1)
To determine: The control plan for the given system failure.
Introduction:
1)
Explanation of Solution
Given system failure:
Inventory shortages have been discovered at Company B by the warehouse managers. They realized that the goods have arrived in the warehouse while investigating the paperwork.
Determine the control plan for the given system failure:
Perimeter and building controls: Accessing control over the warehouse building helps to prevent the losses.
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:
The vendors claimed that they are billing for the goods they have shipped. However, the accounts payable clerks at Company G have trouble in reconciling the quantities as received and the quantities on invoices sent by the vendors.
Determine the control plan for the given system failure:
Count goods and compare to vendor packing slip: Vendor packing slip should be compared with the goods that are counted.
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 C ordered unneeded inventory items from the company for which she is the owner.
Determine the control plan for the given system failure:
A written code of conduct: The buyers should sign in a written code of conduct of the firm to avoid conflict of interest between their financial interest and responsibility.
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:
Person D is working in the receiving department. He once received goods and he is unable to find PO for the goods. Hence, he created PO and received the good. However, later he found that the firm never ordered the goods.
Determine the control plan for the given system failure:
Independent authorization to record receipt: There must be a purchase order on file and the person in logistics should not create the PO.
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:
Person K created a vendor record for Company E, as she is in need to buy a part from Company E. Afterwards, others began to use Company E for other purchases.
Determine the control plan for the given system failure:
Independent vendor master data maintenance: Vendor master data should be maintained. The firm should need a process to approve the vendors to find that they can deliver goods with the prices.
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:
When gotten into some financial difficulties, Person S who is working in Company L started to work for Company H. Person S created PO from Company H and recorded a receipt. However, no goods were received. Afterward, Company H sends a bill and gets paid from Company L.
Determine the control plan for the given system failure:
Segregate warehouse and receiving functions: The warehouse and receiving functions should be segregated.
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:
At Company W, there are discrepancies between the items ordered and recorded that includes wrong quantities and wrong items.
Determine the control plan for the given system failure:
Compare PO data to input receipt data: The purchase order should be matched with the invoice received for the order
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:
Most of the times, Company S would run out of inventory of some items. They investigated and found that the PO was issued but items are not received. They have also noted that these delayed deliveries and poor performance are from the same vendors.
Determine the control plan for the given system failure:
Compare vendors for price, terms, quality, and availability: Available vendors should be compared with respect to the price, terms, availability, and quality. Hence, vendors who can provide the best services can be selected.
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:
The vendors of Company M received POs that seemed to be from the firm but actually bogus. Usually, Company M uses the internet to send purchase orders.
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:
There were several discrepancies in inventory data of Company D. The inventory in the shelf has not reflected in the balances.
Determine the control plan for the given system failure:
Monitor open PO: Open purchase orders should be monitored to avoid discrepancies.
Want to see more full solutions like this?
Chapter 12 Solutions
Accounting Information Systems
- General Financearrow_forwardAs CFO for Everything.Com, you are shopping for 6,000 square feet of usable office space for 25 of your employees in Center City, USA. A leasing broker shows you space in Apex Atrium, a 10-story multitenanted office building. This building contains 360,000 square feet of gross building area. A total of 54,000 square feet is interior space and is nonrentable. The nonrentable space consists of areas contained in the basement, elevator core, and other mechanical and structural components. An additional 36,000 square feet of common area is the lobby area usable by all tenants. The 6,000 square feet of usable area that you are looking for is on the seventh floor, which contains 33,600 square feet of rentable area, and is leased by other tenants who occupy a combined total of 24,000 square feet of usable space. The leasing broker indicated that base rents will be $30 per square foot of rentable area Required: a. Calculate total rentable area in the building as though it would be rented to…arrow_forwardDon't used Ai solutionarrow_forward
- General Finance Questionarrow_forwardConsider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896arrow_forwardAn insurance company has liabilities of £7 million due in 10 years' time and £9 million due in 17 years' time. The assets of the company consist of two zero-coupon bonds, one paying £X million in 7 years' time and the other paying £Y million in 20 years' time. The current interest rate is 6% per annum effective. Find the nominal value of X (i.e. the amount, IN MILLIONS, that bond X pays in 7 year's time) such that the first two conditions for Redington's theory of immunisation are satisfied. Express your answer to THREE DECIMAL PLACES.arrow_forward
- An individual is investing in a market where spot rates and forward rates apply. In this market, if at time t=0 he agrees to invest £5.3 for two years, he will receive £7.4 at time t=2 years. Alternatively, if at time t=0 he agrees to invest £5.3 at time t=1 for either one year or two years, he will receive £7.5 or £7.3 at times t=2 and t=3, respectively. Calculate the price per £5,000 nominal that the individual should pay for a fixed-interest bond bearing annual interest of 6.6% and is redeemable after 3 years at 110%. State your answer at 2 decimal places.arrow_forwardThe one-year forward rates of interest, f+, are given by: . fo = 5.06%, f₁ = 6.38%, and f2 = 5.73%. Calculate, to 4 decimal places (in percentages), the three-year par yield.arrow_forward1. Give one new distribution channels for Virtual Assistance (freelance business) that is not commonly used. - show a chart/diagram to illustrate the flow of the distribution channels. - explain the rationale behind it. (e.g., increased market reach, improved customer experience, cost-efficiency). - connect the given distribution channel to the marketing mix: (How does it align with the overall marketing strategy? Consider product, price, promotion, and place.). - define the target audience: (Age, gender, location, interests, etc.). - lastly, identify potential participants: (Wholesalers, retailers, online platforms, etc.)arrow_forward
- Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE LAccounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage LearningAccounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning