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Style:
Harvard
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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Topic:

Information system in accounting and finance. Accounting, Finance,SPSS

Essay Instructions:

Part 1 - A CASE STUDY
COVID -19 SOLUTION LIMITED (CVS LTD) CASE STUDY
CVS LTD is a company that specialises in providing building supplies to building contractors, hardware stores and home improvement centers in Hull and East Riding of Yorkshire. Over the past years, CVS Ltd has expanded its operations to serve customers across UK and now
employs over 200 people as technical representatives, warehouse workers, sales staff, administration staff etc. CVS Ltd has experienced fierce competition from the online discount stores. In addition, the company is suffering from operational inefficiencies related to its archaic
information system. CVS Ltd expenditure cycle procedures are described in the paragraphs below. As information system student, you are required to help CVS Ltd improve its transaction processing systems.
Purchasing:
The process begins in the purchasing department. Each morning the purchasing agent reviews the inventory level from his department terminal and searches for items that have fallen to their re-order points and need to be replenished. The purchasing agent then select the vendor and creates digital purchase orders in the purchase order file. He then prints two hard copies of each purchase order and sends them to the respective vendors.
Receiving:
When the items are received, the receiving department clerk reconciles the goods with the attached packing slip and the digital purchase order which he accesses from his computer terminal. The clerk then creates a digital receiving report, stating the conditions of the materials received. The systems automatically close the purchase order previously created by the purchase agent. In addition, the receiving clerk prints a hard copy of the receiving report, which he sends with the inventory to the warehouse where the items are stored.
Warehouse:
Upon receipt of the inventory, the warehouse clerk reconciles the items with the receiving reports and updates the inventory subsidiary ledger. The accounting system automatically and immediately updates the inventory control account in the general ledger.
Accounts payable:
Once the accounts payable clerk receives the vendor’s invoice, they reconcile it with the purchase order and receiving report from their terminal. The clerk then creates a digital vendor invoice record and set a due date for payment. The systems automatically updated the accounts
payable control account in the general ledger. The accounts payable clerk reviews the open vendor’s invoice records from their terminal daily looking for items that need to be paid. The clerk then records the payment in a digital check/cheque register and closes the open vendor
invoice. Finally, the clerk prints a hard copy of the check/cheque and sends it to the vendor.
The systems automatically update the accounts payable and cash general ledger accounts.
You are required to;
(a) Analyse the physical internal control weaknesses in the CVD Ltd systems and suggest
possible solutions. (20 marks)
(b) Create a data flow diagram of the current system showing; (i) The Expenditure
processing cycle and (ii) cash disbursement cycle. (20 marks)
(c) Describe IT control systems that should be in place in this system. Your answer should
focus on (a) Input control (b) process control and (c) output control (20 marks)
(Total 60 marks)
Part 2
WRITE A REFLECTIVE ESSAY ABOUT THE EFFECTS OF COVID-19 ON TRANSACTION PROCESSING SYSTEMS OF A COMPANY OF YOUR COICE
Covid -19 has caused major disruptions in the transaction processing systems (TPS) of key multinational companies (MNC’s) and small-scale enterprises (SME’s) around the world. Using an example from any MNC or SME’s of your choice you are required to write a reflective
essay about how Covid-19 has affected the TPS subsystems particularly on (a) The expenditure processing cycle and (b) the revenue processing cycle of a company of your choice.
Please Note: You are ONLY required to select one MNC or SME of your choice and use it throughout all your reflective writing.
Your Reflective Essay has to cover the following points;
(a) Explanation of expenditure and revenue processing cycle providing examples related to your selected company. (8 marks)
(b) Provide examples of some of the activities/procedures involved in the expenditure and revenue processing cycle of your selected company before the Covid -19 outbreak
(8 marks)
(c) How has Covid-19 affected or change these activities/procedures identified in (b)above. Provide arguments for and against the effects of Covid-19 on the expenditure and revenue situations of your selected business (8 marks)
(d) In your opinion, how will Covid-19 influence future TPS systems (expenditure and revenue processing cycle) of your selected company. (8marks)
(e) Reflecting on the Covid-19 pandemic, give your personal judgement on any lessons learnt about the effects of Covid-19 on TPS (expenditure and revenue processing cycles) of your selected company and provide some suggestions that will help your chosen company deal with similar problems in future. (8 marks)
(40 marks)

Essay Sample Content Preview:

COVID -19 Solution Limited (CVS LTD) Case Study
Name
Information System in Accounting and Finance
Date
Part 1 - A CASE STUDY(a) Physical internal control weaknesses in the CVD Ltd systems and possible solutions.
The six categories of the physical internal control are
* Transaction authorization
* Segregation of duties
* Supervision
* Accounting Records
* Access Controls
* Independent verification (Hall, 2018)
Internal controls are the measures that the management adopts to provide reasonable assurance that there is prevention, detection and correction of unauthorised and unnecessary activities. The human activities that influence the controls in accounting systems, primarily focus on the people and how they carry out the tasks.
The purchasing agent selects the vendor and creates digital purchase orders in the purchase order, but there is no mention of an approved vendor list and checking this. There may be a problem as the agent may choose the wrong vendor, price, poor quality goods, and services and at other times there is a risk of late delivery. Another issue in the purchasing department is that there is no information on numbering the purchase orders and authorisation of big purchases.
Thus, there is a need to keep an approved vendor list that is checked by another person, while also numbering the purchase order and authorization purchase of large items. This ensures that the purchasing agent does not receive kickbacks and favour vendors that offer inferior goods at high prices.
While the accounts payable clerk reconciles the purchase order and the receiving report, there is no information on receipt of the goods from the end-users. The clerk needs to ensure that the receiving report had adequate information on receipt of goods, which tallies with the end-users. Additionally, it is necessary to check for any extensions on invoices.
Other Controls
Transaction authorization
* There is a risk of unauthorised acquisition of goods right from purchasing and there is a need for approved requisition.
* Purchases should only be made from approved vendors.
Segregation of duties
* In different stages of the accounting process and transactions having different individuals minimize errors and opportunities for fraud as no one person initiates, records, authorizes and reconcile a transaction.
* Complete separation of receiving and purchasing transactions taking into account the necessary coordination.
Supervision
* Establish a span of control where there is a manager who supervises competent and trustworthy personnel (Johnstone, Gramling and Rittenberg, 2018).
Accounting Records
* Review the purchase ledger control account and reconcile with the bank
* Accounts payable clerk prints the check/cheque and sends it to the vendor, but there is a need to verify the invoices and tracking purchase orders.
Access Controls
* Limiting access to accounting records other than the automated records including the purchase orders, journal, ledger, and control accounts.
Independent verification
* Reconciliation accounts and ensuring there is accuracy and completeness.
(b) Data flow diagram of the Expenditure processing cycle and cash disbursement cyc...
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