The following is a description of the conversion cycle of Central Production Limited:
The conversion cycle of the company is triggered by a report from the warehouse. When the quantityof an inventory item falls below a pre-set minimum level, the warehouse manager sends an onlineinventory status report to production department advising them to schedule a production batch runfor the item.
Upon receipt of the report, the production clerk assesses the digital bill of materials and the routesheet files for the item to be produced and adds the production details to the online productionschedule.
The system automatically adds a record to the open work order file and sends an online work orderto the work centre supervisor’s computer and to the accounting clerk’s computer.
The work centre supervisor receives the work order from his computer and print hard-copy movetickets and materials requisitions for each production process. Production employees take thematerials requisitions to store clerk and receives the materials and subassemblies needed to performthe production tasks. If additional materials beyond the standard amount is needed, the work centresupervisor prepares additional materials requisitions.
Production employees complete job time tickets after completing a production process to record thetime spent on the job. The job time tickets are then sent together with the move tickets to theaccounting department.
After releasing the materials into production, the store clerk updates the material inventory recordsand send the materials requisitions to accounting department. The clerk prepares a journal voucherand posts to the general ledger material control account at the end of each day.
The accounting clerk assesses the work orders and set up a work-in-process account for a productionbatch. Throughout the production period, the clerk also receives move tickets, job tickets, andmaterials requisitions, which he uses to post to the work-in-process account. At the end of each day,the accounting clerk prepares a digital journal voucher and post it to the general ledger work-in process and finished goods control accounts.
Identify the risks exist in the conversion cycle of Central Production Limited. (10 marks, maximum 300words)
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchaseorders, sales invoices and suppliers’ invoices to prepare journal vouchers for general ledger entries.
Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At theend of each month, he reconciles the subsidiary accounts to their control accounts in the generalledger to ensure they balance.
Discuss the internal control weaknesses and risks associated with the above process. (10 marks,maximum 300 words)
Elegant Limited sells restored classic cars. Most of its customers are private buyers who buy cars forthemselves. However, some of them are investors who buy multiple cars and hold them for resale. Allsales of Elegant Limited are for cash.
Depict the association and cardinality for the sales of cars at Elegant Limited based on REA model. (10marks, maximum 300 words)
You are currently working in a mid-tier accounting firm. In an engagement meeting with a client, themanagement of your client is concerned that the audit tests that you perform will disrupt operations.
Your client has recently implemented a data warehouse and the management suggests that you drawthe data for analytical reviews and substantive testing from the data warehouse instead of theoperational database. The management points out that operational data are copied weekly into thedata warehouse and all data you need are contained there.
Outline your response to the management’s proposal and mention any concerns you might have. (10marks, maximum 300 words)
The Chief Information Officer (CIO) and the Managing Director (MD) of Illustrious Limited recently hadthe following conversation regarding the development of a new information system for the company:
CIO: The way to go about the analysis is to first examine the old system, such as reviewing keydocuments and observing the workers performing their tasks. Then we can determine which aspectsare working well and which should be preserved.
MD: We have been through these types of projects before, and what always ends up happening is thatwe do not get the new system we are promised. Instead we get a modified version of the old system.
CIO: I can assure you that will not happen this time. My team just want a thorough understanding ofwhat is working well and what is not.
MD: I would feel much more comfortable if we first started with a list of our requirements. We shouldspend more time in determining what exactly we want the system to do upfront. Then your team cancome in and determine what portions to salvage if you wish. Just don’t constrain us to the old system!
a) The CIO and MD have different views on how the system analysis should be performed. Commenton whose position you sympathise with the most. (6 marks, maximum 200 words)
b) What method would you recommend to Illustrious Limited for system analysis? Explain. (4 marks,maximum 150 words)
Type of service-Academic paper writing
Type of assignment-Essay
Pages / words-4 / 1100
Language style-AU English