pencil system. Due to their recent rapid growth, HARDA Fashion is planning to implement a new accounting information system. For this purpose, they ask you for advice regarding the typical process of having a new AIS for their stores.
Required: As a management consultant, you are required to use plain English language to explain to them the steps they need to take to have a new AIS designed and installed.
[7 Marks. Word Limit: Up to 350 words]
ANSWER:
END OF FINAL ASSESSMENT
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