Bell Studio: Strategic Information Systems Analysis and Review

This report provides a comprehensive analysis of Bell Studio's Purchase System, Cash Disbursement System, and Payroll System. It begins with an executive summary and introduction outlining the report's objectives. The core of the report includes data flow diagrams and system flowcharts for each system, offering a visual representation of their processes. The report then delves into internal control weaknesses and associated risks within each system, addressing key areas such as demand for valid business expenses, efficient ordering, stock checking, approved suppliers, standardized cheques, safe custody of cheque books, customer signatures, duty segregation, and accurate calculations. The report concludes with a summary of the findings and references to the sources used. The analysis aims to identify vulnerabilities and suggest improvements to enhance the efficiency, security, and reliability of the business systems.

Strategic Information Systems
for Business and Enterprise
May 1
2019
Student ID:
Student Name: T1 2019

Executive Summary
The report is showing complete detail about the Purchase System, Cash Disbursement
System and Payroll System of Bell Studio. All possible weaknesses in all systems along
with risks are mentioned in the report.
The data flow diagrams and system flow charts of each system are also depicted in the
report.
The data flow diagrams and system flow charts are easily describing the system and the
users can easily understand the complete system. All processes are mentioned by the
data flow diagrams while all the flows are clearly being shown by the system flow
charts.
Report
Contents
Executive Summary.....................................................................................................................................2
Report..........................................................................................................................................................2
Introduction.................................................................................................................................................3
Data Flow Diagram of Purchases and Cash Disbursements systems...........................................................4
Data Flow Diagram of Payroll System..........................................................................................................6
System Flow Chart of Purchases System ....................................................................................................7
System Flow Chart of Cash Disbursement System.......................................................................................8
System Flow Chart of Payroll System..........................................................................................................9
Internal Control Weakness and Risks Associated..............................................................................10
Purchase System....................................................................................................................................10
Cash Disbursement System...................................................................................................................12
Payroll System.......................................................................................................................................14
Conclusion...............................................................................................................................................15
References.................................................................................................................................................16

Introduction
There report is based upon the Bell Studio. The report is summarizing the Purchase
System, Cash Disbursement System and Payroll System of Bell Studio. The report is
completely describing the three systems pictorially by data flow diagrams and flow
charts.
The possible weaknesses in inter control in all systems is being defined in the report
and associated risks along with all specified weakness is also being defined in the
report.
The internal control in terms of auditing and accounting is a process of assurance of the
objectives of organization, reliable financial transactions, acquiescence with law,
policies and regulations etc. It helps in preventing and detecting the frauds in the
organizations and protects the resources of the organizations both physical and
intangible.

Data Flow Diagram of Purchases and Cash Disbursements systems

Data Flow Diagram of Payroll System
(Lucid Software Inc. 2018) (Smartdraw, LLC 2019)

System Flow Chart of Purchases System

System Flow Chart of Cash Disbursement System
(visual-paradigm n.d.)
(Mind Tools n.d.)

System Flow Chart of Payroll System

Internal Control Weakness and Risks Associated
The internal control in terms of auditing and accounting is a process of assurance of the
objectives of organization, reliable financial transactions, acquiescence with law,
policies and regulations etc. It helps in preventing and detecting the frauds in the
organizations and protects the resources of the organizations both physical and
intangible. Internal Controls should be managed properly to prevent frauds and
scandals. If there is weakness in the Internal Controls of the system, the organization
has to bear a huge loss physical and intangible both. (Wollacott M. 2019)
There may be different weaknesses and their risks in different systems. In Bell Studio,
we are concentrating on three systems- Purchase System, Cash Disbursement System
and Payroll System. Any weakness in Internal Control is very serious issue and should
be rectified on time to prevent of huge loss. The weakness in Internal Control of Payroll
systems etc. is very big blunder. It should be resolved on primary basis.
(myaccountingcourse.com 2019)
Purchase System
The Purchase System is very complicated and very soft area in every organization
because it is linked to the money transactions etc. The weakness in Internal Control of
this system is a great loss in its resources, reputation and revenue etc.
There are so many areas in which the weakness may occur in the Purchase System.
Therefore, to prevent the loss ensure the following things-
Demand for valid business expenses
The management should demand for the valid business expenses because the
vendors, suppliers or any employee can do frauds in the expenses. It is very soft area
where the frauds can occurs. If any of vendors, suppliers or any employee do
something wrong, the expenses will be high. Therefore, this should be strong and
weakness should be resolved from here. There should be strong internal control on
checking valid business expenses.
The risks associated with it are that the frauds can be easily occurred and it will directly
affect the revenue of the organization. (Educator Association 2019)

Efficient and Cost Effective Ordering
The ordering process should be very efficient and cost effective. If the order is not
correct, the complete purchase process will be wrong. If the purchase order format is
not correct, it will be the weakness of the purchase system.
There are so many risks associated with it like incorrect goods delivery, contact with
incorrect supplier etc.
Correct Stock Checking
The stock checking process is very critical and important process in the Purchase
System. It may be weak if there is no proper checking process at this point. There
should be proper checking for stocks and if the quantity is less, the purchase process
should be started.
There are so many risks associated with it like out of stock condition, excess quantity for
some stocks etc.
Use Approved Suppliers
For goods purchase the organizations have to contact to the suppliers and the suppliers
should be approved. If the suppliers are not approved, there will be no guarantee of the
good quality for the received goods. It will be weakness of the system if the
unauthorized suppliers are contacted for purchase order. There should be proper
internal control on checking that only authorized vendors can be contacted.
There are so many risks associated with it like poor quality goods received, delay in
goods receiving, indirectly delay in order delivery to customers, and indirectly harm the
reputation of the organization.
All Items are written on Serial Numbered Purchase Order Form
All items should be mentioned serially on the purchase order form to prevent the out of
stock condition etc. it will be weakness of the system if there is no proper checking of
writing all items on the purchase order form. There should be proper checking that all
orders are written on the purchase order form.
There are so many risks associated with it like out of stock condition, delay in goods
receiving, indirectly delay in order delivery to customers, and indirectly harm the
reputation of the organization