Casestudy

Beep Beep Ltd (BB) is a local company that manufacturers and distribute educational toys to schools that cater to special needs children. The toys are manufactured as well as stored in BB Ltd workshop. All finished products are barcoded. For the most part, BB's management requires thatthestockoftheirpopularproductsbemaintainedtoensureimmediatedeliverywhenordered. Other products, including custom products, are manufactured on a just-in-time basis. BB maintains a perpetual inventory. Currently, all special needs schools within be already its client and there is no scope in the near future to add new schools as customers.

BB receives ordervia email, telephone, andtheir website.Once acustomerplaces an order, the admin officer records its detail on a physical order form. The admin officer uses the barcode of theitemtoidentifytheorderedproduct.Theinformationonthephysicalorderformisenteredinto a computer system at the end of each day. Thefirst task of the admin officer every morning is to printouttheorder'scapturedonthepreviousdayandsendthemtotheworkshop.Anystaff

member that is free at the time the forms are delivered to the workshop can start collating order by ticking the items of on each form.

Once an order has been collated, the staff member responsible for packing will then pack the order and manually label it with the school's delivery address.

Anetworkadministrator,whoisinthechargeofthecomputingequipmentusedatBBLtd,backup their files every day. On Fridays she creates 2 copies of the backup data and takes one of them home for safekeeping. The admin officer sometimes stands in for the network administrator and usethenetwork administrator's computertocreatethebackup.IfthisneedcomeuponaFriday, the admin officer will take the one of the two backup copies home.

Offlate,thestocklevelofBBpopularproductshasalmostalwaysbeenbelowtheirrequiredlevels even though their manufacturing is a continuous process. For this reason, the management suspect that this could be the case of inventory theft.

Required:

1. Identify the major control weaknesses in BB Ltd sales order entry and shipping procedures. For each weakness you identify suggest a method to correct that weakness. Your answer must be specificidentifywhichspecificemployeesshoulddowhat. Assumethatnonew employeecan be hired.

1. Describeinternalcontrolprocedurethatshouldexist inordertoprotectBBfromloss, alteration or unauthorised disclosure of data.

Markingrubric

• 5marksforweaknessesidentified(5marks)
• 5marksforsuggestingmethodstocorrectweaknesses(5marks)
• 10marksfordescribinginternalcontrolprocedurefordataprotection(10marks)