SAN MATEO MUNICIPAL COLLEGE

General Luna St., Guitnang Bayan I, San Mateo, Rizal

Tel. No. (02) 997-9070
www.smmc.edu.ph

ACCOUNTING INFORMATION SYSTEM

Finals Assignments

Assignment 1: DOCUMENTING BUSINESS PROCESSES

This a system flowchart for Rona Co.’s purchase order event. Prepare a narrative to accompany the
flowchart describing this purchase order event. Include in your narrative the source documents involved, data
inputs used to prepare purchase orders, and the outputs prepared from the processing function.
Assignment 2: COMPUTER CONTROLS FOR ORGANIZATIONS AND ACCOUNTING INFORMATION SYSTEMS

The Palmer Company manufactures various types of clothing products for women. To accumulate the
costs of manufacturing these products, the company’s accountants have established a computerized cost
accounting system. Every Monday morning, the prior week’s production cost data are batched together and
processed. One of the outputs of this processing function is a production cost report for management that
compares actual production costs to standard production costs and computes variances from standard.
Management focuses on the significant variances as the basis for analyzing production performance.

Errors sometimes occur in processing a week’s production cost data. The cost of the reprocessing work on
a week’s production cost data is estimated to average about ₱600,000 per year. The company’s management is
currently considering the addition of a data validation control procedure within its cost accounting system that is
estimated to reduce the risk of the data errors from 16% to 2%, and this procedure is projected to cost ₱40,000
per week.

a. Using these data, perform a cost-benefit analysis of the data validation control procedure that the management
is considering for its cost accounting system.

b. On the basis of your analysis, make a recommendation to the management regarding the data validation
control procedure.