Strategic Information Systems for Business and Enterprise
Identify the risks that exist in the conversion cycle of Central Production Limited.
The term conversion cycle refers to the amount of time which is taken for completion of a certain task or finishing a certain product from the requirement stage or time taken to process the raw material to the final good. Conversion cycles are very important in each and every organization in many ways for instance in identifying and resolving risks found in a certain cycle for the sole purpose of saving time, protecting the organization against losses because of secretarial errors and wastage of materials and many others (Akomeah, 2017).
On the basis of the case study above, it is visible that there exists a long process, and a crucial set of measurements is needed. There are many risks that exist in the conversion cycle of central Production Limited. They include the following:
- The concept of Maker and Checker is lacking in the organization. This concept is compulsory since it is performing critical functions of an internal auditor to make sure that the requisitions and the orders that were raised are accurate and not repetitive. This will be very productive id there is an individual at a certain position of authority that is overseeing particular levels and specific procedures.
- The use of hard copies. The utilization of hard copies in the organization by the production work center supervisor for each and every process of production should be limited. The utilization of hard copies is a wastage of resources and it posses a big risk of misplacement and getting duplication. It will be important when all the requisitions are raised online to increase efficiency, improve workflow and management, and can be easily observed by anyone who is concerned.
- There is a wastage of resources due to unauthorized release. Checks are supposed to be placed specific areas to discover the reasons for the requirements of any additional material outside the standard capacity and it must be legalized by a specialist senior to the work center supervisor.
- Supply chain management. The interaction taking place between the departments is too much and not healthy for the organization. It will be important to install an Enterprise Resource Planning (ERP) to assist in the streamlining up the whole process flow.
Week 7
Internal control weaknesses and risks associated with Olive Limited.
Control weaknesses are failures discovered when implementing internal controls in an organization or a company (Chen, 2017). From the above process, there are weaknesses and risks associated. The following are some of them:
Richard is given too much burden or obligation. His responsibilities range from taking care of purchase orders and invoices to the preparation of ledges (Donelson, Ege, and McInnis, 2017). There is a lack of differentiation of duties. The tasks need more than one employee for better production. The process if vulnerable frauds and errors since it is only Richard who is responsible for taking data and there is no any other individual to inspect him (2017). The data for both the organization and the supplier is not protected resulting in the questioning of data confidentiality.
According to the scenario above, the accounting clerk, Richard Palm, is the one who is preparing the journal vouchers and posting in the subsidiary and general ledgers. There is a lack of inspection and approval by higher administration personnel (2017). The resolution of minor accounts to their control accounts by one accounting clerk is an internal control weakness since there is no differentiation of duties in the company. Without the differentiation of tasks in the organization, there are high risks of fraud and errors to be taking place (2017). If the accounting function is done by one person and he is the one who is looking for errors, there is a high probability of committing fraud for self-benefits. Additionally, the resolution of minor accounts into their respective control accounts requires a thorough checking to avoid the occurrence of any type of errors (2017).
Week 8
Depict the association and cardinality for the sales of cars at Elegant Limited based on the REA model.
The REA model means the Resource-Agent model. It can be described as the process of intellectualizing the economic actions which include accounting and sales dealings (Laurier, Kiehn, and Polovina, 2018). The model is an ISO standard that guarantees dependability and quality. The REA model is composed of three factors that are:
R- Resource: Resources are the events or objects that are beneath the dominion of an economic representative (2018). The economic resources include the following: rights, goods, claims, services, obligations, and so on. In this scenario, the economic resource is the resorted classical cars that are Elegant Limited is selling.
E- Event: Events are the deals, situations, and other phenomena that influence the economic resources from the manufacture, exchange, consumption, and circulation (2018). In this case, the event is transactions taking place between the private buyers, investors, and the Elegant limited. The sales are all in cash therefore these can be said to be resources.
- Agent: agents are the distinguishable parties that are obtaining, using, or disposing of the economic resources (2018). In this case, an agent is a party purchasing the cars from Elegant limited company.
Under the REA model, cardinality refers to the relationship that exists between the variables. It expounds on the number of times an object is connected to the other (Ahlawat, and Vincelette, 2019). In the current case scenario, there is a relationship that exists between sales and customers. For each and every sale, there is a sales head that is showing the count of customers. This will further boost the efficacy and competence of the enterprise.
Week 9
Response to the proposal of the management and mention any concerns.
As an auditor, the response to the management’s proposal is information from the warehouse will be uncertain in that there may be traces of incorrect data (Aziz, and Sabri, 2017). I will question them to provide information from the operational database to disturb less their normal activities so that a proficient and reliable report can be made. If there are any traces of uncertainty in the mind of an auditor, the audit report will not be considered confidential and accurate. In other words, the response to the management will be requesting the direct entree to the data.
The concern that I’m having is that the information originates from the data warehouse. This clearly shows that there is no direct data entrée from the operational database where accurate data is found. When data from the data warehouse is used, it will result in the occurrence of errors noted in the reports. There are possibilities that there may be no errors in the data warehouse but it is advisable to use the data extracted directly from the operational database since it is accurate and more reliable for the generation of an audit report (Azhir, Daneshpour, and Ghanbari, 2016). Another concern is if there will be an accuracy of discrepancy in the future days, the audit report will be considered false and such a situation is against the laws and regulation of auditing. To dodge situations like that from taking place in the future days and even currently, it is advisable to collect data from the primary sources such as the operational database.
Week 10
- The CIO and MD have different views on how the system analysis should be performed. Comment on whose position you sympathize with the most.
System analysis is a term that is used to describe the process of probing a system for detecting any presence of weakness in the system and taking the compulsory actions based on the analysis findings (Valacich, George, and Valacich, 2017). The action taken can be an upgrade to the current system or shifting the system to a new system.
Based on the conversation above between the Chief Information Officer (CIO) and the Managing Director (MD) of the company, I will rather sympathize with the Managing Director for many reasons. The Managing Director of Illustrious Limited is much concerned that they have passed through these project types earlier and they did not receive the new system there were assured by the Chief Information Officer (CIO). Rather, what they received is a revised version of the ancient system which was a wastage of time according to the MD.
- What method would you recommend to Illustrious Limited for system analysis?
I will recommend the utilization of the Data Flow Modeling method to Illustrious Limited (Šuman, Jakupović, and Pavlić, 2017). Data Flow Modelling is the process to identify, model, and document the movement of data around the information system (2017). This method scrutinizes processes and activities involved in the transformation of information from one form to another form, data stores; where information is reserved, external entities; what is transmitting and receives information into and from the system respectively and information flow; the route which information trails to reach the projected terminus (2017).
List of Reference
Šuman, S., Jakupović, A., and Pavlić, M., 2017. Knowledge-Based Systems for Data Modelling: Review and Challenges. In Enterprise Information Systems and the Digitalization of Business Functions (pp. 354-374). IGI Global.
Valacich, J.S., George, J.F., and Valacich, J.S., 2017. Modern systems analysis and design. London: Pearson Education Limited.
Aziz, A., and Sabri, P.S.U., 2017. Realistic Approach to Design Data Warehouse Schema. IJCSIS, 15(1).
Azhir, E., Daneshpour, N. and Ghanbari, S., 2016. Fuzzy multi-criteria selection procedures in choosing data source. Journal of AI and Data Mining, 4(2), pp.143-156.
Laurier, W., Kiehn, J. and Polovina, S., 2018. REA 2: A unified formalisation of the Resource-Event-Agent ontology. Applied Ontology, 13(3), pp.201-224.
Ahlawat, S. and Vincelette, J., 2019. Enhancing Knowledge Integration with REA Modeling in an AIS Project. Journal of Information Systems Education, 23(2), p.2.
Chen, Y., Knechel, W.R., Marisetty, V.B., Truong, C. and Veeraraghavan, M., 2017. Board independence and internal control weakness: Evidence from sox 404 disclosures. Auditing: A Journal of Practice & Theory, 36(2), pp.45-62.
Donelson, D.C., Ege, M.S. and McInnis, J.M., 2017. Internal control weaknesses and financial reporting fraud. Auditing: A Journal of Practice & Theory, 36(3), pp.45-69.
Akomeah, M.O., Kong, Y.S., Hu, X. and Afriyie, S.O., 2017. Bearing of credit risk management on financial performance: Evidence from financial institutions in Ghana. American Journal of Multidisciplinary Research, 5(2), pp.150-160.