Accounting Information Systems Assignment

Question 1 -

(a) Briefly describe a business process in which one of the group members is part of.

Suggest reasons of why there may be objections to documentation of that business processes and explain the importance of documentation. Explain if you think that the process should be documented.

(b) Analyse the following business process and draw a flowchart describing it.

Lucy is an employee at ACE.com who needs to purchase a new laptop. She pulls up the purchase requisition form from the company's intranet system and fills in the appropriate information. The system will check that her purchase requisition must not be more than $5,000 dollars. When completed, she then sends the completed electronic form to her supervisor for approval. An email is triggered to her supervisor.

On receiving the email, her supervisor Mary, approves the request and clicks the "Submit" button to forward Lucy's request electronically to the purchasing department. A purchasing agent creates an electronic purchase order (stored in a separate database from the purchase requisitions) based on the information Lucy provided. The agent consults the electronic vendor file to locate an authorized vendor for the requested laptop. The AIS then sends an electronic version of the order to the receiving department. One hardcopy of the order is sent to the vendor while the other copy is filed into Purchase Order file.

Question 2 -

You are part of the internal audit team in a private education institution. The following lapses were reported during an audit of a centralized payment and payroll processing system. Draft a report to the management committee identifying for each lapse, the risk involved and suggest preventive, detective and corrective controls that can be implemented.

(a) Access rights were not granted on a need basis but an entire module.

(b) Delay in removing access rights of officers who no longer needed them.

(c) No periodic reviews of user accounts, including those of privileged users.

(d) No review of activity logs of privileged users.

Question 3 -

Ace Design has a revenue process cycle as follows:

The following scenarios were noticed.

(i) Sales Order Entry (Head Office)

• Sales managers are able to enter items that are not within the stock master data.
• Sales managers are able to enter sales order and approve them as well.

(ii) Shipping (Factory)

• Items were picked and loaded directly into the delivery truck without verification.
• Defective items were returned but not updated in delivery receipt.

(iii) Billing (Head Office)

• Billing invoices are manually triggered by the finance team.

(iv) Cash Collections (Head Office)

• Collection of Cash but receipts were not issued.
• Cheques received were banked in once the cheque number is recorded in the invoice.

(a) Analyse the revenue process cycle scenarios and advise ACE of the threats and security issues that might surface.

(b) Describe how these issues could be mitigated using control principles.