HI5019 Strategic Information Systems

HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment

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HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment
Assignment Specifications
Background
After working at several accounting and consultancy firms for more than a decade, you have recently
decided to start your own consultancy business. A friend of your wife introduces you to Paradise
Industries, a manufacturer of high-precision machine tools based at Adelaide. Paradise Industries
employs a centralised computer system with distributed terminals in the departments. The company
recently have a number of operational problems and the managing director of the company has
engaged you to assess its systems and processes.
Expenditure Cycle
When an inventory item falls to the recorder point, a purchase requisition is automatically generated
and printed on the terminal in the purchasing department. The purchasing clerk select suppliers and
prepare a purchase order. One copy of the purchase order is sent to the supplier and another copy
is sent to the receiving department. The purchasing clerk then adds a record to the open/closed
purchase order file through an update program in the data processing department.
When the receiving clerk receives the delivery from the supplier, the clerk reconciles the items with
the packing slip and the purchasing order. After the reconciliation, the receiving clerk prepares a
hard-copy receiving report recording the quantity and quality of the goods received. One copy of the
receiving report accompanies the items to the warehouse and another copy is filed in the receiving
department. Using the department terminal, the receiving clerk adds a record to the digital receiving
report file. The system then automatically closes the purchase order. Upon receiving the items, the
warehouse clerk updates the inventory subsidiary ledger through the terminal in the warehouse.
When the supplier’s invoice arrives, the accounts payable clerk adds a record to the supplier invoice
file, which in turn triggers the system to automatically set up a liability in the accounts payable
subsidiary ledger based on the financial information contained in the invoice. The system then
automatically updates all affected general ledger accounts.
The computer system scans the accounts payable subsidiary ledger every day for items due to be
paid and print the cheque. The cheque is sent to the supplier and a copy is sent to cash disbursements
where it is filed. The system then adds a record to the cheque register file and removes the liability
in the accounts payable subsidiary ledger. Finally, the system automatically updates the general
ledger accounts.
Conversion Cycle
The production process is triggered by a quarterly forecast of expected sales, which goes to the
production planning and control clerk. From the clerk’s terminal, the production planning and control
clerk updates the digital production schedule to include the batches of products to be produced
during the next quarter. Drawing upon the bill of materials and routing sheet files, the system
automatically prepares the digital work orders move tickets and material requisitions and sends them
to the work centre supervisor’s terminal on a weekly basis.
The work centre supervisor accesses the digital documents and print hard-copy work orders, move
tickets and material requisitions. The supervisor distributes the move tickets and two copies of the
material requisitions to each work centre in the production process.
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HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment
Staff members submit the two copies of material requisitions to the warehouse in exchange for the
materials. If additional materials are needed beyond the standard quantity, the supervisor issues
additional material requisitions. As the production is completed in each work centre, the staff
members send the move ticket to cost accounting to the mark the completion of that phase of the
production batch. Staff members also record labour time spent on each batch on hard-copy job cards,
which they send to cost accounting. Finally, upon completion of the batch, the work centre supervisor
closes the open work order file.
The warehouse clerk files one copy of the material requisition and updates the materials inventory
file from the terminal in the warehouse office. The clerk then sends a second copy of the material
requisition to cost accounting. At the end of the day, the clerk prepares a digital journal voucher and
posts it to the general ledger control accounts.
The cost accounting clerk accesses the digital work orders and set up a work-in-process account for
the production batch. The clerk also receives move tickets, job tickets, and material requisitions
throughout the production process and use the documents to post in work-in-process subsidiary
ledger. At the end of each day, the cost accounting clerk prepares a digital journal voucher and posts
to general ledger control accounts to reflect the status of work-in-process and to record transfers of
work-in-process to finished good inventory.
Required
Prepare a report to the managing director of Paradise Industries to evaluate the processes, risks
and internal controls for Paradise Industries’ expenditure and conversion cycle. In your report, you
need to include the following items:

Assignment Structure
The report should include the following components:

The report should be grounded on relevant literature and all references must be properly cited and included
in the reference list.
Marking criteria

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HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment
Marking Rubric

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HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment

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