1)
To determine: The control plan for the given system failure.
Introduction:
1)
Explanation of Solution
Given system failure:
Company W ordered 30 circuit breakers from Company E and received only 25. Other 5 circuit breakers were on the backorder at Company E. However, an invoice was received for 30 circuit breakers and paid fully.
Determine the control plan for the given system failure:
Match invoice, PO, and receiving report: Matching invoice with Purchase Order (PO) and the receiving report helps the firm to avoid the invoices for the goods which were not ordered or received.
2)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
2)
Explanation of Solution
Given system failure:
Company T usually does not receive invoices and record invoices in a timely manner for payment discounts.
Determine the control plan for the given system failure:
Tickler file of open POs and receiving reports: Tickler files are an electronic or manual area where the documents, which need follow-up will be stored. It will help the firm to follow up the vendors who have not sent invoices.
3)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
3)
Explanation of Solution
Given system failure:
Person N is a cashier at Company S who has been writing checks to herself and no one detected for years.
Determine the control plan for the given system failure:
Reconcile bank account: Reconcile bank account helps to make sure that the payments made by the bank are accurate and authorized.
4)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
4)
Explanation of Solution
Given system failure:
At Company E, some of the incoming invoices are not matched against receiving reports and PO. Person J would prepare a PO to cover the invoice if he cannot find a PO for the incoming invoices.
Determine the control plan for the given system failure:
Segregate duties among purchasing, receiving, and accounts payable: The duties of the purchasing and receiving department, and accounts payable should be segregated.
5)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
5)
Explanation of Solution
Given system failure:
The company I receive vendor invoices once each day as batches from the Value-Added Network (VAN) through EDI feed. However, some of the invoices are from the fake vendors.
Determine the control plan for the given system failure:
Compare input data with master data: Comparing the input data with the master vendor data helps to determine the invoices from the authorized vendors.
6)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
6)
Explanation of Solution
Given system failure:
Due to the cash flow diagrams, Company W loses discounts on vendor payments.
Determine the control plan for the given system failure:
Review of a cash planning report: On a regular basis, the treasurer should produce and review an aging of accounts payable to make sure that enough funds are available to pay obligations.
7)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
7)
Explanation of Solution
Given system failure:
Person A is an accounts payable clerk at Company F, who has grown drained of resolving discrepancies. Person A has changed the accounts payable invoice programs to allow large variances to reduce rejects.
Determine the control plan for the given system failure:
Program change controls: Program that performs a credit check and validation should be prevented from the unauthorized alternation which can be done with the help of program change controls.
8)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
8)
Explanation of Solution
Given system failure:
Person N is an account payable who send the batch of vendor invoices to the clerk in cash disbursements twice a week. However, it is discovered that not all the payments were made correctly.
Determine the control plan for the given system failure:
Reconcile run-to-run totals: The batch totals for approved payments should be created by the cash disbursement clerk and it must be compared with the actual amount paid.
9)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
9)
Explanation of Solution
Given system failure:
Company S receives the electronic invoice by the third party via a web portal. It is discovered that the invoices were altered in transit from the vendor, as most of the invoices are not correct.
Determine the control plan for the given system failure:
Digital signature: Digital signatures make sure that there is only authorized access to the computer.
10)
To determine: The control plan for the given system failure.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
10)
Explanation of Solution
Given system failure:
Person G is the cashier who received invoices and made payments as needed. Some of the payments are to fake vendors.
Determine the control plan for the given system failure:
Segregate duties between accounts payable and cashier: The duties of accounts payable and cashier should be segregated to take care of the things without difficulties.
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Chapter 13 Solutions
Pkg Acc Infor Systems MS VISIO CD
- Process Activities PIC Order data that is inputted on the PDA is synchronized to the computer to automatically create a ''Sales Order'' in the system Admin Question:1. What are the weaknesses of internal control & risks & suggestions for improvement?2. What work process / audit focus can be undertaken?arrow_forwardRevenue Cycle. Discuss how the nature of the necessary internal control features is affected by switching from a manual system to a large-scale computer-based accounting system. а.arrow_forwardWhich of the following is a control that can be used to ensure that all of the components of an invoice number are input by a data entry person? dependency check O procedures for rejected inputs preformatted screens O turnaround documentsarrow_forward
- The computer processing portion of a sales order system is represented by the flowchart. Answer the following questions.a. What type of data processing system is this? Explain, and be specific.b. The auditor suggests that this system can be greatly simplified by changing to direct access files. Explain the major operational changes that would occur in the system if this were done.c. The auditor warns of control implications from this change that must be considered. Explain the nature of the control implications.d. Sketch a flowchart (the computerized portion only) of the proposed new system. Use correct symbols and label the diagram.arrow_forwardPHYSICAL CONTROLSUsing the flowchart of a purchases system for Problem8, identify six major physical control weaknesses in the system. Discuss the unmitigated risks associated with each weakness.arrow_forwardMatch each word or phrase with the best description of it. Descriptions Words / Phrases related tocomputerized accounting systems a. Allows multiple users to access the system at the same time. Audit trailInternal controlNetwork-compatibleEnterprise resource planning systemsEntry-level software b. Enables the tracking of all transactions. Audit trailEnterprise resource planning systemsEntry-level softwareNetwork-compatibleInternal control c. Identifies suspicious transactions or likely mistakes such as wrong account numbers or duplicate transactions. Audit trailInternal controlEntry-level softwareEnterprise resource planning systemsNetwork-compatible d. Large-scale computer systems that integrate all aspects of the organization including accounting, sales, human resource…arrow_forward
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE LAuditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubAccounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,