Internal Regulatory Flaws in Bell Studio ERP System

Bell Studio ERP 1
BELL STUDIO COMPUTER INFORMATION SYSTEM
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Bell Studio ERP 2
Contents
1.0. Introduction...............................................................................................................................3
2.0. Bell System Diagrams.................................................................................................................3
2.1. The Purchasing and Cash Disbursing System Data Diagrams.................................................4
2.2. Employees Salary Payment (Payroll) System.........................................................................6
3.0. Bell Studio Subsystem’s Flowchart Diagrams............................................................................7
3.1. Bell Studio Purchasing Module..............................................................................................7
3.2. Bell Studio Cash Disbursing System.......................................................................................9
3.3. Employees’ management System Flowchart(Payroll)............................................................9
4.0. Internal Regulatory Flaws........................................................................................................10
4.1. Purchasing, Cash Disbursing Systems..................................................................................11
4.1.1. Absence of Authentication Mechanism.......................................................................11
4.1.2. Absence of Approval Process.......................................................................................11
4.1.3. Inexistent Monitoring Process.....................................................................................12
4.1.4. Absence of Separation of Duties..................................................................................12
4.1.5. Dependence on Human Manual Actions......................................................................12
4.1.6. Absence of Auditing and Transaction Tracking Mechanism.........................................13
4.2. Payroll/Employee Management System..............................................................................13
4.2.1. Absence of Authorization Mechanisms........................................................................13
4.2.2. Absence of Automated Employees’ Time Management Controls................................14
Absence of Employees’ Data Verification System........................................................................14
4.2.3. Lack of authentication..................................................................................................14
5. Conclusion.......................................................................................................................................15

Bell Studio ERP 3
Strategic Information Systems for Business and Enterprise
Executive Summary
Bell art company hopes to get an analysis of its enterprise information system to
discover various vulnerabilities that exists within the system. Consequently, the system was
decomposed into various subsystems and discussed using data flow diagrams and system
flow diagrams for the various components. After careful analysis various subsystems of the
ERP system, various challenges in the internal control of the systems were discovered. The
most occurring weakness of the system was the lack of authorization and monitoring and
verification processes. These and other weaknesses were therefore discussed in relation to the
risks they pose to the operations of the company.
1.0. Introduction
Strategic information systems enable businesses attain a high level of competitive
advantage by streamlining their operations (Altaf and Khalil, 2016). These systems are
created to operate in accordance to the business model of the organization. Businesses that
employ strategic information systems reap many benefits such as reduction of costs.
Additionally, computer systems help reduce or prevent fraud that may occur during execution
of transactions. For successful application of computer systems, understanding their
operations, models and control mechanisms is important. This paper seeks to dissect the Bell
Studio computer based ERP system in terms of its structure, operations and control
weaknesses that might exist within the system.
2.0. Bell System Diagrams
Data flow diagrams enable us to visualize the model of the system under discussion
(Ibrahim and Yen Yen, 2010). Various system modules can be decomposed into individual

Bell Studio ERP 4
subsystems and represented using data flow diagrams. This section is going to present data
flow diagrams for purchases and cash disbursement, and payroll subsystems.
2.1. The Purchasing and Cash Disbursing System Data
Diagrams
The purchasing and cash disbursing modules are crucial for Bell Studio operations.
Most transactions take place on this part of the system. Consequently, the area has huge
security impacts on the system. This makes internal controls on this part of the system
necessary to ensure that the company does not lose money. In most companies, fraudulent
transactions start on this part and progress to other areas where identifying and controlling
them is impossible unless thorough audit of the whole system takes place. For Bell Studio,
the main actors on this part are the Purchasing Clerk, Receiving Clerk, Accounts Payable
Clerk, Cash Disbursement Clerk, and the Treasurer. Each of these members has a role to play
in the progress of the transaction.