Case Study: Rainbow Illusion

Running head: CASE STUDY- RAINBOW ILLUSION
CASE STUDY-RAINBOW ILLUSION
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Author Note

CASE STUDY- RAINBOW ILLUSION
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Executive Summary:
The report is prepared to evaluate the rainbow Illusion sales transaction and its related control
system. In this regard, the management reporting system, several transaction cycles and the
financial report of the company has been analyzed. The current issues faced by the internal
control system of the company has been illustrated by highlighting the specific problems in
relation to the transaction cycle of sales. Later section of the report presented various factors that
depicts the advantages of distributed computer system as against centralized computerized
system.

CASE STUDY- RAINBOW ILLUSION
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Table of Contents
Introduction:........................................................................................................................3
Discussion:...........................................................................................................................3
Identifying the strengths for controlling sales transactions of Rainbow illusion-...............3
Identification of problems avoided by sales controlling transactions system:....................6
Identification of two situational pressures influencing the likelihood of fraud:..................7
Outlining the reasons for installing a distributed computer system than a centralized one:9
Conclusion:........................................................................................................................10
References list:...................................................................................................................11

CASE STUDY- RAINBOW ILLUSION
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Introduction:
The risks, processes and internal control for the revenue cycle of Rainbow Illusion is
prepared in this report. The evaluation of internal control system is assessed by the power of
illusion system which controls the sales transactions. Along with the power that has been
identified, the problems that are avoided by the sales controlling transactions system are also
explained. The situational pressures that tend to increase the tendency of fraud for Rainbow
Illusion, two of these pressures are illustrated in this report. The collation between the distributed
and centralized computer system is assessed in terms of internal control system explaining the
reasons of installing the first.
Discussion:
Identifying the strengths for controlling sales transactions of Rainbow illusion-
This section discusses about the six strengths of internal control system of Rainbow
Illusion. They can be explained as follows-
The power of the system to control sales transaction is remained in the productiveness
and simplicity and in managing and controlling the sales transactions along with the wide
acceptance of its regular application by the employees of the organization (Sun et al. 2017).
 A proper structure of authorization is maintained by the Rainbow Illusion for the
sales transactions. The consistent structure of authorization is one of the elements
of strong internal control which helps in detecting any fault or fraud in the
transactions. Sales invoice is scrutinized efficiently due to the presence of proper
verification structure, where the invoices are passed through. The sales person is
responsible for the preparation of sales invoice. The invoice is then sent to the