FNSACC505 Accounting Information Systems Assignment: Sydney Metro

This assignment solution for FNSACC505, Establish and Maintain Accounting Information Systems, includes two tasks. Task 1 covers key aspects of accounting information systems, such as transaction types, system efficiency assessment, objectives, accounting entries, error checking, cost-benefit analysis, system processing, communication requirements, user confirmation, system documentation, user requirements, contingency plans, employee training, data transfer, and system updates. Task 2 involves a case study of Astra Plastics, a company implementing an accounting system. It includes creating a chart of accounts and preparing a trial balance and profit and loss account for Myer Classic Clothes. This document, contributed by a student, is available on Desklib, a platform providing study tools and resources.

Running head: ACCOUNTING ASSIGNMENT 6
Accounting Assignment 6
Name of the Student:
Name of the University:
Authors Note:

1ACCOUNTING ASSIGNMENT 6
Contents
Task 1:.............................................................................................................................................2
Task 2:.............................................................................................................................................7
References:....................................................................................................................................20

2ACCOUNTING ASSIGNMENT 6
Task 1:
Answers:
1. The kind of transactions that an entity involves in, the business environment of the entity, the
level of complexity involved in financial transactions, the complexity in the amount of estimates
to be made and the technical competencies of the employees are few of the important information
needed to prepare a comprehensive accounting information system.
2. In order to assess the efficiency of an existing system as well as its ability to manage the
operational requirements of an organization it is important review the features of the existing
system.
3. The objectives to be fulfilled from the accounting information system, the existing accounting
system and its weaknesses, the nature of accounting transactions, the complexity in accounting
transactions, the complexity in accounting estimates to be made and the level of knowledge of
employees of the company are few considerations necessary in this regard.
4.
a. Accounting.
b. Account reconciliation.
c. Month ending reporting.
d. Verification of accounting entries recorded.
e. Audit trails in accounting system.
5.
a. Ability to record huge amount of entries i.e. the availability of space.
b. The authentication process in the accounting system.
c. The automatic ability to error check.
d. Ability to provide up-to-date records as and when necessary by the management and
other stakeholders.

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e. Reporting capability.
6. The expected cost of introduction of new system along with expected financial and economic
benefits of using the new system. In addition a comparative analysis of the existing system with
the previous system shall further help the management to decide the best course of action for an
organization. Investment appraisal technique can also be sued in case the investment in
introducing the new system is significantly high (Avgerou & Walsham, 2017).
7.
a. Is the accounting system correctly processing the transactions?
b. Operational efficiency of the system.
c. The internal controls and securities within the system.
d. The ability of the employees of an organization to correctly process transactions in the
accounting system.
8. The following information must be included in written communication about the new system:
a. What are the specific requirements of the organization from the new system?
b. What objectives the organization is looking to achieve from the new system?
c. What kind of information will be processed in the system?
d. The skills and talent in the employees of the organization to process transactions in the
new system.
e. Any weakness that the existing system has which has negatively impacted the processing
of accounting transactions.
f. The training required to be provided to the employees to equip them to process
transactions in the new system.
9. The written confirmation from the users shall be evaluated thoroughly by the system developer
before starting the process of developing the new system. It is important to consider the

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organizational environment and its objectives before developing a new system. Apart from that
technical, operational and financial feasibility shall also be conducted to ensure that the new
system will be feasible for the organization and as per the requirements of the users.
10. Again the users shall be conducted as to the specific requirements and expectations from the new
system. The new system should be capable of handling the organizational requirements and be
able to process the accounting transactions correctly.
11. The system documentation shall be kept in both soft copy as well as in hard copy. The soft copy
shall be kept at the mainframe computer of the company which should be made available to the
stakeholders as and when necessary. The hardcopy shall be filed properly and kept at the
accounting department of the organization.
12. The requirements of the users changes with passing of each day. Since development of a new
system takes significant amount of time it is important for the system developers to keep
reviewing the requirements and expectations of the users to make necessary changes in the
system document to ensure the new system is as per the requirements of the users when it is
finally ready for operation (Cleary, 2017).
13.
a. Understand the requirements of the users.
b. Start and configure the system.
c. Conduct user acceptance testing.
d. Provide training.
e. Implement the system and track the progress.
14. Importance to have necessary contingency plan in place to deal with possible roadblocks
including delays and problems at the time of development and implementation of a new system.
15.
a. On the job training.

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b. Discussion and tutorials.
16. The data should be transferred by following the steps mentioned below:
a. System exploration.
b. Assessment of data.
c. Migration of data.
d. Migration build.
e. Data transportation.
17. Regular update of a system will help an organization to identify any weaknesses in the system
immediately. Accordingly, immediate steps can be taken to reduce the losses from such apparent
weakness in the system. If systems are up-dated only once a year then the weaknesses in the
system will go unnoticed for a long period of time. This could result in huge amount of losses for
the organization till the time the weaknesses are rectified.
18.
a. Alphabetical: The files shall be maintained alphabetically to identify discrepancies and
take remedial steps.
b. Chronological: Chronologically files shall be maintained to identify and remedy
discrepancies.
c. Serial number: The files should have serial numbers.
19. During the system development phase and after the development of new system an integrity
report should be ran to ensure integrity of the system. At the time of implementation of the new
system integrity report should also be ran to assess the integrity of the system.
20.
a. Revenue transactions.
b. Expenditure transaction.
c. Acquisition of assets.
d. Sale of assets.

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21. The date on which the transaction has taken place along with the nature and amount of transaction
shall be available to correctly record the transactions in the books of accounts. It is also important
to have specific supporting documents to record the accounting transactions in the books of
accounts correctly.
22. Discussion and meetings shall be held to communicate and promote the processes for recording
and classifying transactions. There should be an established internal verification process in place
to verify the records and documents. The standard procedures should be followed to correctly
record and classify the transactions.
23. It is important to have a standard format for source information and data to maintain data
integrity and confidentiality. In order to ensure that the data is genuine and there is no
compromise with data integrity on the basis of which the accounting information is to be
processed in the system it is of paramount importance to have a standard format for the sources of
data input and documentation (Libby, 2017).
24.
a. Daily back up of data.
b. Full back of data.
25.
a. Vouchers to support expenditures.
b. Receipts to support receipts of cash or cheques.
c. Supporting documents.
d. Employee cards for payroll maintaining.
e. Suppliers invoice.
f. Bills.
26. Analysis of reporting requirements on regular basis would ensure improvement to the reporting
requirements with enhanced financial reporting requirements with passing of each day. The

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changes in legislations and complex business environment has made it compulsory to enhance the
quality of reporting regular assessment of reporting requirements will help in improving the
reporting of an organization.
27. All details about the information source document including its nature, number, file number
where such source document has been maintained.
28. To ensure that the financial structure of an organization remains unchanged and to maintain all
information of financial reconstructions correctly without any unauthorized changes to the
financial records.
29. Budgetary controls include use of appropriate assumptions, practical method and principles to
ensure that the budgets are practical and achievable by an organization. The implications will be
positive on the accounting system if the budgetary controls are practical and appropriate.
30. Only on the basis of costs and depreciation schedule it will not be possible to recommend
whether to purchase a machine or not. In order to give recommendation whether to purchase a
machine or not it is important know the expected revenue to be generated from the machine in the
future.
Task 2:
Question 1:
Astra Plastics is a company that manufactures plastic products in Mascot. The company sell
these products to wholesalers in Australia. The company currently does not have an accounting
information system. It is looking to implement an accounting system within the company to
correctly maintain the accounting records in the future.
The organizational chart is as following:

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The new accounting information system will be very simple and currently available in the
market. Since the company has very simple operating structure it has decided to use user friendly
accounting information system.
The accounting information system will be implemented with the objective of maintaining
proper records of all financial transactions and subsequent preparation of financial statements
from these records.
Question 2:
a.
Chart of accounts
Sales - Clothing
Service Fees
Denise Ryan
(CEO)
Roy Smith
(Purchase
manager)
Linda Mesure
(sales
manager)
Monica Tellis
(Book Kepper)
Jay D' Silva
(Factory
manager)

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Royalties
Discount Revenue
Cost of Goods Sold - Clothing
Advertising
Wages – Sales
Depreciation
Accounting Fees
Computer Software & Training
Consulting Fees
Legal Fees
General Insurance
Electricity
Telephone Charges
Cleaning
Repairs - general
Rent
Loss on Sale -non-current assets

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Bank Fees
Interest – Finance Companies
Discount Allowed
Bad Debts
Cheque Account
Trade Debtors
Inventory - Clothing
Fixtures & Fittings
Motor Vehicles
Equipment
Computer Equipment
Establishment Costs
Accounts Payable Control
GST Payable Control
Input Tax Credit Control
Bank Loan
Capital – Judy

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b.