Strategic Information System for Business and Enterprise

Report
Table of Contents
Report................................................................................................................................1
Executive Summary...........................................................................................................1
Transaction cycles.............................................................................................................3
Types of transaction cycles:...........................................................................................3
Financial Reporting............................................................................................................3
Financial reporting components:....................................................................................3
Objective of Financial Reporting....................................................................................3
Importance of Financial Reporting.................................................................................3
Management Reporting System........................................................................................4
Reasons for acquiring management reporting system..................................................4
Fundamentals of an effective management reporting system.......................................4
E-commerce.......................................................................................................................4
E-commerce technology.................................................................................................5
Data flow diagram of purchases system...........................................................................6
Data flow diagram of cash disbursements system............................................................7
Data flow diagram of payroll system..................................................................................8
System flowchart of purchases system.............................................................................9
System flowchart of cash disbursements system............................................................10
System flowchart of payroll system.................................................................................11
Internal control weakness in each system and risks associated with the identified
weakness.........................................................................................................................12
1. Purchasing system:...............................................................................................12

1. Separation of duties...........................................................................................12
2. Authorization.......................................................................................................12
3. Assets security...................................................................................................12
4. Review and reconciliation...................................................................................13
2. Cash System..........................................................................................................13
1. Accountability.....................................................................................................13
2. Security of assets...............................................................................................14
3. Review and reconciliation...................................................................................14
3. Payroll System.......................................................................................................14
1. Separation of duties...........................................................................................14
2. Authorization.......................................................................................................15
3. Security of assets...............................................................................................15
4. Review and reconciliation...................................................................................16
Conclusion.......................................................................................................................16
References.......................................................................................................................17

Executive Summary
This detailed report contains essential concepts about strategic information system for
business and enterprise. Some of these concepts that are explained include transaction
cycles, financial reporting, management reporting systems, e-commerce, and various
internal controls weaknesses and risks. In every business identifying transaction cycles
and particular tasks within the cycles, are very important to determine the efficiency and
effectiveness of a business and every report of each transaction cycle play a role in
business efficiency. For financial reporting, the department in charge should provide
financial reports and statements accurately and timely thus enabling better decision
making. In the business or an enterprise, there must be a way in which information is
provided to different personnel at various management levels in order to plan, control,
and make decisions which will have a positive effect to the company. Due to the
advancement in technology more so internet, there is increased urge in increasing the
delivery speed in the business where e-commerce that relies on the internet
accessibility has such feature hence the need of e-commerce in businesses. The
Internal Control processes within a business or organization are put in place to make
sure information is accurate reliable, on time, the organization assets are well protected,
laws and regulations are adhered to, and resources are used efficiently and in an
economical way whereby they still have weaknesses and risks. Internal controls basic
intentions are irregularities and errors prevention, problems identification, and ensure
that actions are taken correctively.

Introduction
Strategic information systems implementation in business strategies expose a business
to better opportunities. These strategies may be about financial reporting, e-commerce
or even transaction cycles strategies which affect business growth and also internal
control practices should also be considered and if they are not considered there are
risks associated with them. Some of these strategies and internal control practices are
discussed below:
Transaction cycles
Basically, transaction cycles are the interlacing transaction of a business or businesses.
These cycles may be separated in accordance with particular functions such as
purchases, payments, finances, payroll or sales.
Types of transaction cycles:
1. Payroll cycle. This is whereby a business handles everything about employee
payments. Some of the functions of this cycle are: Issuing payment cheques,
taxes deductions, recording of the time of every employee, overtime worked
hours verification
2. Purchasing cycle. This type of cycle is where the business deals with the order
purchases form different and convenient suppliers. Supplier payment and
receiving of goods.
3. Sales cycle: It handles the orders from the customers, review and corrects it.
4. Financing cycle.
Financial Reporting
Financial reporting is a process of revealing financial information of a business over a
particular period of time to the stakeholders (creditors, investors, government) where
this information is all about financial status and performance of the business/ Mostly,
financial reporting is done quarterly or annually.

In every department f a business or organization records and reports about their
financial state to stakeholders. Most of the departments' functions may be dependent or
interdependent where they are all linked to the finance department. So, Financial
Reporting is the very essential and critical activity of any business or company that is
either making a profit or not. (Elliott and Elliott, 2009)
Financial reporting components:
1. Finance statements which involve loss accounts, such flow statements, balance
sheet, profit accounts
2. Financial statements’ notes
3. Financial reports that are quarterly and annually
4. If it is a public company, management analysis and discussion are done
Objective of Financial Reporting
Financial reporting has a major objective which is providing financial information of a
business which states the financial position, financial performance, and any financial
change to help in making decisions.
Importance of Financial Reporting
1) Assist the business to agree and do according to the regulatory requirements
where quarterly or annual reports should be published in the business or
company is listed.
2) It enhances the auditing of financial statements in a company
3) Enables the stakeholders to easily plan, analyze and make financial decisions
effectively.
4) It enables the business to easily identify means of getting capital.
5) If a company has well-furnished financial statements and reports, it is able to bid,
contract labor, etc.

Management Reporting System
A management reporting system is a phase in the control system under management
that provides information to the business. This information includes various statements
and reports in the business (Antonelli, de Almeida, Colauto, & Longhi, 2014). These
management systems help in making sure that information is timely for the effective
running of activities thus making them very important in any business.
Reasons for acquiring management reporting system
Management reporting systems assist getting data that is required by executive such as
managers to make decisions in a business. The data may be about finance, the number
of employees, salaries customers or clients, products or services, business assets,
performance in investments, etc. Management reporting has a wide scope. Frequent
reports requirement for decision making and analyzing the trends in business. It helps to
eliminate data redundancy while may result in an error (Mancini, Dameri, & Bonollo,
2016).
Fundamentals of an effective management reporting system
An effective management system should generate better reports which are timely,
proper information flow, and format used should be correct and easy to understand
 Flexibility-The management reporting system should be flexible in such a way
that it responds to the requirements set and show some insights when standards
that are predefined are deviated from. If management reporting system is
localized, it simplifies the processes to be carried out.
 Accuracy of the system is expected. In terms of reporting, there shouldn't be any
inconsistency or discrepancy. Due to the way the system is involved in critical
company information or results, it's a must for it to be accurate.
 Cost efficiency. It shouldn't be hard for assembly of reports where they should
also provide acceptable cost justification and with a better cost efficiency