Information System Design and Development Report - [University Name]

This report delves into information system design and development, focusing on traditional and cloud-based accounting systems, IT governance, and corporate governance principles. Task 1 examines the transition from traditional to cloud accounting for Smith Brothers Auto Solutions, evaluating the benefits of cloud-based, database, and spreadsheet solutions. Task 2 explores IT governance within the context of Bank of Queensland, highlighting the alignment of IT with corporate governance principles and the importance of IT governance in achieving business objectives. Task 3 analyzes enforcement actions by the Department of Justice and Securities and Exchange Commission against PTC Inc. for violations related to books, records, and internal controls. The report emphasizes the significance of effective internal controls and ethical business practices in financial reporting.

Running head: INFORMATION SYSTEM DESIGN AND DEVELOPMENT
Information System Design and Development for Accountants
[Name of the Student]
[Name of the University]
[Author note]

1INFORMATION SYSTEM DESIGN AND DEVELOPMENT
Task 1:
Traditional accounting mainly refers to the accrual or accrual based accounting system
which generally requires the user to record the income along with the expenses that have been
invoiced or were billed. This is to be done regardless of the payments that have been made or
not. The traditional accounting system generally requires to keep all the income as well as the
expenditure that includes the records of the assets that has been purchased, the value that the
stocks are having when the accounting period is over, payments made to the employees, cost of
the business vehicles along with the travel cost, interest in building of the society and last any
other type of incomes are also to be declared (Ionescu et al., 2013). Mostly the traditional
accounting system is more suited for large organizations but can act as an important option when
there is a need of quick prediction regarding the growth of any organization.
The Traditional accounting is mainly used when an overhead of the company is lowered
as compared to the direct costs related to production. This system is associated with providing a
accurate figure of the cost required whenever the an organization starts to operate with high level
of production. Besides there does not exists any type of changes in the overhead costs and are
also not associated with creating of any kind of substantial difference while calculating the cost
that is required for the various business processes (Singh & Mehta, 2012). This type of systems
are costly and is very hard to implement.
The main reason lying behind the usage of tradition accounting is for the purpose of
producing external reports as they are simple and can be easily understood by any outsider. Buy
this traditional accounting system is not associated with providing the mangers with an accurate
picture of the cost that the products are having (Akintoye, 2012). Besides this the overhead costs

2INFORMATION SYSTEM DESIGN AND DEVELOPMENT
are also not allocated to the products which are actually associated with the consuming of the
overhead activities.
The various options that are available to the Smith bothers if they want to move from the
current system is cloud based accounting. The major reason that would be lying behind the
adaptation of this technology is because of the fact that the cloud based accounting system is
very much cost effective along with being efficient. As this organization is having a tight budget
so it could be very good choice to select the cloud accounting strategies. This type of accounting
system are generally associated with the usage of the clouds in order to store all the financial as
well as the accounting data (Gupta & Sikarwar, 2016). This in turn would be helping further
access of the data to several authorized users from anywhere by making use of the Internet. In
traditional accounting various type of errors might occur like human errors and many more but
the usage of the cloud accounting software and solutions can greatly help in the decreasing of the
errors and this is done by automating the various processes of the business. Along with this by
taking help from the cloud the employees of the company would become capable of working on
the same file at the same time and this greatly helps in the maintenance and monitoring of the
accounting data which is free of errors.
Other options which are available to Smith Brothers Auto Solution includes the Database
accounting software and the installed accounting software.
The two probable software’s that can be used by Smith Brothers Auto Solutions in order
to tackle all the problems that are currently being faced by them have been listed below:
Database accounting software:

3INFORMATION SYSTEM DESIGN AND DEVELOPMENT
This is the type of system that can be used by the company in order to secure their data
and due to the fact that there is a large database of Smith Brothers Auto Solutions so this is
appropriate type of software that can be used. One of the software which falls in this category is
the Oracle accounting software (Nakhaei, 2016). There is just a need of hiring a system engineer
and system consultant for the purpose of installing this kind of software and by installing this
software and make it work in accordance to the need of the company. This software would be
associated with handling the financial management along the complex tasks, large network and
various complications that is related to the accounting functions (Hall, 2012). The various
advantages mainly includes the flexibility, security, and the ability of handling various type of
complex accounting tasks. But the major disadvantages of this software are it is very expensive
and requires a high maintenance cost.
Cloud accounting software:
This is the type of accounting software that is generally available online and this would
be making the data available online which can be accessed by authorized users anytime and from
anywhere. Few of the cloud based accounting software includes the Freshbooks, Quickbooks,
Sage 50 Premium accounting 2015 and Zero. This type of accounting software has very type of
advantage and the major advantage is that it is less expensive and the data are also available
online. This eventually helps the accountants to keep a track of the account very easily (Dimitriu
& Matei, 2014). Along with this the company Smith Brothers Auto Solutions can also connect
the cloud accounting software with the online bank account of the company.
The spreadsheet solution can be included in the accounting system of the company Smith
Brothers Auto Solutions. This would be helping a lot in the process of bookkeeping. The
spreadsheet can be adopted in order to meet the basic needs of Smith Brothers Auto Solutions.

4INFORMATION SYSTEM DESIGN AND DEVELOPMENT
This can be better understood by using of an example that is the spreadsheet programs would be
associated with the listing of the expenses that are made by the company, along with listing of
the sales and other relevant financial data. This would also be helping in the handling of various
advance accounting functions as well (Zhang & Gu, 2013). Smith Brothers Auto Solutions is a
very simple business so it can use the spreadsheet in order to handle the accounts. One of the
major benefit of the accounting software is that it would be linking all the data related to
accounts. This would be very useful in things like cash flow and many more.
Task 2:
The directors and managers of Bank of Queensland has been associated with making a
commitment regarding the incorporation of governance and providing support to the corporate
governance principles and recommendations as developed by the Australian Security Exchanges
Corporate Governance Council. This is mainly for the purpose of enhancing the credibility along
with the transparency of the capital market they are having. The corporate governance policy of
Bank of Queensland has been categorised into eight major principles which includes the
following:
Principle 1: Lay solid foundations for management and oversight
Principle 2: Structure the board to add value
Principle 3: Act ethically and responsibly
Principle 4: Safeguard integrity in corporate reporting
Principle 5: Making of timely and balanced disclosure
Principle 6: giving respects to the rights that the Security Holders are having

5INFORMATION SYSTEM DESIGN AND DEVELOPMENT
Principle 7: Recognizing and managing of the risks
Principle 8: Remunerate Fairly and Responsibly
The IT governance are not associated with functioning in the isolation but can be
considered as a subset present in the Enterprise or the Corporate Governance present in the
organization (Biegelman & Bartow, 2012). Despite of different stakeholders the principle of
meeting the needs of the stakeholders and the governance objectives to create values is also same
for both of this. In case when the needs of an IT governance stakeholders are considered and
satisfied followed by the completion of the creation of values in order to deliver benefits
associated with the minimization of the risks along with the optimization of the resource usage
(Ali & Green, 2012). Then it is notices that the IT goals that the organization is having are being
met up. When the It goals are met then it can be considered that it is making a direct contribution
for the achievement of the goals that the organization is having and while doing this the needs or
the Enterprise Governance Stakeholders are also satisfied. From that, it’s crystal clear to see why
and how valuable to and for the organization Stakeholders are, and how essential they are in the
Governance of Enterprise IT.
IT governance acts as an integral part of any enterprise and mainly consists of the
leadership and organizational structure as well as the processes. This is associated with making
sure of the fact that the IT of any organization is sustained along with extending the strategies
and objectives of an organization. The main objective of the IT governance is associated with
directing the IT endeavours in order to ensure the make sure following objectives are met (Györy
et al., 2012). The objectives include the alignment of the IT with the enterprise along with
realizing the benefits that have been promised, using of the IT for enabling the enterprise to
exploit the opportunities along with maximizing the benefits, use of the IT resources in a

6INFORMATION SYSTEM DESIGN AND DEVELOPMENT
responsible way and lastly come the appropriate management of the IT-related risks. IT
Governance is to be included with the corporate governance because business is totally
dependent on the IT. This means that the issues related to the corporate governance cannot be
resolved without making use of the information technology. The relationship that exists between
both this governance can be better understood by understanding the fact that translation of the
corporate governance questions is done into specific IT governance questions which are initially
responsible for the disclosure of the corporate governance issues which cannot be addressed by
making use of the information technology (Tallon, Ramirez, & Short, 2013). Corporate
governance is associated with driving a set of IT governance. The IT is associated with having an
influence over the strategic opportunities which are outlined by the enterprise and initially
provides a critical input to the strategic plan. It governance can be considered as a driver of the
corporate governance. So the IT governance and Corporate governance cannot be considered as
pure distinct disciplines and along with this the there is an essential need of integrating this into
the overall governance structure.
Task 3:
The Department of Justice or DOJ and Securities and Exchange Commission were
associated with taking of enforcement actions mainly involve the PTC Inc (Parametric
Technology (Shanghai) Software Co. Ltd. and Parametric Technology (Hong Kong) Limited). In
earlier days the PTC was known as the Parametric technology Corporation and the other two
companies were wholly owned subsidiaries of this organization along with the fines and the
penalties that were made was also quite subsidiary.
It was agreed by the Chinese subsidiaries to pay a penalty of around $1454000 to the
DOJ. Along with this the PTC also agreed to have a profit disgorgement of around $11,858,000

7INFORMATION SYSTEM DESIGN AND DEVELOPMENT
and prejudgment interest of around $1764000 which was paid to the SEC. sustaining of the
books and the records along with internal control violation was done by PTC (Sareen, 2013). The
main reason lying behind the books and record violation was because of the improper recording
of the bribes done by the Chinese subsidiaries on the books and the records which were disguised
as the legitimate commissions and the business expenses (Rice, Weber & Wu, 2014). For this
reason all things were rolled up into the corporate parent’s books and the records.
Besides the PTC also did not have any kind of the appropriate internal control. It is to be
expected by the CCO that there exists internal control at locations outside US are havening the
same efficiency like that of the internal control inside the US but unfortunately this doesnot
happens every time. In many cases it is seen that the corporate level of internal control are much
stronger than those which exists inside the foreign business units. The same thing happened in
case of PTC (Debreceny 2013). Each of the bribery scheme consisted of internal control failures.
There existed least control but still the control was not much effective and this mainly happened
due to the failure of the PTC oversights. This also indicates a weakness that existed in the
internal control. This is associated with allowing of one of the corporate employee to gain an
oversight of the process related to approval. So it can be concluded that this is not a sufficient
internal control.
Most necessarily there should exist different kind of control levels regarding the
commissioning of the third party representatives. This is to be done because of the fact that they
are considered as the highest risk in accordance to the Foreign Corrupt Practices Act or the
FCPA. This is to be followed by compounding of this with the known high risks related to doing
of business in China. By this way it would become very easy to spot the various kind of internal
failure (Chong & Tan, 2012). In order to avoid the enforcement actions there is an essential need

8INFORMATION SYSTEM DESIGN AND DEVELOPMENT
of eliminating the errors and examining the internal controls. The examination is to be done for
the purpose of identifying the weaknesses and the failure especially for those which involves the
foreign transactions. Besides this the control environment is to be maintained which would be
mainly including the style of operating, ethics, delegation of the authority system and lastly the
management processes that were missed or were ignored. The risk assessment is to be done in a
proper way by skilled and experiences personnel’s. Activities which mainly includes the
approvals, verification and reviews of assets are to be performed in the business process for the
purpose of hiding the fraud (Iden & Eikebrokk, 2014). Effective communication with regulators
is to be done along with making sure that the the information system plays an significant role in
the business, proper insights are to be provided to other authorities about the organization, along
with providing of direct options of what are to be done (Hammersley, Myers & Zhou, 2012).
Monitoring of the activities are to be done along with separate evaluation and taking certain
actions which would be helping a lot in correcting the mistakes that are conducted regarding the
Internal control.

9INFORMATION SYSTEM DESIGN AND DEVELOPMENT
References:
Akintoye, I. R. (2012). The Relevance of Human Resource Accounting to Effective Financial
Reporting. International Journal of Business Management & Economic Research, 3(4).
Ali, S., & Green, P. (2012). Effective information technology (IT) governance mechanisms: An
IT outsourcing perspective. Information Systems Frontiers, 14(2), 179-193.
Biegelman, M. T., & Bartow, J. T. (2012). Executive roadmap to fraud prevention and internal
control: Creating a culture of compliance. John Wiley & Sons.
Chong, J. L., & Tan, F. B. (2012). IT governance in collaborative networks: A socio-technical
perspective. Pacific Asia Journal of the Association for Information Systems, 4(2).
Debreceny, R. S. (2013). Research on IT governance, risk, and value: Challenges and
opportunities. Journal of Information Systems, 27(1), 129-135.
Dimitriu, O., & Matei, M. (2014). A new paradigm for accounting through cloud
computing. Procedia economics and finance, 15, 840-846.
Gupta, V. K., & Sikarwar, E. (2016). Value creation of EVA and traditional accounting
measures: Indian evidence. International Journal of Productivity and Performance
Management, 65(4), 436-459.
Györy, A. A. B., Cleven, A., Uebernickel, F., & Brenner, W. (2012, June). Exploring the
shadows: IT governance approaches to user-driven innovation. Association for
Information Systems.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.

10INFORMATION SYSTEM DESIGN AND DEVELOPMENT
Hammersley, J. S., Myers, L. A., & Zhou, J. (2012). The failure to remediate previously
disclosed material weaknesses in internal controls. Auditing: A Journal of Practice &
Theory, 31(2), 73-111.
Iden, J., & Eikebrokk, T. R. (2014). Using the ITIL process reference model for realizing IT
governance: An empirical investigation. Information Systems Management, 31(1), 37-58.
Ionescu, B., Ionescu, I., Tudoran, L., & Bendovschi, A. (2013, June). Traditional accounting vs.
Cloud accounting. In Proceedings of the 8th International Conference: Accounting and
Management Information Systems, Bucharest, Romania(pp. 106-125).
Nakhaei, H. (2016). Market value added and traditional accounting criteria: Which measure is a
best predictor of stock return in Malaysian companies. Iranian Journal of Management
Studies, 9(2), 433.
Rice, S. C., Weber, D. P., & Wu, B. (2014). Does SOX 404 have teeth? Consequences of the
failure to report existing internal control weaknesses. The Accounting Review, 90(3),
1169-1200.
Sareen, P. (2013). Cloud computing: types, architecture, applications, concerns, virtualization
and role of it governance in cloud. International Journal of Advanced Research in
Computer Science and Software Engineering, 3(3).
Singh, T., & Mehta, S. (2012). EVA vs Traditional accounting measures: A pre recession case
study of selected IT companies. International Journal of Marketing and
Technology, 2(6), 95.

11INFORMATION SYSTEM DESIGN AND DEVELOPMENT
Soin, K., & Collier, P. (2013). Risk and risk management in management accounting and
control.
Tallon, P. P., Ramirez, R. V., & Short, J. E. (2013). The information artifact in IT governance:
toward a theory of information governance. Journal of Management Information
Systems, 30(3), 141-178.
Zhang, L., & Gu, W. (2013). The simple analysis of impact on financial outsourcing because of
the rising of cloud accounting. Asian Journal of Business Management, 5(1), 140-143.