One of the strategic objectives of SISBE Limited is to achieve a competitive advantage through the successful implementation of an accounting information system. For this purpose, the head of the accounting department is concerned about the business processes and internal controls of SISBE Limited. Therefore, he has recently contacted you to evaluate their revenue cycle, focusing on the business processes and internal controls of SISBE Limited. During the initial meeting, you elaborated that conceptually, the revenue cycle is a recurring set of business activities and related data processing operations associated with providing goods and services to customers and collecting their cash payments. This definition reveals that the revenue cycle can be categorised into (1) sales order processing procedures and (2) cash receipts procedures. Considering the unique nature of SISBE Limited's business, we can categorise the revenue cycle of SISBE Limited as: (1) Sales Order Procedures (SOP), and Cash Receipts Procedures (CRP). You requested the head of the accounting department to provide you with the information on: (1) The Brief Introduction of SISBE Limited, (2) The SOP of SISBE Limited, and (3) The CRP of SISBE Limited. The head of the accounting department provides the following details.

1. The Brief Introduction of SISBE Limited SISBE Limited is an online company that supplies a range of architectural products to building contractors and private individuals. Their product line includes gable vents, shutters, vinyl sidings, and decorative trim in various materials. The company employs manual procedures and a networked accounting system with distributed terminals in several departments. After years of satisfactory performance, however, SISBE Limited is now experiencing operational inefficiencies and accounting errors.

2. The SOP of SISBE Limited The revenue process activities of SISBE Limited is initiated when a customer places an order either online, by mail or through a telephone representative. These orders are generally categorised into two types at the department level, including online orders and offline orders. Online orders are entered automatically by the system. However, the mail and phone orders are manually entered. When the customer order is entered, the system automatically performs. If credit is approved, the sales process continues. If credit is denied, the process is terminated, and the customer is notified of the automatic rejection. SISBE Limited believes in extending the customer base. For this purpose, the company also receive offline orders. These orders are accepted via mail or through a telephone representative. In most cases, these orders are unstandardised sales. 1 The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer's creditworthiness from his computer terminal. Three years ago, the sales clerk requested the accounting department provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers. The customer's order is rejected if the customer's credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the approved standardised sales order in the sales order system through his computer terminal. The clerk manually prepares four hard copies of each sales order for both types of approved orders (online sales orders and offline sales orders). The clerk then enters the sale into the digital sales journal from his terminal and files one copy of the sales order in the sales department. A second copy is sent to the billing department, where it is further processed. A third copy is sent to the warehouse. A final copy is sent to the customer as a receipt stating that the order has been received and processed. It might be important to note that the warehouse clerk uses the sales order as a stock release document to pick up the requested items from the shelves. The clerk then manually prepares a bill of lading and packing slip, which accompany the goods to the carrier. The warehouse clerk then accesses the computer terminal and creates a digital shipping notice for the billing department. Finally, the clerk files the stock release hard copy in the warehouse. The billing department clerk reconciles the hardcopy sales order and the digital shipping notice displayed on his or her terminal. He or she then prints two hard copies of an invoice. One copy is sent to the customer as a bill, and the other is sent to the accounts receivable department. The clerk then files the sales order copy in the department. Upon receipt of the hard copy invoice, the accounts receivable clerk creates a digital record in the accounts receivable subsidiary ledger from his terminal. The clerk then files the invoice copy in the department.

3. The CRP of SISBE Limited The case receipt processes of SISBE Limited can be broadly categorised into four types. First, customer payments and remittance advices come into the mailroom. A clerk separates the documents and sends the remittance advices to accounts receivable and the checks to the cash receipts department. Second, upon receipt of the remittance advices, the accounts receivable clerk accesses the customer's account in the accounts receivable subsidiary ledger from a terminal and adjusts the balance accordingly. The clerk files the remittance advices in the 1 We have discussed the unstandardised orders in detail in our interactive tutorials.. Third, the cash receipts clerk receives the checks and posts them to the cash receipts journal from his or her terminal. The clerk then manually prepares a hardcopy deposit slip and sends it with the cash to the bank. Finally, at the end of each day, the system prepares batch totals of all sales and cash receipts transactions and posts them automatically to the control accounts in the digital general ledger. Required Based on the above information, prepare a report for the chief financial officer of SISBE Limited to evaluate their revenue cycle. In your report, you need to include the following items:

1. "Accounting information system plays an integral role in getting a sustainable competitive advantage". Discuss this statement in light of the current revenue cycle of SISBE Limited.

2. Identify and describe the potential internal control weaknesses in the sales order procedures and cash receipts procedures of SISBE Limited. Your response should be consistent with the discussion in the weekly interactive tutorials

. 3. Discuss the potential risks associated with the internal control weaknesses identified in requirement number two above. Your response should be consistent with the discussion in the weekly interactive tutorials for the HI5019 T2 2021

4. Based on requirement number three above, what types of frauds are possible. Your response should be consistent with the discussion in the weekly interactive tutorials for the HI5019 T2 2021