Analysing an Accounting Information System

HI5019 T3 2020 Assessment 1: Individual Assignment 1

HOLMES

INSTITUTE

FACULTY OF

HIGHER

EDUCATION

ASSESSMENT DETAILS AND SUBMISSION GUIDELINES

Trimester T3 2020

Unit Code HI5019

Unit Title Strategic Information Systems for Business and Enterprise

Assessment Type Assessment 1: Individual Assignment

Assessment Title Analysing an Accounting Information System

Purpose of the

assessment (with

ULO Mapping)

Students are required to:

• Critically evaluate the purpose and role of accounting

information systems in today’s business environment [ULO 1].

• Articulate the various transaction cycles, financial reporting,

management reporting systems and ecommerce systems to

technical and non-technical stakeholders [ULO 2].

• Appraise the risks inherent in computer-based systems/ERP,

including the role of ethics and the various internal control

processes that need to be in place [ULO 4].

Weight 20% of the total assessments.

Total Marks 20 Marks.

Word limit 2000 words ± 10%.

Due Date The written report is due in Week 7, dated 15th January 2021, on Friday

at 11:59 PM.

Submission

Guidelines

• All work must be submitted on Blackboard by the due date along with

a completed Assignment Cover Page.

• The assignment must be in MS Word format, double spacing, 12-pt

Arial font and 2 cm margins on all four sides of your page with

appropriate section headings and page numbers.

HI5019 T3 2020 Assessment 1: Individual Assignment 2

• Reference sources must be cited in the text of the report and listed

appropriately at the end in a reference list using Harvard referencing

style.

• Include a minimum of ten (10) references, at least five (5) from peer-

reviewed journal relevant to the unit.

ASSIGNMENT DETAILS

The Revenue Cycle of XYZ Limited.

After finishing your Master of Professional Accounting, you started your accounting

consultancy in Brisbane, Queensland, Australia. You got a high distinction in HI5019 Strategic

Information System and preferred to analyse the business processes, risks and internal

controls. XYZ is one of your clients, and the CEO of XYZ is delighted with your services.1 The

head of the accounting department is concerned about their revenue cycle. Therefore, he has

recently contacted you to evaluate their revenue cycle. During the initial meeting, you

elaborate him that conceptually, the revenue cycle is a recurring set of business activities and

related data processing operations associated with providing goods and services to customers

and collecting their cash payments. This definition reveals that the revenue cycle can be

categorised into (1) sales order processing procedures (SOPP), and (2) cash receipts

procedures (CRP). The SOPP and CRP of XYZ are elaborated below. Therefore, you requested

the head of the accounting department to describe the SOPP and the CRP of XYZ Limited

separately. This description is given below.

SOPP of XYZ Limited

The sales department receives the unstandardised sales order since customer orders are

mailed, e-mailed or faxed to the sales department. The sales clerk first converts the

unstandardised sales order into the standardised sales order. For this purpose, the sales

representative requests the missing information, if any. When the order is received, the sales

clerk checks the customer’s creditworthiness of the customer from his computer terminal.

Three years ago, the sales clerk requested the accounting department to provide him with a

list of customers whose account receivables are written off. The sales clerk is still using this

information to check the creditworthiness of the customers. The sales clerk is using the same

procedure to check the creditworthiness of the new customers.

The customer’s order is rejected if the customer’s credit is not verified. The sales order

processing is started after the credit verification. In particular, the sales clerk records the

approved standardised sales order in the sales order system through his computer terminal.

A digital copy of the order is distributed to the warehouse and the shipping department

terminals for further processing. The computer system automatically records the sale in the

sales journal. The clerk reviews this entry and files the hard copy of the customer order in the

sales department.

1 XYZ is a wholesaler of rafting and camping equipment that serves outdoor sports camping retailers throughout the

Queensland.

HI5019 T3 2020 Assessment 1: Individual Assignment 3

As indicated above, the receipt of the digital sales order prompts on the computer terminal of

the warehouse manager. Further, the stock release and the shipping notice are also accessible

at the warehouse terminal. For further processing, the warehouse manager prints out the sales

order, the stock release, and the shipping notice. Using the stock release copy, a warehouse

clerk picks the selected items from the shelves and sends them to the shipping department

along with the stock release and the shipping notice. The warehouse manager then updates

the inventory subsidiary ledger and the general ledger control account from his computer

terminal.

The shipping clerk receives the physical stock, the stock release, and the shipping notice from

the warehouse manager. The shipping clerk matches them to the corresponding digital sales

order displayed on his terminal. If everything matches, he prints out three hard copies of the

bill of lading and a packing slip. The shipping clerk sends two copies of the bill of lading and

the packing slip, along with the goods, to the carrier. The stock release copy and the shipping

notice are sent to the accounts receivable department. The third bill of lading copy is filed in

the shipping department.

Account receivable clerk receives the stock release and shipping notice from the shipping

clerk. Then, the accounts receivable clerk manually creates a hard-copy invoice, which is

immediately mailed to the customer. After mailing the invoice, the clerk uses information on

the stock release to update the accounts receivable subsidiary ledger and general ledger from

his computer terminal. After the records are updated, the clerk files the stock release and

shipping notice in the accounts receivable department. Sometimes, the account receivable

clerk reconciles the quantities from the sales order and adjusts the account receivables.

CRP of XYZ Limited

The payments of customers come directly to the general mailroom along with other mail

items. The mail clerk performs the following tasks:

• Sorts the mail,

• Opens the customer payment envelope,

• Removes the customer’s check and remittance advice, and

• Reconciles the two documents.

To control the checks and remittance advices, the clerk manually prepares two hard copies of

a remittance list. He sends one copy to the accounts receivable department, along with the

corresponding remittance advices. The other copy of the remittance list accompanies the

checks to the cash receipts department. Once the checks and remittance list arrive in the cash

receipts department, the treasurer performs the following tasks:

• Reconciles the documents,

• Endorses the checks,

• Manually prepares three hard copies of a deposit slip,

• Updates the cash receipts journal and the general ledger from his computer terminal,

• Sends the checks and two copies of the deposit slip to the bank, and

• Files the third copy of the deposit slip and the remittance in the department.

HI5019 T3 2020 Assessment 1: Individual Assignment 4

The accounts receivable clerk receives the remittance list and remittance advice from the

mailroom and reconciles these two documents. He then updates the accounts receivable

subsidiary ledger and the general ledger. Then, account receivable files the two documents in

the department.

Required

Based on the above information, prepare a report for the CEO of XYZ Limited to evaluate their

revenue cycle. In your report, you need to include the following items:

1. The CEO asks you to start the report from five general risks involved in the revenue

cycle of any business. Further, indicate the physical and IT control against each risk.

2. Describe potential internal control weaknesses in the sales order processing

procedures and cash receipts procedures of XYZ Limited.

3. Discuss the potential risks associated with the internal control weaknesses identified

in Section (2) above.

4. Based on Section (3) above, what types are frauds are possible. Hint: we have discussed

different types of frauds in the interactive tutorial and lectures. Your discussion should be based

on these contents.

ASSIGNMENT STRUCTURE

The report should include the following components.

1. Holmes Institute Assignment Cover Sheet

The Holmes Institute Assignment Cover Sheet is available at the end of menu item

Assessments on the Blackboard.

2. Executive Summary

The executive summary should be concise and not involve too much detail. It should make

commentary on the main points only and follow the sequence of the report. Write the

executive summary after the report is completed, and once you have an overview of the whole

text.

3. Table of Contents

This needs to show a logical listing of all the sub-headings of the report’s contents. Note this

is excluded from the total word count.

4. Introduction

Typically, the introduction is a short paragraph which includes background, scope and the

main points raised in the order of importance. There should be a brief conclusion statement

at the end of the introduction.

5. Main Body Paragraphs with Numbered Sub-headings

This section contains the detailed information which elaborates on the main points raised in

the introduction. Each paragraph should begin with an exact topic sentence, then supporting

HI5019 T3 2020 Assessment 1: Individual Assignment 5

sentences with facts and evidence obtained from research and finish with a concluding

sentence at the end.

6. Conclusion

This section contains a logical and coherent evaluation based on a thorough and objective

assessment of the research performed.

7. Appendices

This section includes any additional explanatory information which is supplementary and/or

graphical to help communicate the main ideas made in the report. Refer to the appendices in

the main body paragraphs, as and where appropriate. (Note this is excluded from the total

word count.)

Note: The report should be grounded on relevant literature, and all references must be cited

appropriately and included in the reference list.

Marking Criteria

Marking criteria Weighting in

Total Grades

The general risks involved in the revenue cycle, and the physical and

IT controls against each risk. 4%

The potential internal control weaknesses in the SOPP and CRP of XYZ

Limited. 4%

The potential risks associated with the internal control weaknesses in

the SOPP and CRP of XYZ Limited. 4%

The potential frauds in the SOPP and CRP of XYZ Limited. 4%

Presentation and Referencing. 4%

TOTAL Weight 20%

HI5019 T3 2020 Assessment 1: Individual Assignment 6

Marking Rubric

Excellent Very Good Good Satisfactory Unsatisfactory

(80-100%) (70-79%) (60-69%) (50-59%) (0-49%)

The general risks

involved in the

revenue cycle, and the

physical and IT

controls against each

risk. [4 Marks]

Present an excellent

discussion on the

general risks involved

in the revenue cycle,

and the physical and

IT controls against

each risk.

Present a very good

discussion on the

general risks involved

in the revenue cycle,

and the physical and

IT controls against

each risk.

Present a good

discussion on the

general risks involved

in the revenue cycle,

and the physical and

IT controls against

each risk.

Present a reasonable

discussion on the

general risks involved

in the revenue cycle,

and the physical and

IT controls against

each risk.

Present a weak or

inadequate discussion

on the general risks

involved in the

revenue cycle, and the

physical and IT

controls against each

risk.

The potential internal

control weaknesses in

the SOPP and CRP of

XYZ Limited. [4

Marks]

Correctly identify all

the potential internal

control weaknesses in

the SOPP and CRP of

XYZ Limited.

Correctly identify most

of the potential

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Correctly identify

some of the potential

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Correctly identify one

to two potential

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Fail to identify the

potential internal

control weaknesses in

the SOPP and CRP of

XYZ Limited.

The potential risks

associated with the

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited. [4 Marks]

Correctly identify all

the potential risks

associated with the

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Correctly identify most

of the potential risks

associated with the

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Correctly identify

some of the potential

risks associated with

the internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Correctly identify one

to two potential risks

associated with the

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

Fail to identify the

potential risks

associated with the

internal control

weaknesses in the

SOPP and CRP of XYZ

Limited.

The frauds possible in

the SOPP and CRP of

XYZ Limited. [4

Marks]

Correctly identify all

the frauds possible in

the SOPP and CRP of

XYZ Limited.

Correctly identify most

of the frauds possible

in the SOPP and CRP

of XYZ Limited.

Correctly identify

some of the frauds

possible in the SOPP

and CRP of XYZ

Limited.

Correctly identify one

to two frauds possible

in the SOPP and CRP

of XYZ Limited.

Fail to identify the

frauds possible in the

SOPP and CRP of XYZ

Limited.

HI5019 T3 2020 Assessment 1: Individual Assignment 7

Presentation and

Referencing. [4 Marks]

An extensive amount

of high-quality

evidence from peer-

reviewed journal

articles and other

sources was included

and used effectively to

support discussion.

A broad range of

quality peer-reviewed

journal references and

other sources was

included and used

effectively to support

discussion.

An adequate range of

peer-reviewed journal

references was

included and used to

support discussion.

An adequate range of

peer-reviewed journal

references was

included and used to a

basic extent to support

discussion.

Little or no peer-

reviewed journal

references were

included, and these

were rarely used to

support discussion

effectively.

HI5019 T3 2020 Assessment 1: Individual Assignment 8

Academic Integrity

Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic

Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates.

Accordingly, all assessment tasks need to comply with academic integrity guidelines. Table

1 identifies the six categories of Academic Integrity breaches. If you have any questions about

Academic Integrity issues related to your assessment tasks, please consult your lecturer or

tutor for relevant referencing guidelines and support resources. Many of these resources can

also be found through the Study Sills link on Blackboard.

Academic Integrity breaches are a serious offence punishable by penalties that may range

from deduction of marks, failure of the assessment task or unit involved, suspension of

course enrolment, or cancellation of course enrolment.

Table 1: Six categories of Academic Integrity breaches

Plagiarism Reproducing the work of someone else without attribution.

When a student submits their own work on multiple

occasions this is known as self-plagiarism.

Collusion Working with one or more other individuals to complete an

assignment, in a way that is not authorised.

Copying Reproducing and submitting the work of another student,

with or without their knowledge. If a student fails to take

reasonable precautions to prevent their own original work

from being copied, this may also be considered an offence.

Impersonation Falsely presenting oneself, or engaging someone else to

present as oneself, in an in-person examination.

Contract cheating Contracting a third party to complete an assessment task,

generally in exchange for money or other manner of

payment.

Data fabrication and

falsification

Manipulating or inventing data with the intent of supporting

false conclusions, including manipulating images.

Source: INQAAHE, 2020

HI5019 T3 2020 Assessment 1: Individual Assignment 9