University Report: Strategic Information System for Rainbow Illusion

This report examines the strategic information system of Rainbow Illusion, a ready-to-wear garment company. It analyzes the company's strengths, including its decentralized management structure with store managers responsible for their respective locations, manual transaction recording, and data protection measures. The report highlights how these strengths help eradicate potential problems and discusses pressures that could lead to fraudulent activities. It also explores the company's preference for a distributed computing system over a centralized one. The report details the company's accounting practices, including the recording of sales, handling of returns, and reconciliation processes. It emphasizes the importance of data security and the role of young employees in fostering innovation. The report also touches upon the pressures that can lead to fraudulent practices, both by employees and management, and the impact of technology on financial manipulation.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic Information System
Name of the Student:
Name of the University:
Author Note

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Executive Summary
Rainbow Illusion is a company dealing with the production of ready to wear garments for
women and girls. It follows the accounting policies and manages its operations properly. It
allocates the correct resources for production and duties to its managers. It eradicates
potential problems. It involves innovation in its business. It has been seen that companies
choose to adopt a distributed computing system.

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Table of Contents
Introduction................................................................................................................................3
Strategically adopted strengths of Rainbow Illusions................................................................4
Problem eradication by adopting strengths................................................................................5
Pressures that create situations of adopting fraud......................................................................7
Reasons of preferring Distributed Computer System over Centralized Computing System.....8
Conclusion..................................................................................................................................9
Reference list............................................................................................................................10

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Introduction
Rainbow Illusion is a garment company that focuses on the ready to wear garment
production of women. This report has been prepared for the Chief Executive Officer of this
company. The industry produces a large variety of items ranging from slacks, hats, skirts,
jeans, dresses, blouses, accessories and footwear. Plastic, rubber, leather and fur are not used
for the production of cloth. The material and fabric for the industry are purchased from textile
producers which is further used for producing the garments for girls and women. There is a
tough challenge faced by the companies in this industry due to the current prevailing trading
conditions. The local manufacturers are facing immense pressure on the operations as the
garment imports have increased significantly in the recent times (Nayak and Padhye 2015).
Due to this, there are new competitors who have entered the market to compete against each
other. This has resulted in the reduction of the revenue of this particular sector. The
movement of production offshore and the high rate of industry exits faced by this industry is
alarming. As a result, the industry enterprises have depleted in number. The producers have
shifted their focus to the products that have high value addition (Burchielli, Delaney and
Coventry 2014). The success of this sector has been following the trend by the focusing on
important factors like professionalism in the expertise of marketing, the ability to make
required modifications in their producing of goods and rendering of services and establishing
of the particular brand name according to the conditions prevailing in the market
(Radhakrishnan 2015.). Adhering to the requirements of the market, the company has
strategized its operations by allocating the duties and responsibilities to its managers who
have been assigned different stores. It has protected the threats of its information system that
it could be exposed. The information and data of the company have been safeguarded by
implementing the control system of the internal environment. The operations of the business
has been conducted properly that has enabled the company to evade from its forecasted

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problems which have occurred in the future (Burgess, Cameron and Rainnie 2014). There has
been discussion on situations which could lead to adoption of fraudulent practices by the
employees as well as by the managers. The benefits and negative impacts of the different
types of computing have been illustrated. The reasons for which the companies choose to
have a distributed computer system instead of a centralized computer system have been
highlighted.
Strategically adopted strengths of Rainbow Illusions
The company has distributed and allocated the duties and responsibilities to the
managers of different stores. These managers look after the operations and performances of
the store that has been allocated to them. As each store has its own set of managers appointed
to them, there is increased competition which leads to the improved performances of the
company (Quinn et al. 2015). Each store is trying to be better than the other store. The
company has hired young population of the country into its business which will help to bring
innovations in their methods of work conduct. The business has its policy of recording its
transactions manually instead of using the Accounting Information System. They believe in
the protection of the data so that there can be no problems that could arise in the future. The
cash register shows a demarcation of four parts for the purpose of recording the different
transactions that have been given in the invoices. The sales manager performs a detailed
recording of the data which represent the number of the employee, transactions, price of each
unit, class, quantity and its description (Schmitz and Ganesan 2014). The summation of the
sales and the required discounts have been calculated. The totaling of the sales as well as the
calculation of sales tax are also performed by him. A carbon copy is kept in the sales book
while the salesperson transfers another carbon copy to the cashier. The cashier reviews the
invoices and then the recording of transactions is done. The sales made by the company helps
the cashier to handle the approvals of credit. He further, makes approva1 of the deals that

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have cheque payments. The invoices have creation of three photocopies. One carbon copy is
kept with the store, another carbon copy is provided by the cashier to its customers and a
third carbon copy is kept for the use of bank card. The third carbon copy is generally created
in the situations of deposit. The cashier issues the return slip that is managed by the company
returns in the reverse order. At the end of each day, the cashier orders the invoices in serial
order. The cash register summations are obtained by the cashier for the purpose of accounting
the cash returns, credit card sales made by cheque and cash (Aini, Alwiyah and Putri 2019).
The reconcilement of the summations is measured by the assistant manager according to the
consecutive return slips, tapes of cash register and invoice of sales (Shi et al. 2017). The
preparation of reconciliation statements by the assistant manager for each store is reviewed
by the respective store manager. The credit card invoice inclusions of the deposits, credit card
sales, cash and cheque are all reviewed by the manager. The reviewing of the details helps to
prepare the daily bank deposit report. The validation of the files is performed as per the usage
of deposit slips and the managers make the deposits at the bank. There is a daily reviewing of
the return slips, cash register slips and sales invoice by the central department of data
processing. The manager has the duty of reviewing the report on commission activities. The
data processing department answers the sales report on a weekly basis.
Problem eradication by adopting strengths
The organizing, processing, capturing and storing of data is done in an understandable
manner which helps the manager in taking proper decisions. There is no overlapping of duties
as it is clearly and evenly distributed amongst the people (Bandiera et al. 2015). This reduces
work load on an individual and provides opportunities to everyone for personal growth and
development. The resources are being efficiently and effectively used as a proper distribution
control system has been adopted by the individual stores. The preparation of reports everyday
assists the managers in keeping checks over the stock and take necessary measures to conduct

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the inventory management properly. On the basis of the prepared reports, the decision
regarding the inventory management and purchase or sale of items is done. The daily
reporting helps to make the report of performance of the employees while the preparing of
general ledger helps to make the financial statements of the company. The activities in a
revenue cycle include shipping, billing, collecting cash and entry of sales. The business also
helps to update the ledgers (Windsor 2017). The recording of sales entries helps to know the
details regarding the received orders, inventory levels and credit checks of the company. The
reviewing of reports on a daily basis checks the validation of the records, compliance with the
rules and laws, authorization of the verified documents and disclosure of the records being
done by the managers. The transactions recorded by the managers are recorded in a user
friendly manner which makes it easy to understand by the users of accounting. The following
of a proper time frame for recording its transactions helps to make quick decisions. The
wholesomeness of the records ensure that all the details have been taken into account by
them. The data recorded by the managers on a daily basis is relevant and sufficiently reliable
as it has been manually recorded. The delay in work is prevented as the recording of the
transactions is not depending on the machine instead it is depending on the manager himself
for doing it manually. In case, the manager had decided to record the transactions on an ad
hock basis the records would not be maintained sequentially and the records would be
difficult to track down. Someone would have to be appointed with the work of placing the
orders which would create unnecessary and extra work load. The proper auditing techniques
had been adopted and applied in its recording. Therefore, it assists the auditor in conducting
the audit process. As the transactions have been recorded by following the correct policies, it
enables validation of the records. A large group of young people have been involved in their
management which promotes innovation into the business activities. The enthusiasm
witnessed among the existing young employees has encouraged the company to prefer hiring

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more of the young people into the business. The forwarding of the data to the central
department helps to create another blue print of the records which acts as a backup and
becomes helpful at the time of data loss due to any reason.
Pressures that create situations of adopting fraud
Employees resort to unconventional methods of performing the fraudulent practices in
situations of pressure. Some of the examples of these type of frauds include pilfering of
assets, embezzlement and theft. Unlike the conventional method in which the employees
would rob the assets of the company (Manurung, Suhartadi and Saefudin 2015). The
committing of fraud by an employee takes a time span of about 18 months to be detected by
the company. This is a long time and can cause a huge damage to the company by the time it
gets detected by them. In many cases, the management is not able to detect the theft even
within this time frame. Instead, any other employee who has been performing his task faces
glitches and further investigates into the matter. The fraud gets detected by him and he
reports it to the management which then takes necessary actions. The rate at which the
employees have been committing frauds has been rising at an alarming rate and amounts to a
huge loss for the country (Clor-Proell, Kaplan and Proell 2015). The use of technology that
makes the recording of transactions happen automatically without any human interference
has led to the increase of manipulation of values in the books and embezzlement of money.
The management also performs fraudulent activities in order to show a false image of the
company in the situations when the company has not performed up to the expectations. They
perform indirect methods such as inflating the prices of the shares or obtain favorable sources
of financing for the company (Karpoff, Lee and Martin 2014). They are often performed by
the managers at the top level rather than the low level managers. It is mainly done to depict
an accurate and better image of the company due to its reputation and goodwill in the share
market. The assets have been misappropriated using devious and complex methods. This

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fraud practice is termed as Management Fraud. Any commitment of fraud can have a huge
impact on the business, irrespective if the defaulter. The fraud by the management is
equivalent to a fraud committed by its employees.
Reasons of preferring Distributed Computer System over Centralized Computing
System
The Distributed system of computing has a structure in which various computers
located at different places are connected to one another over the network. They are linked to
one another but not dependent on each other (Fujimoto 2015). This is a cost effective system
of computing as it does not involve expensive supercomputers. It makes use of simple
computers to resolve even complex matters of computing. The collection of computers that
are different from one another but look to belong from one logical system to the clients are
called as Distributed Systems of Computing (Banerjee and Hecker 2017). The combining of
computer systems are done using the Local Area Network or Wide Area Network and
communicate with one other from different locations. They perform the activities from their
respective locations without any hindrance in their operations as they are independent. The
peripherals including printers and databases by them is shared but their memory and
processors are independent of one another as they all have nodes on the self-governing
machines (Wu 2017). The front end and the back end are the two divisions of the system. The
back end does the finding and sorting of the required data and run it on the central computer
located at a distant location. The front end is the part that is made user friendly as it interacts
with the users. It determines the data that is explained and does the process of organizing
them. Due to the applications being splitted over the individual computers the functioning of
these computers seem to be client-server friendly (Stanciu 2017). Within the distributed
computing system, there is another type of system known as grid computing that has a
distributed system of architecture and requires large numbers of computers for being

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connected to solve the problems. The personal computers are linked to one another using
low-speed of networks. They perform individual task over the grid model. It searches and
downloads data by using personal computers (Varghese et al. 2016). Distributed applications
make use of multiple systems at one particular time while the running of standalone
applications required traditional applications.
The Centralized Computing System has the client’s computer directly linked to the
server at the central department. The computers have almost negligible computing capacity
and limited functionalities. Their Central Processing Units are weak and have primary
devices for input (Varghese and Buyya 2018). The compilations and computations are done
by the central server. The installation of the server is done using primary applications, high
capacity storage, intensive computing features and large amount of computing resources.
The client nodes dependent on the server as it provides them computing, security, application
access and internet access. It faces a major drawback due to this dependability (Damachi and
Souder 2015). It causes failure of work up on breakdown of the central server. It may also
cause complications at the time of high traffic over the server as several ports are connected
over the server.
Conclusion
It can be concluded from the report that Rainbow Illusion is a properly managed
company. It makes timely updates in its books of accounts and ensures availability of right
amount of resources on time. It encourages the young population of the country by including
them as a part of their company. It conducts its operations by properly distributing the
responsibilities and duties among its employees. It does not pressurize an individual with all
the responsibilities. It adopts the practice of manual recording to ensure validation of data. It
prepares the required blue print of the invoices and provides it to the relevant people. It

10STRATEGIC INFORMATION SYSTEM
avoids several problems by applying these strategies into its business. However, certain
organizations adopt to fraudulent practices in the situations of pressure. It has been concluded
that several firms choose to opt for a distributed computing system rather than a centralized
computing system due to its advantages.
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