ACCOUNTING INFORMATION SYSTEMS 1

Accounting Information Systems

Student Name

Course No.

Institution

Date
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AIS Subsystem

The AIS subsystem helps in elaborating the manner in which accounting information

system will attain the targeted objectives, whereby there is need of grouping the organizations

activities in 5 different cycles that is the AIS subsystem:

1. The expenditure cycle that comprises many activities related to purchasing and paying

for services the construction company uses.

2. Production cycle taking into account activities that change the raw materials and

labour into finished products.

3. Human resources cycle comprising of activities related to paying and employing

salaries for employees.

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4. The revenue cycle incorporates sale of goods or rather receiving cash.

5. The financing cycle takes into account activities which deliver funds required for a

specific operation.

The primary activities in each cycle comprises of a give and get association hence

deliver data to the prospected ledger and other reporting systems that create data for both

external and internal users. As like other systems, the MIS comprises of different subsystems.

Maybe an essential collection of the subsystem within each corporation is functional

information system. They are regarded to be functional information system as they aid to

ensuring organizational core functions. Considering the fact that there are different forms of

information systems, though four created systems within the construction company are sales

and cash disbursement process.

The Order Entry/Sales (OE/S) Process

A physical model has been assumed to illustrate the complete OE/S BPMN based on

the preidentified logical design presented in figure 3above. Figure 4 is a presentation of the

complete OE/S systems business process flowchart of the model. The sales order department

is equipped with a personal computer connected to the centralized data processing department

that allows them to perform a set of services for customers including checking the availability

of inventory, determining the status of open orders, initiating sales and instant confirmation

of orders. The department also has communication capabilities allows the staff to

communicate with a customer who is placing an order, either via email, telephone or online

channel. For new customers, a credit application will be required. The sales person sends the

credit application or an older customer’s details to the credit department for the credit officer

to initiate a credit investigation.

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Figure 1: OE/S Process Vertical Perspective

Figure 2: OE/S Process Data Flow

Accounts Payable/Cash Disbursements (AP/CD) Process sub-system

The AP/CD process includes invoice verification and payment processing, which are

the last two steps in the purchase-to-pay process. Problems, such as fraud, may occur in the

process. Controls help prevent the problem or reduce the impact. The Accounts payable/ cash
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disbursements (AP/CD) process is an interacting structure of people, equipment, activities,

and controls designed to create information flows and records that:

 Handle the repetitive work routines of the accounts payable department and cashier

 Support the decision needs of those who manage the accounts payable department and

cashier.

 Assist in the preparation of internal and external reports

Document the system using narrative and flowchart

Part 3: Internal Controls Analysis and Documentation, and Recommendations

The control matrix is an apparatus used to investigate a frameworks flowchart (and

related story) to decide the control plans fitting to that procedure and to relate those designs

to the procedures control objectives. It builds up criteria to be utilized in assessing a specific

procedure. We'll begin by investigating the four basic components of the network—control

objectives, prescribed control plans, cell passages, and clarifications of the cell sections. At

that point, we'll expound on the means used to set up the framework.
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Control Matrix
Control Goals of the Operations Control goals for the
System Information system
Ensure effectiveness of Ensu Ens For ......... input For .
operations by achieving re ure ensure: ........
the following system effici secu . file
goals: ent rity ensu
empl of re:
oyme reso
nt of urce
resou s
rces
Recommended U U
Control Plans A B C D E     IV IC IA C A
                         
 Present
Controls                 P-1       
 P-1: Confirm
input acceptance                  P-1      
 P-2: Written
approvals  P-2            P-2 P-2         
 P-3: Procedures
for rejected
inputs                 P-3  P-3     
Missing
Controls                        
 M-1: Assess
resource  M-  M-
efficiency 1 2      M-2            
 M-2: Online
recording of  M-
wages     2                  
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
KEY:
A Enter Details of operations control goals here IV Input Validity
Input
B Enter Details of operations control goals here IC Completeness
C Enter Details of operations control goals here IA Input Accuracy
U Update
D Enter Details of operations control goals here C Completeness
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U Update
E Enter Details of operations control goals here A Accuracy

Control Matrix Explanation

Confirm Input Acceptance

The control plan presented will be of great help in attaining the first objective of the

control matrix for instance precision of buying transaction. Considering the fact that inputs

will be acquired, various ingredients would be acquired with invoice alongside and must be

recorded. Considering the fact that the invoice have been recorded, maintaining track of each

transactions which are occurring. The structural elements within the construction sector will

be precise for purchasing amount. The third objective might be attained via the prospected

plan. Whereas confirming the subsequent input it would be better reflecting a feasible rate of

the construction elements for the OUTREACH SCHOOL based on the benefit and might

attain suitable profits for the OUTREACH SCHOOL. It will not assist in maintaining the

profits based on the prices though the quantity, prior various inputs acknowledged within the

construction sector and there is no excess input purchased that leads to loss or not a level

optimal for the organizational profit.

Written Approval

Based on the written official or rather various senior employees who are responsible

for the signing of crucial documents on behalf of the OUTREACH SCHOOL Company

whereby the fact has been acknowledged. Subsequently, there is signing of vital approval like

the increase in wages and the changing vendors input. Once an official member comes to a

decision, it is essential that the decisions will be targeted to meet the organizational

objectives. Considering the presented approval hence it is essential that the benefits and
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limitation might be recognized by each employee. Such control measures aids in the

subsequent choice for making crucial decisions for changing every wage rate.

Procedures from Rejected Inputs

This control helps in avoiding many errors which might occur if the rejected returns

entries are not made. These rejected entry procedures are important in two of our goal. The

first goal it is necessary because if the transaction are not made clearly and the rejected input

is not recorded then it would not be returned and if returned it might overstate the purchases

of the restaurant. If it overstates the purchases then our goal would fail eventually. Our

second goal would also fail because the purchases would be overstated and that would result

in understating of the profit. The understating of the profit would not show the correct

amount which the restaurant could spend. In this way this would help achieve the objective of

the two of the subsystems.

Online Recording of wages

This control would efficiently record the hours worked of the waiters, chef and bar

tenders. The efficient system of recording hours would further help us in recording the wages

of the worker accurately. If the wages of the employees are accurate then the two goals

regarding the wage and the sustainability of the profit would be achieved easily. The online

recording of wages is a control in which the wages would be calculated through hours which

would be accurate, as the hours are accurate then the payroll system becomes accurate. In the

same way if the correct amounts of wages are deducted from the gross profit then the net

would e accurate.

Assess Resource Efficiency

In this control we would look at the different resources that are being used by the

organization and if they are being efficiently being used. In order to know about the
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efficiency of a resource of the restaurant we have to check its optimality. The optimality of

the resource would make all the goals successful, because in all goals the resources of the

restaurant are being dealt. In the first goal the efficiency of the inputs that are being

purchased would be recorded. The efficiency of the inputs can be noted through the point the

amount of the input that is bought is used all for producing the output there is no excess or

shortage. In this way the input would be used efficiently. Employees are also considered as

the resources of the organization. The efficient use of the employee would be when the

employee’s wage is equal to the input produced by the employee then employee would be at

its optimal, and then the missing objective of the organization would be fulfilled. The last

goal is achieved through the resources so the efficiency of the resources would eventually

bring the profit which would be efficient.

Control Analysis

Present Control

Initially we will start from the present control. In this the first part talk about confirm

input acceptance in this the organization should be sure about how much material they need

for the input. In this part the employee should be efficient so that he can tell how much

material he needs for the input of the product. The second part is about the written approvals

there should be a written letter if the manager or the employer want to implement, prevent

something from the organization. In this control the work in the organization will be

completed effectively The third of present control is about the procedures for rejected input in

this first employer have to tell the employee that his work is being rejected and employer

should give him some preventive tips so employee would not repeat the same thing. On the

other side employer should also tell the employee about the corrective which mean he should

tell him how to correct his mistakes. We can also judge his effectiveness from his work.
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Partial Control Matrix

The other control of partial control matrix is missing controls. In this control system

the first part talks about the assess resource efficiency in this control the efficiency of the

employees is being judged how effectively they are working for the organization. The second

part of missing controls are online recording wages in this part if there is efficiency present in

then system then there will be no problem in recording wages of the employees and this will

saves the time and can utilize that time in some other effective work. There is a possibility

that expensive control support a single goal because organization is investing too much for

the control system so they will prefer on a single goal and shows the best of it. The most

important thing that will matter is the quality of the control from the above control system.

Managerial Recommendations

Expenditure Cycle

The expenditure cycle records the resources of the organization and the proper

utilization of the resources on the correct expenditure is also a goal or an aim of the

organization which could be achieved through the expenditure cycle.

Payroll Cycle

Payroll cycle would play an important towards our objective as our objective lies in

the wages and its efficient recording. The work should not be done manually; it is one of the

missing controls taken by OUTREACH SCHOOL. The control would surely help in making

the payroll cycle effective. The ease of recording the wages according to the objective would

release the problems attached to payroll cycle. The incorrect entries could be solved though

to improve it we would suggest software such as ERP. It is online software which transfers

the wages directly in the accounts of the employees by the end of the week or by the end of

the month. The ERP is also effective in achieving our goal and also in fulfilling one of our
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missing controls. The online issue of recording the wages would also be solved. The hours

would be noted in the ERP, and other important issues regarding the employees such as

overtime wage would all be set and there would be less chance of error eventually making it

error free.

Revenue Cycle

The resources if are efficiently handled, then the revenue cycle would be the most

productive. In order to fulfil then our missing control we would use the ERP system. It would

provide us useful information about the current sales and with that help we would be able to

forecast the future sales value, and also the amount of revenue that could be generated in the

future. The amount of the future would eventually help us in allocating the resources

efficiently. It would be efficient because then we would allocate the resources looking at the

revenue. We would allocate the resources on those foods of the menu which are more

profitable and would generate more revenue for the restaurant. The ERP system would be

software package that we would introduce that at both time fulfil the objective as well as help

us in achieving the missing controls. Revenue cycle also helps in estimating the profit, so

ERP system would also help in forecasting the future profit for the restaurant.

Conclusion

In conclusion, software developments are a process. It incurs time consumption and it

takes a grace period of time to be completed. However, this tool has really created a

milestone in how we carry out our businesses daily. Business nowadays can be managed

away from home without any need to be available. In this system for example, the customer

creates a personal account and can start making orders from OUTREACH SCHOOL. The

order is then reviewed by the team members and then sends a feedback request to the

customer on the status of the order. Before the delivery of the product, the system will keep
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on updating the client on the delivery of the product. As soon as the product has arrived at the

destination, the client is prompt to pick it without delay. Everything has been made possible

and the whole world is now like a single village.

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