PART I:

COMPANY
BACKGROUND

1
Company Profile:

Qavalo Incorporated was founded by Laurice Chionbian last 2015 and the
operation started last July 07, 2016. Qavalo was named after the word “Kabalo”, a
Cebuano dialect which means knowledgeable specifically on quality assurance review.
Qavalo offers outsourcing solutions to home health agencies in the US-- California,
Texas and Florida. A team of experienced healthcare professionals are ready to support
home health agencies improve documentation processes with a variety of services. At the
moment, Qavalo has two (2) branches which are located at PDI Condominium, Banilad,
Cebu City and Robinsons Cybergate, Fuente Osmena, Cebu City.

Qavalo is a type of company which offers medical outsourcing services. Qavalo

incorporated hires Registered Nurse and Licensed Physical Therapist. They are the ones
who do the clinical reports in which the company in the US can not do. Currently, Qavalo
has around ninety (90) employees and most of them are millennials.

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Organizational Structure

3
Current Problem of Accounting Information System

Over- reliance on a single individual for payroll

Currently, the accounting department only has one employee, the
accounting manager, which handles the payroll computation and distribution of payslips.
The researchers see this as a problem since there should be a segregation of duties of who
computes the payroll and who distributes the payslips. Since the accounting department
only has one employee, the over-reliance of this employee might constitute in more
loaded work and cause delay to the whole entity.

Lack accounting documents

For the purchase processing system, the entity lacks a receiving report for
the receipt of purchases. Although there is a delivery receipt from the supplier, there is
still a need to file a receiving report which tells the quantity and condition of the items.
The receiving report, supplier’s invoice, purchase order, and purchase requisition
completes the data needed in the purchase processing system.

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November 13, 2019

Laurice Chiongbian
CEO
Qavalo Inc.
6th floor PDI Condominium
Gov. Cuenco Ave. Banilad
Cebu City

Dear Ms. Laurice Chiongbian,

We, the undersigned students from the University of San Carlos - Dept. of Accountancy
are currently taking up the subject Accounting Information System (AIS). The subject
focuses on studying the company’s internal control, how information flows within the
entity, and how transactions are being processed. As part of the subject requirement, we
are tasked to conduct a company case study. The focus of the study would be identifying
the company's profile and understanding the company's current accounting information
system, processes, and storage of accounting data.

In this connection, may we request from your good office to grant us permission to have
your company as our subject for the study and be able to conduct interviews to key
personnel to gather information on the company's profile and accounting processes. We
will ensure that the data gathering will be done in the least disruptive way of your
company operation.

We hope that you can grant us this opportunity and rest assured that we will utilize any
gathered information with utmost confidentiality.

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And lastly, if your schedule permits, may we invite you or any representative from your
company to be part of our panelist upon presenting our output at the University of San
Carlos - Downtown Campus (Main Campus) this November 26, 2019, at 1:30 pm to 3:00
pm.

We look forward to a positive response. Thank you very much.

Sincerely yours,

Andrea Delia Isabel S. Malaza

Group Leader

Members:
Angelo Rafael Alfafara
Junne Bedivere D. Bontia
Shaira Naneth Pical

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 Downtown Campus
P. del Rosario Street, Cebu City
DEPARTMENT OF ACCOUNTANCY
Company Profile
1. When did the company start operating?
2. How did the company name "Qavalo" being conceptualized?
3. What is the nature of your business?
4. What is the organizational structure of the company?
5. What is the company's mission, vision and goals?
6. Presently, how many company branches do you have?
7. How many departments does the company currently have?
8. What are your future plans for the company?
Accounting Information System
1. What is the scope of work of the accounting officer?
2. How many employees are working in the accounting department?
3. Indicate the frequency of these following accounting transactions:
a. Sales. _________________
b.Collection. _________________
c. Payroll. _________________
d. Purchasing _________________
e. Cash Disbursement ________________
f. Fixed Asset Inventory ________________
4. Is the company's accounting recordkeeping done by books (physical) or
automated?

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5. SALES
a. How does the company generate sales?
b. What accounting documents are used for sales?
6. COLLECTION
a. What is the company's collection process?
b. What are the accounting records used in this process?
7. PURCHASING
a. What is the company's purchasing process?
b. Who authorizes the releasing of payments or checks?
c. What are the accounting records used in this process?
8. PAYROLL
a. What is the company's payroll process?
b. What are the accounting records used in this process?
9. FIXED ASSETS INVENTORY
a. What is the company's inventory process for fixed asset?
b. What are the accounting records used in this process?
c. What are the accounting documents used?
10. RECORD KEEPING
a. What is the company's protocol in record keeping?
b. How are the files in your company being stored and secured?
c. What are the physical controls you have in your company to ensure the safety
of sensitive data?
11. Did you at some point experienced any problem(s) in terms of processing
accounting information? Please elaborate.
12. Would you consider your present accounting information system efficient enough
in providing guidance to decision-makers?

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 13. Are there any areas in the accounting department that requires improvement and
what would that be?

ANSWERS:
Part I
1. It started last July 07, 2016
2. Named after the word “Kabalo” a Cebuano dialect means knowledgeable specifically
on quality assurance review.
3. Qavalo’s nature mainly focuses on medical outsourcing services.
4. Refer to the previous page.
5. The company’s Vision is:
Quality Life through Quality Healthcare.
Mission
Qavalo fulfills a Higher Purpose via our QA services by:
1. Ensuring that all medical documents are CMS “Survey-Ready”.
2. Maintaining the highest clinical standards for patient chart documentation.
3. Supporting a transparent partnership for constantly improving on our
clients’ documentation objectives.
The Qavalo’s 7 core values are:
● Respect begets respect
● More We, less Me
● Teach. Share. Learn
● Initiative is a step towards Progress
● It’s not about the job you do, It’s about how you do your job
● Qavalo’s blood type is positive
● Add to the flywheel
6. Presently, the company has two (2) branches. Located at PDI Condominium and
Robinson Cybergate.

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7. There are seven departments within the entity, the following are:
Human Resource Department
This department is responsible for handling employment accreditations.
Marketing Department
​This department is responsible for advertising and sales management.
Accounting Department
​This department maintains the company’s financial statements, controls
financial transactions and disburses checks.
Outsourcing/ Production Department
This department mainly consists of the registered nurses and physical
therapists assigned to do the clinical reports.
Data Intelligence Department
This department analyzes the clinical reports done by the production
department and translates it to client needs.
Site Operation Department
This department handles the company’s daily operation needs.
Training/ Compliance Department
This department keeps the entity updated with new regulations from US
Health Care Regulations and applying it to the company.
8. The future plans of the company are to be the number one in the country in terms of
quality healthcare and planning to hire MedTech.
Part II.
1. The accounting officer is the one who manages the financial recording or bookkeeping
in the company, does the process of the invoice, records payment, tracks expenses and
supervises staff and members.
2. Presently, the company has around ninety (90) employees in both branches.

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3. a. Sales. The company processes their sales monthly.
b. Collection. Monthly
c. Payroll. Twice a month, every 15​th​ and 30​th​ of the month.
d. Purchasing. The company purchases are office supplies, internet subscription.
e. Cash Disbursements. Checks and Petty Cash
f. Fixed Asset Inventory. Laptops and Monitors
4. The recording keeping is done by Quickbooks.
5. SALES
a. The company generate sales through pioneer
b. The company recorded its sales in the Sales Journal. The company issues sales
invoice to those clients that won’t avail the package subscription.
6. COLLECTION
a. The company’s collection process is through bank and e-bank – Pioneer,
Paypal.
b. Bank Statement or Statement of Account
7. PURCHASING
a. Make Purchase order and to be approved by the CEO.
b. Accounting Officer
c. The accounting records used in purchasing is Purchase Journal
8. PAYROLL
a. The company uses biometrics then download it to excel then sends it to the bank
with the approval of the CEO.
b. Payslip, released by the accounting officer.
9. FIXED ASSET INVENTORY
a. The acquisition of new assets is done in the same manner with the purchasing
process.
b. Fixed Asset File and Fixed Asset Subsidiary Ledger
c. Purchase Requisition, Maintenance Form and Repairment Report.

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10. RECORD KEEPING
a. The Accounting Officer and HR Manager
b. Software that only Accounting Officer and HR Manager can access.
b. Softcopy and print only those files that are needed by the BIR.
11. There was a problem once in the processing the payroll, the CEO forgot to sign the
document needed and the bank experienced phishing. Hence, the company had to do
manual payroll for that matter.
12. Yes, once the statement of account is received from the bank, the accounting
department generates a monthly financial statement and gives the CEO the current state
of the company in terms or finances.
13. In Accounting Department, the payroll.

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 PART II:
ACCOUNTING
INFORMATION
SYSTEM

13
REVENUE
CYCLE

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 SALES
PROCESSING

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 Narrative Description: Revenue Cycle - Sales Processing System

Sequence Department Activity

1 Sales & ● The customer sends a customer order to the marketing

Marketing manager via email.
● The marketing manager receives the customer order and
profiles the customer and inputs it in the customer record
database.
● A free service trial is provided for the customer before the
subscription of full service.
● After the free service trial, the marketing manager
prepares a sales order in the form of a service contract.
● The sales order is then sent to the accounting department
for billing.

2 Accounting ● The accounting manager receives the sales order from the
marketing manager.
● A sales invoice is prepared and sent to the customer
● The customer sends payment through a bank transaction.
● The accounting officer receives a bank statement from the
payment.
● Reconcile the bank statement with the sales invoice for
verification. (IV)
● The bank statement is recorded in the sales journal to
recognize sales.

Legend:

IV- Independent Verification

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17
Legend:
IV -Independent Verification

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 Internal Control:​ ​Revenue Cycle: Sales Processing System

Physical Controls
Transaction ● Customer sends customer order
Authorization ● Customer Profiling
● Sales Order
Segregation of Duties ● Separate functions of marketing and accounting
department.
Independent ● Reconcile the sales invoice with the bank statement.
Verification
Supervision ​The marketing department supervises the sales transaction.
Accounting Records ● Customer Records
● Sales Journal
● General Ledger
Accounting ● Customer Order
Documents ● Sales Order
● Sales Invoice
● Bank Statement
Access Controls ● CEO and Accounting Manager are the only ones
authorized to check sales documents.

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EXPENDITURE
CYCLE

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PURCHASE
PROCESS

21
 Narrative Description: Expenditure Cycle - Purchases System

Sequence Department Activity

1 User ● The department manager prepares a purchase requisition

Department form and sends it to the CEO for approval.
● Upon approval, the purchase requisition forms are sent to
the accounting manager.

2 Accounting ● The accounting manager prepares a purchase order and

sends it to the CEO for approval.
● Upon approval of the CEO, the purchase order is sent to
the supplier.
● On the delivery date, the accounting manager receives
the invoice from the supplier.
● The accounting manager prepares a receiving report to
recognize the goods received. (AD)
● A three-way approach method is used in verifying the
accounting documents. (IV)
● The accounting manager sends the CEO the ​receiving
report​, supplier’s invoice, purchase order, and payment
request for approval. ​(AD)
● The CEO approves and the accounting manager prepares
a check voucher, check, and check copy.
● The check is recorded in the check register, released and
sent to the supplier.

Legend:
IV -Independent Verification
AD - Accounting Document

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23
Legend:
IV -Independent Verification
AD - Accounting Document

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 Internal Control: Expenditure Cycle: Purchase Processing System
Physical Controls
Transaction Authorization
Segregation of Duties
Supervision
Accounting Documents
Accounting Records
Access Controls
Independent Verification
- Purchase Requisition from the user department.
- N/A
- Purchase Orders or requesting departments are supervised by
the Accounting Department.
- ​ urchase Order
P
- Purchase Requisition
- Suppliers Invoice
- Receiving Report
- Check Voucher
- Check
- Check Register
- Purchase Journal
- General Ledger
- Accounting Manager and CEO are the people authorized to
check purchase documents.
- Three-Way Approach
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 PAYROLL
PROCESSING

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 Narrative Description: Expenditure Cycle - Payroll Processing System

Sequence Department Activity

1 Human ● Extract information from the biometric system and input

Resource it into the employee timesheet excel file.
● Employee timesheet excel file is sent to the accounting
manager for the computation of payroll.

2 Accounting ● The accounting manager receives the employee

timesheet excel file and computes for the payroll of each
employee.
● The employee payroll record is sent to the human
resource manager for verification and accuracy.
● The verified employee payroll record is sent to the CEO
for approval.
● Upon approval, the employee payroll record is recorded
in a payroll register.
● The payroll register is inputted in the bank payroll
system and salaries are released through ATM.
● The payroll register is summarized in a payroll summary
and posted to the general ledger.
● Payslips are prepared by the accounting manager and
distributed by a paymaster. (SOD)

Legend:
SOD - Segregation of Duties

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28
Legend:
SOD - Segregation of Duties

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 Internal Control

Expenditure Cycle: Payroll Processing System

Physical Controls
Transaction ● Biometrics
Authorization ● Separate logbooks in cases of technical problems
Segregation of ● Timekeeping personnel is separate from disbursement function
Duties ● Computation of payroll and releasing and distributing of
payslips should be done by separate persons
Supervision ● HR manager supervises timekeeping
Accounting ● Employee Records
Records ● Payroll Register
● General Ledger
Accounting ● Payslip
Documents ● Payroll Summary
Access Controls ● Make sure that the number of hours worked on are not
misrepresented or there should be no errors
Independent ● The accounting manager verifies the payroll summary to the HR
Verification manager with regards to the number of hours worked, absences
and lates for accuracy.

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FIXED ASSET
PROCESSING

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 Narrative Description: Expenditure Cycle - Fixed Asset Procedures

Sequence Department Activity

1 User Department ● Prepare purchase requisition for new asset and

proceeds to authorization procedures.
● Prepare a receiving report upon receipt of the asset and
send it to the accounting department.
● For asset repair and maintenance, a maintenance form
is filed and a repair report is sent to the supplier’s
service center, the supplier’s invoice is sent to the
accounting department.
● For unrepairable assets, the disposal procedures should
start by filing a disposal request (AD), then sent to
authorization procedures and upon approval of
disposal, a disposal report (AD) is made after disposal
procedures and send to the accounting department.

2 Accounting ● Receive the receiving report from the user department

and recognize the new asset in the fixed asset file and
record in the fixed asset subsidiary ledger.
● Upon recognition of the new asset, the fixed asset
system uses a depreciation schedule to automatically
record depreciation.
● Receive the supplier’s invoice and prepare a check
voucher, check, and check copy.
● Upon receipt of the disposal report, the accounting
manager deletes the asset from the fixed asset file and
records the deletion in the fixed asset subsidiary
ledger. (AR)

Legend:

AD - Accounting Document AR- Accounting Record

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33
Legend:

TA - Transaction Authorization IV - Independent Verification

AD - Accounting Document AR- Accounting Record

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 Internal Control

Expenditure Cycle: Fixed Assets System

Physical Controls
Transaction ● Each transaction should be initiated by a written request from the
Authorization requesting department.

Segregation of ● N/A
Duties
Supervision ● Department managers supervise the use of assets.
Accounting ● Fixed Asset File
Records
● Depreciation Schedule

● Fixed Asset Subsidiary Ledger

Accounting ● Purchase Order

Documents
● ​Receiving Report

● Suppliers Invoice

● Maintenance Form

● Repair Report

● Disposal Report

Access Controls ● No unverified transactions should be made. It should be audited

by the accounting manager and approved by the CEO.

Independent ● The accounting manager reviews the asset acquisition and

Verification approval procedures to determine the reasonableness of factors
used in the analysis, this includes the useful life of the asset.

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 PART III:
SUMMARY OF
RECOMMENDATION

36
 EXISTING

RECOMMENDATION
(Before Oral Defense)

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A. Existing Recommendation before Oral Defense
Recommendation/s for Revenue Cycle – Sales processing System
❖ Reconcile bank statements with the sales invoice for verification.
Reason/s for recommending:
❖ To validate transactions and also to reviews the appropriate amount for
each transaction and determines whether the amount in the account
matches the actual amount spent​.
Recommendation/s for Expenditure Cycle- Purchases System
❖ The accounting manager should prepare a receiving report (RR) to
recognize the goods received.
❖ The three-way approach method be should used in verifying and
completeness of accounting documents.
Reason/s for recommending:
❖ Receiving report is an important record of the merchandise that the
company has actually received from a supplier, it will also improve
transparency in the company by providing reports about the good/s
purchased by the entity and also for cash payments to be more efficient.

Recommendation/s for Expenditure Cycle- Payroll Processing System

❖ Paymaster – To distribute payslips

Reason/s for recommending:

❖ Computations and distribution of payslips should be separated.

Recommendation/s for Expenditure Cycle – Fixed asset System
❖ Disposal of an asset should start with a disposal request, approval of
disposal, disposal procedures, and disposal report.
Reason/s for recommending:
❖ Although the company has not disposed of any asset yet, a suggested
disposal process is provided to complete the fixed asset procedures.

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 ORAL DEFENSE
RECOMMENDATION

39
B. Oral Defense Recommendation

Recommendation/s for Expenditure Cycle- Payroll Processing System

❖ A logbook is not necessary when there is already biometrics.

❖ In segregating duties for payroll computation and distribution of

payslips, it does not need hiring new employees.

Reason/s for recommending:

❖ Before oral defense, it was recommended that a logbook for attendance is

needed in cases of technical problems.

❖ Hiring new employees for segregation of duties is not necessary but there
is a need for the distribution of tasks for payroll procedures, one
employee should not be the one computing payroll and the same person
distributing the payslips.

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PART IV:
APPENDIX

41
ACCOUNTING
DOCUMENTS

42
43
PICTURES

44
Interview With The Company

45
Oral Defense

46
Submission of Company Study to the Company

47
BIODATA

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PERSONAL DATA:
Name: Angelo Raphael C.Alfafara
City Address: Admacor Road, Mandaue City
Provincial Address: N/A
E-mail Address: angeloalfafara@gmail.com
Date of Birth: September 18, 1999
Civil Status: Single
Gender: Male
Place of Birth: Cebu city
Citizenship: Filipino

Father’s Name: Joshua Michael Alfafara

Occupation: Manager
Mother’s Name: Dara Carangue
Occupation: Businesswoman

EDUCATIONAL BACKGROUND:
Elementary: Saint Louis College- Cebu
High School: Saint Joseph’s Academy- Mandaue
Senior High School: Saint Joseph’s Academy
College: University of San Carlos- MC
Year Graduated: A.Y. 2011- 2012
Year Graduated: A.Y. 2015- 2016
Year Graduated: A.Y. 2017- 2018
Year Graduated: A,Y 2018- Present

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PERSONAL DATA:
Name: Junne Bedivere D. Bontia
City Address: Santa Cruz Poblacion, Osmeña Blvd.,
Cebu City
Provincial Address: Dawis Norte, Carmen Cebu
E-mail Address: cosaibontia@gmail.com
Date of Birth: June 08, 2000
Civil Status: Single
Gender: Female
Place of Birth: Carmen Cebu
Citizenship: Filipino

Father’s Name: Themestocles P. Bontia Jr.

Occupation: Non- life Insurance Agent
Mother’s Name: Radina D. Bontia
Occupation: Teacher

EDUCATIONAL BACKGROUND:
Elementary: Dawis Norte Elementary School
High School: Saint Louis College- Cebu
Senior High School: University of Cebu- Banilad
College: University of San Carlos- MC
Year Graduated: A.Y. 2011- 2012
Year Graduated: A.Y. 2015- 2016
Year Graduated: A.Y. 2017- 2018
Year Graduated A.Y. 2018 - Present:

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PERSONAL DATA:

Name: Andrea Delia Isabel S. Malaza

City Address: La Aldea, Buena Mactan, Timpolok,
Lapu- lapu City
Provincial Address: N/A
E-mail Address: adzandrea.am@gmail.com
Date of Birth: January 18, 2000
Civil Status: Single
Gender: Female
Place of Birth: Cebu City
Citizenship: Filipino

Father’s Name: Almino T. Malaza Jr.

Occupation: Self- employed Web Developer
Mother’s Name: Carmela S. Malaza
Occupation: ​SECRET

EDUCATIONAL BACKGROUND:
Elementary: San Lorenzo Ruiz School Year Graduated: A.Y. 2011- 2012
High School: University of San Carlos- SC Year Graduated: A.Y. 2015- 2016
Senior High School: University of San Carlos- MC Year Graduated: A.Y. 2017- 2018
College: University of San Carlos- MC Year Graduated: A.Y. 2018-Present

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PERSONAL DATA:
Name: Shaira Naneth Pical
City Address: Sambag I, Urgello Street, Cebu City
Provincial Address: Camella Homes, Ormoc City
E-mail Address: shairapical@gmail.com
Date of Birth: July 07, 2000
Civil Status: Single
Gender: Female
Place of Birth: Santa Ana, Manila
Citizenship: Filipino

Father’s Name: Romeo B. Camayra

Occupation: Businessman
Mother’s Name: Leticia Pical
Occupation: Therapist

EDUCATIONAL BACKGROUND:
Elementary: Ormoc City Central School Year Graduated: A.Y. 2011- 2012
High School: New Ormoc City Nat’l. High School Year Graduated: A.Y. 2015- 2016
Senior High School: Western Leyte College Inc. Year Graduated: A.Y. 2017- 2018
College: University of San Carlos- MC Year Graduated: A.Y. 2018-Present

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