Strategic Information Systems for Business
Management of strategic information is one of the important feature in the growing Information Technology based world today. The process itself is a business in its categorisation, process, Store, protecting and transferring the information created and received by them, It also allows the companies to be applied as analytical tools to be able to calibrate the growth opportunities and ensure operational efficiency. In this report a discussion is presented on a renowned art and supplies firm called Bell Studio based in Adelaide. The Foodpanda and travels important component of Expenditure or transaction cycles within the company such as purchase in system, cash December cement system and payroll system along with shading light on existing internal control weakness in each of the system followed by certain measures to be applied to avoid such issues.
Data flow diagram of purchases and cash disbursements systems
Data flow diagram is visual depiction of the flow of information within a certain system being processed. It is not the design of the process rather it is the for the requirement that a system needs in order to you execute as well as accomplish certain program all process wit in a system. It is an important tool connecting Bridge between system analyst and the person who initiates system redesigning (De Simone, Ege and Stomberg 2014). The Diagram represents visually the teps followed by a data starting from the external source till the end of the destination in the internal source.
System flowchart of purchases system
A flowchart is a visual representation of a process breaking it down step by step from the beginning to the end of a certain action to be executed. It also provides solution If in case there appears error during follow-up of the step (Cassidy 2016). The function of a flowchart is to visually show to layman how a process can be made to function or how can it be design in order to obtain certain end result within a process of system.
From the above diagram the idea regarding the processing of purchasing system is derived. Purchase system is one of the major components of the expenditure cycle followed within Bell studio. The stem rigorously follows step that get initiated when a clerk known as purchasing clerk keeps track of the inventory ledger in each morning. On finding the quantity of certain art supply items low beyond threshold the clock generates purchase order and get to hard copy of it. One tends to sent to the vendor is selects for the supply of the item and another he adds to the file of the purchase order (Galliers and Leidner 2014). The receiving department make proper inspection of the arrived goods keeping parity with the digital purchase order and consequently prepared to copies of receiving report. One of them is attached with the received items bed house to be kept on the shelves and another copy of the report is further sent to the department of accounts payable. The clerk in that department waits for suppliers invoice to come and after he receives it he makes a updation in the digital account ledger. It is the duty of the clerk to combine and make copy of the invoice, purchase order and receiving report and further proceeds that to the department of cash disbursement.
Internal Control weakness and associated Risk Factor:
There exists lack of independent checking of stocks against the requisition of the Purchase items. This may lead to overstock in inventory which is detrimental for the company. Often it has been noticed that the Purchase transactions do not follow a sequence making inclusion of the cancel orders. This eventually can lead to displacement of the orders. This will see really impact the revenue and Audit control of the company. Regarding selection of the vendor, the company generally give spectral lines to ask reputation and good business connection over the factors such as time of delivery, product quality, prices, creativity and accountability of the products to need the customer demand, innovative designs etc. The receiving department often fails to clear the goods in coming to the inventory making inclusion of fixed assets. There exists lack of tracking of the purchasing items against the items ordered.
Measure of Control
One of the important measure to avoid the risk and to do away with the internal control weakness can be maintained through a daily report by the purchasing department specially the Sequencing of purchase requisition and the orders to be delivered. This will enhance the Assurance of the shipment of all the purchased items (Arvidsson, Holmström and Lyytinen 2014). The selection of vendor for supplier should be done based on prices charged, time of delivery, quality of the product and its design creativity is well to attract I will reach to more customer base. In order To avoid additional problems the clock associated with this department should maintain all the printed hard copies of the purchase order, received report etc safely.
System flowchart of cash disbursements system
The second important component of expenditure cycle is cash disbursement which refers to the process related to the fund usage within a business organisation. The cash is this embarrassed two different sectors, departments and even employees for the benefit and various usage. Such processes of cash disbursement are strictly executed within the internal control and the framework of self created rules.
From the above diagram the process of cash disbursement within their Studio is quite clear. After the purchasing clerk send document to the department of account payable. the can characters keep the documents hidden file till the due date for the payment arise and on the very due date cheque ok is prepared by him (Galliers and Leidner 2014).. The cheque if sent to the treasurer for assigning and after that it is directly mail to the vendor or supplier. It is the duty of the cash disbursement clerk to update the check register and the subsidiary ledger of account payable. The invoice, copy of purchase, cheque ok and receiving report our father kept in files by receiving clerk of the said department.
Internal Control weakness and associated Risk Factor:
Handling of documents and keeping adequate documentation Army major internal control weakness within cash disbursement department. Due to digitalization of management system regarding making payment, approval, modification, time of modification, execution, results of action often can go wrong, misplaced or even deleted or not stored properly. This can lead to huge loss of data affecting the business. The department requires segregation of function allotted to different employees rather than allocating loads of works to single clerks. This can often lead to failure in the execution of task as well as fraudulent activity. Availability of adequate training sometimes get missing as it is very important to update the standard of the company in terms of managing financial resources such as cash disbursement (Gissel 2014). The company often neglect to keep track of the approvers made by its employees so that it does not exceed their level of authorisation because if that happens continuously the company can land of in severe financial trouble. Another major issue revolve around reconciliation of the important document such as inventory report, purchase order, invoice, copies of cheque etc. Lack of properly consolation can lead to lack of accountability for difference is within business which is not expected at any cost.
Measure of Control
In order to deal with documentation issue it is important to ensure inclusion of supporting documentation within cash disbursement system. It will empower each Walkers to make verification regarding the integrity of transaction of cash and supporting documentation will consolidated the process without keeping any scope for tampering the data in future. It Is also important to review the steps in order to secure the electronic as well as physical cash and related data which should be secured with strong password policy (Guo, Huang, Zhang and Zhou 2015). In order to safeguard information related to financial transactions it is mandatory to review the electronic as well as manual oversight control. Access To various functions should be according to the allocated responsibilities of the workers does limiting their unlimited access in other documents and also trimming their activities.
System flowchart of payroll system
The employees in the Bell Studio keep record of their working hours in a time card on a daily basis. These cards along with data are further reviewed by the supervisors Who then submit this data to the department of payroll towards the end of every week. It ok is the duty of the central payroll department to check the inputs of the time card and make printed hard copy of the pay cheques along with payroll registers which are combined and posted to maintain the digital records of the employees (Pearlson, Saunders and Galletta 2016). The Time cards are filed by the payroll clerk and teachings are delivered to the employee through various supervisor’s forefather review. It is then the duty of the payroll clerk to convey the payroll register to the accounts department and find the time cards in the department. On receiving the payroll register the clerk associated with accounts payable department for the preparing of voucher regarding disbursement .This voucher goes to the ledger department and a cheque is written at the accounts payable department for the entire payroll and adequate money is deposited in the bank account. The clerk keep all the copy of the documents in proper file within the accounts payable department.
Internal Control weakness and associated Risk Factor:
The process of internal control within payroll department aims to protect the information of employees as well as the financial resource of the company. Weaknesses existing in such internal control process often leads to appearance of errors in the entry causing peril discrepancies that further exposes huge penalties, fine and loss of reputation honour company. Major internal control weakness within belt studio can refer to the collection of data. Even if the company uses digitised computerized system to handle data few activities regarding time card are managed manually which can lead to falsified information. Weaker time card verification process applied can lead to severe misinterpretation of data affecting their payroll.
From Description of expenditure cycle in Dell Studio it is clear that that does not exist numerous employees to deal with payroll activities. It is mandatory to keep the function segregated and allocated to various employees over concentrating the charges on one because if one person falters then the entire system can go wrong. Moreover there can be possibility of fraud activities. Another major issue in internal control of payroll of a company can be security of data regarding the payroll as well as personal information of each individual employees. Activities such as blank cheques signs, equipment to Stamp on cheques ,hard printed copy of information can cause information theft, misplacement of documents leading to major identity theft and financial ruin (Aramide and Bashir 2015). Often lack of strong password policy, double ended encrypted usage of information can lead to This issues.
Measures of Control
One of the safest measure in this regard is to limit the access to the records of payroll two only the one who takes care of the entire process regarding petrol and that preferably should be the owner of the business or someone trusted specialist. It Is also important to make regular inspection of the payroll records to maintain accuracy (Galliers and Leidner 2014). Monthly reviewing of the payroll records cuts back any chances of problem being an noticed. It is a safest measure for the one who owns the business but does not run the payroll in order to avoid major problem in future. Creating separate bank account for the Rolling of payment and Taxes related to payroll is another important measures to avoid any kind of issues. It is also helpful to safeguard the financial resources of business if fraudulent activity takes place. One of the important and safest measure to avoid internal control weakness in payroll department is to approve and review the time card through eyes maybe weekly and monthly in order to eliminate manipulation of the working hours of the employees by all means. Rituals of periodical payroll audit insurance correct movement close the system, employees as well as associated agencies (Gissel 2014).. In order to stop an authorised access within the payroll system and protect the electronic records strong passwords, software should be used and also backup paper record should be maintained in safety lockers.
The above discussion is substantial enough to conclude the importance of strategic information system within the business organisation. It not only help in proper functioning of the important transaction cycle such as purchasing system, cash disbursement and payroll system but also application of proper software based system can lead to avoidance of major issues within the these systems.. Ultimately the end result will be e an error free, efficient effective and productive business growth executed by the company benefiting both the local as well as global economy contributing to the consolidation of the industrial establishment.