Adams & Co Case Study - Analysis of Expenditure Cycle

Running head: ADAM & CO CASE STUDY 1
Adam & Co Case Study
Name
Institutional Affiliation

ADAM & CO CASE STUDY 2
ADAM & CO CASE STUDY
Executive summary
This report provides a complete analysis of the Adams and Co business. The company is
based in Adelaide. Its main purpose is provision of art wholesalers. Adams and Co has a
centralized accounting system with various networking terminals. The terminals operate in
different locations. This report, therefore, is composed of various analysis of the company’s
expenditure cycle. Within the discussion, three of the rationale system will be analyzed;
purchases system of the company, cash disbursement system of the company, and the payroll
system of the company. The beginning part of the report will mostly discuss an over view of the
conceptual systems. The Data Flow Diagram will mostly be discussed in the second session. The
system flow chart is then discussed with focus on the potential strengths and weaknesses of the
system. The risks of the system will also be analyzed using the same system chats.

ADAM & CO CASE STUDY 3
Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................3
Purchase system data flow diagram.................................................................................................4
Cash disbursement systems.............................................................................................................8
Pay roll system.................................................................................................................................9
System flow chart of the purchase system.....................................................................................11
System flow chart of the cash disbursement..................................................................................12
System flow chart of payroll system.............................................................................................13
Internal control weaknesses and risk in the systems.....................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

Purchasing Department
Inventory Warehouse
Cash Disbursement Department
Monitor inventory records
Updates inventory records
Receives Goods
Prepares Digital Purchase Order
Updates Inventory Control AccessUpdates AP Control Access
Updates digital AP subsidiary ledger
Valid Vendor File
AP Pending File
Vendor
Account Payable Department
Inventory Subsidiary Ledger
Receiving File
Digital purchase order records
Purchase order copy 1
Purchase order copy 2
Receiving reports copy
Receiving report copy 2
Sends invoice
Sends invoice
Inventory level
ADAM & CO CASE STUDY 4
Introduction
The expenditure cycle is developed to enable the conversion of a company’s financial
resources, human resources and physical assets be used for various functions within an
organization. The focus of this paper is to highlight and provide an analysis of expenditure cycle
of the Adams and CO company. The paper then goes ahead to complete an analysis of the
relevant weaknesses and strengths that the system has. The report is supposed to aid the COO of
the company Adams and Co evaluate the risks, internal processes and come up with own
adjustments for the expenditure cycle.
Purchase system data flow diagram