Accounting Information System - Assignment Sample

Running head: ACCOUNTING INFORMATION SYSTEM
Client name:
Student Name:
Title of report: Accounting Information System
Date:

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ACCOUNTING INFORMATION SYSTEM
Table of Contents
Question 1:.......................................................................................................................................3
Expenditure cycle:.......................................................................................................................3
Question 2:.......................................................................................................................................4
Data Flow Diagram:....................................................................................................................4
Question 3:.......................................................................................................................................5
Internal control weaknesses:........................................................................................................5
Bibliography....................................................................................................................................9

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ACCOUNTING INFORMATION SYSTEM
Executive Summary:
The report consists of the description of the accounting system of the Platinum manufacturing
group. The expenditure cycle is a recurring set of business activities related to the purchase and
processing of the purchase for an organization. The report has been used here to describe the
expenditure cycle of the Platinum manufacturing group company. Additionally the DFD and the
internal control weakness of the organization is also been defined in this report.

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ACCOUNTING INFORMATION SYSTEM
Question 1:
Expenditure cycle:
The expenditure generally flows the purchase decision to the payment and in the final
purchase process. The cycle is generally used by the shoppers so that they can calculate the
expenditure of the items and compare the prices of the expenditure of the items the selects the
appropriate alternative. The platinum manufacturing company purchased goods worth of $13
million and individual orders ranged generally from $3000 to $30,000. For the purchase a
requisite form is prepared by the treasurer. After the purchase requisition is received the
verification procedure is followed. After the purchase orders are placed the receiving process of
the system is obtained. The copy of the purchase is stamped with the data in the received items
are verified accordingly. After this the process is forwarded to the accounts payable section and
the clerk in the department checks the files and open purchase order file. Unpaid invoices are
filed on the due date for the organization. The Cheques are then forwarded to the treasurer where
the treasurer store the details of the details of the transaction and also the divides the cheques
into two groups. Blow 10,000 and above 10000.

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ACCOUNTING INFORMATION SYSTEM
Question 2:
Data Flow Diagram:
Figure 1: Data flow Diagram
Source: (created by Author)
Question 3:
Internal control weaknesses:

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ACCOUNTING INFORMATION SYSTEM
Internal control
weaknesses
Impact of
weaknesses
Specific ICs to
mitigate issues
Modification of IT
application
 It has been
found that
organization
falls under the
control
material
weaknesses.
They have
values lower
than the non-
ICW firms.
This has been
identified
under the
section 404 of
Sarbanes–
Oxley Act
(SOX).
 Another
weakness in
the internal
control of the
organization
is the stock
performance.
This comes
under the
SOX 404
ICW firm
disclosure.
 The results
provided
above also
define the
hypothesis of
the equity in
the market
that involve
negative
information
in association
with the SOX
 The main
impact of this
that the
management
has to
maintain
sufficient
amount of
evidences that
would support
the design of
the company.
 The auditor
would be
required to
provide an
alternate
opinion and
also provide
the opinion
independently
as a third
party.
 The
management
would be
required to
organize and
enhance their
documentatio
n so that they
can facilitate
the work that
is done by the
auditors.
DeFond, M. L., &
Lennox, C. S. (2017).
Do PCAOB
 Section 404
requires
controls to be
in place. SOX
compliance
for IT
systems seeks
to ensure that
there are
ample
controls for
preventing
fraud, loss or
misuse of
data relating
to the
company’s
transactions.
 SOX
compliance
for IT
systems seeks
to also ensure
that these
controls are
effective. To
ensure this,
SOX
compliance
for IT
systems
requires
companies to
put the kinds
of controls in
place that
ensure that
irregularities
are quickly
detected and
facilitate
speedy
 First and
foremost,
SOX
compliance
for IT starts
off from a
new plane. It
approaches
compliance
requirements
for IT from
the standpoint
of the need for
welding the
company’s
financial
audits with its
technological
audit.
 This presents
a big shift,
because in
most
instances,
financial
audits used to
focus on the
financial
aspects of the
company,
while IT
audits used to
be concerned
with only the
technological
aspect, with
there being
almost no
conjunction
between the
two.
 Moreover,

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ACCOUNTING INFORMATION SYSTEM
404 ICW
reports.
 It is also seen
that the ICW
firms with
efficient
credit
rankings do
not doesn’t
reduce the
investment to
the level
required.
Li, Y., Yu, J., Zhang,
Z., & Zheng, S. X.
(2016). The effect of
internal control
weakness on firm
valuation: Evidence
from SOX Section
404 disclosures.
Finance Research
Letters, 17, 17-24.
Jacoby, G., Li, Y.,
Li, T., & Zheng, S.
X. (2017). Internal
control weakness,
investment and firm
valuation. Finance
inspections improve
the quality of internal
control
audits?. Journal of
Accounting
Research, 55(3), 591-
627.
Gallemore, J., &
Labro, E. (2015). The
importance of the
internal information
environment for tax
avoidance. Journal of
Accounting and
Economics, 60(1),
149-167.
correction.
 It allows
companies to
clearly state
exceptions,
which must
be part of
audit trails, so
that the right
action can be
taken to
tackle these
exceptions.
 SOX
compliance
for IT
systems
makes IT
systems a part
of the larger
corporate
financial and
governance
controls audit,
which
companies
have to
comply with.
Samal, S. K., Nayak,
D., Ichihashi, M.,
Banna, S., & Lim, S.
K. (2016,
November). Tier
partitioning strategy
to mitigate BEOL
degradation and cost
SOX
compliance
for IT makes
it mandatory
for people at
the highest
levels of the
companies’
management
boards, such
as Board of
Directors,
CEO’s, CFO’s
and Audit
Committee to
vet and
produce the
relevant
documentation
of their
companies’
financial
records as
well as to
ensure that
there is totally
verifiable
reliability and
security in the
IT systems
that contain
the financial
details.
 This marks a
very major
shift from the
previous
legislation in
this matter, as
the market
compliance
for IT brings
into its fold
senior
management
into the

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ACCOUNTING INFORMATION SYSTEM
Research Letters. issues in monolithic
3D ICs.
In Proceedings of the
35th International
Conference on
Computer-Aided
Design (p. 129).
ACM.
Ramanathan, T.,
Ramanathan, N.,
Mohanty, J.,
Rehman, I. H.,
Graham, E., &
Ramanathan, V.
(2017). Wireless
sensors linked to
climate financing for
globally affordable
clean
cooking. Nature
Climate
Change, 7(1), 44.
financial and
IT audits of
the company,
and more
importantly,
makes them
work in
tandem.
Kotabe, H. P., &
Hofmann, W. (2015).
On integrating the
components of self-
control. Perspectives
on Psychological
Science, 10(5), 618-
638.
Criswell, J.,
Dautenhahn, N., &
Adve, V. (2014,
May). KCoFI:
Complete control-
flow integrity for
commodity operating
system kernels.
In Security and
Privacy (SP), 2014

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ACCOUNTING INFORMATION SYSTEM
IEEE Symposium
on (pp. 292-307).
IEEE.
Conclusion
For conclusion it can be said that the expenditure cycle of the Platinum manufacturing
group has been done efficiently in this report. In addition to this data flow diagram has been
used to illustrate the flow of procedures during the purchase of the items by the platinum
manufacturing group. The internal control weaknesses of the company has also been defined in
this report. In addition to this, the impact of the weakness and the internal control of the
organization is also provided in this report.

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ACCOUNTING INFORMATION SYSTEM
Bibliography
Criswell, J., Dautenhahn, N., & Adve, V. (2014, May). KCoFI: Complete control-flow integrity
for commodity operating system kernels. In Security and Privacy (SP), 2014 IEEE
Symposium on (pp. 292-307). IEEE.
DeFond, M. L., & Lennox, C. S. (2017). Do PCAOB inspections improve the quality of internal
control audits?. Journal of Accounting Research, 55(3), 591-627.
Gallemore, J., & Labro, E. (2015). The importance of the internal information environment for
tax avoidance. Journal of Accounting and Economics, 60(1), 149-167.
Jacoby, G., Li, Y., Li, T., & Zheng, S. X. (2017). Internal control weakness, investment and firm
valuation. Finance Research Letters.
Kotabe, H. P., & Hofmann, W. (2015). On integrating the components of self-
control. Perspectives on Psychological Science, 10(5), 618-638.
Li, Y., Yu, J., Zhang, Z., & Zheng, S. X. (2016). The effect of internal control weakness on firm
valuation: Evidence from SOX Section 404 disclosures. Finance Research Letters, 17,
17-24.
Ramanathan, T., Ramanathan, N., Mohanty, J., Rehman, I. H., Graham, E., & Ramanathan, V.
(2017). Wireless sensors linked to climate financing for globally affordable clean
cooking. Nature Climate Change, 7(1), 44.
Samal, S. K., Nayak, D., Ichihashi, M., Banna, S., & Lim, S. K. (2016, November). Tier
partitioning strategy to mitigate BEOL degradation and cost issues in monolithic 3D ICs.