Accounting Information System 14

Accounting Information System1
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Accounting Information System
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Accounting Information System 2
Table of Contents
Contents
Table of Contents.............................................................................................................................2
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
System flowchart of purchases system............................................................................................5
Processes involved in purchases system of Adam & Co.............................................................5
Risks associated with purchases system of Adam & Co.............................................................7
Internal control weaknesses involved in purchases system of Adam & Co................................7
System flowchart of cash disbursements system.............................................................................8
Processes involved in cash disbursements system of Adam & Co..............................................8
Risks associated with cash disbursements system of Adam & Co..............................................9
Internal weaknesses associated with cash disbursement system of Adam & Co.........................9
System flowchart of payroll system..............................................................................................10
Processes involved in the payroll system of Adam & Co..........................................................11
Risks involved in payroll system of Adam & Co......................................................................11
Internal weaknesses associated with payroll system of Adam & Co.........................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

Accounting Information System 3
Executive Summary
Adam & Co is one of the industrial suppliers in Perth that make use of a centralized accounting
system to control and manage its expenditure cycle. Purchasing, cash disbursement, and payroll
systems make up the company's expenditure cycle as a massive volume of financial resources is
spent on them. Financial resources are spent mainly on processes relating to the acquisition of
goods and services as well as compensation payments for labor services. The company makes
use of its employees and departments to ensure that all processes involved in its purchasing, cash
disbursement, and payroll systems are effectively executed to achieve set goals and objectives.
However, fraud, miscalculations, and incorrect entries that take place during execution of system
processes pose a significant threat to the achievement of desired business goals. Besides, internal
weaknesses in the form of ineffective communication, authorization concerns, and time card
errors threat the company's financial accounting system.

Accounting Information System 4
Introduction
Being a large wholesaler of industrial suppliers, Adam & Co makes use of its centralized
accounting system at distinct locations to ensure that the utilization of resources is effectively
done to meet desired goals and objectives. Adam & Co focuses on providing that the flow of its
resources is effectively done basing on its organization structures at distinct locations. Most
significantly, the company consists of several departments and professionals that collaborate and
coordinate to ensure that all resources are effectively managed to achieve set goals and
objectives. Purchase clerk, vendors, payroll clerk, are some of the professionals at the company
that ensures that its expenditure cycle is effectively executed to meet desired business goals and
objectives. Besides, purchasing department, receiving department, accounts payable and
receivable are the necessary departments at Adam & Co that ensure that all processes and risks
involved in the expenditure cycle are expertly executed and managed (Belverd & Marian 2013).
As such, this report will mainly address the risks, processes, and internal control of Adam & Co's
expenditure cycle. As a business analyst, the report will be directed to the managing director at
the company regarding the expenditure cycle. Most importantly, the report will address risks,
processes, and internal control weaknesses associated with the company’s purchases system,
cash disbursements system as well as payroll systems as discussed below.