HOLMES INSTITUTE

FACULTY OF
HIGHER EDUCATION

Assessment Details and Submission Guidelines

Trimester T1 2020
Unit Code HI5019
Unit Title Strategic Information Systems for Business and Enterprise
Assessment Type Individual assignment
Assessment Title Case Study – Paradise Industries
Purpose of the Students are required to:
assessment (with ULO  Critically evaluate the purpose and role of accounting information systems in
Mapping) today’s business environment (ULO 1).
 Articulate the various transaction cycles, financial reporting, management reporting
systems and e-commerce systems to technical and non-technical stakeholders (ULO
2).
 Appraise the risks inherent in computer-based systems/ERP, including the role of
ethics and the various internal control processes that need to be in place (ULO 4).
Weight 20% of the total assessments
Total Marks 20
Word limit Not more than 2,500 words
Due Date Week 7, Friday 5:00 pm (AEST)
Submission  All work must be submitted on Blackboard by the due date along with a completed
Guidelines Assignment Cover Page.
 The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm
margins on all four sides of your page with appropriate section headings and page
numbers.
 Reference sources must be cited in the text of the report, and listed appropriately
at the end in a reference list using Harvard referencing style.

HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment
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Assignment Specifications
Background
After working at several accounting and consultancy firms for more than a decade, you have recently
decided to start your own consultancy business. A friend of your wife introduces you to Paradise
Industries, a manufacturer of high-precision machine tools based at Adelaide. Paradise Industries
employs a centralised computer system with distributed terminals in the departments. The company
recently have a number of operational problems and the managing director of the company has
engaged you to assess its systems and processes.

Expenditure Cycle
When an inventory item falls to the recorder point, a purchase requisition is automatically generated
and printed on the terminal in the purchasing department. The purchasing clerk select suppliers and
prepare a purchase order. One copy of the purchase order is sent to the supplier and another copy
is sent to the receiving department. The purchasing clerk then adds a record to the open/closed
purchase order file through an update program in the data processing department.

When the receiving clerk receives the delivery from the supplier, the clerk reconciles the items with
the packing slip and the purchasing order. After the reconciliation, the receiving clerk prepares a
hard-copy receiving report recording the quantity and quality of the goods received. One copy of the
receiving report accompanies the items to the warehouse and another copy is filed in the receiving
department. Using the department terminal, the receiving clerk adds a record to the digital receiving
report file. The system then automatically closes the purchase order. Upon receiving the items, the
warehouse clerk updates the inventory subsidiary ledger through the terminal in the warehouse.

When the supplier’s invoice arrives, the accounts payable clerk adds a record to the supplier invoice
file, which in turn triggers the system to automatically set up a liability in the accounts payable
subsidiary ledger based on the financial information contained in the invoice. The system then
automatically updates all affected general ledger accounts.

The computer system scans the accounts payable subsidiary ledger every day for items due to be
paid and print the cheque. The cheque is sent to the supplier and a copy is sent to cash disbursements
where it is filed. The system then adds a record to the cheque register file and removes the liability
in the accounts payable subsidiary ledger. Finally, the system automatically updates the general
ledger accounts.

Conversion Cycle
The production process is triggered by a quarterly forecast of expected sales, which goes to the
production planning and control clerk. From the clerk’s terminal, the production planning and control
clerk updates the digital production schedule to include the batches of products to be produced
during the next quarter. Drawing upon the bill of materials and routing sheet files, the system
automatically prepares the digital work orders move tickets and material requisitions and sends them
to the work centre supervisor’s terminal on a weekly basis.

The work centre supervisor accesses the digital documents and print hard-copy work orders, move
tickets and material requisitions. The supervisor distributes the move tickets and two copies of the
material requisitions to each work centre in the production process.

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Staff members submit the two copies of material requisitions to the warehouse in exchange for the
materials. If additional materials are needed beyond the standard quantity, the supervisor issues
additional material requisitions. As the production is completed in each work centre, the staff
members send the move ticket to cost accounting to the mark the completion of that phase of the
production batch. Staff members also record labour time spent on each batch on hard-copy job cards,
which they send to cost accounting. Finally, upon completion of the batch, the work centre supervisor
closes the open work order file.

The warehouse clerk files one copy of the material requisition and updates the materials inventory
file from the terminal in the warehouse office. The clerk then sends a second copy of the material
requisition to cost accounting. At the end of the day, the clerk prepares a digital journal voucher and
posts it to the general ledger control accounts.

The cost accounting clerk accesses the digital work orders and set up a work-in-process account for
the production batch. The clerk also receives move tickets, job tickets, and material requisitions
throughout the production process and use the documents to post in work-in-process subsidiary
ledger. At the end of each day, the cost accounting clerk prepares a digital journal voucher and posts
to general ledger control accounts to reflect the status of work-in-process and to record transfers of
work-in-process to finished good inventory.

Required
Prepare a report to the managing director of Paradise Industries to evaluate the processes, risks
and internal controls for Paradise Industries’ expenditure and conversion cycle. In your report, you
need to include the following items:
 System flow chart of expenditure cycle
 System flow chart of conversion cycle
 Analysis of physical internal control weaknesses in the expenditure cycle
 Analysis of the risks exist in the conversion cycle and the changes needed to reduce the risks

Assignment Structure
The report should include the following components:
 Assignment cover page clearly stating your name and student number
 A brief introduction of what the report is about
 Body of the report with appropriate section headings
 Conclusion
 List of references

The report should be grounded on relevant literature and all references must be properly cited and included
in the reference list.

Marking criteria
Marking criteria Weighting
System flow chart of expenditure cycle 2%
System flow chart of conversion cycle 2%
Analysis of physical internal control weaknesses in the expenditure cycle 3%
Analysis of the risks exist in the conversion cycle and the changes needed to 9%
reduce the risks
Presentation 2%
Research quality 2%
TOTAL Weight 20%
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Marking Rubric
Excellent Very Good Good Satisfactory Unsatisfactory

System flow Present a Present a Present a Present a Present a

chart of system flow system flow system flow system flow system flow
expenditure chart that chart that chart that depict chart that depict chart that does
cycle correctly depict correctly depict the expenditure the expenditure not properly
the whole the whole cycle with some cycle with errors represent the
/2 expenditure expenditure errors and/or and/or expenditure
cycle. cycle with minor omissions. omissions cycle.
errors. throughout the
diagram.
System flow Present a Present a Present a Present a Present a
chart of system flow system flow system flow system flow system flow
conversion cycle chart that chart that chart that depict chart that depict chart that does
correctly depict correctly depict the conversion the conversion not properly
/2 the whole the whole cycle with some cycle with errors represent the
conversion conversion cycle errors and/or and/or conversion
cycle. with minor omissions. omissions cycle.
errors. throughout the
diagram.
Analysis of Present an Present a very Present a good Present a Present a weak
physical internal excellent good analysis of analysis of reasonable or inadequate
control analysis of physical internal physical internal analysis of analysis of
weaknesses in physical internal control control physical internal physical internal
the expenditure control weakness in the weakness in the control control
cycle weakness in the expenditure expenditure weakness in the weakness in the
expenditure cycle. cycle. expenditure expenditure
/3 cycle. cycle. cycle.

Analysis of the Present an Present a very Present a good Present a Present a weak
risks exist in the excellent good discussion discussion of the reasonable or inadequate
conversion cycle discussion the of the risks exist risks exist in the discussion of the discussion of the
and the changes risks exist in the in the conversion cycle risks exist in the risks exist in the
needed to conversion cycle conversion cycle and the changes conversion cycle conversion cycle
reduce the risks and the changes and the changes needed to and/or the or the changes
needed to needed to reduce the risks changes needed needed to
/9 reduce the risks. reduce the risks. to reduce the reduce the risks.
risks.

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Presentation Report included Report included Report included Report included Report lacked
all elements and all elements and all elements and most elements some elements
/2 was very well was well was generally and was and was poorly
presented. presented. presented adequately presented.
Writing flowed Writing flowed appropriately. presented. Writing often
clearly and clearly and Writing mostly Writing did not flow
sections were sections were flowed well and sometimes did clearly leaving
linked very linked sections were not flow clearly the paper to
effectively. effectively. linked. leaving the seem somewhat
Referencing was Referencing was Referencing was paper to seem disjointed.
exemplary. of a high in accordance disjointed in Referencing was
English was used standard. with guidelines. areas. not entirely in
very effectively English was used English was used Referencing was accordance with
and was error- effectively with effectively with somewhat in relevant
free. very few errors few errors accordance with guidelines. Basic
present. present. guidelines. Basic English was used
English was used with errors
with some present.
errors present.
Research Quality An extensive A broad range of An adequate An adequate Little or no peer-
amount of high- quality peer- range of peer- range of peer- reviewed journal
/2 quality evidence reviewed journal reviewed journal reviewed journal references were
from peer- references and references was references was included and
reviewed journal other sources included and included and these were
articles and was included used to support used to a basic rarely used to
other sources and used discussion. extent to support
was included effectively to support discussion
and used support discussion. effectively.
effectively to discussion.
support
discussion.

HI5019 Strategic Information Systems for Business and Enterprise Individual Assignment