Accounting Information System Report: Bucks Phyz Analysis

This report provides an analysis of the accounting information system (AIS) of Bucks Phyz, a medium-sized company with an annual turnover of $2.5 million. The report examines the sales process, identifying internal control weaknesses stemming from data entry procedures, the new pricing tool, the authorization policy, and the credit check process. It highlights the impact of these weaknesses, such as potential data errors, fraudulent activities, and financial losses. The report also discusses the introduction of corporate credit cards and their potential benefits, while emphasizing the need for strict monitoring. Recommendations include restricting access to the ERP system, providing proper training on the pricing tool, modifying the authorization policy, and implementing a system that enforces credit checks before finalizing sales. The report concludes with a discussion on the importance of a code of conduct to prevent conflicts of interest and promote ethical behavior within the organization.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
Name of the Student:
Name of the University:
Author Note

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ACCOUNTING INFORMATION SYSTEM
Executive Summary
The situation that has been proposed in the case study is that as a part of delegating the
role of the accountant of Bucks Phyz , the sales process of the company has to be reviewed. The
reviewing has to be carried out on the basis of the key information that has been derived from the
interview of the staff and other related personnel. The decision of introducing corporate credit
cards has also been analyzed in this particular study.
The purpose of this study is to look into the internal control weaknesses of the
organization, Bucks Phyz. This will help in understanding the concepts of internal control that
are implemented within an organization for the purpose of exercising improved corporate
governance.

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Table of Contents
Introduction......................................................................................................................................3
Overview of the Sales process.........................................................................................................3
Issues in the internal control in the Bucks Phyz sales process........................................................4
Introduction of the corporate credit cards........................................................................................7
References........................................................................................................................................8

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ACCOUNTING INFORMATION SYSTEM
Introduction
The information that has been provided in regards to Bucks Phyz is that it is a medium
sized company that derives an yearly turnover of $2.5 million. The issue that has been presented
in the question is that as a part of delegating the role of the accountant of Bucks Phyz , the sales
process of the company has to be reviewed. The reviewing has to be carried out on the basis of
the key information that has been derived from the interview of the staff and other related
personnel. It has also been mentioned in the case study that the company has gone through a
restructuring program that has particularly taken place within the sales team. This has been
majorly due to the changes in the operating environment that took place within the company. The
impact of the change, as mentioned in the case study has been such that the employees do not
have a clear view about the new responsibilities. There also have been fraudulent events in the
accounts department. This further states that the current condition of the company has been such
that it cannot allow any further leakage in terms of revenue. Thus, the identification of the
particular areas of concern and the implementation of the required internal controls have been
discussed in this particular study. The policy of introduction of the corporate credit cards has also
been analyzed (Heise, Strecker & Frank, 2014).
Overview of the Sales process
The sales process in Bucks Phyz that has been adopted by business pivots around the new
pricing tool that has been introduced by the sales manager. This tool can effectively impact
business in a positive way as it can effectively compute the prices of the offers that are sent out
by the executives of the organization. The authorization policy however, has not been complied
with. This is further reinstated by the Head of Sales, Barry who mentions in his interview that in
spite of the availability of a standardized process that states the particular way in which the
managers can send the offers to the customers, it is not strictly followed. This is mainly because
the standardized process has not been mapped yet (Chang, 2014).

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Issues in the internal control in the Bucks Phyz sales process
The sales process that has been monitored and evaluated has helped in the identification
of a number of weaknesses in the operational proceedings of the company. These weaknesses are
as follows:
Sales Process Internal control
weakness
Impact Recommendation
The process of data
entry
Alfred and Joy are
delegated with the
responsibilities of
entering the information
about the new
customers in the
operating system of the
company. The area of
concern in regards to the
data entry process is that
is the creation of a
pricing template. The
review of the customer
data that has been
entered into the pricing
template would be
irrational according to
the management. The
management is of the
opinion that
implementation of such
a procedure will also
affect the cost benefit
ratio. Furthermore, no
information has been
provided as to whether
The way the lack of
review of the pricing
template can affect
business is that critical
information in regards
to customer data might
be wrongly entered or
lost. This might hamper
the entire business and
its goodwill might be
affected. The access to
the ERP system should
also be restricted. This
is because unrestricted
access to the ERP
system will broaden the
chances of data
manipulation and thus
widen the scope of
occurrence of fraudulent
events. The billing
system should be
modified in such a way
that it guides the user
effectively in case the
data has been entered
The particular internal
control applicable in
such a situation is the
segregation of duty. The
appointment of a
particular employee for
checking the pricing
template will decrease
the chances of wrong
input of data into the
operating system.
Moreover, the cost
benefit ratio will also
not be affected by such
a change. Thus, other
than Alfred and Joy
another employee
should also be trained in
the usage of the pricing
template. The access to
the ERP system should
also be restricted within
the core comprehensive
management so that the
chances of fraud are
mitigated (Osadchy, &

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the access to ERP has
been restricted or not.
Moreover, the billing
system that is available
to the staff does not
provide any guidance to
the user in terms of the
irrelevant fields.
into irrelevant fields.
Entering data into the
irrelevant fields may
affect the business in a
negative way.
Akhmetshin, 2015).
The pricing tool The implementation in
regards to the new
pricing tool will only be
beneficial for business
when the managers are
properly trained in the
effective utilization of
the tool.
The lack of proper
training may lead to the
sending of offers by the
managers to their
customers with a faulty
price. This will put both
the business and the
client at stake. The
organization in such a
case will also be
affected negatively
Imparting proper and
effective training in the
usage of the new
pricing tool is the
suitable internal control
that should be provided
here (Sari, Ghozali, &
Achmad, 2017).
Authorization policy The standardized
authorization policy that
has been established by
the management is not
strictly adhered to. This
means that the managers
have an option and can
opt for not following the
standardized process in
case of situations that
comes with certain
constraints.
The fact that the
standardized process has
not been adhered to
broadens the scope of
occurrence of fraud in
the firm. for instance, a
manager may send an
offer to a customer with
a price that is higher
than its real price.
The standardized
process should be
modified and its degree
of suitability should be
increased in order to
mitigate the occurrence
of fraudulent activities
(DeFond & Lennox,
2017).
Credit check process The credit check
process that has been
incorporated within the
The non-compliance to
checking the credit
worthiness of a
The particular system
should be designed in
such a way that without

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company has been
without any error.
However, it has been
accepted by Lucinda in
her interview that there
has been several
instances in which the
credit checks have been
done n the customer
after the signing of the
sales contract and
issuance of the invoice.
customer before signing
a deal can be can impact
the business drastically
and result in a huge
business loss.
checking the credit
worthiness of the
customers, a particular
deal could not be carried
forward (Farkas, &
Hirsch, 2015).
Code of Conduct There should be a
behavioral code for all
employees which
restrict them to act in
some specified ways
inside the organization.
For instance, the
marriage of the Head of
Sales with the Accounts
Receivable manager
might not turn out to be
healthy for business.
The growth of personal
relationships within the
boundaries of the
organization might lead
to the generation of
conflicts of interest,
which may potentially
increase the occurrence
of frauds inside the
organization.
A proper code of
conduct is mandatory.
This will make the
employees aware of the
particular ways in which
they need to act inside
the organization Parker,
(R. J., Huang & Yan,
2017).

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Introduction of the corporate credit cards
The introduction of the corporate credit cards might bring huge profits into business.
However, the particular point that should be noted here is that the specified transactions that are
proceeded with the help of the corporate credit cards should be strictly monitored and evaluated
as to whether the purchased service or product was really needed by business or not. The facility
of corporate credit cards exposes the business to high amounts of risk. But the particular
advantages provided cover for the proposed risks. The corporate credit cards will free the
business from the unnecessary workload of transferring the payments from the business to the
supplier account. In fact, the reimbursement process will also be simplified by the incorporation
of the corporate credit cards (Al-Matari, Mohammed& Al-Matari, 2017).
The management of Bucks Phyz should consider the formation of a particular group that
will monitor the transactions that are incurred with the help of the corporate credit cards. To be
more precise, this team will authorize the transactions before debiting real cash from the business
account. The finance department personnel may be chosen for building the particular team.
The recommendation to the chief executive officer in regards to the issuance of the
corporate credit cards is that the proposal apparently is brilliant and will benefit business.
However, it is highly recommended that the corporate credit cards should only be issued to the
key personnel of the management of the organization. For an instance, in case of the training
course mentioned in the provided case study, the service should be purchased with the corporate
credit card allotted to the human resource manager post the authorization by the finance team.

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References
Al-Matari, Y. A., Mohammed, S. A. S., & Al-Matari, E. M. (2017). Audit Committee Activities
and the Internal Control System of Commercial Banks operating in Yemen. International
Review of Management and Marketing, 7(1).
Chang, S. I., Yen, D. C., Chang, I. C., & Jan, D. (2014). Internal control framework for a
compliant ERP system. Information & Management, 51(2), 187-205.
DeFond, M. L., & Lennox, C. S. (2017). Do PCAOB Inspections Improve the Quality of Internal
Control Audits?. Journal of Accounting Research, 55(3), 591-627.
Farkas, M. J., & Hirsch, R. M. (2015). The effect of frequency and automation of internal control
testing on external auditor reliance on the internal audit function. Journal of Information
Systems, 30(1), 21-40.
Farkas, M. J., & Hirsch, R. M. (2015). The effect of frequency and automation of internal control
testing on external auditor reliance on the internal audit function. Journal of Information
Systems, 30(1), 21-40.
Heise, D., Strecker, S., & Frank, U. (2014). ControlML: A domain-specific modeling language
in support of assessing internal controls and the internal control system. International
Journal of Accounting Information Systems, 15(3), 224-245.
Kieseberg, P., Malle, B., Frühwirt, P., Weippl, E., & Holzinger, A. (2016). A tamper-proof audit
and control system for the doctor in the loop. Brain informatics, 3(4), 269-279.
Osadchy, E. A., & Akhmetshin, E. M. (2015). Development of the financial control system in the
company in crisis. Mediterranean Journal of Social Sciences, 6(5), 390.
Parker, R. J., Dao, M., Huang, H. W., & Yan, Y. C. (2017). Disclosing material weakness in
internal controls: Does the gender of audit committee members matter?. Asia-Pacific
Journal of Accounting & Economics, 24(3-4), 407-420.
Sari, N., Ghozali, I., & Achmad, T. (2017). THE EFFECT OF INTERNAL AUDIT AND
INTERNAL CONTROL SYSTEM ON PUBLIC ACCOUNTABILITY: THE

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EMPERICAL STUDY IN INDONESIA STATE UNIVERSITIES. Technology, 8(9),
157-166.