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Ais255 Case Study

This document contains a group assignment case study on the revenue and expenditure cycles of an accounting information system. It identifies weaknesses in the purchasing, receiving, accounts payable, and treasurer functions and provides suggested solutions. Key risks identified include incorrect information from verbal orders, higher costs without competitive bidding, errors from lack of standard receiving procedures, unbalanced accounts, and potential fraud or theft without segregation of duties or dual verification of cheque signing. The suggested solutions center around implementing purchase requisitions, receiving reports, segregating tasks, and adding verification steps.

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Noor Syazani
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360 views4 pages

Ais255 Case Study

This document contains a group assignment case study on the revenue and expenditure cycles of an accounting information system. It identifies weaknesses in the purchasing, receiving, accounts payable, and treasurer functions and provides suggested solutions. Key risks identified include incorrect information from verbal orders, higher costs without competitive bidding, errors from lack of standard receiving procedures, unbalanced accounts, and potential fraud or theft without segregation of duties or dual verification of cheque signing. The suggested solutions center around implementing purchase requisitions, receiving reports, segregating tasks, and adding verification steps.

Uploaded by

Noor Syazani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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AIS255

ACCOUNTING INFORMATION SYSTEM


UITM PERLIS CAMPUS ARAU
RAC1204F GROUP ASSIGNMENT

PREPARED FOR: NOR HASHIMAH BINTI ABDUL WAHID

BY:
MAWADDAH BINTI ZAKARIA [2019418656]
NOOR SYAZANI BINTI NOOR NASIR [2019448276]
NURANIS AWATIF BINTI MOHD NASIR [2019424572]
SYAZA MAZLIYANA BINTI MAZALI [2019232408]
CASE STUDY 1 (THE REVENUE CYCLE)
Mail Room Cash Receipts Accounts Receivable

Customer Remittance
Cheque
List
Remittance
Remittance
List
Advice
Cheques Cash Account
Remittance Receipts Receivable
Advice Journal Sub Ledger
Reconcile
cheques
with RA and Process Cash Process Cash
prepare Receipt Receipt
remittance Journal
list Account
Voucher
Summary
Deposit Slip
Deposit Slip Remittance
Remittance List
List Deposit Slip
Remittance
Remittance Advice
List
Remittance Cheque
List Remittance
List
File
Cheques

Remittance File
Bank
Advice
Case Study 2(The Expenditure Cycle)

Question 1 and 3

Business Weaknesses Suggested Solutions


Functions
1.Purchasing 1.The purchasing clerk use a phone 1. The purchasing clerk should
to request price quotation and gives prepare a purchase requisition that
the vendor verbal order. includes the name and address of the
primary supplier, the economic order
quantity of the item and expected unit
cost of the item.

2. No procedures established to 2. Ask bids for large orders.


ensure the best price is obtained.

2.Receiving 1. The receiving clerks stamps the 1. Use receiving report starting the
purchase order with a date received quantity and condition of inventories.
and if relevant they use a red pen
to records any difference between
quantity on the purchase and
quantity received.

2. The receiving clerk noticed the 2. Print a multipart hard-copy


purchasing department by using receiving report. One copy to the
orally. storeroom. Another copy to purchase
department. Third copy sent to the
inventory control. The last copy is
sent Account Payable department.

3.Account 1. The Accounts Payable Clerk only 1. The Accounts Payable Clerk
Payable debiting the equipment account. should credit account payable too so
Purchase from vendor can be the account can be balance.
incorrectly calculated.

2. A cheque is prepared. The 2. The payable account clerk needs


invoice and PO are files by PO to segregate work tasks in a more
number in a paid invoice file, and orderly manner to employees so that
then the cheque is forwarded to the every activity involved can be done
Treasurer for signature. There are as best as possible.
no segregation of duties.
1. Only one employee that have a 1. Atleast there has more than one
4.Treasurer key and signature plate to the staff for doing this job for avoided any
cheques-signing machine and burglary.
maintains a record of usage of the
cheque-signing machine

2. There are no checks from other 2. Take another employees to double


employees on cheque that have checking about cheques that have
been signed by the treasurer. been signed by treasure for avoid any
theft.

2. Explain possible risk to operations of LEO Manufacturer due to weaknesses found in Question 1.

1. Purchasing

Weaknesses 1: Wrong information can happen when using a phone and gives a verbal vendor.

Weaknesses 2: More costs are used.

2. Receiving

Weaknesses 1: No standard work can caused many mistakes.

Weaknesses 2: There can be errors in giving and hearing information from both parties.

3. Account Payable

Weaknesses 1: The account is not balance.

Weaknesses 2: The employment’s activities will not run smoothly

4. Treasurer

Weaknesses 1: Risks such as losing company money.

Weaknesses 2: The risk of misappropriation of company money and fraud in altering data easily.

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