Risks in Conversion Cycle of Central Production Limited

STRATEGIC INFORMATION SYSTEMS FOR BUSINESS AND
ENTERPRISE

Q1. Identify the risks exist in the conversion cycle of Central Production Limited.
The term conversion cycle refers to the time required for the completion of a manufacturing
organization starting from the need for a stock of raw materials up to the collection of a finished
product. Nowadays, there are different types of transformation cycles such as the cash
conversion cycle, the inventory exchange cycle and so on, which the company uses to achieve
efficiency and performance level. It is also useful in identifying risks that are harmful to society
and that help implement operational control measures to reduce the bad luck caused by these
risks. In the given scenario of the creation of a limited vehicle, since the physical development of
the stocks is distributed among various departments and agents, it is essential to have significant
internal control measures.
The following are some of the risks that exist in the conversion cycle:-
1) Authorization of transactions: There is a risk of entering an exchange more than once due to
unclear subscription. To mitigate this, all producers should follow the accumulated rules for
different exchanges, such as following a list of fixed values, to ensure the least amount of error.
Likewise, a pair of designated employees should rely on the important companies identified by
their areas of expertise as the creator of this position, who is responsible for the bill of products
on- line and course charts updated to reflect the human error.
In addition, there are some exchanges that require clear approval and unambiguous observation
and should be managed in this way by an experienced supervisor.
2) Segregation of Duties (SOD): It is a basic structural square of the risk of support for operators
and controls within a company. The SOD rule is based on the shared functionality of a key
approach that spreads the basic elements of that approach to multiple people or departments.
Without this distinction in the main procedures, the risks of extortion and error are much more
realistic. Each company has a unique ability to grasp. Risks for effective efforts have particular
"bias loops", risks of misfortune caused by hatred or error, show risks and legal risks in some
random companies.

Q2. Discuss the internal control weaknesses and risks associated with the above process.
Financial reporting system: a diagram of the financial details framework (FRS) of the
association's budgetary activity. The data on the society's cash position is also released by the
FRS.
Customers out there want financial information that FRS will bring in. This is because the data
reflects the entirety of society's presentation.
The weakness of control is a disappointment regarding the performance or operational feasibility
of internal controls. Infectious entertainment can use a lack of internal control to circumvent
even the most sincere security efforts. The wide range of internal controls, the new innovations
are incredible, and the level at which malware advances must keep an eye on information
security checks. Authorization checking usually allows associations to test the operational
feasibility of their internal controls and find flaws in their performance - before terrorists can
abuse them.
The internal weaknesses and risks associated with the above process have been discussed below:
 The above process is unable to maintain data security controls to keep file safe and make
backup of the same.
 Another loop hole in the process is technical control weakness which sometimes can
result in configuration failures and loss of important information’s from the system.
 Operational control weakness has also been seen in the process due to which failure can
be seen while establishing standards and policies.
 Administrators and owners do not see the need to make complex agreements and
procedures or even basic flowcharts that reflect key business formats, given that some
independent companies have some ways to gives the impression that they are simple. Be
that as it may, it is probably one of the most underused control devices where the greatest
value can be brought in with a little effort.