2.

Here are the advantages and disadvantages.

Advantages:
1. Save funds: TPS can lead to cost savings by automating routine transactions and reducing manual
processing expenses.
2. Process transactions accurately and quickly: TPS ensures precision and efficiency in handling a large
volume of transactions.
3. Operational efficiency: It enhances overall organizational efficiency by streamlining business
processes.
4. Carry out operations in multiple segments: TPS can manage various transaction types or segments
simultaneously, supporting diverse business needs.

Disadvantages:
1. Does not have a standard format: TPS may lack standardized data formats, making data integration
and analysis more challenging.
2. High setup cost: Implementing a TPS can be expensive, particularly for small businesses.
3. Hardware and software compatibility issues: Ensuring seamless compatibility between hardware and
software components can be complex.
4. May stop working/slow down: Technical issues or overloading can cause TPS downtime or
performance slowdowns, disrupting business operations.

3. Revenue cycle is the process of accepting customer orders until cash collections. Expenditure cycles
relate to acquiring materials and other purchases or incurring expenses until payment.

To discuss further the revenue cycle activities involved in making money for a business are all included in
the revenue cycle. Sales often mark the beginning of the process, which concludes with client cash
collection. The revenue cycle in a TPS entails tasks including order processing, billing, credit
management, and payment receipt. In addition, the TPS tracks sales, creates invoices, and keeps track of
receivables when a customer places an order. The TPS also maintains account of allowances, discounts,
and refunds on sales. It makes sure that revenue recognition occurs on schedule and accurately, which is
essential for financial reporting.

However, the organization's spending activities or the expenditure cycle, include the acquisition of goods
and services and the payment of vendors, are covered by the expenditure cycle. In a TPS, the spending
cycle entails activities like as purchase orders, purchase requisitions, receiving products, comparing
invoices, and paying bills. When a department needs products or services, it starts a purchase request
that must be approved. After being accepted, a purchase order is created, and the products are
delivered. After that, the TPS links invoices to receipts, purchase orders, and other related paperwork,
enabling precise and prompt payments to suppliers. Effective controls throughout the expenditure cycle
are necessary to stop unauthorized spending and guarantee budget adherence.
4. TPS process high volume of every transaction within organization (transaction level), whereas,
Business Intelligence, process on a large scale basis (covers the challenges as a whole). Transaction
Processing Systems are primarily designed for capturing, processing, and storing day-to-day transactional
data. They handle routine operations such as sales, inventory management, and order processing.
Business Intelligence, on the other hand, focuses on analyzing and reporting historical data to support
decision-making. It involves extracting, transforming, and visualizing data to gain insights and make
strategic decisions. TPS deals with operational data, which includes real-time or near-real-time
transactional data like sales, purchases, and inventory levels. BI works with historical and often
aggregated data. It may include data from TPS but also other sources like data warehouses, external
data, and more.

In conclusion, business Intelligence or BI systems are complete solutions involving processes,

technologies and applications. In contrast, a TPS is an information processing system responsible for
processing every transaction occurring within an organization. The main purpose of BI systems is to
improve a company’s operations using relevant data. On the other hand, a TPS’s purpose is to process
every transaction occurring within an organization.

5.
There are two primary types of Transaction Processing Systems (TPS): batch processing and real-time
processing. In batch processing, data is grouped and processed in sets that share similarities, which can
introduce delays, but these are generally acceptable in TPS. This method is efficient because it utilizes
fewer resources, as the computer is only active when processing is scheduled.

In contrast, real-time processing handles transactions immediately, eliminating delays, making it ideal for
businesses dealing with individual, time-sensitive transactions. However, it demands more resources as
it operates around the clock, which can be considered inefficient due to potential network issues.

6. General controls and application controls.

7. Field checks, valid character checks, reasonable or limit checks, sign check, zero balance checks,
master file checks, and document count.
8.

Processing controls are designed to ensure that the inputs or resources used in a process are of the
required quality and are appropriately managed. These controls focus on the initial stages of a process and
aim to prevent defects or issues from entering the process in the first place. Processing controls are
important for maintaining the integrity of the process and ensuring that it starts with the right inputs.
Examples of processing controls include:

 Physical file identification procedures

 Sequence test over predetermined documents
 Zero balance checks

Output controls, are implemented to monitor and assess the results or outputs of a process or an
organization's activities. These controls are applied after the process has been completed or is in progress,
and they focus on the outcomes to ensure that they meet predefined standards and objectives. Examples
of output controls include:

 Matching and agreeing output information to the input data e.g. for input data related to journal
processed to create an additional provision for bad and doubtful debts, one may want to
compare or match the balance appearing in the ledger after the transaction is processed as a
way of verifying that output matches the input.
 Noting distribution of all output information to verify that this information is accessible to and
is distributed to the list of authorized users only.
 Error listing or exception reports should be generated on a daily basis and reviewed by an
independent person to ensure that the transactions summarized in these reports are investigated
and where appropriate resubmitted for processing.

Also these are necessary to ensure that

- Expected reports are received from input data processed.
- Results of processing are accurate.
- Output is distributed to appropriate users promptly.

 High Speed – In a CIS environment, information can be generated very quickly. Even complex
reports in specific report format can be generated for audit purposes without much loss of time.
 Low clerical error – computerized operation being a systematic and sequential programmed
course of action the changes of commission of error is considerably reduced.
 Concentration of duties – In a CIS environment, the traditional separation of duties among
individual from manual system does not exist, since computer programs perform more than one
set of activities at a time thereby concentrating the duties of several personnel involved in the
work.
 Disappearance of manual reasonableness/documentation - The shift from traditional manual
information processing environment to computerized information system environment needs
a detailed analysis of the physical system for transformation into a logical platform.
 Impact of poor system – Care has to be taken in adopting manual operations switching to
computerized operations, otherwise computer information system environment may do
more harm than good in the integrated business operations.
10. Black-box approach and white-box approach.
11. Test packs/ test data and computerized audit programmers.
12. Computer hardware, computer software, database, network resources and human resources.