Accounting Information System Report: Internal Control Evaluation

This report provides an in-depth analysis of the accounting information system (AIS) of Bucks Phyz, a medium-sized enterprise undergoing restructuring. The report, from the perspective of a newly employed accountant, assesses internal control weaknesses, focusing on sales procedures, data entry, and credit checks. It identifies issues such as inadequate employee codes, ineffective credit checking, and complexities in the new pricing tool. The study explores the impact of these weaknesses on the firm, including potential fraud and revenue loss. Furthermore, the report evaluates the influence of corporate credit cards and offers recommendations to mitigate risks, such as implementing employee codes, improving training, and establishing robust credit policies. The report concludes with a summary of the findings and recommendations for strengthening the AIS and improving overall financial performance.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
University Name
Student Name
Authors’ Note

2ACCOUNTING INFORMATION SYSTEM
Executive Summary
The current report prepared from the perspective of a newly employed individual intends to
assess the internal controls of the corporation. In essence, the current report aims to elucidate
in detail diverse weaknesses in the overall structure of the internal control of the corporation
and assess the overall procedure of sales. Based on the analysis of the study, the accountant
of the study intends to analyse credit score. Furthermore, the report also mentions
illustratively different recommendations that the management of the firm can introduce with
immediate consequences in a bid to lessen the scope and possibilities of fraud and introduce
credit card into the cycle of business. Finally, the current study also presents in detail the
significance of the benefit of particularly corporate credit and provides summarized
impression of the report.

3ACCOUNTING INFORMATION SYSTEM
Table of Contents
Accounting Information System................................................................................................1
Introduction................................................................................................................................3
A succinct view of the sales procedure of Bucks Phyz..............................................................4
Internal Control Weaknesses of Bucks Phyz.............................................................................4
Influence of Weaknesses on the firm.........................................................................................7
Influence of corporate credit on the firm Bucks Phyz...............................................................8
Internal controls to lessen the influence of corporate credit card..............................................8
Recommendations......................................................................................................................9
Conclusions................................................................................................................................9
References................................................................................................................................10

4ACCOUNTING INFORMATION SYSTEM
Introduction
Bucks Phyz can be considered to be a developing industry, that is to say a medium
sized enterprise that is undergoing restructuring programs since the past two years.
Essentially, the restructuring program occurs in the sales team and functional environment of
the business. Apart from this, yet another considerable alteration also takes place in the
workforce of the corporation. Workers of the corporation are regularly shuffled and new tasks
are assigned. Owing to these kinds of alterations in the business concern, it can be observed
that there are certain redundancies in the operations of the workers and this subsequently
leads to blurred accountabilities. Furthermore, the company Bucks Phyz has currently
encountered fraudulent actions in the accounting section of the firm directing towards
revenue loss and deterioration in the firm’s figure of sales. Taking into consideration the
fraudulent actions in the corporation, management of the firm intends to employ new
accountants for restructuring processes and roles of employees and challenging operating
environment for the corporation Bucks Phyz. Basically, this study is meant to assess diverse
issues along with internal controls of the corporation in order to make it more productive.
A succinct view of the sales procedure of Bucks Phyz
Bucks Phyz is necessarily a medium sized enterprise that acquires an annual turnover
of $2.5 million. The corporation has currently undergone organizational restructuring in a bid
tom make it able enough to develop its business and resolve the issues associated to internal
control. Basically, new tools of pricing introduced by the corporation can be considered to be
a major process of restructuring that has occurred in the past two years. Both standardized as
well as specific processes is existent in the corporation, nonetheless they get messed with one
another making the operating environment intricate (Adenike & Michael, 2016). Bucks Phyz
essentially has an obsolete online template that necessarily does not match with the standards

5ACCOUNTING INFORMATION SYSTEM
of the market, leading to decline in the level of revenue. As such, procedure of credit check
out of Bucks Phyz is not credit worthy and can earn the company a “C” rank.
Internal Control Weaknesses of Bucks Phyz
Different internal weaknesses can be observed by the currently employed accountant
of the firm by undertaking detailed analysis of operations of the firm Bucks Phyz. Essentially,
the weaknesses of the corporation are hereby mentioned in a table below:
Procedures of Sales Weaknesses of Internal
Control
Influence Recommendation
Data Entry Procedures Data Entry Procedure
can be considered to be
one of the primary
issues of the
corporation that limited
the same from attaining
growth. Essentially
abundance of ERP
admittance along with
billing issues has led to
decrease in the sales of
the company Bucks
Phyz. Furthermore,
wrong data that
intentionally or
unintentionally insert
lead to failure of
company to analyse its
The corporation Bucks
Phyz has reduced
overall auditing scope
that has limited overall
growth of the
corporation. Also, the
access of ERP has
provided the
employees the scope to
engage in fraudulent
actions.
Bucks Phyz has the
need to direct the
managers to segregate
the duties of the
employees in a bid to
minimise the
jeopardising impact.
Furthermore, it can
prove to be beneficial
for the corporation to
upgrade their cycle of
business so that the
firm’s benefit ratio can
get aggravated (Simkin
et al., 2014).

6ACCOUNTING INFORMATION SYSTEM
performance over the
past two years
(Srivastava &
Lognathan, 2016).
New Tool of Pricing The management of the
firm has brought in
pricing tool for the firm
Bucks Phyz currently
and it has intricate
procedures. There is
inadequacy of Proper
training processes for
the workforce.
Essentially, this has led
to the improper
insertion of requisite
data.
Inadequacy of
knowledge regarding
pricing tool has led to
failure of the
corporation to acquire
competitive advantage.
Apart from this, it has
complicated the overall
strategy of billing for
the corporation.
Managers of the
corporation have the
need to introduce
innovative and
advanced procedures of
training for the
workforce of the
corporation (Fitriati &
Mulyani, 2015). As
such, this can help all
the sales associates to
comprehend the overall
utilization process and
allow the firm to earn
desired level of
income.
Strategy of
management
A specific strategy of
management
administration is
currently present in the
firm. Nevertheless the
workforce of the
corporation does not
necessarily follow the
It can be hereby said
that non-compliance of
standardized scheme of
authorization has
directed the employees
of the corporation
Bucks Phyz to engage
into fraudulent actions
A modified strategy of
authorization has the
need to be introduced
in the corporation. This
in turn can act as a
handbook for the
workforce (Zhang &

7ACCOUNTING INFORMATION SYSTEM
same and subsequent
deterioration of internal
control.
Ni, 2016).
Procedure of credit
check
Procedure of checking
credit can be
considered to be
ineffective and there
exists no strict
regulation regarding
this matter
Essentially, there are
several examples
where credit checking
is carried out after the
process of invoicing.
The management of the
firm have the need to
implement strict
regulations for
checking credit before
generation of invoices
(Collier, 2015).
Managers of the firm
can introduce specific
strategies of
remuneration cut and
this can subsequently
lead to enhancement of
overall efficiency of
operations.
Employee Code As such, there exists no
code for workers in the
corporation Bucks
Phyz. This generate
undue advantage to the
workers to engage into
different fraudulent
actions
The non-existence of
the employee code lead
to increase in
fraudulent actions and
permit the workers to
engage in personal
association (Susanto,
2016).
Management needs to
introduce employee
code with immediate
effect in order to curb
internal control issues.

8ACCOUNTING INFORMATION SYSTEM
Influence of Weaknesses on the firm
Analysis of the operations of the firm and evaluation of feedback from employees
helps in identifying different weaknesses as regards processes as well as structure of business.
Essentially, there is inadequate credit worthiness particularly in online template of both sales
as well as service section. Lack of code of firm’s employees has directed towards fraudulent
actions that in turn jeopardise tasks and lead to decline in overall efficacy of the employees.
Furthermore, accounting segment of the firm Bucks Phyz has lower level of rating owing to
low efficiency in the activity. In essence, the corporation has nevertheless failed to acquire
higher level of profit during the past two years and led to write offs of approximately $1
million. Recent alteration in firm’s accountabilities also has hampered the strategy of sales
and decreased revenue of the firm (Ismail & King, 2014).
Influence of corporate credit on the firm Bucks Phyz
Corporate credit card can be considered to be stimuli for particularly the medium
sized enterprises such as Bucks Phyz that generates annual turnover of around $2.5 million.
This can provide vested advantage that can augment morale of the workforce and help them
save vital time, lessening the time to lone customer. This can prove to enhance the efficacy of
the corporation and assist in making the employees efficient and subsequently simplify their
tasks (Zhou, 2015). The management also needs to bear in mind past fraud actions by firm’s
workers. However, in case if the workers are assigned with specific corporate credit cards,
then this generates a chance of under utilization of card and augments probabilities of fraud.
Internal controls to lessen the influence of corporate credit card
As mentioned earlier, an effective credit policy can make certain proper usage of credit
card and lessen the overall scope of fraudulent actions (Uyar et al., 2017). In view of the
structure of the corporation Bucks Phyz, it can be hereby stated that firms have the need to

9ACCOUNTING INFORMATION SYSTEM
bring in credit cards to the workers who are necessarily related to the core team for
management. Nevertheless, management of the firm can follow certain steps and mechanisms
of internal control to minimize influence of corporate credit strategy:
 Ascertain the eligibility criteria of specifically holding a corporate credit card
 Establish credit limit
 Control the overall revocation as well as issuance rule
 Examination of annual credit of workers who are issued the credit card (Prasad &
Green, 2015).
Recommendations
In n bid to control the identified issues the management of the corporation Bucks
Phyz can highlight the following recommendations:
-Introduction of code of employees is significant as this can help the firm to control and
monitor fraudulent actions (Laudon & Laudon, 2016).
-An appropriate appraisal mechanism can prove to be an advantage for the firm as this can
help in inspiring employees to work sincerely
-Identified issues associated to new pricing tool can be mitigated with immediate effect and
managers can look into the matter whether employees are inserting data faultily
-Corporate credit card also have the need to be issued, however the distribution need to be
limited to the core management team for reduce possibility of fraud (Adenike & Michael,
2016).

10ACCOUNTING INFORMATION SYSTEM
Conclusions
The current study helps in analysing diverse aspects of the firm Bucks Phyz
associated to internal control of the corporation. The study has assessed the likelihood of
fraud and focussed on the suggestions in a bid to lessen the scope in the upcoming period.
Bearing in mind the feedback of the employees, it can be inferred that restructuring has
become forceful on the internal control, and it has delivered some undue advantage to core
management team to curtail strategies. Analysis presented above also reveals that access to
ERP, lack of code of employee lead to increase in fraudulent actions. However, for handling
the dwindling state of affairs, this study has stated several effective strategies.

11ACCOUNTING INFORMATION SYSTEM
References
Adenike, A. T., & Michael, A. A. (2016). Effect of Accounting Information System Adoption
on Accounting Activities in Manufacturing Industries in Nigeria.
Collier, P. M. (2015). Accounting for managers: Interpreting accounting information for
decision making. John Wiley & Sons.
Fitriati, A., & Mulyani, S. (2015). Factors that affect accounting information system success
and its implication on accounting information quality. Asian Journal of Information
Technology, 14(5), 154-161.
Ismail, N. A., & King, M. (2014). Factors influencing the alignment of accounting
information systems in small and medium sized Malaysian manufacturing
firms. Journal of Information Systems and Small Business, 1(1-2), 1-20.
Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education
India.
Prasad, A., & Green, P. (2015). Organizational competencies and dynamic accounting
information system capability: impact on AIS processes and firm
performance. Journal of Information Systems, 29(3), 123-149.
Simkin, M. G., Norman, C. S., & Rose, J. M. (2014). Core concepts of accounting
information systems. John Wiley & Sons.
Srivastava, P., & Lognathan, M. S. (2016). Impact of accounting information for
management decision making. IJAR, 2(5), 171-174.
Susanto, A. (2016). The Effect of Internal Control on Accounting Information
System. International Business Management, 10(23), 5523-5529.