Question 3: Past Paper Question 4, May 2020 Onion is a civil engineering company based in Belfast. It has been recently set up by three university friends: Conor, Sarah and Tom, who are civil engineers with no financial or management experience. They employed an experienced administrator, Claire, and assumed that they could leave most matters relating to the finances of the business with Claire. However, after a few issues in the first year, Conor, Sarah and Tom asked a consultant to perform a preliminary review of their business. That report concluded that the existing accounting information system was not fit for purpose. Major issues were highlighted in the financial accounting cycle. The report recommended that Onion should urgently: Evaluate its financial accounting cycle Explore the option of outsourcing some of its accounting information system Prepare XBRL-enabled financial statements Requirement Explain the key steps in the financial accounting cycle, and suggest why this may be an area of significant risk for Onion. 8 Marks