Introduction to Accounting Information System - Pdf

Accounting Information
System

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Flowchart diagram...........................................................................................................................3
PART B............................................................................................................................................4
Internal control weaknesses relating to Chips expenditure..............................................................4
Impact of such internal control weaknesses on organization...........................................................7
Specific internal control that could be implemented.......................................................................7
CONCLUSION................................................................................................................................8

INTRODUCTION
Accounting information system is a computer based system software which deals with
the collecting, sting, processing and analyzing the financial transaction a business concern. The
reports generated by such information system are an important tool for the management that
assists them in their decision making (Maskell, Baggaley & Grasso, 2016). Different types of
accounting information system are ERP, SAP etc. In the present project report, there will be two
part in which part A will show a flow chart which will reflect the activities from purchase
requisition to payment system in Oriental Trading. Part B will show internal control weaknesses
in Chips, a manufacturer of computer parts and the impact of such weaknesses on the
organization.
PART A
Flowchart diagram
The expenditure starts with and ends in the chronological order as mentioned below:
purchase requisition prepared made by head of purchase department
1. Sent to purchase department
2. Verification of the requisition by purchase clerk
3. Reviewing of suppliers and placing of purchase order
4. Copies of purchase order sent to purchase department head, receiving department and
accounts payable department
5. Receiving department receives goods
6. Informs to Purchase order and filing of the same by receiving clerk
7. Receiving department gets copy of purchase orders and matches the quantity and actual
goods received
8. If any difference, then red line is marked and such stamped document is sent to purchase
department head
9. Accounts payable files the purchase order
10. Invoices are sent to the accounting department for authorization