Rainbow Illusion: Strategic Information System and Fraud Prevention

This report provides an executive summary and analysis of Rainbow Illusion's strategic information system, a 30-store retail chain. The report identifies six strengths in the company's sales transaction control system, such as the use of young, part-time sales personnel compensated with hourly wages and commission, and the use of unsophisticated cash registers. The report explains how these strengths help Rainbow Illusion avoid issues like slow queue management and training problems, and it highlights the benefits of daily reconciliation reports and weekly sales reviews. The report also identifies two situational pressures—emotional and financial—that can increase the likelihood of fraud within the company. Emotional pressures include employee frustration, dissatisfaction, and workload issues, while financial pressures encompass money problems and greed. Finally, the report explains why some companies might prefer to install a distributed computer system over a centralized one, though the specifics of this choice are not elaborated upon in the provided text. The report concludes by summarizing the key findings and their implications for Rainbow Illusion's business operations.

Strategic Information System
For Business And Enterprise

EXECUTIVE SUMMARY
This present report has covered some strengths of Rainbow illusion's system for
controlling sales transaction and preventing itself from any type of fraud. All these strengths has
helped this company to avoid problems which could occur if it does not have these strengths. It
has also covered financial and emotional situation and pressure which became the reason of
fraud or increase fraud. This report has also covered the reason of companies for installing
distributed computer system rather than centralized system in the future.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................1
Identification of six strengths in Rainbow illusion's system for controlling sales transaction.. .1
Explanation of problems, Rainbow illusion has avoided by incorporating the strength in the
system for controlling sales transaction......................................................................................3
Identification of two situational pressures in a company like Rainbow illusion that would
increase the likelihood of fraud...................................................................................................4
Explanation of why some companies would choose to install a distributed computer system
rather than a centralized one.......................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic information system are a kind of information system that has several features
like strategic analysis and are being developed in response to corporate business initiative
(Cassidy, A., 2016). It gives the higher advantages of competition to companies. This present
report is based on Rainbow illusion that is a 30 store retail chain in New South Wales and
Victoria. It sells ready to wear clothing for young females. This report is going to show about
some strengths which this company has in the context of sales management. All these strengths
help this retail store in solving or avoiding problems that can occur due to not having a sales
system and proper management like fraud, slow queue management. Further it will also discuss
about some situational pressure that can increase fraud like risk of hackers, ineffective
management. There are some reasons of choosing to install a distributed computer system rather
than a centralized within an organization.
Identification of six strengths in Rainbow illusion's system for controlling sales transaction
Rainbow illusion has approximate 30 stores that are known for its qualitative offering of
ready to wear clothes for young females. There are several reasons which makes this store more
able to attract customers towards buying its products. Salesperson perform their duties in an
effective manner which help them in avoiding problems related to sales transaction. The assistant
manager, cashier, sales person and the manager of this retail store work collaboratively with the
main aim of avoiding problems and increasing sales. Some strengths in Rainbow illusion's
system that are being used for controlling sales transaction are described as follows:
Strengths
1. Cashier and sales personnel are young and working as a part time. They are paid on an hourly
wages plus a commission based on sales volume: This is called the main reason which increase
the sales of this company because it offers ready for clothes only for young females. Young sales
personnel can understanding demands and new trends of young females more effectively rather
than old or elder people. They also help manager in managing sales process by providing quicker
services as compare to elder sales man.
2. This retail store uses unsophisticated cash register with having 4 parts sales invoice in order to
record each transaction: This strength of using unsophisticated cash register that have four parts

sales invoice help them in recording each and every detail related to sales (Ingram and et.al.,
2015). It makes management process easy and effective because having an effective and [roper
record can improve the security on shop floor.
3. The sales personnel passes the sales invoice to the cashier who reviews orders and input the
sales: This strength of having and passing sales invoice keep all records related to sales as well
as inventory. It helps the manager of this company to oversee and control of inventory and
balance between demand and supply of goods. This sales invoice shows and provides them a
way to track the date on which goods was sold and amount of money which was paid. This
management and strength make accounting function easy.
4. Returns are handled in exactly in reverse manner with the cashier issue the return slip: It
means if any customer return any product then sales slip or invoice is being given to customers
and bankcard which satisfy customers and shows them every detail of sales like quantity of
products and amount which are being paid by customers.
5. A daily reconciliation report is prepared by the Assistant manager of Rainbow illusion's retail
This strength is also called the reason of effective management of sales and income (Meeker,
Berens and McDonnell, 2018). Some transactions in this store is being done on credit and some
are done in cash. Reconciliation of All types of sales help them in identifying the number of total
sales and also prevent them from any type of fraud by knowing the variation.
6. The data processing department of this store returns a weekly sales as well as commission
activity report to the manager for review: This strength of returning weekly sales to the manager
for review can help them in preparing bank deposit and analysis of their sales and revenue. By
reviewing weekly sales, manager can identify the total number of returns and then identify the
reasons for making changes (Demner-Fushman and et.al., 2015).
So, it can be said that all these 6 main strength of this Rainbow illusion's store make them
able to manage inventory and increasing sales to young females. With the help of all these
strength, it can take competitive advantages and expand its business in other countries as like
Australia.

Explanation of problems, Rainbow illusion has avoided by incorporating the strength in the
system for controlling sales transaction
It is stated already that Rainbow illusion's retail store has several strengths which makes
it able to increase sales and effective management regarding sales. There are mainly 6 strengths
which helps them in avoiding problems for controlling sales transaction. Each strength avoid
problems related to sales and it is described as follow:
The main and preliminary strength of this retail store is it has all young sales personnel
that are being paid on the basis of sales volume and are part time. This strength avoid the
problem of slow queue management (Lei, Wu and Zhang, 2017). All sales personnel are young
and active so they perform their functions and duties quicker and try to provide them services
fast which increases time of customers and sales person and also increase their experience. Sales
person are pain on hourly and sales volume basis and are part time which promotes a healthy
competition. For earning extra income and incentive on the basis of sales, they try to influence
customers for buying their products and services. It increase sales and revenue of the company.
Other strength of this company is it uses unsophisticated cash registers with having 4
part sales invoice. This strength can help them in avoiding the problem of training the new
staff. By having cash register with having different part related to sales invoice help them to
provide quick service to customer and managing all processes of the company. It records each
transaction related to sales which can show customers about their sales and purchasing detail
whenever needed.
Third strength is reviewing orders and input the sales on the basis of sales invoice by
the cashier. These sales invoice help them to avoid the problem of knowing the sales type and
balancing between demand and supply of products (Wells, 2017). By reviewing all orders at
the end of the day that made by sales person, they make payment to sales person on the basis of
sales volume. It is being analysed by sales invoice and they can also inform to manager about
the total number of sales and products is being sold.
Sales return are handled in the reverse manner by issuing the return slip is other main
strength which helps them in avoiding the problems related to any type of claim done by
customers. If any customer return some products and make any changes in the sales invoice and

slip which is given to customers then they can claim and demand for extra money. But having
return slip, cashier can solved out this problem.
An assistant manager prepare reconciliation report on daily basis and this strength also
help Rainbow illusion's retail store to avoid and solve the problem of any type of fraud by re-
conciliating the payment type (cash, cheque and bankcard). There are several hacker that have
the ability to hack account, so by reviewing and knowing if payment is done properly and paid in
the same account the company can prevent them from fraud. No one can manipulate data if the
company prepare reconciliation report.
Data processing department returns a weekly sales report and commission activity
report to manager in order to review them. This strength helps the company in avoiding the
problem of ineffective sales forecasting. By making sales report, the manager can find potential
market opportunities where they can expand and improve results. It tracks sales metrics by which
his company can make the best strategy related to sales and also can make itself able to measure
forecasting sales and performance.
Identification of two situational pressures in a company like Rainbow illusion that would
increase the likelihood of fraud
Fraud risk is called the main problem which many company specially E-commerce
businesses are facing. This type of risk can come from external as well as from internal sources
of the company. There are several factors that can influence the company's risk such as ethics
and value of the company and its employees, effectiveness of its business internal controls and
the environment in which the company operates and run its business.
People make frauds due to some situations or it can be said that some form of pressure
force them to commit a criminal act (Schuchter and Levi, 2016). It may be related to finance and
emotions like money problems, gambling debts, greediness. It is stated that there is no system is
made that can fully eliminate the risk of fraud. Some factors include void sales, false returns,
financial and emotional force in Rainbow illusion and other company would increase the
likelihood of fraud.
Emotional pressure: If there is a workload among employees at the time of increased
sales, then in this type of situation there are more chances of fraud. When employee become

frustrated then they do not focus on their duties and sometimes they make wrong sales invoice
knowingly. When employer do not pay attention on employees and if they do not satisfy their
needs and only focus on increasing sells then employees become bind to make frauds. When
employees feel that there needs and preferences are ignored then they commit criminal act or
fraud knowingly. Some opportunities of making fraud also act as a pressure for a company.
When people and employees feel less chances of being caught after committing any type of
crime and fraud the they continuously make such type of things. It can also include the level of
dissatisfaction among employees.
If workforce of Rainbow illusion's retail store is not happy then they become more
inclined to engage in fraud. This type of situation occur when the company reduces the points
and benefits of incentives, bonuses, promotional opportunities etc. In addition, when employees
feel some type of pressure and workload from outside investors in order to meet a certain given
target or to meet balance sheet goals that time also a high risk of financial reporting fraud.
Financial pressure: Financial pressure includes shortage of money, gambling debts, loss
in business etc. When people feel helpless and suffer from money problem then they commit
fraud. When company make rapid growth then it create greediness in competitors then they also
try to make fraud with the company. The mindset of an individual of committing crime or fraud
is called rationalization (Zaki, 2017). It is also stated that if the company has a large amount of
bills on hand as well as cash in banks then there are high chances of fraud. Void sales are also a
type of fraud because this type of sales are not registered in the books and it is all done by staff
members. Staff members sales products to customers and keep this record and money with
themselves and make it as a void sale. So, it can be said that fraud related to financial pressure
happens due to lack of money or shortage of money.
By using the fraud triangle the company can analyses factors and vulnerability to fraud
and any type of unethical behaviour which is being done by employees with the main aim of
commuting fraud. It can relieve pressure by implementing this effective framework within an
organization.

Explanation of why some companies would choose to install a distributed computer system
rather than a centralized one
There are mainly 3 types of computer system such as centralized, decentralized and
distributed. All these computer system has some advantages and disadvantages on which basis
the company make its decision of choosing and installing them for their business.
Centralized system: In this type of system one or more than one users nodes are directly
connected to a central server (Seabaugh and et.al., 2019). It is the most favourable and common
type of system which are being used by several companies. In this type all calculations are done
on single system rather than multiple system in which client sends a request to the company's
server and in return get the response. Example: Wikipedia.
Distributed system: In this type of system, every nodes or computers make their own
decision. There is no single entity that receive as well as response to the client requests.
Calculations are made by multiple computers. It is beneficial when the company has a large
amount of data for calculation. Examples includes LAN, World wide web, database management
system etc.
There are several reasons which are pitting pressure on companies to install distributed type of
computer system which are described as follows:
• As compare to centralized system, distributed system server can not affect the whole
system of the company. In centralized system, if the server fails then it can hamper all
other processes of the company due to having a single entity and server controls all
operations.
• The other main reason which makes distributed system more effective is data replication.
This system puts copy of same data and informations on multiple systems. The main
benefit of doing this is to not face the problem of losing data. If one of the system break
down then other machines have the same data.
• A distributed computer system has more capability and total computing power than a
mainframe.
• People can collaborate and share informations more effectively by having a large number
of personnel computers (Wu, 2017).

• There is a more flexibility as compare to centralized computer system, so it can spread
and distribute the workload over the available machines.
• This type of system cam offer a better performance as well as price as compare to
mainframes and centralized. It is called the best way of increasing computing power and
solving problems related to data management.
• Distributed computer systems can easily scalable as they are designed for parallelism.
CONCLUSION
From the above study it has been summarized that strategic information system and sales
system played a vital role in retail sector. By having and implementing an effective sales system
companies increased its overall productivity, organizational efficiency and coordination among
different person related to sales department. It has also shown increasing importance of having a
proper management and sales system within an organization as it supported the company in
avoiding the problems that could create. Further it has shown 2 situational pressure that become
the reason of fraud and by which an organization faced several problems like decrement in
customers experience, conflicts among employees etc.

REFERENCES
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Schuchter, A. and Levi, M., 2016. The fraud triangle revisited. Security Journal. 29(2). pp.107-
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Seabaugh, K. and et.al., 2019. Centralized accounting system for invoice generation accessible
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Wells, J.T., 2017. Corporate fraud handbook: Prevention and detection. John Wiley & Sons.
Wu, J., 2017. Distributed system design. CRC press.
Zaki, N.M., 2017. The appropriateness of fraud triangle and diamond models in assesing the
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