HA2042 Accounting Information Systems Case Study: Adam & Co. Analysis

This case study examines the accounting information systems of Adam & Co., a wholesale supplier. The analysis focuses on three key systems: payroll, cash disbursements, and purchases. The study includes flowcharts illustrating the workflow within each system, from input to output. It also evaluates internal controls to identify potential weaknesses and proposes solutions to mitigate risks. The payroll system, cash disbursement system and purchases system are analysed in detail, including the inputs, processes, and outputs. The case study highlights the importance of a controlled accounting system and the need for cognitive presentation abilities for effective decision-making. The report also provides recommendations to improve the systems and enhance efficiency within the organization. The assignment provides a detailed overview of the accounting processes and internal controls within the company, highlighting potential weaknesses and suggesting improvements.

Running Head: ACCOUNTING INFORMATION SYSTEMS
Accounting Information Systems
Name of the Student
Name of the University

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Executive Summary
The detailed evaluation of the report focuses on Adam and Co.’s three main
procedures for the accounting system the payroll calculation system, cash allotment system
and purchases system along with the flowcharts. There are flowcharts for all the three
systems in order to highlight the workflow and to show how all the data is being managed by
the different levels of the department. The flowchart will highlight all the key efforts for
output and input to every next team in the department.
The report also includes the various controls systems to recognize any possible
limitations or disadvantages that might exist in the abovementioned departments. The control
system is also provided with the resolution for all the weaknesses that the department faces.
Therefore, the control system helps to eliminate any kind of risks that are related to the
weaknesses.

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Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................4
Purchases System..................................................................................................................................4
The flowchart.....................................................................................................................................4
Internal Control.................................................................................................................................8
Cash disbursements system..................................................................................................................9
The flowchart.....................................................................................................................................9
Internal control................................................................................................................................12
Payroll System.....................................................................................................................................12
The flowchart...................................................................................................................................12
Internal control................................................................................................................................15
Conclusion...........................................................................................................................................17
References...........................................................................................................................................18

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Introduction
In an organization, it is important to have a controlled accounting system for any kind
of data or information processing. Conversely, on any accounting system if the
comprehensive variety is connected than it is important to have cognitive presentation ability
for every system of the department. This system will facilitate the higher executives to put
together a decision based on precise field, which is obtained from the presentation that needs
instant attention (Prasad, Acklesh and Peter 2015).
The detailed assessment of the report is based on the organization named Adam and
Co. The company is a wholesale supplier that deals with its item from Perth and transports in
the mandatory purchase globally from Vietnam, Thailand, and China. The company’s
complete accounting cycle or flowchart is divided into different processes that include the
payroll calculation system, the cash allotment system and purchase system.
Purchases System
The flowchart
In Adam and Co. organization, the complete purchase system is programmed to a
definite amount relating to the resources for sales. The below flowchart is a highlight for
complete purchases system of the organization.

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In order to manage the complete purchase system of the organization, the flowchart is
important and helps us to understand the different processes that are necessary. The main or
the first part of the flowchart is the inventory that boot starts the process. The purchase
system department looks after the inventory receipt in order to discover any kind of inventory
shortage. If the department finds any then it is quickly reordered, after examination the

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inventory subsidiary ledger the company is accounted. As seen in the flowchart, this results in
the seepage of purchase system order that will eventually result in a merchandise inflow
along with a dealer invoice and packing slip.
The scrutiny of the received merchandise is the next step of the flowchart. The
receiving department of the system handles the process by understanding the dealer invoice
and packing slip thus making sure of the creation of a delivery report. The report is printed as
two copies and the inventory clerk sends one copy to the inventory department for later filing
and another copy is dispatched to the depart of accounts payable that are accountable for the
understanding of the delivery report. The dealers’ proof of purchase and the digital purchase
order eradicates any inconsistency that might occur. The primary function is to update the
system in its own general heads of both subsidiaries and manage the inventory ledger
management and the payable accounts ledgers. Lastly, after eliminating all the material errors
the rationalized service copy is sent to the cash expenditure team (Komala 2017).
Internal Control
There needs to be an efficient internal control system for the purchase system as a
huge part of this system is programmed. The internal control system will make sure about the
continuous workflow all over the system. The definite weakness and their possible resolution
that might happen in the future are:
 A wholesaler subsystem does not exist for the generation of the demand of an object.
For this kind of instance, there should be a system in place that would maintain the
entire supporting ledgers, which contains comprehensive information about all the
possible vendors in the area including the services and cost of products offered by
them (Cho and Lee 2016). This will help with the new demand, as it is easy to
crosscheck and the system will resolve any trouble of vendor inaccuracy that might
happen in the system.
 The information supply will be inaccurate in all the forthcoming days if false
information is supplied at the end of the day. An organized system needs to be in
place for the entire department even though the organized accounts are being
sustained for particular ledgers. The control system is there to check the effectiveness

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of the department. The various departments have their own confirmation system that
is indulged to check the details at least two times.
Cash disbursements system
The flowchart
This system plays a vital role in sufficient reimbursement delivery for both the vendor
and the subsequent system that incorporates employees. It also acts as a representative for
those who have worked in the direction of the efficient delivery of the merchandise. The cash
disbursements system’s nuances are highlights through the flowchart:

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The receipts as in the form of the purchase order, dealer’s invoice and the delivery
report is the main entry point for the flowchart of the cash disbursement system from the first
department of purchase system, the receiving report and the digital purchase order. In order to
uphold a good relationship with the vendors, the system is accountable for its satisfactory and
timely disbursement. The system’s clerk recognizes the due date of disbursement from the
entire abovementioned invoices and once the reconciliation is done then it will arrange a
cheque for a vendor. For the final disbursement from the cheque, it should be sent to the
organization’s treasurer in order to attest it (Herrera-Cáceres and Ibeas 2016).