ACC-315 Accounting Information Systems

ACC 315 Project Two Guidelines and Rubric

Competency

In this project, you will demonstrate your mastery of the following competency:

Analyze how controls in an organization’s accounting information system mitigate risk

Overview

For this project, you will focus on identifying and mitigating risks associated with an accounting information system (AIS). Using your knowledge of financial statements, you will review select financial statement accounts (general ledger accounts) of an organization that were processed through an AIS and identify any inconsistencies or anomalies among the financial accounts and subsidiary journals that could be an opportunity for risk. In your role as a professional accountant, you will experience internal and external controls within accounting information systems that will help mitigate risk.

Scenario

You are a business analyst at a small direct-to-consumer organization and have been tasked with verifying the integrity of the accounts payable process. You will compare select general ledger data with other journals to prove the ledger, identify areas of risk, and determine whether appropriate internal and external controls are present. You will need to draft a memo to the chief financial officer (CFO) to communicate any findings.

Directions

For this project, you will use select financial data provided in the Supporting Materials section to perform an analysis of the subsidiary and financial statement (general ledger) accounts to identify any account irregularities (red flags). You will review current internal and external controls using specific financial data to identify inconsistencies or anomalies that provide opportunities for risk. Then communicate any findings in a memo using the Project Two template found in the What to Submit section.

Specifically, you must address the following rubric criteria:

1. Analyze the state of the company's current financial controls.

1. Use Posey’s Pet Emporium Accounts Payable Policies and Procedures and Accounts Payable Ledgers and Journals found in the Supporting Materials section.

2. Include any internal or external controls found in the guide.

2. Identify inconsistencies and anomalies in controls. Include the following details in your response:

3. Identify any discrepancies in the controls.

4. Identify numbers that appear irregular (red flags).

3. Identify risks for potential fraud, stealing, or information exposure by reviewing the general ledger/journal numbers. Consider the following in your response:

5. Determine whether established security procedures are being followed.

6. Examine roles and access to data.

7. Determine if approval paths meet the level of security for the task.

4. Explain the need for risk mitigation based on the scenario. Include the following details in your response:

8. Identify inconsistencies or anomalies that require risk mitigation.

5. Summarize your findings based on your analysis. Include the following details in your response:

9. Identify any inconsistencies or anomalies present.

10. Explain the risks discovered.

What to Submit

To complete this project, you must submit the following:

Memorandum to CFO Submit your memo to the CFO using the Project Two Template. It should be a 2- to 3-page Word document addressing all the rubric criteria. Use 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.

Supporting Materials

The following resources support your work on the project:

Posey’s Pet Emporium Accounts Payable Policies and Procedures

Posey’s Pet Emporium Accounts Payable Ledgers and Journals

You will find all the requirements for completing Project Two assignment in the Project Two Guidelines and Rubric under Module 7.

Please use the Memo template (format) provided as a link in the rubric to present your response. Use headings to organize your answers to the 5 areas under the section “Specifically, you must address the following rubric criteria:”. Also, include a list of at least two (2) outside references. Your response should comply with all the elements of the “ Project Two Guidelines and Rubric”.

Very Important: For business context, you must use the two documents “Posey’s Pet Emporium Accounts Payable Policies and Procedures” and “Posey’s Pet Emporium Accounts Payable Ledgers and Journals” found under the Supporting Materials section of the rubric.

Posey’s Pet Emporium

Accounts Payable Policies and Procedures

Table of Contents

Posey’s Pet Emporium Company 1

Accounts Payable Policies and Procedures 1

Purpose 2

Objective 2

Scope 2

Transactions Involving Purchase Orders 2

Employee Reimbursement Requests 2

Check Processing and Distribution 3

i. Checks 3

ii. Accounts Payable 3

iii. Invoices 3

iv. Vendors 3

v. Payments 3

Receiving Procedures 3

i. Partial Shipment: 4

ii. Complete Shipment: 4

iii. Returns: 4

iv. Cancellations: 4

Purpose

The purpose of this policy is to establish policy statements, guidelines, and procedures to effectively manage the accounts payable processes. It establishes procedures and practices for the purpose of goods and services as well as reimbursements to individuals as part of carrying out the company’s business.

Objective

To be a guide of all timely and accurate recording of payment to ensure that vendors, staff, and other owed parties are paid accurately and timely.

Scope

General policy: This policy applies to all accounts payable for Posey’s Pet Emporium. All payments must be supported by a source document, which in most instances is a third-party invoice, and an approved purchase order or check request. The invoice represents confirmation from a third-party that a product or service was provided to the company.

Transactions Involving Purchase Orders

Accounts payable receives the appropriate documentation from the pertinent department indicating goods and services have been received. A three-way match of the purchase order, invoice, and receiving document is performed and approved by accounts payable. Once approved by accounts payable, a payment voucher is created in the Oracle NetSuite system for payment.

Employee Reimbursement Requests

The company will reimburse employees for business expenses incurred as part of their job responsibilities or incurred while on company required travel. Employees request and submit all supporting documents for these expenses utilizing the web-based expense reimbursement system. These transactions are approved electronically by the employee’s department head. Once all approvals have been made the document electronically passes to accounts payable. Accounts payable reviews the supporting documentation and approves the report for reimbursement.

Check Processing and Distribution

i. Checks

Checks are processed on Tuesdays and Thursdays and distributed on Tuesdays and Fridays by accounts payable. It is the general policy of A/P to mail checks to vendors within thirty days of invoice date. Expedited processing can be approved by the controller or by the accounts payable team lead.

ii. Accounts Payable Accounts payable mails checks directly to the vendors to maintain control over checks and to limit the additional time necessary for special handling. It must be clearly noted on the invoice when sent to A/P if a circumstance exists where the check should not be directly mailed from the finance/accounting office. The controller reviews and approves any exceptions to direct mailing.

iii. Invoices If a circumstance exists where a copy of the invoice is required to be mailed with payment, this must be clearly marked on the invoice when sent to A/P. It is also the responsibility of the office forwarding the invoice to furnish a copy of the document that must accompany the payment. The invoice must remain in A/P.

iv. Vendors All vendors are required to complete a W-9 prior to being added to the vendor file for payment. Any payments made to an independent contractor or an unincorporated vendor for services require the organization to prepare and mail a Form 1099 after the calendar year-end.

v. Payments Payments to non-U.S. citizens cannot be disbursed prior to the receipt of a completed Foreign National Information Form certifying foreign status, or any other applicable documents.

Receiving Procedures

Goods are delivered directly to the requesting office. The requestor receives the goods and packing slip. After the goods or services have been received the packing slip should be signed indicating receipt of goods and scanned and emailed to accounts payable. Below are units payable.

i. Partial Shipment If you receive a partial shipment, mark the items and date received on your receiving report, photocopy the receiving report, sign, and date the copy and send the copy to accounts payable. Send the original receiving report when all items have been received.

ii. Complete Shipment If all items are received from the vendor, sign, and date the receiving report and send the receiving report to accounts payable.

iii. Returns Sometimes the goods received need to be returned. The requestor should contact the vendor to inform them of the need to return and obtain a return authorization number. The requesting office should repackage the goods and place the return address label on the package. The package should be returned to the vendor. After the order has been received by the vendor notify the purchasing office and have the purchase order modified or voided.

iv. Cancellations When goods or services are ordered but not needed, the requesting office should contact the purchasing office staff to inform them of the need to cancel the order. The purchase order generated will be closed/modified in the financial accounting system.

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