PBL AIS510/Sept 2012-Jan 2013

FAKULTI PERAKAUNAN UNIVERSITI TEKNOLOGI MARA

ACCOUNTING INFORMATION SYSTEMS AIS 510 LEARNING PACKAGE: CASES PBL Session 1 PBL Session 2 PBL Session 3

SEMESTER SEPTEMBER 2012 !ANUARY 2013

BY "ALILA # A"ALILA$ $! KASSIM UiTM SARA%AK

PBL AIS510/Sept 2012-Jan 2013

PBL Session 1: Revenue Cycle (50 marks)

P&'( I: C&s) Re*ei+( S,s(e- E&s(e'n In./s('ies Co-+&n, Jason Scott has worked energeticall !or the past !ew "onths tr ing to doc#"ent the "a$or %#siness in!or"ation !lows at &astern Ind#stries 'o"pan ( )pon co"pleting his personal inter*iews with cash receipts clerks+ Jason Scott asks o# to de*elop a co"prehensi*e doc#"ent !lowchart !or the cash receipts s ste"( Jason Scott narrati*e o! the s ste" is as !ollows, Customer payments include cash received at the time of purchase and account payments received in the mail. At days end, the treasurer endorses all check sand prepares a deposit slip for the checks and the cash. A clerk then deposits the checks, cash, and deposit slip at the local bank each day. When checks are received as payment for accounts due, a remittance slip is included with the payment. The remittance slips are used to update the accounts receivable file at the end of the day. The remittance slips are stored in a file drawer by date. Every week, a cash receipts report and an aging customer report are generated from the data in the accounts receivable ledger. The cash receipts report is sent to the management. A copy of the aging customer report is sent to the credit and collections department. Re0/i'e.: aPrepare a doc#"ent !lowchart to doc#"ent the cash receipts s ste" at &astern Ind#stries 'o"pan ( .20 "arksBrie!l e/plain the p#rpose o! each o! the doc#"ents or reports listed %elow #sed % &astern Ind#stries 'o"pan in its re*en#e c cle( i( 0eposit slip( ii( 1e"ittance slip( iii( 'ash receipts report( i*( Aging c#sto"er report( .2 "arks0escri%e two .2- possi%le threats #nder cash collections acti*ities in the re*en#e c cle( .2 "arks.TOTAL: 30 MARKS1

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P&'( II: C&s) Re*ei+( S,s(e- &n. S&2es O'.e' P'o*essin3 Te. B&4e' Co-+&n, 15 3he proced#re o! handling cash receipts doc#"ents in 3ed Baker 'o"pan %egins with a "ail clerk in the sales depart"ent+ opens the "ail each "orning( 3he "ail clerk prepares a re"ittance ad*ice showing c#sto"er detail and the a"o#nt paid( 3he checks and re"ittance ad*ice are then !orwarded to the sales depart"ent s#per*isor+ who re*iews each check and !orward the checks and re"ittance ad*ices to the acco#nting depart"ent s#per*isor( 3he acco#nting depart"ent s#per*isor+ who also !#nctions as credit "anager+ re*iews all checks !or pa "ents on past-d#e acco#nts and then !orwards the checks and re"ittances ad*ices to the acco#nts recei*a%le clerk+ who arranges the ad*ices in alpha%etical order( 3he re"ittance ad*ices are posted directl to the acco#nts recei*a%le ledger cards( 3he checks are
Adapted from Accounting Information System by Bodnar and Hopwood; 9 th Edition; 2004; !iscussion "uestions and prob#ems$
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PBL AIS510/Sept 2012-Jan 2013

endorsed % sta"p and totaled( 3he total is posted to the cash receipts $o#rnals( 3he re"ittance ad*ices are !iled chronologicall ( A!ter recei*ing the cash !ro" the preceding da 4s cash sales+ the acco#nts recei*a%le clerk prepares the dail deposit slip in triplicate( 3he third cop o! the deposit slip is !iled % date+ and the second cop and the original acco"pan the %ank deposit( 3he acco#nting depart"ent s#per*isor is the onl person responsi%le to take the deposit to the %ank( 3he process in 3ed Baker 'o"pan contin#es with the sales order processing s ste"( '#sto"er orders are recei*ed % phone+ % "ail or o*er 3ed Baker4s 'orporate 5e% site( 1egardless o! how c#sto"er orders are recei*ed+ the one and onl e"plo ed sales clerk will per!or"ed a rele*ant edit checks to ens#re co"plete acc#rac %e!ore he prepares sales in*oice in triplicate( 3he original and second copies are presented to the cashier( 3he sales clerk retains the third cop in the sales %ook( 5hen the sale is !or cash+ the c#sto"er pa s the sales clerk+ who presents the "one to the cashier with the in*oice copies( 3he cashier appro*es a credit sale !ro" an appro*ed credit list a!ter sales clerk prepares the three-part in*oice( A!ter recei*ing the cash or appro*ing the in*oice+ the cashier *alidates the original cop o! the sales in*oice and gi*es it to the c#sto"er( At the end o! each da + the cashier recaps the sales and cash recei*ed and !orwards the cash and the second cop o! the sales in*oices to the acco#nts recei*a%le clerk( 3he acco#nts recei*a%le clerk %alances the cash recei*ed with cash sales in*oices and prepares a dail sales s#""ar ( 3he credit sales in*oices are posted to the acco#nts recei*a%le ledger+ and then all in*oices are sent to the in*entor control clerk in the sales depart"ent !or posting to the in*entor control ledger( A!ter posting+ the in*entor control clerk !iles all in*oices n#"ericall ( 3he acco#nts recei*a%le clerk posts the dail sales s#""ar to the cash receipts and sales $o#rnal and !iles the sales s#""aries % date( 3he cash !ro" cash sales is co"%ined with the cash recei*ed on acco#nt to "ake #p the dail %ank deposits( 3he %ank *alidates the deposit slip and ret#rns the second cop to the acco#nting depart"ent+ where the acco#nts recei*a%le clerk !iles it % date( 6onthl %ank state"ents are reconciled pro"ptl % the acco#nting depart"ent s#per*isor and !iled % date( Re0/i'e.: a( Identi! and e/plain two .2- strengths o! the e/isting re*en#e s ste" and s#%se7#entl e/plain two .2- potential risks/e/pos#res that can %e a*oided( .2 "arksState and e/plain three .3- weaknesses inherent in the a%o*e s ste"( 1eco""end three .3- internal controls proced#res that can %e #sed to i"pro*e the e/isting internal control s ste"( .12 "arks.TOTAL: 20 MARKS1

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PBL Session 2: Expen i!ure Cycle ("0 marks)

P&'( I : P/'*)&sin36 Re*ei+(s6 S(o'&3e &n. Iss/e o7 -&(e'i&2 P'o*e./'es M&n/7&*(/'in3 Co-+&n, 25
2

8/inn

Adapted from Accounting Information System by %omney and Steinbart; && th Edition; 2009; !iscussion "uestions and prob#ems$

PBL AIS510/Sept 2012-Jan 2013

3he !ollowing in!or"ation descri%es the proced#res o! 8#inn 6an#!act#ring 'o"pan regarding its internal control o*er the p#rchase+ receipts+ storage and iss#e o! raw "aterials, The process in uinn !anufacturing Company begins with the production department re"uesting raw materials from the storeroom department. #aw materials which consist mainly of high$cost electronic components are kept in a locked storeroom %epartment. &toreroom personnel include a supervisor and four clerks. All are well trained, competent and ade"uately bonded. #aw materials are removed from the storeroom only on written or oral authori'ation of one of the production foremen. (o perpetual inventory records are kept) hence the storeroom clerks do not keep records of goods received or issued. To compensate for the lack of perpetual records, a physical inventory count is taken monthly by the storeroom clerks, who are well supervised. Appropriate procedures are followed in taking the inventory count. A physical *nventory report is then prepared by the by the storeroom clerk. After the physical count and based on the physical *nventory report, the storeroom supervisor matches "uantities counted against a predetermined reorder level. *f the count for a given part is below the reorder level, the supervisor enters the part number on a materials re"uisition list and sends this list to the accounts payable clerk. The accounts payable clerk prepares a purchase order for a predetermined reorder "uantity for each part and mails the purchase order to the vendor from whom the part was last purchased. When ordered materials arrive at the Company, the materials are received by the storeroom clerks. The clerks count the merchandise and reconcile the counts with the shippers bill of lading. All vendors bills of lading are initiated, dated and filed in the storeroom to serve as receiving reports. Re0/i'e.: a( 'reate a doc#"ent !lowchart o! the e/isting s ste"( .12 "arks-

%( 0escri%e !i*e .5- weaknesses in the internal control and reco""end !i*e .5- internal controls proced#res to i"pro*e the e/isting internal control s ste" in 8#inn 6an#!act#ring 'o"pan ( .20 "arks9TOTAL: 3: MARKS1 P&'( II: P&,'o22 s,s(eA*-e G&'-en( M&n/7&*(/'in3 Co-+&n,

3he Ac"e 9ar"ent 6an#!act#ring 'o"pan e"plo s 20 sta!! in 6ala sia #nder per"anent ter"s o! contract( 0#ring the %#s season+ the !ir" will also e"plo aro#nd 100 part-ti"e workers( 3hese part-ti"e workers are paid according to the n#"%er o! ho#rs worked and the ho#rl rates(

PBL AIS510/Sept 2012-Jan 2013

$i'in3 o7 e-+2o,ees;3he personnel depart"ent is responsi%le !or handling the recr#it"ent o! per"anent sta!!( 3he personnel "anager a#thori:es the hiring o! new per"anent sta!! % signing two copies o! the e"plo "ent contract+ which state the ter"s o! e"plo "ent and the a"o#nt o! salar ( ;ne cop o! the e"plo "ent contract is !or the sta!!+ and the other cop is kept in the personnel !ile( <ewl recr#ited sta!! is not re7#ired to sign the e"plo "ent contract( 3he !ir" has two prod#ction s#per*isors who handle all the co"pan 4s a!!airs relating to the recr#it"ent o! part-ti"e workers incl#ding setting the ho#rl rate( As the t#rno*er rate o! part-ti"e workers is *er high+ the personnel depart"ent does not set #p a personnel !ile !or part-ti"e workers 5 Ti-e;4ee+in3;3he prod#ction s#per*isors4 o!!ice and the part-ti"e workers4 working place are %oth on the second !loor o! the !actor ( A ti"ecard s ste" is adopted to keep track o! the ho#rs worked % each part-ti"e worker( 3i"ecards are located at the !actor entrance( &ach worker writes down the ti"e o! co""ence"ent and cessation o! work on his ti"ecard e*er da ( 3he part-ti"e workers an co"e to work at an ti"e o! the da + th#s it is not !easi%le !or the prod#ction s#per*isors to %e present watching the workers #pdate their ti"ecards( As the part-ti"e workers are paid on ho#rl %asis+ the prod#ction s#per*isors are not re7#ired to prepare an a%sentee reports( P&,'o22 +'e+&'&(ion;At each "onth end+ the pa roll depart"ent prepares a pa roll sheet !or per"anent sta!! %ased on the prior "onth4s pa roll sheet( I! there are changes in salar rates+ addition or resignations o! sta!!+ the personnel "anager will prepare a "e"o to noti! the pa roll depart"ent o! the changes( Pa roll checks are then prepared !or the !inancial controller to appro*e( &ach pa roll checks is drawn on indi*id#al sta!! na"es and crossed( &ach o! the prod#ction s#per*isors prepares a pa roll sheet !or part-ti"e sta!!( 3he prod#ction s#per*isors collect the ti"ecards and co"p#te the total ho#rs worked !or the "onth( 3he pa roll sheet records the total ho#rs worked and the ho#rl rate agreed % the prod#ction s#per*isors with the part-ti"e workers( 3he ti"ecards will %e destro ed i""ediatel a!ter preparation o! the pa roll sheet( 3he pa roll depart"ent checks the prod#ction s#per*isors4 calc#lations % "#ltipl ing the ho#rs worked % the ho#rl rate and signs the pa roll sheets as e*idence o! checking( A cash checks is prepared !or the !inancial controller to appro*e and sign( P&,-en( o7 +&,'o22;3he !inancial controller re*iews the pa roll sheet !or per"anent sta!! and signs the pa roll checks( ;n the !irst da o! each "onth+ each per"anent sta!! "e"%er collects the pa roll checks directl !ro" the !inancial controller and acknowledges receipt % signing the pa roll sheet( =or the part-ti"e workers4 pa roll+ the !inancial controller re*iews the pa roll sheet and signs a cash checks( 3he cashier and an acco#nting sta!! "e"%er collect cash !ro" the %ank and the pa roll depart"ent prepares pa packet !or each part-ti"e worker( 3he prod#ction s#per*isors collect the pa packets !or their tea" o! part-ti"e workers and are responsi%le !or the distri%#tion o! the pa packets to their tea" "e"%ers( 3he prod#ction s#per*isors sign the pa roll sheets on %ehal! o! the workers+ and this ser*es as e*idence o! acknowledge"ent o! receipt o! pa "ent 5 Re0/i'e.: a( Identi! and e/plain eight .2- internal control weaknesses in the pa roll proced#res o! Ac"e 9ar"ent 6an#!act#ring 'o"pan ( .1> "arks%( S#ggest eight .2- internal control proced#res that co#ld %e designed to o*erco"e the identi!ied weaknesses in .a-( .1> "arks.TOTAL: 32 MARKS1

PBL AIS510/Sept 2012-Jan 2013

PBL Session #: Pro uc!ion Cycle (50 marks)

P&'( I: 6odern St le 6an#!act#ring 'o"pan "akes athletic !ootwear( It in*ol*es in handling the !o#r %asic acti*ities #nder prod#ction c cles( 3he 'o"pan also e"plo ed s#per*isors in the work centre( a%0escri%e the !o#r %asic acti*ities #nder prod#ction c cles( .2 "arksBrie!l e/plain the p#rpose o! each doc#"ents or !or"s listed %elow( .10 "arksiiiiiii**cBill o! "aterials ;peration List 6aterials re7#isition 6o*e ticket 6aster prod#ction sched#le

5h the co"pan 4s need to e"plo s#per*isors in the work centre? .@ "arks.TOTAL: 22 MARKS1

P&'( II: Ne<(on In./s('ies In*(3 <ewton Ind#stries Inc( "an#!act#res water !ilters+ air !ilters and !iltering s ste"s !or cons#"er and ind#strial #se( 3he "an#!act#ring process %egins with the iss#ing o! two copies o! the ser*ice re7#est !or" % the prod#ction planning and control depart"ent( 3he second cop o! the ser*ice re7#est !or" is !orwarded to the work centre and the !irst cop is !iled in the prod#ction planning and control depart"ent( In the work centre+ the second cop o! the ser*ice re7#est !or" is #sed to "an#all prepare !o#r copies o! the work order !or"( 3he second cop o! the ser*ice re7#est !or" is ten !iled in the work centre( 3he !o#rth cop o! the work order !or" is !orwarded to the prod#ction planning and control depart"ent to acknowledge the ser*ice re7#est( 3he third cop o! the work order !or" is !iled in the work centre( 'lerks in the work centre "an#all record act#al "aterials and s#pplies #sed and la%or ti"e re7#ired onto the !irst and the second copies o! the work order !or"( 5hen the work order is co"pleted+ the !irst cop is !iled in the work centre and the second cop is !orwarded to the acco#nting depart"ent( In the acco#nting depart"ent+ the clerk "an#all co"pletes a detailed costing o! the second cop o! the work order !or"( 3he clerk then prepares three copies o! the work order s#""ar report( 3he second cop o! the work order !or" is !iled in the acco#nting depart"ent( 3he !irst cop o! the work order s#""ar report is !orwarded to the prod#ction planning and control depart"ent( 3he second cop o! the work order s#""ar report is !orwarded to the work centre and the third cop o! the work order s#""ar report is !iled in the acco#nting depart"ent( a( Re0/i'e.: Prepare a doc#"ent !lowchart o! the preceding proced#res( .22 "arks9TOTAL: 2:

MARKS1

Adapted from Accounting Information System by Bodnar and Hopwood; 9 th Edition; 2004; !iscussion "uestions and prob#ems$
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PBL AIS510/Sept 2012-Jan 2013

AIS 510 Se+(e-=e' 2012 ; !&n/&', 2013 PBL Re+o'( 913>1

GROUP

: ????????????55? REMARKS . . . /50/A0/50/1A0

CONTENT@FINAINGS PBL 1 PBL 2 PBL 3 FRONT MATTER 3itle Page Acknowledge"ent 3a%le o! 'ontent BACK MATTER 1e!erences B Books C Jo#rnals 5 5e% Addresses Appendices . . . /5/5/5/15 / 200 / 13 . . . /5/5/5/15

PBL AIS510/Sept 2012-Jan 2013

AIS 510

Se+(e-=e' 2012 ; !&n/&', 2013

P'esen(&(ion : 5> .PBL ;%$ecti*e 39ro#p ,DDDDDDDDDDD( 0ate ,DDDDDDDDDDD GROUP %ORK Slide &!!ecti*eness .'olor/%ig/clear/attracti*e/ etc=low o! presentation .Intro+ content + concl#sionA#dience attention 3;3AL INAIVIAUAL %ORK
Eoice .lo#d C clear.109est#re .e e contact.100eli*er .=l#enc .10Appearance .dress+ shoes.10TOTAL 91001 TOTAL 95>1

'ase ,DDDDDDDDDD

/20 /20 /20

PRESENTER

OVERALL REMARKS ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

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PBL AIS510/Sept 2012-Jan 2013

PEER EVALUATION: AIS 510

Se+(e-=e' 2012 ; !&n/&', 2013

<a"e ,FFFFFFFFFFFFFFFFFFFFFFFFFFFFF 9ro#p, FFFFFFFFFFFFFFFFFFFFFFFFFFFFF Please gi*e o#r peers o#r honest rating( 3he rating is 0 thro#gh 10 !or each criterion Please !ill in o#r co""ents to ens#re o#r tea" "e"%ers are !airl e*al#ated( 3his !or" will %e accepted onl i! all %lanks incl#ding G'o""entsH !ield are !illed #p( 92 -&'4s1ACe -&'4s To(&2 930 -&'4s1

P&'(i*i+&(ion

Pee'Bs N&-e

Coo+e'&(ion

A((en.&n*e

Co--en(s

15 2 35 D5 55 E5