Question 1

Discuss some TWO (2) specific examples in which information systems can reduce time lags and how the firm is positively affected by such time lags.

Question 2

The long-term financial objective of a company is often seen as being the maximisation of shareholder wealth.

i) Discuss how a companys accounting information system can assist in achieving this objective.

ii) Explain an example of maximization of shareholder wealth when the company able to operate an effective accounting information system

Question 3

John Smith worked in the stockyard of a large building supply company. One day he unexpectedly

left for supply company. One day he unexpectedly left for California, never to return. His foreman seized the opportunity to continue to submit time cards for John to the payroll department. Each work, as part of his normal duties, the foreman received the employee pay cheque from payroll and distributed them to the workers on his shift. Because John was not present to collect his paycheck, the foreman forged Johns name and cashed it.

Required:

Discuss two control techniques to prevent or detect this fraud scheme

Question 4

The accounting clerk for the RAM System receives source documents such as purchase orders, sales invoices, and vendor invoices, which she uses to prepare journal vouchers for general ledger entries. Each day the clerk posts the journal vouchers to the general ledger and the related subsidiary ledgers. Each month the clerk reconciles the subsidiary accounts to their control accounts in the general ledger to ensure that they are balance.

Required:

Discuss any control weaknesses and risks associated with this scenario.

Question 5

Each day the system scans the AP ledger for items due to be paid and prints the cheques. A cheque is sent to the vendor , and a copy is sent to cash disbursements, where it is filed. Next, the system adds a record to the cheque register file and removes the liability in the AP subsidiary ledger. Finally, the system automatically updates the general ledger accounts.

Required:

a. Create a data flow diagram of the current system

b. Analyze the physical internal control weaknesses in the system