HI5019 Information Systems for Business and Enterprise

Bell Studio sources its inventories from manufacturers in Australia, China, Japan and New Zealand. The company has a centralised accounting system with networked terminals at different locations. Bell Studio’s expenditure cycle procedures are described as follow:HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment

Purchases System

The process begins when the purchasing clerk checks the inventory subsidiary ledger at his/her computer terminal each morning. When the quantity of an item is deemed to be too low, the clerk selects a vendor from the valid vendor file and prepares a digital purchase order. The clerk prints two hard copies: one copy is sent to the vendor, and the other is filed in the purchasing department. Digital purchase order record is added to the purchase order file.

When the goods arrive in the receiving department, the receiving clerk inspects them and reconciles the items against the information in the digital purchase order and the packing slip. The clerk then manually prepares two hard copies of the receiving reports. One of these accompanies the goods to the inventory warehouse, where the clerks shelves the goods and updates the inventory subsidiary ledger from his/her computer terminal. The clerk then files the receiving report in the department.

When the accounts payable clerk receives the invoice he pull the receiving report from the temporary file, prints a hard copy of the digital purchase order, and reconciles the three documents. At this time, the clerk updates the digital accounts payable subsidiary ledger, the accounts payable control account and the inventory control account in the general ledger from his terminal. The clerk then sends the invoice, receiving report, and the purchase order copy to the cash disbursement department.

Cash Disbursements System

Upon the receipt of the documents from the accounts payable department, the cash disbursements clerk files the documents until their payment due date.

The cash disbursements clerk then updates the cheque register, accounts payable subsidiary ledger, and the accounts payable control account from his/her computer terminal. Finally, the receiving clerk files the invoice, purchase order copy, receiving report, and cheque copy in the department.

Payroll System

Bell Studio’s employees record their hours worked on time cards every day. Their supervisors review the time cards for correctness and submit them to the payroll department at the end of each week. Using a computer terminal connected to the central payroll system, which is located in the data processing department. The payroll clerk inputs the time card data, prints hard copies of the pay cheques, print two copies of the payroll register, and posts to digital employee records. The payroll clerk files the time cards in the payroll department and sends the employee pay cheques to the various supervisors for review and distribution to their respective department employees.

The accounts payable clerk reviews the payroll register and manually prepares a disbursement

voucher. The clerk sends the voucher and the payroll register to the general ledger department. The

accounts payable clerk then writes a cheque for the entire payroll and deposits it in the imprest

account at the bank. Finally the clerk files a copy of the cheque in the accounts payable department.

Once the general ledger clerk receives the voucher and payroll register, the clerk posts to the general ledger from the department computer terminal and files the voucher and payroll register in the department.

Required

Prepare a report to Chief Operating Officer to evaluate the processes, risks and internal controls for its expenditure cycle. In your report, you need to include the following items:

Data flow diagram of purchases and cash disbursements systems Data flow diagram of payroll system

System flowchart of purchases system

System flowchart of cash disbursements system System flowchart of payroll system

Description of internal control weakness in each system and risks associated with the identified weakness

Assignment Structure

The report should include the following components:

Assignment cover page clearly stating your name and student number A table of contents, executive summary

A brief introduction or overview of what the report is about.

Body of the report with sections to answer the above issues and with appropriate section

headings Conclusion

List of references