Strategic Information Systems for Business and Enterprise

Bell Studio Systems 1
STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND ENTERPRISE
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Bell Studio Systems 2
Contents
1.0. Introduction...............................................................................................................................2
2.0. System Description....................................................................................................................3
2.1. Data Flow Diagrams...............................................................................................................3
2.1.1. Purchases and Cash Disbursement Systems..................................................................3
2.1.2. Payroll System....................................................................................................................5
2.2. System Flowchart..................................................................................................................6
2.2.1. Purchases System..........................................................................................................6
2.2.2. Cash Disbursement System............................................................................................8
2.2.3. Payroll System Flowchart...............................................................................................8
3.0. Internal Control.........................................................................................................................9
3.1. Purchases System................................................................................................................10
3.1.1. Authorization...............................................................................................................10
3.1.2. Procurement process...................................................................................................10
3.1.3. Assignment of tasks.....................................................................................................11
3.2. Cash Disbursement System..................................................................................................11
3.2.1. Lack of oversight..........................................................................................................11
3.2.2. Lack of Payment Review process.................................................................................11
3.3. Payroll System.....................................................................................................................11
3.3.1. Manual data input.......................................................................................................12

Bell Studio Systems 3
Executive Summary
Bell Studio, an Adelaide art wholesaler hired an analyst to assist in analyzing the
various transaction cycles, financial reporting, and management reporting of its enterprise
system. Consequently, the system was divided into various subsystems that interact with
each other. These subsystems were the purchasing modules, cash disbursement, and payroll
modules. Each was represented using data flow diagrams and system flowcharts. After this
undertaking, each was analyzed for various internal control weaknesses. As a result, several
weaknesses were discovered in each of the subsystem. For this reason, the risk associated
with each internal control weakness was described. Weaknesses found include the lack of
properly defined procurement process, lack of managerial oversight and authorization, lack of
user authentication and lack of transaction monitoring process.
1.0. Introduction
Enterprise resource planning systems enable businesses to integrate various resources
and business processes towards achievement of the company’s goals. This helps address
various business concerns than cannot be addressed by other types of information systems
(Alrawashdeh, Muhairat and Qatawneh, 2014). This leads to cost reductions in operations
and ability to respond to users needs. However, due to uniqueness of each business’
processes, there is no one standardized model of implementing business information systems.
Therefore, analysis of each system becomes crucial in determining whether the system works
as expected. Additionally, it becomes imperative to determine whether the system exposes
the company to any risks associated with dependence on such a system. For this reason, this
report analyzes the Bell Studio Inc. information management system. This process will
include a discussion of various internal control weaknesses and their associated risk
implications to the company.

Bell Studio Systems 4
2.0. System Description
System analysts use various methods in describing computer information systems.
However, Data Flow diagrams and System flowcharts are commonly used to describe
computer systems. A data flow diagram (DFD) is a diagrammatic representation of the flow
of various processes and data across the system (Dobesova, 2014). This provides a visual
understanding of the system (Yakubu et al., 2011). Similarly, system flowchart is a visual
representation of the data flow in the system and hence the system process model (Ibrahim
and Yen, 2010). The main difference is that the system flowchart focuses on the flow control
and execution sequence of the process while DFDs focus on flow of data.
2.1. Data Flow Diagrams
2.1.1. Purchases and Cash Disbursement Systems
Purchasing systems are crucial in managing inventory and monitoring of stock. This
assists companies in understanding what to buy, when and from whom. Cash disbursement
system enables companies to handle payments effectively. The two systems are closely
related since the purchasing system depends on the latter to settle payments for goods
acquired. Similarly, the cash disbursement depends on the purchasing system to determine
what needs to be paid for and the amount. The two systems form a subsystem that can be
accurately represented using data flow diagrams. Data involved in this subsystem include
vendors, purchase orders, receiving reports, accounts payables, and inventory lists