Accounting Information Systems and Controls: A Comprehensive Analysis

This report delves into the complexities of accounting information systems and controls, examining real-world scenarios to illustrate key concepts. It analyzes the challenges faced by Read-All Technology, a company struggling with software system upgrades and employee turnover. The report explores the role of consultancy firms in improving software systems, identifies organizational issues that need addressing, and recommends steps to ensure successful consultancy engagements. Additionally, it examines the effectiveness of security awareness training programs, explores the risks associated with offshore outsourcing of information systems functions, and provides insights into fraud detection and prevention. This comprehensive analysis offers valuable insights for students and professionals seeking to understand the intricacies of accounting information systems and controls in a practical context.

Accounting Information Systems and
Controls
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Table of Contents
Introduction:....................................................................................................................................3
1:..................................................................................................................................................4
(a): Attempts to improve the software systems and contribution of Consultancy Company......4
(B): Define the organisational issues that the CEO and management team must address in the
future............................................................................................................................................5
(C): Recommend steps that can be taken to ensure a good outcome from consultancy services.
.....................................................................................................................................................6
2: ways to maximise the effectiveness of the security awareness training programs..................7
3:..................................................................................................................................................9
(a): List fraud symptoms that should have aroused the auditor’s suspicion................................9
(b): Audit procedures that identify that fraud occurred.............................................................10
4: Possible risks offshore outsourcing of various information systems functions,....................11
Conclusion:....................................................................................................................................13
References:....................................................................................................................................14
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Introduction:
The present report is about Read-All technology which is facing some problems related to
employee shortage and negative customer experience due to internal problems. This report is
made to explain the reasons for such negative results along with the factors which contribute in
the same from the side of the consultancy firm. The risks related with the outsourcing of an
organisation's information system are also explained in this report along with some ideas which
can be used to enhance the effectiveness of training related to security awareness. Along with all
above, the report will also give significant information to the user so that he can understand the
audit facts and fraud symptoms.
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1:
(a): Attempts to improve the software systems and contribution of Consultancy Company
The steps taken to improve the software system failed due to various internal reasons and some
of them are as follows:
Loss of skilled staff: Read-All technology was facing a big problem related to the experience of
staff. The skilled and experienced staff of company leave their job due to better growth options
and the company does not make proper recruitments to fulfil their vacancies. The existing
employees of the company do not have relevant and enough experience to improve the software
system to fulfil the needs of customers thus company lost a great growth opportunity and also
face a negative cash flow situation.
Complex interface: the interface of software update was complex and hard to understand and
due to the same, the user and developer both feel the complexity. Developers of Consultancy
Company faced problems during the updating because the interface of software of Read-all was
not so understandable. Due to the same reason, developer of consultancy firm was not able to
make collaboration between old software and advance update which contribute in the failure of
improvement process (Dunlosky, et. al., 2013).
Lack of vision: lack of vision is one of the reasons for the failure of a development program.
Software systems required regular monitoring and updating to provide quality services but the
company does not make a regular update as per market trends which also contribute to failure.
A contribution of Consultancy Company: the company which is hired to eliminate the
complex situation also contribute to failure due to lack of managed work. Developers of
consultancy make high-quality upgradations without considering the base features of the
software which make it irrelevant and not understandable for customers. thus, the company lost a
great chance of growth and customer base.
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(B): Define the organisational issues that the CEO and management team must address in
the future.
Development of employees: In modern businesses, employees are most valuable assets and
every company should concentrate on its employee turnover to ensure proper talent in the
organisation. The same problem was faced by the Real-All technologies when they go for
software upgradation process. Due to a shortage of experience in employees, it faces a situation
of loss of income and customer base. In this way, every company should focus on employee
training, turnover and skilfulness so that it can achieve the target of profit.
Planning and product development: The management of the company should concentrate on
the regular upgrade of its software systems and strategy. Read-All also faces the same situation,
then the company does not make regular upgradation in its software which is required to serve its
new customers and face a situation of loss. It proves that the management of Read-All should
concentrate on the development of products and services so that it can take advantage of
upcoming growth chances.
Management issues: the situation which was faced by the Read-All technology also denotes the
inefficiency and ineffectiveness of proper management practices. Skilled employees of the
company have left the job before one year and management of the company does not take
employee turnover seriously (Fitzgerald and Stol, 2014). Also, the new hiring for vacant posts
does make the management which shows that the management does not have the clear
understanding of the internal situation of the organisation. To avoid the same situation in future,
the management should concentrate on the development of management.
Work capability: Read-All appoint an external consultancy firm to provide helps in software
upgradation but proper planning does not make by the company and due to the same,
consultancy firm started working on the update without considering the basic interface of
existing software which makes the update irrelevant and generates extra negative cash outflow
for the organisation.
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(C): Recommend steps that can be taken to ensure a good outcome from consultancy
services.
Ensure professional relationship: to ensure good outcome form the consultancy company the
management should take a lesson from previous mistakes and make a professional relationship
with a consultancy firm. The company should make a proper contract which contains all the
terms of service to eliminate the negative situations.
Clarify needs and process: previously consultancy firm does not generate required outcomes
because the role and needs of the company did not properly explain. Management of company
should clarify requirements of services and related facts of work so that consultancy firm can
provide a better outcome for the company.
Pre-identification of data: data related to existing software and software interface was very
complex and the experienced employees of the company do not there to give proper
understanding. To avoid this situation, the company should provide required data in
understanding able manner so that developers of consultancy company can make upgradation as
per company needs.
Regular meetings: Regular meetings of company and consultancy employees should be
organised to discuss the present situation and effectiveness of work. On the basis of regular
feedback provided to the consultancy firm, they can make the software workings as per company
requirements which will ensure the growth of both businesses.
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2: ways to maximise the effectiveness of the security awareness training programs.
Leading Phishing Attacks:
Earlier, we said prairie dogging wherein a delegate cautions a repeated phishing email and
signals the others within the paintings surroundings about it. This contemplates can in spite of
accomplishing an unmistakable drop in phishing weak spot in checks that do not trade over into
this gift reality (Allam, et. al., 2014)
. Delegates get used to the imitated sports of the combat, make sense of a way to appearance out
for them every Monday morning and beginning there maintain as standard. What you turn out to
be with is a reproduced phishing action that has besides zero impact on specialist easiness.
Make it dynamic:
The security scene is continually hinting at trade, which shows that safety care planning must be
dynamic with a specific proper goal to hold up. This does not infer that everything should be
modified predictably, yet it implies that the 'investigated and large' factor from the beyond tip
should be passed on ahead inside reliable updates (Tu and Yuan, 2014). It does not should be
extensive, nor does it need to rethink the wheel with respect to getting everybody returned within
the classroom; e-mail is your pal right here, and those updates can show up as organized mail
outs.
Booking and passing on getting ready:
Most institutions will begin with every year getting an equipped challenge and planning in
particular for brand new contracts is the bottom that needs to be finished. Guarantee associations
design month to month works out. Step with the aid of step can be unreasonable, quarterly is not
ok. Associations should blend the substance up and make content material noteworthy to
incidental perils where cloth.
Exhaustive Programs Work:
Most safety care applications are shallow, maximum ideal scenario. They can also fuse a few
realistic sporting events, besides they do not dovetail into an organized and thorough application.
What is lacking is a valuation for the adversary being gone up in opposition to and the extent of
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obligation an association need to need to fend off ambushes. It is irreplaceable that the C-suite
manages the level of the peril and the sheer weight of advantages the foe is passing on to
supervise towards marketers.
Give Thorough Security Training:
Antiquated protection getting the readily supported deal with or video approach. The difficulty
with this form of getting prepared is that it may swiftly wind up outdated – the safety scene of
twelve months lower back is out and out unique in terms of that of these days. It similarly
focuses exorbitantly on theory and isn't balanced by using a useful utility (Allam, et. al., 2014).
Security Awareness Training is astute, alters idea and alertness is reliably invigorated and is
based on the thorough comprehension of the way cybercriminals function. Ideally, it will unite
the companies of an expert developer who is aware of each one of the techniques for getting into
an association and every one of the traps of the phishing change.
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3:
(a): List fraud symptoms that should have aroused the auditor’s suspicion
The management of Queensland sold its old vehicles below the market price and unethical
advantage is taken by some managers and employees. In this situation, following symptoms
provide a base to make doubt to the auditor:
Non-compliance with a policy with the head office: The head office of Queensland sales it's
old vehicles through the bid system but this policy was not followed by the Queensland
management. They sold their old vehicles through the negotiation which will make an adverse
impact on the inflow and the same thing provides a base to make doubt to the auditor (Magro and
Cunha, 2017). The unethical benefit was taken by the management and some employees.
Excuses from management: when an auditor asks about the irrelevant procedure of scape sale,
management provide strong excuses to support their workings. Also, the old vehicles were sold
after sound expenses on repairing and the same awakened the doubt of auditor.
Internal control: a sound internal control is required to reduce the risk of fraud. If the level of
internal control within the organisation is high, the risk level will be low or vice-versa. In the
case of Queensland, auditor finds lack of internal control because the old vehicles were regularly
sold by using wrong policy and the head office was not had any information regarding the same
(TEME, 2013). It also enhanced the doubt of auditor.
Accounting system: financial statements are made before the audit and the accounting person of
the branch should provide complete information regarding the financial matters but in the present
situation, accounting person does not make any reporting to head office about this matter and
non-compliance. Heavy expenses which were made on repair was also paid by the finance
department without thinking about the appropriateness of expenses and the same give strong
reason to the auditor to find out the chance of fraud.
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(b): Audit procedures that identify that fraud occurred.
Extended personnel risk or deception in inspected substances is the quality obstruction for the
common conduction of survey strategies. Agency is liable for evading except, revealing coercion
and oversight by showing a reliably running accounting structure and an inner control device. An
audit check of the adjustments within the International Audit Standards coordinates audit manner
for perceiving the peril of error and fraud. Numerous Audit procedures used for perceiving fraud
has taken place are.
Brainstorming Session of fraud:
Under basic diagnosed assessing standards, audit responsibility bunches should preserve a
deception meeting to provide new thoughts in the direction of the start of the survey (Magro and
Cunha, 2017). This consultation drove through the accent liable for the audit, is planned to offer
a threat to the survey amassing to consider how the affiliation may want to supply distortion.
Estimating accounts:
Comprehensible area for coercion is in accounting checks. Since accounting measures are
subjective, the enterprise may additionally have the capacity to affect accounting assessments to
manipulate the cash associated clarifications. Analysts test for distortion in accounting measures
in two critical behaviours (Kostova, 2012).
Entry Testing of Journal:
Since giving material fiscal verbalization distortion often expects changes as consistent with the
affiliation's budgetary data, evaluators will test the affiliation's journal regions for any symptoms
of control. To play out this take a look at, in the wake of grabbing a cognizance of the
affiliation's controls and frameworks, the examiner will settle on a decision from the
association's journal sections.
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4: Possible risks offshore outsourcing of various information systems functions,
Outsourcing of information system functions is very common in mid-size business firms because
it generates various benefits for business but there are several risks which are also associated
with the same outsourcing and the same are explained as follows:
Data Security related risks: data related security can be decided in following
Data security is the very crucial matter for every business organisation because data is one of the
most important assets of a business. When the IS functions are shared with an outsider, the
security and privacy of data lost (Nduwimfura and Zheng, 2015). In other words, an outsider gets
access to internal information of business and organisation loss the control over its own data.
Secrets related to trade policyis also becomes available for the third party which is like an
intelligence asset for the organisation and the leak of a trade secret may generate heavy losses for
the organisation.
Loss of privacy insinuates concerning data on staff and clients. Information recognized with
back, Employee facts, ID numbers and portions are secured within the path of movement of
affiliation. For example, if information related to pay of an affiliation receives spilled with a
contender, they could use it to break the skilled workforce of the company. Besides, facts on
clients are likewise secured in the association machine (de-Sá-Soares, et. al., 2014). Information
can be related to credit card, account facts, prosperity data, et. If clients wind up organized that
their personal information is being bestowed to an outcast and probably being discharged, the
effect of same can be opposed for affiliation
Complete dependence on the third party: Complete dependence on the third party may cause
serious impact on the business of an organisation. During the in-house processing of data, the
internal technical staff of the company can manage the data processing as per the specified need
of business time to time but a firm which provides outsourcing services to various parties cannot
change the data processing system for a specific business. Thus, the business will require
spending extra funds to take extra specific services.
Difficulty when a relationship ends:
If the relationship closes, the greater difficult position will be a rise for the affiliation. There are
various instances that would purpose the difficult end of an outsourcing courting. For example, if
the outsourcing firm faces budgetary issues, it could be forced bankrupt. If the affiliation is
confined to find a fast substitution, this will be uncommonly tough to do and the affiliation
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would lose the idea which becomes made. In case the association shuts the outsourcing
relationship, review that the pariah company has converted right into a pro regarding the IT
additives of association and the association catastrophe such inclination. Therefore, the
outsourcing firm has loads of energy to make exchanges; and the association will land up
prisoner to the outsourcing company.
Loss of knowledge:
If a company outsource its It workings, another threat is knowledge loss. When the IT functions
internally processed, company have significant special knowledge about the information system
and technology along with skilled employees which can handle any adverse situation but when
the process get outsourced, company does not have control on the process and also loss the depth
knowledge related with IT system and knowledge is like asset in modern business environment
(Varajão, et. al., 2017).
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Conclusion:
After making detailed research, it is concluded that the outsourcing of information system is a
controversial matter because it provides various advantages along with various problems. It
generates various benefits like cost saving, expertise working but several problems like the risk
of data leak and loss of knowledge. It is also proved that the negative situation which was faced
by the Read-All, arise due to improper management and planning strategies and report gives
various ideas to ensure Rescue from that situation. A detailed discussion is also made in above
report about the security awareness program and some advisory points are advised for the user
which can be used to increase the quality of such programs.
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12. TEME, E., 2013. Audit Procedures for Disclosure of Errors and Fraud in Financial
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