Acct20007 Tutorialsol Combine

ACCT20007
Accounting Information: Risks & Controls
Tutorial Week 2 Suggested Solution
Topic 1
What is Good Accounting Information
Topic Objectives
At the end of this topic you should be able to:
1. Discuss the nature and purpose of accounting from economic events to reporting
and decision making.
2. Define the qualitative characteristics of useful financial information (both
fundamental and enhancing) established in the IASB/AASB’s Conceptual
Framework.
3. Define the information qualities of validity, accuracy, and completeness, with
respect to both transactions and balances.
4. Critically discuss the relationship between the Conceptual Framework’s qualitative
characteristics and the information qualities of validity, accuracy and
completeness, in the context of the conceptual roadmap of accounting.
Readings
Chapter 1 (E-text): The Conceptual Framework for Financial Reporting
Suggested reading: Chapter 2 (E-text)
Tutorial Week 2
Tutorial Question
PRE-CLASS TASK
Question 1 (adapted from “Contemporary Issues in Accounting”, by Michaela et al.,

2012.)
The following information is provided for two items of property for a company.
Property A was purchased five years ago for $400,000. It was intended to be used to
build another factory, but the company has now reorganised its original factory and it
is no longer required. The company now intends to sell it. The current property
market has dropped but it is expected to rise when interest rates fall. If sold now, the
property is expected to realise $360,000. Real estate experts have predicted that if the
company wait for the property market to recover, it could realise $450,000.
Property B is the current factory. It was purchased ten years ago for $200,000. If sold
now, it would be expected to realise $380,000 (and $500,000 if the property market
recovers). The company has various estimates about its contribution to the profit of
the company. Using current interest rates and various assumptions about future sales
and costs, the property is calculated to have a present value (in terms of future cash
flows) of $900,000. It is insured for $600,000 because this is the cost required to
rebuild it.
The company has always recorded property using the historic cost basis. Other
companies in the same industry have traditionally used the same basis, although
about 40% now use the fair value basis.
Required:
a) For each of the properties, identify which cost or value would best meet each
of the following qualitative characteristics (consider each separately) of:
• Faithful representation
Recall that faithful representation requires to represent faithfully what it

purports to represent and to be complete, neutral and free from error. This
also requires a description of what the number represents. Hence:
• Cost, if clearly indicated as cost, for both is clearly a faithful

representation (although remember we normally adjust cost via
depreciation which involves estimates).
• Current and future fair values would also be a faithful representation
providing that it is clear is an estimate and ‘the nature and limitations
of the estimating process are explained’ (refer QC15).
• Likewise present values could also be considered a faithful
representation providing that it is clear is an estimate and ‘the nature
and limitations of the estimating process are explained’ in such a case
Tutorial Week 2
it would also be required that assumptions etc made to achieve this
estimate were outlined.
• Verifiability
• The original costs could be verified from documentation.

• The verifiability of current fair value would be more problematic and
would depend on whether information was available about recent
similar sales etc. Recall that to be verifiable one aspect is that
independent observers could reach consensus. Future fair values
would be even less verifiable, as this relies on making assumptions
about the property market in the future, which would be more likely to
vary and be contestable.
• The verifiability of present value for Property B would also be less as
this requires estimates of future events and is also influenced by
choices about interest rates used. The insurance amount would
generally be verifiable given it is part of a contract (this would vary,
very reliable if set amount in policy; could vary if policy relates more
generally to replacement costs).
• Comparability
As the companies have in the past used cost this would assist in comparison
across time. As other companies use either cost or fair value these measures
would be useful for comparisons.
• Understandability
The original costs, fair values and insurance value would be easily
understood. The only value that could be more difficult to understand would
be the present value for Property B as this requires an understanding of the
item value of money and the impact of assumptions in relation to future cash
flows, costs and interest rates. However, the Conceptual Framework expects
users to ‘have a reasonable knowledge of business’ (QC32).
• Relevance (this is important in IFA 2, less significant for this subject)
Recall that relevance will vary depending on the user’s perspective and the
decision being made. For Property A the most relevant measure would be fair
value as this is intended to be sold. Whether current fair value or expected
fair value is more relevant will depend on users’ perspective and also whether
or not the company is intending to ‘wait’ until market recovers before selling.
For Property B from shareholders perspective (as interested in long term cash
flows) then the present value would appear most relevant, although cost
obviously also relevant (as this will determine profit made that can be
distributed as dividends etc). For other users, perhaps assessing liquidity or
Tutorial Week 2
safeguarding funds provided to the company current fair value may be most
relevant.
b) For each of the properties, consider which option would provide the highest
quality accounting information. Explain why.
• For Property A choose current fair value. Although less verifiable than cost,
providing information is provided about this as an estimate it would be
representationally faithful and it is more relevant given that the company
intends to sell and future fair value is not sufficiently verifiable.
• For Property B choose cost. This is verifiable (especially as compared to
present value) and still comparable with most other companies in the industry.
Fair value is not relevant as intending to use asset.
c) Do you think everyone would agree with your choices? Why or why not?
No, particularly in relation to Property B; it could be argued that cost has no

relevance.
Tutorial Week 2
IN-CLASS TASK
Question 2
You are hired as a consultant for Company ABC Ltd. The company runs a retail
business and in order to improve the customer experience, they are in the process of
introducing self-checkouts.
The director of the company, Martha Jane, is asking for your opinion on potential
risks to accounting information produced by the self-checkouts.
Required:
Consider what validity, accuracy and completeness risks could potentially arise from
the self-checkouts.
• Choosing a product that is not the one you purchased (e.g.

putting everything through as carrots)
Validity • Queensland lady who stole multiple items including coffee
machines worth $199 each by scanning them through as 2-
minute noodles worth 65c and 72c
• Skip bagging – could be putting in more products than what

you paid for – countering the effectiveness of weighing (e.g.
buy for 3 of the same item pay for 1)
Accuracy
• Store not updating barcode for reduced items – customers
paying full price for reduced products
• Customers incorrectly scanning reduced items
• Not paying for all items purchased (e.g. purchased 3 different

products pay for 2)
• Accidentally left something in the trolley and pushed the
Completeness (Details) trolley out without paying for that item
• From a store perspective, if the company forgot to include
details of types of different products (e.g. all mangoes are just
mangoes, without the different types)
• How easy it is for customer to walk out without paying? (e.g.

there was a news about a guy who managed to continually
Completeness (Events)
steal magazines by rolling them up and walking out of the
store.)
Tutorial Week 2
Articles about issues with self-service machines:
https://www.news.com.au/technology/innovation/inventions/new-selfservice-checkout-tech-
slammed-as-being-dangerous/news-story/38edd8a0604b060442e0c8bd8b371a04
https://www.vice.com/en_au/article/4w5pz3/how-best-to-scam-supermarket-self-service-
machines
Tutorial Week 2
ACCT20007
Workshop Week 1
Question 1
Consider JB Hifi (https://www.jbhifi.com.au/)
The following table contains some of the key line items from JB Hifi’s Statement of Profit
and Loss and Balance Sheet. For each line item consider what data would be used to
calculate the line amount that would be shown and why this information would be
considered faithfully represented.
Hint: Consider where the information (data) will be collected from, and what controls may
be in place to ensure it is faithfully represented.
Rationale: The purpose of this exercise is to get you thinking about where accounting
information (data) comes from, not how to prepare the statements
Line Item How do we know the Information is faithful?

Statement of Profit and Loss
Revenue See lecture slides
Cost of Sales Invoices (in - costs and out - what sold), point of
sales system for receipts, security to ensure
inventory is sold
Other Income (interest) Bank Statement for validity

Bank Reconciliation for accuracy and completeness
Invoices and other source documents like time

Sales and Marketing Expenses cards, staff rosters, internal memos for validity
Occupancy Expenses Completeness be checks to ensure everything is
Adminstrations Expenses processed.
Workshop Week 1
Balance Sheet
Physical check for existence, Security controls,

Inventories
Accuracy checks of inventory method (FIFO etc.),.
Completeness should be confirmed by stocktake.
Physical check for existence, Security controls,

Plant and Equipment
Accuracy checks of depreciation and fair value.
Completeness should be confirmed by stocktake.
Invoices in, reconcile against a supply statement

Trade and Other Payables
Bank Statement for validity

Borrowings Bank Reconciliation for accuracy and completeness
Share certificates and register

Contributed Equity
Workshop Week 1
ACCT20007
Topic 2 Suggested Solution
Topic 2
What is a Business Process and how do we document them?
Topic Objectives
1. Define the nature and extent of a business process.

2. Compare and contrast a process versus a functional view of business activities.
3. Briefly describe the role of the revenue, expenditure and general ledger/reporting
transaction cycles in the production of accounting information.
4. Read and interpret a Flow Chart with a view to identifying threats to information
quality.
5. Describe the role of business processes in the capture of data for business
decision making and accounting reports with reference to the information qualities
of validity, accuracy and completeness.
Readings
Chapter 3 (E-text): Accounting Information Systems and Business Processes Part 1
Chapter 5 (E-text): Documenting Accounting Information Systems
Tutorial Week 3
TOPIC 1 Reflection
In your own words, reflect on the relationship between the Conceptual Framework’s
qualitative characteristics and the information qualities of validity, accuracy and
completeness, in the context of the conceptual roadmap of accounting.
Use examples to enhance your reflection.
- The conceptual roadmap of accounting (this is a map in one of the Week 1 videos)
highlight the cycle of business event > data > information > decision making
- From an accounting perspective, we have data which we then structure into information
useful for decision making. These information includes the financial reports, which as per the
Conceptual Framework, needs to be a faithful representation of the business events.
- To do so, the data, which acts as the basis of the information need to achieve VAC in order
for the information to then be of a faithful representation.
PRE-CLASS TASK
TASK 1 – Flowchart: Functional and Process
A Flowchart combines both the functional and process perspectives into one
document. In what ways does a Flowchart combine the functional and process
perspectives?
A Flowchart describes a business process through pictorial representations of actual

sequences and flows of events in a process to create value. It includes details to the
business functions/departments involved, what each business function/department does as
a part of the process and how they do it. Therefore, Flowchart is said to combine both the
functional and process perspectives.
In generating a Flowchart, one of the most important steps is to identify all the departments
involved in the system and to separate them with “swim lanes”, with documents and tasks of
related departments classified under corresponding headings, as seen in Figure 1, which
depicts a hiring process in a firm (Simkin, Norman, & Rose, 2015). This reflects the
functional perspective, which is task-driven (i.e. focuses on “what is done”). Generally, this
perspective looks into the clearly defined set of activities and tasks of a business
function/department in achieving a particular objective. For instance, the “Payroll
Department” column depicts what specific task the department performs as a part of the
hiring process (i.e. using the position hiring form to enter data into the firm’s system to create
payroll record for the newly hired employee) (See Figure 1) (Simkin et. al, 2015).
Tutorial Week 3
Simultaneously, Flowchart also reflects the process perspective, which focuses on “how
things are done”. The process perspective is customer-driven as it looks into the system by
which an organization delivers value to its customers (both internal and external). The
Flowchart depicts a well-defined beginning (i.e. job vacancy) and a clear end (i.e. employee
hired and payroll account created) in the process, clearly depicting how the process (i.e.
hiring) is performed within the firm (See Figure 1) (Turner & Weickgenannt, 2013). It does
not only show what each department does in the process but, through the arrows and off-
page connectors, it suggests an interrelation between the departments involved in the
process (See Figure 1). This insinuates that while the Flowchart details the specific tasks
each department is responsible for (i.e. functional-perspective), these tasks serves as inputs
and/or outputs to the business process to create and deliver value (i.e. process-perspective).
Not one task rank superior over another as they are only the interlocking pieces to the
business process execution as a whole.
TASK 2 – Card Sorting Exercise – Part 1
Watch the video titled “Card Sorting Part 1”. The following is the instruction that we have
provided to the “Card Sorters”.
§ Form a team of 5 people

§ Sort a standard deck of cards
§ Separate by suits
§ Ace through King
Job description:
§ Take a card from an unsorted deck
Tutorial Week 3
§ Pick up the partially sorted deck of same suit
§ Place card in proper position (Ace at the bottom)
§ Put the partially sorted deck of the same suit back on the table.
Rules:
§ Place the 4 Aces face up on the table

§ Only the 4 Aces may touch the table
§ Everyone does their job simultaneously
§ If you have a card in your hand, you may NOT take another.
Required: Draw a pictorial representation of what you observed in the video. Show this to
someone who has not watched the video. Were they able to deduce what occurred?
Also consider the following questions:
§ What was difficult about creating the diagram? Identifying the process beginning
and end is an abstract concept and does not easily lend well to pictographic
representation.
§ Would your diagram be different if:
o Only 1 person was doing the job?
o 10 people were doing the job?
The diagram would look different (having to illustrate ten people doing the job
could complicate the diagram). However, the basic task that each person does is
the same.
§ Do you think others would illustrate the process in a similar way? Not everyone
is likely to illustrate the process in the same way.
§ Where is the bottleneck in this process (the card-sorting process)? The waiting
time for one person to finish sorting a deck for a particular suit before another person
can sort the same deck.
§ How could we overcome these issues? In drawing the diagram, we could

incorporate a wait-loop or a clock to represent the delay.
IN-CLASS TASK
TASK 1 – Card Sorting Exercise – continued (see “CardSortingExercise” file on

Canvas)
Tutorial Week 3
TASK 2 – Construct and narrate a Flowchart
Case 1: Adapted from: Parkes, Alison, Brett Considine, Karin Oleson, Yvette Blount.
Accounting Information Systems, 5th Edition. John Wiley & Sons Australia, 04/2015.
VitalBook file. Page 324, question 7.2
Alpha Ltd offers an audio-visual equipment hire service. The online sales process is
described below.
The customer sends an equipment hire request form containing their name, email address,
phone number, dates of booking and equipment required. The Sales Assistant checks the
details are complete and sends the form through to the Sales Consultant. The Sales
Consultant uses the computer to check whether the equipment requested will be available
on the dates required. The Sales Consultant emails the customer to advise them whether or
not the equipment is available, and how much the equipment hire will cost. If the equipment
hire is not available on their nominated dates, the customer is given some alternative hire
dates. The email advises the customer to reply within seven days if they wish to proceed
with the hire. The Online Sales Consultant files the hire request form in date order in their
‘Awaiting confirmation’ file.
Tutorial Week 3
Alpha Ltd – Sales Process
Sales Assistant Sales Consultant Computer
(3)
Customer Checked Hire

Request
(1)
Hire Request
Extracts equipment
(4)
Hire details details
(2) (6)
(5)
Checks Equipment
details availability
Equipment
Checked Hire
Request Creates customer
(7) (9)
Email details email
(3)
(8)
a Checked Hire
Request Email
Customer
(10)
Awaiting
confirmation
Online Sales
Tutorial Week 3
VitalBook file. Page 325, Question 7.4
Delta Ltd sells and installs solar panels. Their main customer base is homeowners, but they
also occasionally do a large industrial installation. The billing process for Delta is described
below.
Once an installation date has been confirmed, the Installation Team Leader prepares and
sends a completed Confirmed Installation form to Accounts Receivable. The Billing Officer
enters the details into the computer, which saves the sales order data and prints two copies
of an invoice. The Billing Officer collects the printed invoices from the computer print room
and sends them to the Installation Team Leader. The Installation Team Leader checks the
details and posts one copy of the invoice to the customer. As all installation invoices must be
paid in full before the installation takes place, the installation request form is matched to the
invoice and the matched documents are filed in customer number order in the ‘Awaiting
payment’ file.
Tutorial Week 3
Delta Billing process
Installation Team Leader Billing Officer Computer
When installation date

confirmed
Start
Prepares
Installation
confirmation
Sales
(1)
Installation Installation (4)

Confirmation form (2) Confirmation form
Creates and saves

(3) invoice
Installation data
Copy 2 Sales Invoice

Prints invoice
Copy 1 Sales Invoice (7)
Copy 1 Sales Invoice (5)
(6)
Checks Copy 1 Sales Invoice
details
(8) Installation
Confirmation form
(10)
(10)
(9)
Matches
Customer

Installation
Confirmation form
(11)
Solar Panel Installation
Invoices
Awaiting
Payment
Tutorial Week 3
VitalBook file. Page 325, Page 325, Question 7.5
The following is a description of ordering food at Gamma Restaurant.
The Waiter records customers’ food and drink orders by writing the details on an order form.
The order form is given to Kitchen staff for use when preparing the food and drinks. Once all
the food and drinks have been given to the Waiter for delivery to the table, the Kitchen staff
give the order form to the Cashier. The Cashier enters the order details into the computer,
saves the sales details and then two copies of the bill are printed. When the customers have
finished their meal, the Waiter collects one copy of the bill from the Cashier and gives it to
the customer. Gamma accepts only cash payments. The customer pays the Cashier and
keeps their copy of the bill as their receipt. The Cashier puts the cash in the cash drawer,
writes ‘paid’ on the other copy of the bill and files it in the sales file.
Tutorial Week 3
Gamma Restaurant – Sales Process
Waiter Cashier Computer
Kitchen Staff
(5)
Customer
Sales Order form
Records (6)
order
(6)
Sales details
(1)
Saves data &

Copy 2 Bill (8)
Sales Order form creates Bill
Copy 1 Bill
(2) Pays bill (7)

in cash
Kitchen Staff (9)

Customer Bills
(11)
Copy 1 Bill
Puts cash in
drawer
(10) (12)
Copy 2 Bill
Customer
Writes
‘Paid’ on
bill
(13)
Paid Copy 2 Bill
(14)
Sales
Ordering food
Tutorial Week 3
1
Shuffle the cards, and once again place several of the same suit next to each other.
2
3
Rather than have each person wait for the suit-sorting decks, it is the team lead who
will now wait while one person is busy. If the wait is long enough, then everyone else
will wait for new work, while one person feels overwhelmed.
In this exercise, not everyone is doing the same job, and so multiple stick people
need to be included. You can discuss whether it should be 2 (one lead, one specialist),
or 5 (one lead, and each kind of specialist). Typically it will be easier and clearer to
create a diagram with 5 roles rather than 2.
You can facilitate a discussion on correctness vs. clarity at this point. 2 or 5 could both
be accurate representations, but the use of 5, even with extra detail that is
duplicated, generally makes it clearer to see “what is going on”. It is also useful to
refer back to this discussion when presenting the sub-process icon. It allows for more
effective handling of repeated detail, while retaining important role interaction.
The bottleneck in this process is still the wait time but this mainly occurs on the team
leader.
4
5
6
7
8
9
You can discuss here that the process crosses from one role and back again several
times.
Highlight that although there are multiple students the role is only documented once
because each student behaves exactly the same and interacts with the teacher the
same way.
Highlight that a process begin node can be given a description. This can be used to
describe how often the process begins, or what event triggers it. Other examples of
this can be “At 9AM”, “Every Monday”, and “Once an hour”.
10
Rather than have the teams do this themselves, you could do it as a joint class
exercise. It takes less time, and is much easier to coach the students.
5 roles will be easiest to understand. While it is more correct with 2, it’s more
difficult. If you like, start with 2 and when things get difficult switch to 5.
It will seem tempting to create a decision split that goes 4 ways, with “Suit?” being
the text. This is both cumbersome and messy to diagram. Coach the students into
thinking about yes/no switches. Prompt them to think of a series of questions that
accomplish the same logic.
Similarly, ask them about the merits of having one or four end points. If there is only
one, then in which lane should it be?
Ask them about the detail of each specialists work. Do we need to include it, or can
we treat it is a sub-process that can be documented once elsewhere?
11
This is one of many valid possibilities.
You can discuss the pros and cons of this representation:
- Pass/take card are clearly included, as it is a process bottleneck. You can argue that
the wait state is represented in how long it takes for the “pass card” tasks to
complete.
- While tempting to put the first hand-off to the first spec. lane, it would result in a
much wider diagram or the crossing of process lines.
- The sequence of decisions is arbitrary, and may not reflect someone’s internal
mental processing. The representation is an abstraction of reality, and the goal is
to communicate in the clearest way what happens between roles to someone
unfamiliar with the process.
- When considering the next diagram, one also has to think about what facilitates
understanding the difference between the two processes. I chose this
representation over a four way decision, to seed the thinking needed to
understand the “to-be” process.
12
The jokers will create a dilemma. Each person who receives one will have to make a
choice:
(a) Obey the rules and be unable to complete the exercise
(b) Break the rules by putting it on the table, or keeping it in hand, and taking
another card
(c) Pass the card, and the dilemma, on to the next person
(d) Place it arbitrarily in a sorted deck
(e) Ask for clarification
13
14
Bottlenecks are more evenly distributed, but the club and diamond specialists can
jam up resulting in the heart and spade specialists being idle.
Being neither red, nor a club, the jokers should end up with the spade specialist if the
decision splits are strictly interpreted.
For discussion:
• Is it feasible to model errors and exceptions? All of them?
• Can they all be known? If included, how complex do the diagrams become?
• What about for common occurrences, or a way to have a catch all?
15
Since a joker is neither red nor black, the flow of the exception here is clearer. We
don’t know exactly what the team lead is supposed to do, but that they are in fact
accountable.
If the joker ends up being rejected (allowed to be put aside), this flow is clear.
But what does it mean to be “corrected”, for example, the idea that it’s a custom
order for the 11 of diamonds, or another 9 of clubs? How will this return for
processing?
The answer is that we don’t know exactly what happens in that sub-process, and we
don’t care here. But, what they need to realise is that the item could be resubmitted
to start this process all over again, and it is not always necessary to add extra flows to
show where exceptions rejoin regular process flow.
16
If cards could be put on the table, then the team leads would be very efficient. They
would simply place cards on the table to their left and right.
The next people in line, would then pick up each batch of cards, and probably pre-
sort into suits, passing on work that was not theirs and then going about completing
their own.
The whole process would feel more effective since no one would be waiting to hand
off work to someone else.
Exception handling would feel less urgent, since each person could put the card aside
and decide what to do while working on other jobs, or while they had no work to do
(especially the team lead, who could deal with them at the end since they’re likely to
be finished first).
The table in this sense is synonymous with technology – quite literally “supporting”
the business process. While this easily compares to the use of computer systems, it is
worth pointing out that forms, inboxes and outboxes are also technology and serve
the same function.
17
ACCT20007
Topic 3 - Solution
Topic 3 What is Data? How do we store data? How
do we design and document the structure of
stored data?
Topic Objectives
1. Distinguish between business events, economic events and accounting transactions.
2. Briefly compare and contrast the traditional versus events “database” view of accounting
systems.
3. Discuss the ACID properties of Transaction Processing.
4. Read and interpret an Entity-Relationship Diagram with a view to identifying threats to
information quality.
5. Understand how an ER Diagram works in conjunction with a process flowchart to
understand when and how information enters, is processed and stored, and reused as a
business conducts its operations.
Readings
Chapter 6 (E-text): Database Concepts 1
Tutorial Topic 3
POST-TUTORIAL CONSOLIDATION (TOPIC 2)
• Explain the importance of having a standard (agreed upon) notation to document process.
• Without a standard notation, it may be difficult to illustrate a process and have another
person deduce what is going on.
• As we experienced in Week 2’s pre-class exercise, it was relatively difficult to draw a static
illustration of the card sorting process, much less get another person to figure out what it is
illustrating.
• Without having a standard notation, it will be difficult to communicate what happens in a
process from one person to the next.
• This will create difficulty in areas e.g. training for new staff, audit of the process, figuring
out whether the process contains any weaknesses that should be addressed, etc.
• Describe the role of business processes in the capture of data for business decision making
and accounting reports with reference to the information qualities of validity, accuracy and
completeness.
• The different business processes (e.g. sales, purchase, conversion, etc.) records event and
transactions that is occurring in the entity’s day-to-day operation.
• As discussed in last week’s Topic 1 Consolidation, the accounting reports are the
information needed for decision making and in order for it to faithfully represent what is
occurring in the business, the data recorded needs to be able to achieve VAC.
• This means that business processes need to have controls in place to ensure that the data
that it is capturing are valid, accurate and complete representation of the events and
transactions for the business.
Tutorial Topic 3
PRE-CLASS TASKS
TASK 1: Economic event vs. business event
• In this expenditure cycle process flowchart, where do economic events occur?

When supplier ships the item (and the company receives the item) and when the company
pays the supplier (and the supplier receives the payment)
• Whose economic events are they, i.e. which organisation should record them?
Both companies should record an inflow and an outflow of resources. Hence, both
companies will be recording the economic events.
TASK 2: Fantastic Widget Pty Ltd

Before attending your tutorial, review the narrative, process flowchart (fig. 1) and entity-
relationship diagram (fig. 2) provided for Fantastic Widgets Pty Ltd.
Do your best to understand the process and the data used, captured and stored by this process.
Make a note of any questions or parts of the diagrams/process that are not clear to you.
Review the in-class activities. You may attempt them yourself before attending the tutorial.
Tutorial Topic 3
Fantastic Widgets Pty Ltd sells the most fantastic widgets online. Its widgets are so fantastic, that
anyone who buys one, will never need more than one, and never need another.
Fig. 1 and 2 document the sales and delivery process, and database structure, for their online sales
process and supporting computer system.
Tutorial Topic 3
1. The flowchart is annotated with the numbers 1 through 4. At each of these points, data is being retrieved from the database. For each of
these, which entities and attributes are being referenced? Complete the table below.
Entity Attribute(s)
Position 1 Products Description, Price (and probably Code as well)
Position 2 Inventory Units on Hand, Units reserved
Position 3 Sales Sales ID (to generate the next one)
Position 4 Sales Product Code, Customer Name and Address, Shipment Date
2. Suppose the contents of the Sales entity table is as below, and it’s July 29, 2019 at 8am. What would be the best way for the system to
determine which records are “new sales orders” (annotation 4)?
All orders where the Shipment Date is empty – these are all unshipped. Using Order Date for the previous day won’t work because it won’t
catch items ordered on Friday or Saturday when run on Monday morning, and any item ordered before 8am on the same day can be
processed on the same day.
Sales ID Cust. Name Cust. Address C.C. Nbr. Prod. Code Order Date Shipment Date
1001 Andrew Andy’s palace 123-00000-12 WDGT-A 2019-06-27 2019-06-28
1002 Bob Bob’s private island 123-00000-09 WDGT-A 2019-07-25 2019-07-26
1003 Cindy Cindy’s mega-yacht 123-00000-19 WDGT-V 2019-07-26
1004 Casper Haunted castle 123-00000-10 WDGT-V 2019-07-27
Tutorial Topic 3
IN-CLASS TASK
1. Suppose a new customer, Danny, comes online on July 29 at 7am, and purchases a Kryptonite Widget. Follow the process step by step, up
until the end of the first sub-process (Goodbye!). Add to the Sales table above and modify the Products and Inventory tables below where
necessary at each step of the process. Danny lives on the moon, and his CC number is 123-00000-87.
Modified tables:
Product Code Description Price Product Code Cost per unit Units on hand Units reserved
WDGT-A Adamantium Widget $1m WDGT-A $ 0.1 m 10 0
WDGT-K Kryptonite Widget $ 100 m WDGT-K $ 10 m 1 01
WDGT-V Vibranium Widget $ 10 m WDGT-V $1m 2 2
1003 Cindy Cindy’s mega-yacht 123-00000-19 WDGT-V 2019-07-26
1004 Casper Haunted castle 123-00000-10 WDGT-V 2019-07-27
1005 Danny The Moon 123-00000-87 WDGT-K 2019-07-29
2. Another customer, Eve, comes online and would like to purchase a Vibranium Widget. Can she? Why/why not?
She can’t.
Available units = Units on hand – Units reserved = 0 (for WDGT-V)
There are two reserved units (for sales #1003 and #1004 that have not been fulfilled yet).
Tutorial Topic 3
3. Now follow the second sub-process performed by the warehouse. Update the tables above at each step of this process.
3 orders are found and shipped. Inventory is decreased for each of the three orders, and the reservation released for each one also.
WDGT-A Adamantium Widget $1m WDGT-A $ 0.1 m 10 0
WDGT-K Kryptonite Widget $ 100 m WDGT-K $ 10 m 1 0 1 0
WDGT-V Vibranium Widget $ 10 m WDGT-V $1m 2 0 2 0
1003 Cindy Cindy’s mega-yacht 123-00000-19 WDGT-V 2019-07-26 2019-07-29
1004 Casper Haunted castle 123-00000-10 WDGT-V 2019-07-27 2019-07-29
1005 Danny The Moon 123-00000-87 WDGT-K 2019-07-29 2019-07-29
Tutorial Topic 3
4. It is now the afternoon of July 31st. Andy’s partner, Franceska, wants an Adamantium Widget of her own. Complete the first sub-process for
her purchase, updating the tables above as necessary once again. Franceska lives with Andy and uses his credit card.
Modified tables:
WDGT-A Adamantium Widget $1m WDGT-A $ 0.1 m 10 0 1
WDGT-K Kryptonite Widget $ 100 m WDGT-K $ 10 m 0 0
WDGT-V Vibranium Widget $ 10 m WDGT-V $1m 0 0
1003 Cindy Cindy’s mega-yacht 123-00000-19 WDGT-V 2019-07-26 2019-07-29
1004 Casper Haunted castle 123-00000-10 WDGT-V 2019-07-27 2019-07-29
1005 Danny The Moon 123-00000-87 WDGT-K 2019-07-29 2019-07-29
1006 Franceska Andy’s palace 123-00000-12 WDGT-A 2019-07-31
Tutorial Topic 3
5. On the morning of July 28th, the manager has asked you to prepare an ad-hoc trial balance for the month of July up to that date (use Table
3) Note: You can assume the owner of Fantastic Widgets only provided the initial inventory in starting the business
Accounts DEBIT CREDIT
Cash 22,000,000
Inventory 13,000,000
Unearned Revenue 20,000,000

13,200,000
Owners Equity
Retained Earnings 900,000
Revenue 1,000,000
Cost of Sales 100,000

35,100,000 35,100,000
Tutorial Topic 3
6. On the morning of August 1st, the accountant for FW Pty Ltd arrives. Using the data from the database tables above:
a. Calculate the value of Inventory as it would need to be represented on the Balance Sheet as at July 31st, 2019.
Two key aspects to get this right – we use stock on hand, ignoring reserved, because we need to show items that are in our
possession; and we value at acquisition cost.
10 x $0.1m + 0 x $10m + 0 x $1m = $1 million
b. Prepare journal entries to update the necessary Income Statement account balances for the economic events that have taken place in
the month of July (use the table below).
Here, we need to calculate sales revenues based on items that shipped in July – ignore items that have not shipped yet, or that
shipped prior to July 1st. Revenue is calculated based at the sales price. The corresponding debit goes to Cash since we have already
collected the payment prior to shipping – there is no Accounts Receivable.
1 x $1m + 1 x $100m + 2 x $10m = $121 million
For Cost of Goods Sold, we use the same sales quantity, but at cost. The corresponding credit goes to Inventory.
1 x $0.1m + 1 x $10m + 2 x $1m = $12.1 million
Date Account Name Debit Amount Credit Amount
2019-07-31 Cash 121,000,000
Revenue 121,000,000
2019-07-31 Cost of Goods Sold 12,100,000

Inventory 12,100,000
Tutorial Topic 3
7. For each of the two sub processes (Start -> Goodbye, 8AM -> Out for delivery), which of the 3 data processing modes is being used?
Start->Goodbye: Immediate. Key aspect here is that all data is written to database at the same time (inv reservation and sale), and processing
takes place immediately after the customer enters payment information.
8. Would you consider that the design of this database is normalised? Given that a customer only ever orders a single product, it is reasonable
to keep it as is, or would you change the structure?
Yes. The attributes of customer name, address and credit card are relevant to the sales order - who bought it, where to ship it, how it was
payed for. The fact that two people can live at the same address and use the same payment method is irrelevant. Even if we split out a
customer table, this information would be recorded twice, because there are two separate customers and the address and payment info
applies to both. The only real case for splitting out a customer table, would be if customers could order multiple times.
9. How do the ACID principles help ensure that data is correctly recorded and that the two subprocesses, or two customers ordering at the same
time would not interfere with each other?
Ensuring that the saving of the Sales record, and the update to Units reserved, are both successful, or neither of them are successful.
(Atomicity)
Ensuring that the update to Shipment Date, Units on hand and Units reserved each time a sales order is shipped are all successful. (Atomicity)
Ensuring that sales orders don’t refer to products that don’t exist. e.g. WDGT-B (Consistency)
Ensuring that two sales orders don’t use the same Sale ID. Ensuring that these two orders both result in +1 being added to Units reserved.
(Isolation)
Ensuring that the updates when an item ships, does not interfere with new sales orders being created. Specifically, the ship date of a new
order should not be updated when shipping a previous order. The decrement and increment to Units reserved should not interfere or
overwrite with the other between shipping one order and a new one coming in at the same time. (Isolation)
All updates must persist forever and not be lost due to power failure etc. (Durability)
Tutorial Topic 3
ACCT20007
Accounting information: Risks & Controls
Suggested Solution: Tutorial Topic 4
Topic 4
Internal Controls I
Topic Objectives
1. Define the nature and purpose of internal control

2. Describe the five control components of an internal control system under the
COSO framework
3. Briefly describe the principles of corporate governance in the control system
4. Briefly describe several financial statement assertions giving examples of risks and
possible control responses
Readings
Chapter 8 (E-text): Internal Controls I
Additional readings: New COSO Framework:

https://www.coso.org/Documents/990025P-Executive-Summary-final-may20.pdf
Topic 4
POST-CLASS CONSOLIDATION (TOPIC 3)
Required: Compare and contrast how the journal entries for the month of July would be different in
a traditional accounting process as opposed to the database processing shown above.
• In the traditional accounting process, the event happened then documentations (e.g. receipts)
are generated. This receipt is then sent to the accounting department to get recorded in the
journal entries. Whereas with the database processing, the event itself is captured in the system.
And from the capturing of the event, we can now generate the receipts and/or create the
reports. The two are now independent of each other. We don't need source documents to
produce accounting records.
• The end result of two journal entries method will be the same; however, in the traditional
accounting process, the journal entries would be done for each transaction, even if you are
doing specialised journal entry (e.g. sales journal). However, for the database accounting
process, the system would capture the transactions and events and will be able to generate an
aggregated report without necessarily needing the per-transaction journal entries.
ONLINE VIDEO QUESTION
Q: Below is an extract taken from accounts payable, each of the 8 transactions records a
payment made. What quality problems can you see with this data?
A:
Line 1 (need to check line 5): The same vendor ID as like 5, but different name, and different
invoice format. Which suggests that there is a typo in the spelling of one, or possible the
same vendor id used twice.
Line 2 No Vendor ID – So is this a valid vendor? Preapproved?
Line 3 (need to check line 6) When compared to line 6 we have to companies with similar
names, Invoices in sequence but different vendor IDs which suggests a double up in data.
Line 4 Payment not authorised
Topic 4
Line 5 (also see line 1) Apart from the issues addressed in line 1 this number is significantly
higher than all other amounts, so risk that this is an overpayment and the actual amount is
much lower, e.g. 894.00 or 893.00 or 894.30
Line 6 (also see line 3) In addition to issues addressed in line 3 the date is in a incorrect
format.
Line 7 (also see line 4) Same amount as line 4 and vendor, which suggests double payment,
this time it is authorised, but no invoice number.
Line 8 (also see line 6) Same amount and vendor as line 6, but different authorised by. With
the a on the end of the invoice number same as 6, looks like a deliberate attempt to get
around paying the same invoice number twice control which has resulted in a double
payment.
PRE-CLASS TASK
Task 1 - Assertions and Payables
Required: Discuss how management’s assertions regarding the value of trade and
other payables (account payable) on the balance sheet impacts the control
environment. Your answer should refer to information quality goals.
Business are may be tempted to purposely omit a liability to make themselves look better.
Thus, a focus of the control environment should be that all liabilities are included, therefore
completeness is a main risk, i.e. or Completeness (Event) for information goals.
Other risks are paying for goods not received, double recording or recording fake invoices.
Therefore, there needs to be controls in place to check the validity of the invoices.
- This could be discussed as either the existence of the trade payable, and/or the
obligation to pay.
Accuracy of entry is always an issue, thus controls in place to enhance the entry of invoices.
Affecting the valuation of Accounts Payable. No need to mention allocation.
Task 2 – COSO Framework
Using the document ‘Internal Control – Integrated Framework’, explain each of the five
elements of internal control (https://www.coso.org/Documents/990025P-Executive-Summary-
final-may20.pdf)
Sets the tone of a firm, influences the control consciousness of its

employees, and establishes the foundation for the internal control
system. Control environment factors include the management’s
Control
philosophy and operating style, integrity and ethical values of
environment
employees, organisational structure, the role of the audit committee,
proper board oversight for the development and performance of
internal control, and personnel policies and practices.
Topic 4
Involves a dynamic process for identifying and analyzing a firm’s risks
from external and internal environments. Risk assessment allows a
firm to understand the extent to which potential events might affect
Risk
corporate objectives. Risks are analyzed after considering the
assessment
likelihood of occurrence and the potential loss. The analysis serves as
a basis for determining how the risks should be managed. This
component will be discussed later in the chapter.
Occur throughout a firm at all levels and in all functions. A firm must
Control establish control policies, procedures, and practices that ensure the
activities firm’s objectives are achieved and risk mitigation strategies are
carried out.
Supports all other control components by communicating effectively

to ensure information flows down, across, and up the firm, as well as
interacting with external parties such as customers, suppliers,
Information and
regulators, and shareholders and informing them about related policy
communication
positions. Relevant information should be identified, captured, and
communicated in a form and timeframe that enables employees to
carry out their duties.
The design and effectiveness of internal controls should be monitored

by management and other parties outside the process in an ongoing
Monitoring basis. Findings should be evaluated, and deficiencies must be
activities communicated in a timely manner. Necessary modifications should be
made to improve the business process and the internal control
system.
IN-CLASS TASK
Task 1: Bong Bong
Note: this question cuts across topics and is a past exam question. Part 3 covers future
topics but the overview of processes and readings from topic 2 should allow you to answer
it.
Imported Product Company only stocks items made in Korea. All products are pre-
packed and contain a barcode. To minimise waiting times at checkouts, it has
introduced self-checkouts.
Security recently caught someone in the store with a sheet of barcode labels for small
cans of Bong Bong (a grape drink; one of the store’s cheapest products), sticking the
Topic 4
labels onto other products before going through the self-checkout. The person caught
is a regular customer and has been frequenting the store on a daily basis.
Required:
1. Would this be considered a random or systematic error in relation to sales data?

Explain why.
It’s a random error as its one customer who has been detected. The error does not
impact all products in the store. From the sales data perspective, the error is also
random as it only impact the products which have been labelled as Bong Bong and not
all products in the store.
2. What document produced by the self-checkout would be incorrect due to this

error? Explain the impact on information reliability (with reference to information
reliability goals)
Receipt. Validity as the items recorded as sold are not what actually got sold.
3. Explain how this data problem would affect two other transaction cycles (not
sales) and the impact(s) this problem would have on the financial reports. Your
answer should clearly identify the decisions that would be most affected and the
consequences of these decisions on subsequent processes and the financial
reports.
Purchasing and General Ledger/Reporting Cycles. The business is a retailer not a

manufacturer, therefore Conversion (or Production) cycle will not be impacted.
Purchasing cycle: As a result of this the business would think it has sold lots of Bong
Bong, thus would order more of it. However, it actually sold other more expensive items
without realising it and would not reorder these other items in the quantity needed.
Therefore, extra cans of Bong Bong would be purchased but the business will “under-
purchase” other items.
GL/FR cycle: This section would not expect you to be able to fully answer at this stage
• Would affect budgeting (linking into the purchase cycle)
• Would also affect report producing as sales of inventory would be incorrect due to
chart of account coding.
• Note revenue would be reported correctly based on what was recorded as sold.
Task 2 – Telstra Cut-Off
Consider the following scenario:
Telstra needs to determine which accounting period the revenue from a phone call
should belong to. The phone call started before midnight on balance date (30th of
June) and finished after midnight (1st of July).
Required:
Topic 4
a) What accounting period did the phone call occur in? You might want to consider
the different options that Telstra has.
Telstra could recognise the phone call either when it started or when the phone call has
ended. Or, alternatively, Telstra could also recognise part of the phone call that
happened before the balance date (the duration of the phone call up to the balance date)
as revenue for the previous period and the remaining duration of the phone call after the
balance date as revenue recognised in the next period (pro-rata across both periods).
b) As a result of your answer for a), what information would Telstra need to ensure
that revenue is reported correctly within the financial statements?
The information that you will need for the phone call to ensure that revenue is reported
correctly within the financial statement are the following:
• Cost of call
• The time stamp for when the call started
• The time stamp for when the call ended
• Calculation for the duration of the phone call – depending on how Telstra
recognise the revenue.
Task 3 – Natural directions of financial statement misstatements
The table below maps information goals to the elements of financial statements and the
normal direction of impacts.
Direction of Possible Revenue Account Misstatement

Information
Reliability Goal
Not achieved Revenue Expense Asset Liability
Validity Overstated Overstated Overstated Overstated
Over or Over or Over or Over or

Accuracy
Understated Understated Understated Understated
Completeness
Understated Understated Understated Understated
(Event Level)
Required:
a) Define and explain the information reliability goals of validity, accuracy and
completeness.
- Validity – what is recorded relates to actual events that were authorised, actually
occurred and involve actual entities
- Accuracy – relates to whether the details recorded in the system actually
corresponds to the actual event
Topic 4
o Furthermore, accuracy also relates to whether the details for a particular
event have been correctly calculated
- Completeness (details) – have all the details of a particular transaction been
recorded?
- Completeness (events) – have all valid events/transactions that occurred been
capture? Have all valid events/transactions been updated to the relevant data
stores?
b) For revenue, expense, asset and liability accounts explain what overstatement and
understatement means.
Overstated (Understated) revenue means that revenue is reported higher (lower) than
the actual revenue the firm earned (or should have earned) from the economic
transaction.
• E.g. we entered the wrong price when setting a price or scanned the wrong
barcode. It does NOT mean that we have charged too little for our products or
services. (i.e. we charged $90 when we could have charged $100).
Overstated (Understated) expense means that expense is reported higher (lower) than
the actual expense paid incurred.
• E.g. we recorded an electricity bill of $100, when in actual fact it was $90. It does
NOT mean that we have paid too much for our expenses, e.g. we paid $50 for an
item from supplier A, when we could have purchased it from supplier B for $450.
Overstated (Understated) assets means that the asset values or assets reported are at
a higher (lower) value than economic value (cost) of the assets the company holds.
Overstated (Understated) liability means that the liability reported is higher (lower)
than the liability the company has.
c) Holding all else constant, if a company wants to use their financial statements to
signal an improvement in their financial position, which information goal risks are
at risk for revenue and expense accounts? Why? Provide examples to support
your argument.
Holding all else constant, validity is most likely at risk for revenue items because
overstating revenue will lead to an increase in profit.
Holding all else constant, completeness at event level is most likely at risk for expense
accounts because understating actual expenses will increase profit.
This question is asking you to think about how different incentives can decrease
accounting information quality
Topic 4
ACCT20007
Accounting Information: Risks and Controls
Topic 5
Internal Controls II
Topic Objectives
• Briefly describe the role of authorisation, recording, input accuracy in achieving the
key qualities of information
• Briefly distinguish between general controls and application controls
• Distinguish between preventive, detective and corrective controls and give an
example of each
Readings
Chapter 9 (E-text): Internal Controls II
Tutorial Topic 5
POST CLASS CONSOLIDATION (TOPIC 4)
Required: Describe how each of the period and period-end assertions relates to the information
quality goals of validity, accuracy and completeness.
Period Assertion Info Quality Goals Period-End Info Quality Goals

Assertion
Occurrence V, A Existence V
Completeness C(D), C(E) Rights and V, C(E)
Obligations
Accuracy A Completeness C(D), C(E)
Cut-off V, C(E), A Valuation and A, C(D)
allocation
Classification V, A, C(D)
Tutorial Topic 5
PRE-CLASS TASK
Gaurav operates a small physical store (i.e., bricks-and-mortar) that sells various electronics
goods. The company updates its inventory database once every two days. Gaurav has
sufficient controls in place so that database updates are always quite accurate. Gaurav
considers shifting to an online-only business model (i.e. no physical store; all sales are made
online).
Required:
What recommendations would you provide to Gaurav in regard to data processing

modes for inventory? Explain with reference to information quality goals.
Gaurav will need to shift to real-time processing, so inventory is always up to date to reduce
the risk of selling inventory not available.
What type of controls (detective, preventive, corrective) are adequate in such an

environment? Explain.
For real-time processing, preventive controls are effective and necessary to reduce the risk
of errors in the first place.
Tutorial Topic 5
IN-CLASS TASK
Task 1 (adapted from Parkes, Olesen & Blount (2017). Internal Controls II. In
Accounting information systems, John & Wiley Sons Ltd, Australia.)
NOTE: the table at the end of the document provides a brief overview of possible
controls. Under each fraud risk, there are also a series of controls – these have been
noted down from discussions within tutorials.
CPA Australia’s advisory guide on employee fraud identifies some typical ways that fraud is
carried out. These include:
i. creating ‘ghost’ employees or not deleting ex-employee records and having

the salary of these ‘ghost’ employees paid into the fraudster’s bank
account
• Timesheet system that can be reconciled to payment of wages

(preventive in that acts a deterrent and detective to find errors)
• Check holder of the account or account number (whether this is an
existing employee or not) (detective)
o Checking for duplicate bank accounts within employee system
(detective)
• Clock in and clock out associated with employee ID (detective)
• Checking on abnormalities on things like not taking annual leave, etc.
(detective)
• Check whether the employees who are present = employee accounts that
are active (detective)
• If an employee has left the company, ensure that their pay account is
deleted or made inactive straight away (preventive)
• Segregation of duties – between those who create/update employee
accounts and those who make the salary payment (preventive)
o Authorisation required to change/update employee account
(preventive)
ii. creating bogus suppliers, with payment being made to the fraudster’s bank
account
• Inventory (goods receipt) check with invoice on whether we actually

purchase something (detective)
• Authorisation control for addition of suppliers (preventive)
• Check whether there is a bank account details that is a duplication
between employee/supplier (detective)
• Pre-specify a list of pre-approved vendors that we can select from
(preventive). See above for approval.
• Higher cash outflow (e.g. direct transfers) as opposed to accounts
payable (detective)
Tutorial Topic 5
iii. creating bogus purchase orders of a bona fide supplier and substituting the
supplier’s bank account details with fraudster’s bank account details
• Check for duplicates of bank account/payment details of employee vs.

supplier (detective)
• Log/history for the change in suppliers’ account details (detective)
• Any change to the suppliers’ account provide an alert to management
(preventive and detective)
• Only pay if you have a goods receipt (preventive)
• Confirmation/validation from supplier for any changes in account before a
change can go through (preventive)
• Reconcile goods receipt with purchase order (detective)
• Segregation of duties for payment and cash handling – also with those
who can change the supplier details (preventive)
iv. obtaining kickbacks or bribes from suppliers or contractors (as an

inducement to purchase from them)
• Segregation of duties – between purchasing (i.e. who makes the

purchase decision) and those who select the suppliers (preventive)
• Policies with regards to accepting kickbacks and gifts (preventive)
• Whistleblowing incentive to anyone who would report it (detective)
• Job rotation (preventive)
v. associates of the staff providing services to the business at inflated prices
• Declaration of association and affiliations (preventive)

• Having supplier selection policies/procedures – e.g. checking for quality
(preventive)
• Requiring multiple quotations from different companies (where possible
selected by someone independent of the affiliation (preventive)
• Check for unusual cash outflow for a purchase that is significantly higher
in value compared to market/usual purchases (detective)
• Conflict of interest policy within the company (preventive and corrective)
vi. using business resources for personal use
• Cross referencing resources used with clients/jobs (detective)

• Resources stored in a secure location
o Needing access, administered by staff (preventive)
o CCTV (preventive and detective)
• Checking for log of resource usage (e.g. printing) (detective)
o Associate use of resources with staff ID (detective and preventive)
• Check for abnormalities (e.g. sudden depletion of business resources)
(detective)
vii. submitting inflated/bogus reimbursement claims
Tutorial Topic 5
• Preset limits for various claims (preventive)
• Require receipt/claim summary before submitting a reimbursement
(preventive and detective)
o Issue: fake receipt, don’t show the purpose of the activity
• Guideline on what can/cannot be reimbursed (preventive)
• Upper limit – above the amount, require authorisation before allowing to
spend /get reimbursement (preventive)
• Human trust
viii. manipulating financial data to receive performance-based bonuses
• Independent review/audit of financial data/report (detective)

• Incorporation of non-financial criteria into performance schemes
(preventive)
• Checking of source documents in suspicious transactions (detective)
ix. faking time sheets
• Linking timesheets to job cards (detective)

• Review hours worked and patterns worked (detective)
• Reasonableness of hours claimed/number of days worked (detective)
• Biometrics associated to timesheets (detective)
o Issue: if work from home, might not be accurate
• Manager approve timesheet before submitted (detective)
• Timesheet automatically generated based on clock-in and clock-out
(preventive)
• Cross check time cards against other sources, e.g. CCTV (e.g, 7 Eleven
Scandal) (detective)
x. making private purchases through business accounts/business credit

cards
• Regular review of expenses related to business credit cards (detectivew)

• Require submission of receipts - if no receipts require employees to
reimburse company (preventive and corrective)
o With this case, the company already paid – hence, the
reimbursement is to the company
• Having a limit on the business credit card (preventive)
xi. providing discounted (or free) goods or services to friends and associates.
• Authorisation – requires authorisation from supervisor when issuing

discounts (preventive)
• A policy that there is a limit to discounts or free goods that you give out
(preventive)
• Scanning free samples given out (e.g. Aesop) (detective)
Tutorial Topic 5
Required:
For each of the above:
a) Suggest a possible application control that could deal with the fraud
b) Classify the control as preventive, detective or corrective and justify your
classification
c) Explain how the control addresses the fraudulent activity
Tutorial Topic 5
Scenario (a) (b) (c)
/ Risk
Application Control Classification Explanation
i. * Search employee D * Bogus employees or former employees not

data for with the firm any more are obviously not going
abnormalities (ie not to appear in other transactions associated with
taking leave) their employment – for example leave
applications. Over an extended period,
analysing leave balances and leave frequency,
sick leave etc may point towards these bogus
payroll payments.
* Duplicate accounts * There is the possibility that the bogus

D
– Search payroll employee may be paid using the same account
details for duplicate as the employee perpetrating the fraud.
payment account Looking for duplicate employee banking details
numbers would help detect this situation.
ii. * Supplier P * Having set processes for screening suppliers

authorisation before approving them for business means that
procedures – Set they can be confirmed as existing and of
process for adding / suitable quality etc. If, having gone through this
editing suppliers process, they are added then the chance of
data, including a them being ‘bogus’ is reduced.
procedure for
screening and
accepting suppliers
* Crosschecking * If being perpetrated by employees, there is

payment details (ie the possibility that they may be using the same
account, bank, account they are being paid through. Looking
account number etc) for matches between employee banking details
D
against other and supplier details would detect this situation.
records (eg
employee payment
details)
iii. *Review of address D *In situations where supplier banking details

and banking details are altered, a log of changes could point
changes for suppliers towards when the changes were made and who
and log of banking made the changes.
detail changes
Tutorial Topic 5
*Cross checking * A crosscheck of employee banking details and
employee and supplier banking details looking for matches will
supplier data to look detect any situations where the details are the
for payment details D same. This could point towards situations
for employees that where the employee has engaged in such
match payment fraudulent activity.
details for suppliers
iv. Separation of Duties Keeping the supplier selection process and

– Separating supplier purchasing activities separate can be a way of
authorisation from reducing the effectiveness of such kickbacks,
purchasing P since the person making the purchasing
decisions is separate from the person who
approves suppliers and adds them the list of
approved suppliers.
v Declaration of P * A declaration of associated parties (for

associated parties examples other companies the person may be
when joining the involved with or have links or interests in)
organisation would allow for screening of new suppliers to
check if they are on the list. By being upfront
about their affiliations, employees are also
probably less likely to engage in unfavourable
terms with these parties since the relationship
is on the record
Supplier selection * Having clearly stated supplier selection

policies and policies, procedures and criteria allows for
procedures suppliers to be selected on merit. Requiring
P these to be complied with and documented
reduces the likelihood of a supplier being
accepted that could lead to such unfavourable
terms.
vi. * Cross referencing P * Jobs that allow the cross-checking of materials

resources used to used and charged to jobs against inventory
clients / jobs records could prevent this, since employees
would only be able to gain materials by quoting
a job number
Tutorial Topic 5
* Resources stored P * Storing resources in a secure location locked
in a secure location after hours limits staff access outside if normal
and administered by hours. Missing stock can also be traced back to
a staff member keyholders. Since they would also be
responsible for administering and releasing the
items.
* Staff to P * Having staff identify themselves when using

sign/identify resources makes them directly accountable.
themselves when This could act as a deterrent to staff and thus
using resources prevent the activity. Examples could include
swipe cards when using photocopier, which link
resource use to individuals
*Reviewing logs of Logs of resource (for example internet use,

resource use D copier use) can be periodically reviewed to
identify abnormal/excessive usage levels.
vii. * Preset limits for P Setting upper thresholds for reimbursements

various claims (eg could be a means of stopping exorbitant claims.
travel, meals) Setting standard per day amounts and
accommodation allowances and not paying
above those amounts could prevent inflated
amounts getting paid.
* Require receipt * Requiring the presentation of receipts from

and claim summary D travel and related expenses could be a means of
before reimbursing reducing bogus expenses
viii. *Independent D * Independent audits would allow the veracity

review / audit of of the financial results to be tested through a
financial report data series of audit procedures and analysis
techniques. This would typically be done by an
independent auditor (internal audit may be an
option in this scenario). This would allow for
the detection of material misstatements in the
financial reports.
* Incorporation of * If the concern is coming through the

non-financial criteria manipulation of financial results, the
into performance incorporation of non-financial measures may
schemes P alleviate the effectiveness of financial
statement manipulation. Of course, these
measures could also be prone to manipulation.
Tutorial Topic 5
ix. * Linking time sheets * If employee work is traceable to specific jobs /
D
to job cards clients, reconciling hours on time sheets to
hours allocated to clients/jobs may allow for
detection of the anomaly. Also, analysis of
hours worked but not billed (for example admin
time in a service firm) may be a hint to this
practice.
*Review hours D * Comparison of average hours worked,

worked, and overtime hours worked per week to previous
patterns worked months may assist in detecting initial abnormal
hour claims and prompt follow-up enquiry
*Reasonableness of * Excessive hours may be picked up by a

hours claimed / reasonableness test (for example amounts >50
number of days D are flagged for follow-up)
worked
x. * Regular review of D * A regular review of expenses paid for with

expense reports company credit cards would detect any
relating to business anomalies or items that are outside the normal
credit cards payment policy of the organisation. This could
lead to follow up procedures.
* Require * When reimbursing for expenses on a company

submission of credit card the policy could be to require the
receipts for presentation of original receipts. This would
reimbursement P allow determination of what the items being
purchased were. With the introduction of this
accountability it may deter employees from
seeking reimbursement for such expenditure.
xi. * Authorisation – * By requiring specific authorisation for

Require specific P discounts the staff will need approval from a
authorisation from a supervisor / manager when issuing discounts. If
supervisor when a discount is dubious they are less likely to seek
issuing discounts approval for it and, even if they do, the
manager is less inclined to approve it.
Tutorial Topic 5
ACCT20007
Topic 7 – Revenue (sales) Cycle
Topic Objectives
• Describe the key objectives of the revenue (sales) process
• Describe key revenue business decisions, and the activities and data stores that
support them
• Briefly describe common technologies for enabling the revenue process
• Identify the primary activities in the revenue process
• Analyse the risks and develop control plans pertinent to the primary activities
• Identify processing modes used in the revenue process and explain the implications for
risk assessment and information reliability
• Map Key Performance Indicators to the objectives, activities and data stores within (and
off) the revenue process
Readings
Chapter 10 (E-text): Revenue Cycle
Tutorial Topic 7
POST-CLASS CONSOLIDATION
1. Compare and contrast the different modes of data entry and processing with
particular reference to the information qualities of validity, accuracy and
completeness and the impact on the control system
Data entry and processing Information qualities (VAC) Impact on Control System
modes
Batch: data inputted and Completeness (D and E) Detective controls are needed
updated periodically
Online Transaction Entry: data With the immediate input, Preventive controls are
inputted immediately and there may be needed at the input level and
updated in batch validity/accuracy issue but if detective controls needed at
there are checks before it is the update level
updated, it may be alleviated.
Still need to be mindful of
potential completeness issue
Online Real-Time Processing: Validity and potentially Preventive controls needed

data input and update are accuracy issues could arise
immediate
2. Outline the framework of analysing a business process. To do this, watch the worked
example on: "How to Analyse a Business Process (see Resources)” videos.
Step 1: Identify the process, goals, data and processing modes
Step 2: Identify and assess the generic risks of the process
Step 3: Assess the effectiveness of the control plans
Step 4: Assess the strengths and weaknesses of the process
Step 5: Provide recommendation on how to improve the process and how to measure the
impact of the recommended changes
Tutorial Topic 7
PRE-CLASS TASK
1. Watch this video, please note this is not in English, so the sound can be turned
off.
• https://vimeo.com/159634451
2. Answer these questions:
a. In what order do the steps in the sales cycle occur (e.g. sales order, picking,
packing, shipping, billing and payment) and who undertakes these steps?
Picking done by customer as selecting coffee. Placing in the shopping bag is

packing. The cash register combines sales order/billing and receiving payment.
Shipping occurs as the customer leaves the stores.
b. What technology is being used in this process, i.e. how does the checkout
work.
The main technology is the cash register which uses RFID to detect what is in the
shopping bag. This enables the checkout to detect what type of coffee pods are
in the bag. The register can search existing data stores to determine the price of
each box of pods to charge the customers the correct price. Built in payment
facilities, such as an EFTPOS terminal enables to proceed.
Furthermore, there is also a weight-check that reconcile with the RFID technology
so that the expected weight is compared against actual weight to identify any
inactive RFID chips. For instance, if the RFID scans through 4 products but there
are 5 in the bag, then you will be directed to get assistance and sale will not
progress.
c. Complete the table on the next page based on your observations from the
video.
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Process Goals How is the goal achieved? Any remaining risks or concerns?
The use of RFID technology should enable this to

Accurately capture details of Risk regarding inactive chip – weight-check (see part
occur with minimal risk (see video at 00:44 – 00:45
all valid sales and deliveries (b))
– how the data appears on the screen)
Only sell to credit-worthy As goods are paid for before leaving the store, this
customers should be achieved
The use of RFID chips can also be used as a

security mechanism to detect if any active chips Need staff on hand to stop anyone leaving the store if
Protect inventory from theft
pass through entryways. The checkout deactivates the alarms at the entry ways go off
chips after payment occurs.
As customers purchase in-store and walk out the

Deliver goods to customers
store with the product, this is achieved through the
on time
nature of the sales process
Customers purchase in-store, selecting their own

Deliver the correct goods to
goods. Thus, the goal should be achieved through
customers
the nature of the process.
Charge the right amounts for

the right products, and This should be stablished assuming that the data
collect those amounts at the the checkouts use are kept up to date
right time
Ensure all valid customer

The use of electronic cash registers (or checkouts)
payments are recorded in an
should achieve this
accurate and timely manner
Protect cash receipts from The self-service checkout are cards only. This
fraud and misuse eliminates the handling of cash at the self-checkout
Tutorial Topic 7
IN-CLASS TUTORIAL
TASK 1: Nespresso
Go to https://www.nespresso.com/au/en/ and place some coffee capsules in the shopping

basket
3. Consider what is different between buying online compared to a self-service store

and answer these questions:
a. What order do the steps in the sales cycle occur (e.g. sales order, picking,
packing, shipping, billing and payment) and who undertakes these steps?
When moving to online sales, the sales order, billing and receiving payment would
be completed via the online sales systems. The main shift would be the need to
have a pick, pack and ship process based on the orders submitted by customers
online.
b. How might the technology that you identified being used in the self-
checkout be used within the online revenue process, and in which step(s)
would it be used?
RFID chips can be used to identify the correct pods for each sales order,
combined with barcode scanning. This ensures that each good selected (either
manually or in an automated process) is correct. Barcode scanning can ensure
packages are labelled correctly.
See Amazon videos under “Additional Resources” in the “Week 7 – Revenue

Cycle” module on the LMS.
c. What are the key process differences between an online sale, and a self-
service checkout? How do the risks differ?
The key difference is who does the picking, packing and shipping. In online
sales, this becomes an internal process, which increases the risk of the
customers receiving an incorrect package or items. This is the case because
when purchasing in-store, customers are picking what they are purchasing on
their own and therefore, knows exactly the product they are going to have.
However, within stores, having stock on display to the public increases the risk
of theft.
For online sales, access to the latest inventory figures is critical to ensure that
only available goods are being sold. Within stores, this is done by only being
able to sell goods that are on the shelves.
4. Nespresso also offers business solutions

(https://www.nespresso.com/pro/au/en/home). Customer whose annual
purchases exceed a certain limit can be invoiced after delivery. How would this
change the revenue process?
This introduces credit sales, which introduces the risk of never getting paid for a sale. A
credit/identity check is needed upfront to ensure that only customers that are authorised
Tutorial Topic 7
to buy pods in such a way are extended credit. In addition, an invoicing process will need
to be established.
TASK 2: Coombes Pty Ltd
Required: Review the flowchart and the narration below and complete the following tasks.
Coombes Pty Ltd is a retailer of heavy machinery spare parts. To increase sales, and to provide
a better service, Coombes recently changed its sales process to allow for the sale of goods that
are currently not on hand but can be ordered (i.e., items on backorder). That is, when customers
place an order they are advised if the goods they wish to purchase are not immediately available
and given an approximate delivery date before deciding if they wish to proceed or not.
Tutorial Topic 7
After the first few sales of backorder items the managing director of Coombes hires you as a
consultant to identify the cause of several recent customer complaints. The complaints can be
summarised by these sentiments: “I never receive all the items I order” and “I was billed for items
that were not in the delivery package”.
Coombes provides the invoice at the same time the goods are shipped, a practice that customers
previously indicated they appreciated.
The managing director believes that the cause of the complaints is Coombes’ failure to change
its warehouse and invoicing processes to align with the company’s new sales order process. You
have been asked to examine the process and identify the issue(s) triggering the complaints. As
the change to allow backorder items was heavily advertised, Coombes believes it needs to fix
the problem rather than return to only selling goods on hand.
It should be noted that all documents and labels are pre-numbered and barcoded. The numbering
process is not shown in the diagram and can be assumed to be effective. The warehouse requires
swipe cards for access and is equipped with CCTV surveillance. Coombes has its own delivery
vehicles
Tutorial Topic 7
Step 1 – Identify the Process, Goals, Data and Processing Modes
Process Revenue
Primary Operational Goal/s of

Right goods to the right place at the right time, and charge the right amounts for the right products, at the right time.
Process
Data Input/s Picking data (from scanner)
Sales Order (status)

Accounts Receivable
Data Store/s Updated
Inventory
Shipping
Processing Mode/s All immediate (assuming scanner is returned to docking port)
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Step 2 – Identify and Assess the Generic Risks on the Process
Generic Risks Impact on information goals Impact on financial statements *
Unauthorised shipment No impact on financial statements (assuming inventory

recorded as shipped),
Validity
Billed for goods not shipped Accounts Receivable overstated
Invoice Recorded, but not sent Accounts Receivable overstated
Picking errors and/or Incorrect Inventory under/overstated depending on error

packing and/or incorrect shipment
Accuracy
Accounts Receivable under/overstated depending on error
Incorrect amount on invoice
Orders not shipped Accounts Receivable Overstated, Inventory understated
Shipment not recorded Inventory overstated

Completeness (Event)
Shipped goods not billed Accounts Receivable Understated
Invoice Not recorded Accounts Receivable Understated
Not picking/shipping all goods

Inventory understated, Accounts Receivable overstated
Completeness (Detail)
Not including all goods on invoice
Accounts Receivable Understated
These are just examples could be more
Tutorial Topic 7
Step 3 – Assess the Effectiveness of the Control Plans.
Identify two present and two missing controls. Annotate the flowchart.
Information Reliability Goals

Control Activity Completeness
Validity Accuracy
Detail Event
Risk: Picking errors and/or Incorrect packing and/or incorrect shipment
Control Plan 1: Use of RFID for Pick, Pack and Ship P1 P1 P1 P1

Explanation: The use of RFID for picking helps to ensure that picking is correct, that the right goods are picked (V), that all goods are complete (C(D), that the correct
number of goods are picked (A) and that all orders are picked (C(E)) as RFID is also used the packing stage combined with the use of barcodes to match documents
helps to ensure that the correct package is sent to the correct customer, and the customer receives the correct invoice. As shipping data is based on what was
scanned via the RFID scanner this would help to ensure that shipping data is also correct, and inventory would be updated to reflect what was sent.
Risk: Orders not shipped / Invoice Not recorded.
Control Plan 2: Prepopulating Invoice and Picking Data P2
Explanation: Basing orders and picking data on sales order which is automatically generated by computer. This helps ensure that every sales order gets shipped, and
every sales order has an invoice (note though that there are issues with this control later around Validity and C(D) as this data is never cross checked against what is
actually shipped).
Risk: Incorrect amount on invoice/ Invoice Not recorded
Control Plan 3: Sequence Check /Batch totals of Invoices. P2/M1 P3
Explanation: Basing orders and picking data on sales order which is automatically generated by computer. This helps ensure that every sales order gets has an invoice
(note though that there are issues with this control later around Validity and C(D), and thus Accuracy as this data is never cross checked against what is actually
shipped).
Risk: Goods not shipped
Control Plan 4: update Sales order to partially shipped based on RFID picking data M2 M2
Explanation: Currently Sales order are marked as complete when information is sent to RFID scanner, if there are goods unavailable this would result in the goods
never being sent. The Sales order should be updated to partially shipped based on RFID data.
Risk: Invoiced for goods not sent

Control Plan 4: use picking data to create invoices not sales order M3
Explanation: currently invoices are based on sales orders, the system should be updated so that invoices are based on goods that are picked, (thus sent) and not on
the sales order data due to the fact that the system allows goods to be placed on back order.
Tutorial Topic 7
P1
P2
P1
M2
P3/M1
M3
P1
M2
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Step 6 – Identify How to Measure the Success of the Changes
Provide and explain how to calculate one or more KPIs (where does the data come from). What would indicate
improvement (increase, decrease, maximum minimum etc.)?
Answer
Customer complaints regarding “goods not delivered” and “Incorrect invoices: this data is currently being
collected as explained in the case, with existing data collection methods being used. This could include tracking
phone calls, and emails received with these complaints.
Given that customer complaints are already being recorded a new KPI could be Reconciliation errors between
shipping, sales orders and invoices.
Given the nature of this process it is recommended that regular reconciliation of all invoices, sales orders and
shipping information occurs. The reconciliation could be daily, weekly, or monthly depending on volume of
orders. The purpose of the reconciliation is to identify any inconsistences between these three set of data
which should match once all shipping is complete, considering invoices are sent along with the package.
This could be done by someone independent of the process, (e.g. Manager) and would help identify any
outstanding goods not sent (which could be cross referenced to purchases), as well as any items invoiced but
not sent.
Tutorial Topic 7
ACCT20007
Topic 8 – Expenditure (purchase) Cycle
Topic Objectives
• Describe the key objectives of the expenditure (purchase) process
• Describe key expenditure business decisions, and the activities and data stores that
support them
• Briefly describe common technologies for enabling the expenditure process
• Identify the primary activities in the expenditure process
• Analyse the risks and develop control plans pertinent to the primary activities
• Identify processing modes used in the expenditure process and explain the
implications for risk assessment and information reliability
• Map Key Performance Indicators (KPIs) to the objectives, activities and data stores
within (and off) the expenditure cycle
Readings
Chapter 11 (E-text): Expenditure Processes and Controls
Tutorial Topic 8
POST-CLASS TASK:
Required: Based on your analysis of Coombes Pty Ltd’s process (Steps 1-3),
complete Steps 4-5 found within “Coombes Pty Ltd Answer Sheet”
Step 4 – Assess Strengths and Weaknesses

Assess the extent to which the current receive goods process at Coombes achieves the
primary goal and the information reliability goals.
The success of the system achieving the both the process goal, and information reliability
goals depends on if goods are placed on back order or not.
When all goods are available to be picked then the system achieves its
objectives however when all goods are unavailable to be picked it does not. Thus, it can only
be concluded that the system has a low chance of achieving its process goal.
There is low risk of errors in the Inventory and Shipping data due to the use of RFID in the
Pick, Pack and shipping process. With both shipping and inventory updates based on what
was picked and sent there is low chance of errors occurring in this process as the goods are
checked by RFID scanners at each stage of this subprocess and this information is used to
directly update these data stores with no human entry. As such the validity, accuracy and
completeness of this data is high.
Operationally however there is a Completeness detail, and possibly completeness event

issue, around back orders. This error however does not affect the inventory and shipping
data. Since sales orders are marked as complete every morning after being extracted to
create picking information. If there are goods unavailable and placed on back order, then
picking would never reoccur to ship these goods. Inventory and shipping
data are unaffected it is based on what was shipped, not sales orders.
In contrast accounts receivable data has a high chance of being invalid due to the same
error as invoices are based on sales orders each day, not what was shipped. This would
result in being invoiced for any goods not available, thus shipped. The nature of this error
means that all sales orders are invoiced, and invoiced for all goods, thus accounts receivable
is data is complete though invalid. This error would also cause sales revenue to be invalid
for the same reason.
Step 5 – Provide Recommendations for Improvement
How could the Coombes process be changed to better achieve the primary goal and
information quality goals? Explain how the changes would work, the strength of these
changes and any possible weaknesses.
Answer
The system needs two changes to achieve the primary goal and information reliability goal.
1. That sales orders are not updated as complete each morning rather updated to reflect
that they are being picked. When picked goods data is sent to create the delivery docket
Tutorial Topic 8
(B on the flowchart) the same information is used to update the Sales Order as partially
complete, including what goods are left to pick. To achieve this temporary data store to
monitor unpicked items may be required, adding some cost and complexity to the
system.
2. That invoices are not based on sales order, rather based on picked goods data used to
create the delivery docket (B on the flow chart). This would help to ensure that invoices
are based on what is sent, not what is ordered. A weakness with this is may delay the
creation of the invoices resulting a day’s delay in delivery if shipping times are missed.
PRE-CLASS TASK
TASK 1: UoM I-Procurement
1. Watch the following video on how to use the Melbourne University I-

Procurement system: https://player.vimeo.com/video/198620228
2. Answer these questions:
a. Why would the University restrict access to I-Procurement?
The university would restrict access as a security control to help prevent

unauthorised purchases and requisition requests.
b. What are the advantages and disadvantages of using a single central

vendor for items like stationary?
Advantages: lower prices through bulk buying; better delivery times;

guaranteed quality
Disadvantages: inability to change suppliers quickly in case of quality or pricing

issues.
c. After items are selected for purchase, what is the process that occurs
that results in the supplier receiving a copy of the purchase order?
Purchase requisition gets sent to a manager (or equivalent) for approval.

Once approved, the purchase order is created and emailed directly to a
supplier. Disadvantages of this process are that the process may be time-
consuming and that blind approvals may occur.
A confirmation of the purchase order is sent to the person requesting the

purchase.
d. Why would purchases of certain items above $2,000 be subject to a

different receipting process?
Tutorial Topic 8
For receiving goods (or services) under $2,000, no receipt is requested. This
is done on a cost-benefit basis. The cost of administering the large number of
such purchases would be significant on an annual basis.
e. Receipt of expensive (over $2,000) or dangerous goods requires an email

notification. What is the purpose of this step?
To ensure that valuable or dangerous goods are identified as being

received. For dangerous products this would be an OHS (Occupational
Health and Safety) grounds to ensure that the correct safety procedures
are used. For items above $2,000, the reason is to ensure that the goods
are received before invoices are paid.
TASK 2: Account Payable and Billing Process of an ASX-listed company
On the next few pages are the flowcharts for the accounts payable and billing process of a
large listed company on the ASX. They have asked not to be identified, but we are allowed
to use their materials.
This is a two-level flowchart.
• Level 1 – shows the overall steps in the process

• Level 2 – shows the details of each sub-process
Required:
1. Write a summary of the process outlines in the Level 2 flowcharts.
At accounts receivable stage, invoices are received and scanned into an initial
database.
If the invoice has a related PO, the details are added to the invoice before a 3-
way match between the invoice, goods received, and PO is conducted. If the
match is successful or within $50 or 5%, it is approved for payment (remember
discussion point around the 5% or $50) and sent for payment. If not matched and
outside tolerance limits, it is further investigated. If there is no PO associated with
the invoice, the invoice goes to the AP manager for separate approval.
Once approved for payment, the accounts payable team groups payments
together and notifies treasury to ensure that funds are available in the correct
accounts to pay. Once funds have been transferred (and presumably approved)
by Treasury, payment occurs. If payment is not in $AUD, payment is processed
bi-monthly and made via Bank of America. If domestic (in AUD), a payment run is
made twice weekly via Westpac which confirms the payment details before
payment is made. A monthly bank reconciliation is done by Treasury.
IN-CLASS TASK
Tutorial Topic 8
TASK 1: Account Payable and Billing Process of an ASX-listed company
Tutorial Topic 8
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2. Identify two controls that are present within the Invoice Validation & Processing
stage and the purpose of these controls.
• Three-way match between PO, receipt of goods, and invoice to ensure that all goods
are ordered, received and that the amount to be paid is reasonable.
• The three-way match can also help with completeness and validity
o When going from start to end (i.e. PO à Receipt of goods à Invoice) – this is
a completeness check
o When going from end to start (i.e. Invoice à Receipt of goods à PO) – this is
a validity check
• Electronic scanning of invoices helps ensure accuracy
• Management approval of non-PO invoices to ensure these are valid. There should be
a check to ensure the good/service were delivered.
3. Identify two controls that are present within the Payment Processing & Account
Settlement stage and the purpose of these controls.
• Bank reconciliation each month to verify that the two sets of records (internal and
external) match and to identify possible differences.
o As this is a detective control, further actions that would need to be undertaken

to account for any differences is not documented in these flowcharts
• Separation of duties between people who make the payment and those who control
the bank account.
o This is to reduce the risk of fraudulent activities (e.g. staff paying themselves)
by requiring multiple people in the process
Tutorial Topic 8
TASK 2: AB Hi-Fi Expenditure Cycle
Step 1 – Identify The Process, Goals, Data and Processing Modes

Process Expenditure – Goods receipt
Primary Operational Goal/s

Ensure accepted goods meet quality specifications.
of Process
Purchase Order Number (to lookup purchase order from the data store) *2
Data Input/s Quantity received (to record quantity of items received) on paper (not needed) which is transferred to the
datastore
Purchase orders (status update for received goods)

Data Store/s Updated
Inventory (add to balance)
Batch (periodic) – the goods received report is filled in by paper and updated periodically by the Goods
Processing Mode/s
Receiving Clerk.
Tutorial Topic 8
Step 2 – Identify and Assess the Impact of Unaddressed Generic Risks on the Process
Generic Risks Impact on information goals Impact on financial statements
Accept goods not ordered (not missing) Inventory – Overstated

Validity
Accept goods of unsuitable quality Inventory – Overstated
Counting errors Inventory – (+/-)

Accuracy
Data entry errors Inventory – (+/-)
Delivery received but not recorded Completeness (Event) Inventory – Understated
Part of the details of an individual delivery not

Completeness (Detail) Inventory – Understated
recorded
Step 3 – Assess the Effectiveness of the Control Plans.

Focus on generic risks that are likely to occur and document the control plans. Annotate the flowchart.
Tutorial Topic 8
NOTE: The question asks for ONE (1) MISSING control plan FOR EACH goal. For completeness and to facilitate answers in the next stage, this solution has
more than 4 missing controls, AND includes controls that are PRESENT.
Information Reliability Goals

Control Activity Completeness
Validity Accuracy
Detail Event
Risk: Accept goods not ordered
Control Plan: Verify delivery with purchase order at point of delivery P1
Explanation: When the supplier arrives with the delivery and the delivery docket the warehouse clerk should immediately enter the purchase order number
(contained on the delivery docket) into the computer, with the computer then retrieving the details of the corresponding purchase order. The warehouse clerk
should ensure that the purchase order corresponds to the delivery docket details. In the instance of no corresponding purchase order being in existence the
delivery should be rejected and returned to the supplier immediately. The existence of a corresponding purchase order provides the validity for the delivery and
authorises the acceptance of the delivery, since it confirms that the goods that have been delivered were actually requested by the organisation and can
therefore be recorded as part of the inventory balance. Failure to execute this control plan means deliveries could be accepted that were never requested,
meaning that inventory would include items for which we have no title and are not ours to sell.
Risk: Accept goods of unsuitable quality
Control Plan: Inspect goods at point of receipt M1
Explanation: When the goods are delivered, the warehouse clerk inspects the goods with the inspection including the identification of goods that are of
unsuitable quality. Any goods that are not of suitable quality should be returned to the supplier immediately and not recorded as part of inventory, since such
inventory cannot be used or sold. Including such items in the inventory balance would, therefore, overstate the inventory balance. The inventory balance would
include items that are not actually available to be sold due to quality issues.
Tutorial Topic 8
Risk: Counting errors
Control Plan: Dual staff involved in inspection and counting M2

Explanation: When the warehouse clerk counts the details, there should be a second person present to verify that the quantities counted are correct. Since the
warehouse staff have possession of the goods received report (which would contain supplier records of quantities ordered) the temptation may be to rely on
those quantities instead of independently verifying the quantities through a count. Having two people involved – counter and supervisor – helps ensure that
the count is conducted properly. One person would have the delivery docket and the other doing the counting. This would help to reasonably assure that the
counted quantities reflect the actual amounts received.
Risk: Data entry errors
Control Plan: Edit check – numeric format – on entered quantities M3

Explanation: The Goods Receiving clerk staff enters the quantities received into the computer and the computer conducts a test on the keyed data to ensure
that it is in the correct format. In this instance, since it is the quantities that are being entered, the edit check would run a test of numeric content on the keyed
data. This preventive control would stop errors of incorrect data formats being keyed into the system.
This kind of control is fairly mainstream on most modern, commercial software systems. However, imagine a company that isn’t using a purchased software
system, but rather an Excel spreadsheet as the data store – Excel is not going to check that only numbers were typed into a cell.)
An additional control could be double entry, where the user is required to enter the number twice, and the system checks you entered the same thing twice. It
could also do a blind check against the PO quantity. If what is entered matches the PO, the value is accepted. If not, then the user is asked to re-enter the number.
If the second entry matches the PO quantity or matches the first entry it is accepted.
Tutorial Topic 8
Risk: Delivery received, not recorded
Control Plan: Immediate entry of delivery details M4
Explanation: This control plan involves the warehouse clerk entering the details of the delivery into the computer at the point where the delivery first occurs.
This eliminates any temporal gap between the receipt of inventory (economic event) and the recording of the event in the system. Accordingly, it reduces the
chance of a delivery event going unrecorded due to it being forgotten about, or the paper-work that reflects the delivery going missing.

Control Plan: Periodic review of open purchase orders M5
Explanation: A periodic review of open purchase orders would involve the computer selecting the open purchase orders in the purchase order data store and
providing these details to staff to follow up on the status of the order. Orders that have been open for an abnormal period would be the focus, since they would
more likely represent orders that have been received but not recorded. Follow up could include confirmation of order status with suppliers, with the suppliers
able to confirm whether delivery has occurred. This will allow for the detection of unrecorded supplier deliveries.

Control Plan: Batch total reconciliation of Goods Receipt reports generated with deliveries recorded M6
Explanation: The delivery docket is the documentary evidence from the supplier that the delivery has occurred. Each delivery docket (assuming it is a valid
delivery) should generate an entry in the goods received data store and a corresponding status update to the purchase order data store. The preparation by the
computer of periodic batch totals (e.g., number of deliveries recorded for the day) and the reconciliation of this to the physical batch total of the number of
delivery docket for the day (calculated by the warehouse staff) would detect if there are any deliveries that have been received but not recorded.
Risk: All details of an individual delivery not recorded

Control Plan: Required quantity fields for purchase order items M7
Explanation: When the purchase order number is entered into the system, the purchase order details are displayed on the screen, with these being the basis for
the recording of the quantities received. This could be used as the basis for mandatory fields when entering the receiving details, with each line item on the
purchase order requiring a delivery quantity to be entered. If a line item quantity for the amount received is not entered, the computer would not save the
delivery details. By mandating the completion of the line item quantity fields, the risk of unrecorded line items is reduced.
Tutorial Topic 8
ACCT20007
Topic 10 – General Ledger and Financial Reporting
Topic Objectives
• Describe key GLFR business decisions, and the activities and data stores that support
them
• Briefly describe common technologies for enabling the GLFR process
• Identify the primary activities in the GLFR process
• Understand the risks and control plans pertinent to the primary activities
• Identify processing modes used in the GLFR process and explain the implications for risk
assessment and information reliability
• Map Key Performance Indicators (KPIs) to the objectives, activities and data stores within
(and off) the GLFR process
Readings
Chapter 13 (E-text): Administrative Process and Controls
Tutorial Week 11
POST-CLASS CONSOLIDATION:
• What were the overall steps in the process?
The game is played in three rounds:
1. Round 1: Sales and marketing – changing prices and adjusting marketing
2. Round 2: in addition to what we do in Round 1 + Conversion – convert existing planned

order to production order
3. Round 3: in addition to what we do in Round 2 and 3 + Sales forecast and purchasing.
The business runs a complete cash to cash business cycle.
Sales forecasts are made which is planning which leads to an MRP run which creates
Purchase Requisitions, which leads to a creation of PO (decisions made by the teams)
the simulation then receives the raw materials and stores them. Teams then trigger the
order of production, causing the simulation to move raw materials to production,
production happens, and finished goods stored. Based on prices and marketing set by
teams, goods are sold triggering the pick pack and ship process run by simulation. In
the background invoices (both in and out) are processed by the simulation, and
payments made/received.
• What were the economic events in the process?
The main economic events in the process are:
o The outflow of finished goods inventory as a result of sales
o The inflow of cash when the customers pay for their goods
o The outflow of cash when we pay the suppliers for the purchase of raw materials
and packaging
o The inflow of raw materials and packaging
o The movement within the inventory (finished goods and raw materials) as a result of
conversion
• What is the purpose of the MRP Run?
The MRP Run allows for the generation of the purchase requisition with just enough raw
materials and packaging to fulfil the production need of the company.
In the MRP Run, the system looks into the sales forecast for the next period and also look
into current levels of finished goods inventory. The difference between the two numbers
indicate the number of finished goods that needs to be produced. The MRP Run then looks
into the BOM to see the raw materials required to produce each unit of the finished goods –
then this value is multiplied by the number of finished goods needed. This will then create
the purchase requisition for the raw materials needed (considering existing raw materials
levels that are not yet reserved for other production).
Tutorial Week 11
• What controls can be (are) implemented in the process?
Some examples of controls within the process:
o Application control within the system can control user access to the system – login
▪ Login also acts as an audit trail for who has performed the transaction
▪ Another example is that each group is playing within their own teams – you
cannot execute transactions for another team.
o Only allowing one person per team to edit the price at one time – this minimises the
risk of having the wrong price entered (i.e. having too many people deciding on
price)
o Edit checks, mandatory field check (e.g. ensure that the date entered is valid)
o Interactive feedback check – confirmation of what items are ordered (one example
of this is when you have created a purchase order)
o Pre-numbering/pre-filled fields from the master database
▪ The use of codes for raw materials linked to a master database (this allows
for pre-population), which reduces the likelihood of data entry error and also
minimises the risk of ordering something that does not exist
▪ Making sure that the sold-to-party and the ship-to-party is the same entity
o Timestamps within the system for different transactions – act as audit trail
Further controls can be seen in the EPRSim videos posted to the LMS.
• At what stage would there be impact to the financial statements and how would they
be accounted for?
For the most part, the changes to the financial statements would occur when the economic
events occur. However, as the game also has a payment term, accounts payable and
accounts receivable will also be impacted.
The list is:
• Marketing expenses: spent each day (accounted for weekly, every 5 days), other fixed
costs such as labour, depreciation etc are accounted for the same way.
• Goods Receipt (Raw materials) this is linked to inbound invoicing. The receipt of Raw
materials triggers the account payable, which depending on accounting policies is
recognised here, or when the invoice is received.
• Production (Raw Materials – Finished goods)
• Delivery (Finished goods) this is linked to trigger outbound invoicing (accounts

receivable). This is the earliest point that sales revenue can be recognised.
• How is data shared across the different functions?
Tutorial Week 11
SAP acts as a central database. One example of this would be that inventory data can be
accessed by the purchasing personal to decide what raw materials need to be purchased
and the sales department for decision making around prices to charge and marketing
expenses. Inventory data can also be used to inform production decisions (what to produce,
and what order). Any updates to the inventory database are updated in real-time so
relevant personnel are then able to make decisions based on updated information at all
times.
• What information did you use for your decision making? Would this information be
considered accounting information? Could it be used to produce accounting
information? (the word “information” is “data” in the students’ version of the question)
Inventory, sales order, summary sales order, price market report (to see the average
market price to determine whether price is too high or low)
The above reports are the major information that are used for decision making. This
information is not considered as accounting information from a financial accounting point of
view, in that they do not directly affect financial reports. However, it can be used to produce
accounting information (e.g. inventory value, revenue, etc.)
However, it can also be argued that this information is accounting information as these
reports can be considered management accounting information/reports (as opposed to
financial accounting information) as they inform decision making that leads to changes in
economic events, and allocation of economic resources (e.g. what product to manufacture
impacts raw material allocation) and is based on financial data also used to produce the
financial reports.
PRE-CLASS TASK:
Task 1:
Undertake the University of Melbourne training module on the chart of accounts (please note this
needs to be viewed on a device that can flash)
https://lcms.elmolms.com/lms_modules/course_39589_ZWRzZ2RwNEkzZzNmnpmroA==/inde
x.php?t=d27cfd44d40d37576bbdfefa8ef30556&cid=184&mid=519&uid=12756&sd=uomtrainme
.elmotalent.com.au&page=0
Tutorial Week 11
Required: Answer the following questions:
1. What is the purpose of the chart of accounts? How is it used?
The chart of accounts allows for classification of transactions (and thus data) into an AIS. It
identifies each account, as well as cost centre, project and budget unit
2. What are the segments of the chart of accounts? What is the purpose of using
segments?
Company, Budget Unit, Cost Centre, Natural Account, Project Code, LPC, Activity, Location.
The various segments enable multiple reports to be produced. For example, a user might want
a set of reports for a faculty or department within a faculty in which case the budget unit could
be used. Or, if a project cuts across faculties, project codes would need to be used.
3. What type of reports are supported through the university chart of accounts?
The University’s chart of accounts supports both Financial Accounting (FA) and Management
Accounting (MA) reports. For FA, it is used to generate the consolidated financial statements
of the university and those of each of the separate entities (as well as each unit of the
university).
It can also produce a range of MA reports for budgeting and expense tracking purposes, both
within and across divisions.
Task 2:
On the next few pages are the flowcharts for the reporting process of a large listed company on
the ASX. They have asked not to be identified, but we are allowed to use their materials.
Provide a brief summary of each of the five flowcharts by describing which sub-processes they
reflect. Your summary should identify any key controls that are in place as well as the reports (if
any) generated by the sub-process.
Tutorial Week 11
Tutorial Week 11
Tutorial Week 11
Tutorial Week 11
Tutorial Week 11
Tutorial Week 11
ANSWER:
Chart 1: summarises the overall process used to produce the company’s financial statements; before the statements are being produced, all
balance sheet accounts are reconciled.
Chart 2: the process to request a change to the chart of accounts: local units’ request goes to a director to approve or reject before being
changed (if approved) by the finance unit.
Chart 3 and 4: show how each account is reconciled, depending on the owner (if it is a corporate account or belongs to a location within
Australia).
Chart 5: the actual process for preparing each of the reports:
• Finance first prepares the information by consolidating the various inputs into one report;
• They then prepare adjusting entries and identify issues;
• Subsequently, the regional finance teams prepare their individual reports (including commentary);
• Head office prepares the main reports.
Tutorial Week 11
ACCT20007
Topic 6 – Ethics of Data
Topic Objectives
• Explain and give examples of key ethical issues relating to accounting information
systems
• Outline the regulatory framework for information privacy in Australia
Readings
Pregnant? Big Data is watching you -

https://www.abc.net.au/science/articles/2014/04/15/3985934.htm
Australian Privacy Principles quick reference - https://www.oaic.gov.au/privacy/australian-

privacy-principles/australian-privacy-principles-quick-reference/
What is the digital divide? - http://www.digitaldividecouncil.com/what-is-the-digital-divide/
Topic 6
POST-CLASS CONSOLIDATION:
Required: Reflect upon your experience in working through the GBI modules, in particular, the
SD and MM modules.
• Summarise what occurred within each case study
SD Module: You start the sales order process by creating a new business partner (BP) with
the role customer (The Bike Zone) in Orlando. Then, you receive an inquiry which you will
process into a quotation. Once the customer accepts the quotation, you create a sales
order referencing the quotation. As you will have enough bikes in stock, you deliver the
products ordered to your customer, create an invoice, and receive the payment.
MM Module: Before you start the purchasing process, you will create a new vendor (Mid-
West Supply) in Lincoln. Then you create a new master record for a trading good (Chain
Lock) in the system. After checking the stock (that will be zero), you start the procurement
process by creating a purchase requisition. As the buyer, you will create a request for
quotation and enter the submitted bids from various vendors – including your new vendor.
After evaluating and accepting the quotation of Mid-West Supply, you will create a purchase
order referencing the RFQ. You will then post the receipt of the goods and verify the
physical receipt into stock. After creating two partial invoices, you will post the payments to
the vendor and review the G/L accounts.
PP Module: Before you can start forecasting demand for your touring bike product group,
changes in the material master record of the bikes need to be maintained. Afterwards, you
will create a 12-month sales and operations plan (SOP) for your product group, receive the
production of relevant goods from the warehouse storage location and issue them to the
production order. To conclude the process, the production is confirmed as complete, and
the finished goods are received into the warehouse and costs assigned to the production
order are analysed.
FI Module: Before you can post the accounts payable invoice, master data has to be
maintained. Within the Case Study, you will create necessary accounts within the General
Ledger and create the vendor. Afterwards, you will post the invoice and verify the changes
in your accounts. Since the posting is relevant to P&L-Statement, you will review the impact
on your Financial Statement as a final activity.
• Summarise what departments/personnel are involved in the process (hint: you may want to
look at the shaded box at the beginning of each step)
SD Module:
David Lopez (East Rep. Miami), Maria Diaz (Sales Person 1), Matthias Dosch (Sales
Person 2),, Sergey Petrov (Warehouse Employee), Stephanie Bernard (Billing Clerk),
Jamie Shamblin (Cost Accountant)
MM Module:
Joyce Hausman (Contract Administrator), Sandeep Das (Warehouse Supervisor), Sergey

Petrov (Warehouse Employee), Wilton Saban (Inventory Supervisor), Alberto Conti
Topic 6
(Technical Office Assistant), Aura Maxwell (Buyer), Tatjana Karsova (Receiving Clerk),
Silvia Cassano (Accounts Payable Specialist), Shuyuan Chen (Chief Accountant)
PP Module:
Jun Lee (Production Supervisor), Hiro Abe (Plant Manager Dallas), Lars Iseler (Production
Order Worker), Susanne Castro (Receiving Clerk), Sanjay Datar (Warehouse Employee),
Michael Brauer (Shop Floor Worker 4), Jamie Shamblin (Cost Accountant)
FI Module:
Silvia Cassano (Accounts Payable Specialist), Shuyuan Chen (Chief Accountant), Clayton
Bartolome (Fixed Assets Accountant)
• Identify the economic events that occurred within the process.
SD Module: Delivery of goods to customer and receipt of payment
MM Module: Receipt of goods delivered and posting of payment to vendors
PP Module: Conversion of raw materials to finished goods
FI Module: Post payment of rent expense
• Identify several controls that exist within each process.
These may include, but not limited to, the following:
- Approval of documents
- Mandatory field checks
- Edit checks
- Pre-population
- Login (authorisation)
- separation and segregation of duties
- Document Tracking
- Confirmation notification (e.g. each time a document is created, you get a confirmation
down at the bottom of the screen containing the document details and/or whether the
document has created successfully).
• Identify what data was created and what additional data was used within the process
SD Module:
- Created: new customer, contact person for the customer, BP Relationship, inquiry,
quotation, sales order, picking slip, shipping document, invoice, receipt of payment
- Data used: inventory data (check stock status), product database
Topic 6
MM Module:
- Created: new vendor, material masters for trading goods, purchase requisition, RFQ
(request for quotation), purchase order, goods receipt document, invoice receipt
- Data used: inventory (stock list), a quotation from the vendor
PP Module:
- Created: changing the forecast of materials, adjusted routing of materials, sales and
operation plan (SOP), MPS (master production scheduling) and MRP (material
requirements planning), production order (from planned order),
- Data used: Demand management, stock/requirement list
FI Module:
- Created: Bank account, reconciliation account, expense account, vendor master record
for the landlord, cost element for an expense account, invoice receipt
• Compare and contrast your experiences in GBI and ERPSim
GBI: related to the input of the transactions and following one transaction across the
process.
ERPSim: the high-level strategic decision making based on the data that is produced by
the system.
Topic 6
PRE-CLASS TASK:
iHarden is an online company that sells hardware products for new houses to both industrial clients and
individual consumers. As a result of its very competitive price schemes, iHarden has developed an
extensive customer base, which is reflected in its burgeoning database of customer details, purchasing
and internet usage data. Recognising that these data are potentially valuable to third parties, iHarden’s
directors discuss the prospect of selling its customer database to a large insurance company, thus
allowing the insurance company to target advertising and mail-outs about home and contents
insurance to new home buyers. The directors are divided on the issue. Some view this as an exciting
way to add value to their customers, through complementary product offerings; while others see it as a
gross misuse of information that is not in keeping with the original purpose for which the data were
gathered.
Required: You have been hired as an ethics consultant by the board of iHarden. You are required to
identify and analyse the key ethical principles at stake, and come up with a recommended course of
action.
Because this question is about ethics, there is no right or wrong answer. That is the point of ethical
dilemmas in the real world. The central question of ethics is: What ought one to do? Ethics should be
central to the study of all business disciplines, including accounting. All types of businesses and
government entities need to consider the ethical implications of their actions. Businesses and
governments have control of the world’s resources, including information, and managers make
decisions that affect those resources and the lives of millions of people.
Ethics is about making a choice. Ethics is how we act to make the ‘right’ choice to produce ‘good’
behaviour. Ethics is an examination of principles, values, duties and norms, the consideration of
available choices in order to make the decision and the strength of character to act in accordance with
that decision.
Advances in information technology have created ethical issues such as the common one described in
the question above. The situation should be used to prompt discussion, and students should be able to
come up with ‘what if?’ alternatives.
On the positive side, some individuals may welcome the targeted advertising, as it may be relevant to
their needs, and save them on personal information search and processing costs in seeking insurance
cover. On the other hand, it is a narrowing of their choice options.
Key ethical issues (in addition to the point above):
• Consent – individuals did not consent for their data (or metadata) to be used for this purpose? o
Would it be possible to get consent? Now or in the future? Can that consent ever be fully informed?
• Privacy – would this be an invasion of individual privacy?
• Security – how secure is the data if it is shared with third parties? What’s to stop third parties on-
selling the data?
Topic 6
• Ownership – who actually ‘owns’ the data? Is this personal data an ‘asset’ in accounting terms?
Consider ownership and control aspects.
• Does it make it okay because other businesses are doing this all time?
• What processes could the business put in place to make this action ethically acceptable?
So, what do you recommend iHarden do?
IN-CLASS TASK:
Required: Considering your experiences with SAP (ERPSim and GBI), what are some ethical/privacy
concerns that you see with using SAP (or an ERP system) in a corporate environment.
- In addition, also consider what are some controls/policies that can be put in place to
minimise these concerns.
Some possible discussion points could include the following – you will need to justify their answers
- Access to a central database – who can leak information?

- In a view only scenario, can information still be leaked?
- Authorisation control
- Removal of access is important if someone quits
- Audit trail
- Policies – as part of contracts (non-disclosure agreement)
Topic 6

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ACCT20007

Accounting Information: Risks & Controls

Tutorial Week 2 Suggested Solution

At the end of this topic you should be able to:

Chapter 1 (E-text): The Conceptual Framework for Financial Reporting

Suggested reading: Chapter 2 (E-text)

Question 1 (adapted from “Contemporary Issues in Accounting”, by Michaela et al.,

Recall that faithful representation requires to represent faithfully what it

• Cost, if clearly indicated as cost, for both is clearly a faithful

• The original costs could be verified from documentation.

• Relevance (this is important in IFA 2, less significant for this subject)

No, particularly in relation to Property B; it could be argued that cost has no

• Choosing a product that is not the one you purchased (e.g.

• Skip bagging – could be putting in more products than what

• Not paying for all items purchased (e.g. purchased 3 different

• How easy it is for customer to walk out without paying? (e.g.

Line Item How do we know the Information is faithful?

Revenue See lecture slides

Other Income (interest) Bank Statement for validity

Invoices and other source documents like time

Physical check for existence, Security controls,

Physical check for existence, Security controls,

Invoices in, reconcile against a supply statement

Bank Statement for validity

Share certificates and register

Topic 2 Suggested Solution

At the end of this topic you should be able to:

1. Define the nature and extent of a business process.

Chapter 3 (E-text): Accounting Information Systems and Business Processes Part 1

Chapter 5 (E-text): Documenting Accounting Information Systems

Suggested reading: Chapter 4 (E-text)

Use examples to enhance your reflection.

TASK 1 – Flowchart: Functional and Process

A Flowchart describes a business process through pictorial representations of actual

TASK 2 – Card Sorting Exercise – Part 1

§ Form a team of 5 people

§ Take a card from an unsorted deck

§ Place the 4 Aces face up on the table

Also consider the following questions:

§ How could we overcome these issues? In drawing the diagram, we could

TASK 1 – Card Sorting Exercise – continued (see “CardSortingExercise” file on

Sales Assistant Sales Consultant Computer

Customer Checked Hire

Installation Team Leader Billing Officer Computer

When installation date

Installation Installation (4)

Creates and saves

Copy 2 Sales Invoice

Copy 2 Sales Invoice

The following is a description of ordering food at Gamma Restaurant.

Waiter Cashier Computer

Sales Order form

Saves data &

(2) Pays bill (7)

Kitchen Staff (9)

Paid Copy 2 Bill

• In this expenditure cycle process flowchart, where do economic events occur?

TASK 2: Fantastic Widget Pty Ltd

Accounts DEBIT CREDIT

Unearned Revenue 20,000,000

Cost of Sales 100,000

2019-07-31 Cost of Goods Sold 12,100,000

Suggested Solution: Tutorial Topic 4

At the end of this topic you should be able to:

iii. Review of address D In situations where supplier banking details

viii. Independent D Independent audits would allow the veracity

Review hours D Comparison of average hours worked,

Reasonableness of Excessive hours may be picked up by a