The report discusses the case study of Bell Studio, a wholesaler art service, and analyzes the internal weaknesses and risks associated with its transaction, purchasing, and payroll systems.
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Running head:STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Strategic Information for Business and Enterprise Name of Student- Name of University- Author’s Note
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1STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Executive Summary The report consist of case study of the Bell Studio which is famous as a whole seller art service. The company consists of transaction system, the management system and the report systems that are used for detailing the working processes in the company. The working process consist of transaction that takes place in the company, the purchasing process of materials from different other countries and the payroll system about how the employees are paid in the system and how their data are kept recorded in the system. The business of Bell Studio carries out its working process with a centralized computer based system and all the processes are dome manually in the system. This report states all those related systems and the internal weakness that might occur in the internal working process of the system. The weakness are defined in this report stating which risk it might follow.
2STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Table of Contents Introduction........................................................................................................................3 Data Flow Diagram of Purchases and Cash Disbursements Systems.............................4 Data Flow Diagram of Payroll System...............................................................................5 System Flowchart of Purchases System...........................................................................6 System Flowchart of Cash Disbursements System..........................................................7 System Flowchart of Payroll System.................................................................................8 Internal Control Weakness and Risk Associated..............................................................9 Conclusion.......................................................................................................................10 Bibliography.....................................................................................................................11
3STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Introduction Bell Studio is one of the most famous whole seller of art materials and it imports materials from different other countries. The company has to store the details of all the vendors associated with the company for placing the order. The order that by placed by the purchasing clerk of the company first checks the inventory and then purchases materials accordingly. All these activities are carried out manually. The Bell Studio incorporates all the activities done manually. The transaction process, the financial reporting process and the management process is explained in this report with the help of data flow diagrams. The diagrams states how the working process is being carried out by the system of Bell Studio. There are data flow diagrams depicting the flow of data in the system. There are system flowcharts that shows how the three sub-systems works in the system. This report also details the weakness that each sub system includes while dealing with the process. As the working process is carried out manually, there are many flaws in the system of Bell Studio. The company needs to finds out those internal weakness and the risks associated with the weakness. As a business analyst of the company, this report is written to the Chief Operating Officer so that the risks associated with the working process can be evaluated. The detail of the business process is detailed below in this report.
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4STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Data Flow Diagram of Purchases and Cash Disbursements Systems Figure 1: Data Flow Diagram of Purchases and Cash Disbursements Systems (Source: Created By author)
5STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Data Flow Diagram of the Payroll System Figure 2: Data Flow Diagram of Payroll System (Source: Created By author)
6STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE System Flowchart of Purchases System Figure 3: System Flowchart of Purchases System (Source: Created By author)
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7STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE System Flowchart of the Cash Disbursements System Figure 4: System Flowchart of Cash Disbursements System (Source: Created By author)
8STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE System Flowchart of Payroll System Figure 5: System Flowchart of Payroll System (Source: Created By author)
9STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Internal Control Weakness and Risk Associated SystemInternal Control Weakness Risk Associated Purchasing System1.Theprocessis dependentonthe purchasingclerkofthe system. 1.1 The system takes long time to complete the work and as there might also be humanerroriftheclerk makessomemistake. (Hockerts 2015). 2. The purchasing process orthemanagement process is too slow. 2.1 There might be a risk of not satisfying customer demandasbecausethe orderingofproductsare notautomatically.Ifthe clerkisnotavailablefor somereason,thatmight lead to stop the purchasing material in the system. 3.Handlingoffilesand documentsisanother internalweaknessofthe system (Haynes 2015). 3.1 As the files and receipt aretakenfromone departmenttoanother, theremightbehuman errorofmissingthefile. Thereceiptmight notbe handledproperlywhen needed for cross check. Cash Disbursement System 1.Inthistransaction system, there might be a riskofsubmittingwrong chequeorwritingwrong numberonthecheque. This might lead to loss of thecompanyormight createanissueinthe payment procedure. There might be mistake in writing the cheques as it is done manually. 1.1Riskincludeis companylossandface difficultiesinmatching budget sheet. 2. The payment procedure isdonethroughcheque and encashment of cheque isalongprocess.The employeehastowaste theirtimeandeffortin encashing the cheques. 2.1 Risk is losing customer retentionaspayment procedure through cheque mightresult inloosingof chequeandtakinglong timetocompletethe transaction.(Upwardand
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10STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Jones 2016). 3.Chequemightbe misplacedandtherecan be wrong value written on thecheque(Woerkomet al. 2016). 3.1 Risk is managing the budget of the system. If the cheques are misplaced or valueofchequesare writtenwrong,thenthe companyfacesriskof matchingthebudgetof process. Payroll System1. Extra burden of paying a chequeinbankinthe company account so that the employee can get their requiredmoney(Collier 2015). 1.1 Risk of handling long processandinsufficient system(Korablevaand Kalimullina 2016). 2. The payroll clerk makes copiesofregistersand files and while coping the contents,theremightbe some mistak (Wellin 2016). 2.1 Risk that is involved is the human risks that might occur while making copies oftheregisterand cheques (Safari, Faraji and Majidian 2016). 3.Theemployeemight unethically input their entry time and exit time of their working hours as different and it is not possiblefor thesupervisortokeep noticeonallthe employees (Quirke 2017). 3.1 Risk of lessening the productivityofthe company and risk of loss of money as because the employeesarepaidon theirworkinghoursin officeandmoreworking hourswillleadtomore paymentofmoney (Luftman, Lyytinen, and Zvi 2017). Conclusion Theabovereportsstatesthebusinesstransactionprocess,management process and the purchasing process of the operation methods carried out in Bell Studio. As mentioned above, Bell Studio is one the most leading company of art supplies and imports materials from all over the world. The company presently deals their working operationsmanuallyandhasacentralizedaccountingsystemformanagingits businesses. The company also handles its data manually by maintaining files for each department and process. The files are manually transferred from one department to another. The report above shows the data flow of the transaction process, data flow of the purchasing process and the data flow of the management process that is carried out by
11STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE the centralized accounting system. This report also states the details of the system flowchart of all three systems in the organization. As the organization carries out centralized accounting information system, there are many flaws that the company has to deals with. The weakness that might occur in the system are human risk, monetary risk, security risk and many other. All those risks are explained in this report stating the details of the risk and the internal weakness that is occurred in the organization because of the accounting information system.
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13STRATEGIC INFORMATION FOR BUSINESS AND ENTERPRISE Wellin, M., 2016.Managing the psychological contract: Using the personal deal to increase business performance. Routledge. Wheelen,T.L.,Hunger,J.D.,Hoffman,A.N.andBamford,C.E.,2017.Strategic management and business policy(p. 55). Boston: pearson.