Accounting Information Systems - Part-A

Weakness Relating to Purchases

The Company’s special ordering system for purchase has a form of purchase requisition which is sent to the department of purchase. After that buyer verifies that the requester is the head of department. Then the buyer selects the appropriate supplier and then he calls the supplier and requests for a quote of price and accordingly place an order verbally. Then a pre numbered order of purchase is processed and original is sent to the supplier with the copies to the head, receiving and accounts payable. Also a copy is filed in the requisition file and then the receiving department informs verbally to the buyer of the receiving. Then the order is transferred to the open to filled file.

The next problem that arises is with the placement of order to the supplier. The buyer places the verbal order to the supplier by asking them a quote. There is no written communication for the purpose and in future no proof can be generated that in turn will be an issue. When the purchase order is processed that instead of sending the original to the head of department for approval, it is directly given to the seller with a copy to the head of department, receiving and accounts payable. The approval for placing the order while displaying the quotes to the department head was not considered in the process.

Again when the order is received there is no proper channel of communication in writing to update the buyers. The only communication is verbal. No receiving is done nor is the receiving provided to the buyers. In this case, nor the buyer will have any proof that the material have been supplied nor the receivable department can show on paper that items have been received. Also, all these activities are carried out through paper format that is a problem for the appropriate functioning as it leads to collection of huge records overtime. Thus, these are the various problems that are attached to the method of purchase order for the company.

Weakness Relating to Payments

According to company’s method of payment, when the purchase order is received the clerk files the order in open file. When the invoice is received by the company from vendor, then it is checked with the order for purchase and a payable is generated by keeping requisition account in debit. On the date of payment check is prepared and forwarded to the treasurer for signature. All the checks above $20000 are signed by both the treasurer and cashier.

The problem in the method of payment is that the payment is made on the basis of invoice received. There is no methods of confirming it with the quantity that is received. It might happen that full order has not been sent or certain items are missing but since there is not confirmation, payment is made in full even for the items that have not been received. With that the payment that are less than $20000 have no check on them and are single handedly hold by the cashier that might lead to misrepresentation and misleading cash activities.

Control Procedures for Purchase Method

Once there are certain requirement for the company that has been identified and the order is created then the head of the department should foresee it before sending it to the purchasing agents or the buyer. Head of the department should see it and them accordingly stamp it and sign it. This will reduce the process of re-verifying by the buyers. More to that it is more of a convenient and appropriate method. At times reconfirmation can be given by other person until and unless the buyer themselves go down to meet the head of department and reconfirm the order. So, stamped and signed purchase order will give a surety that it is been checked and confirmed by the head of department.

Another change that is required for better control is at the time when the purchasing agent places the order. The buyer does not have any proper channel for getting the quotes and selecting the quotes. The buyer should have quotes in writing from the sellers and then forward it to the head of the department. This will help in keeping a check as at times there is a percentage that buyer get from selecting a particular seller that might cloud their judgement. So, instead of buyer making all the decisions, the quotes should be forwarded to head of the department and then the seller should be finalized.

Once the order is placed and purchase order is generated, then the original copy should be sent to the receiving department so that they can check the quantities and match it with the received order and place both the order receipts together. This will help in confirmation on the part of goods that are being received by the company and payment will be released accordingly. The reasons like defected goods, less items etc. can be sorted and no extra money will be paid by the company.

Also, at the time of receiving the quantities, it is required for the company that a proper order of receiving is created with the amount of quantities that have been received. This will help in matching the required quantities that was ordered and the quantities that have been received. Also, a copy of it should be sent to the buyer instead of verbal communication as in case of need everyone will have the proof of receiving. In any situation where seller claims that quantity has been sent and it was not received, receiving order will serve as the document for proof. Thus, these are certain control measures that should be adopted by the company for purchase.

Control Method for Paying Method

The payable is created once the purchase order is made and as per that check is prepared at the payment date. But before creating a check, a process should be added where the payment is to be made according to the receipts of goods. When the goods are received they are to be checked whether all the goods are received or not and according to the quantity that has been received should the payment be made to the seller.

Also, in the company for paying an amount lower than $20000, only one person is required that in turn gives more power in the hands of one person. So to control that company should appoint the clerk and cashier to sign the payments receipts if made to anyone. Clerk because he is the one who generates order and have better idea of the items that have been received by the company. Also, when there are two person chances of carrying a fraud reduces. Thus, these factors should be considered for better control in the company.

Electronic forms are one web based paper form that should be used by the company in place of purchase requisition form. A format should be created and accordingly the requirements should be filled in it. Once that it is created through electronic data interchange, these forms should be sent to the buyers. The buyers can forward these forms to the sellers and accordingly quotes can be received from them through the same platform of electronic data transfer. These quotes than should be forwarded to the head of the department and accordingly the seller should be selected. For finalizing the order head of the department should select the quote and send a mail to the buyer and then accordingly buyer should place the order.

Once the order is place EDI will again play its role. Seller when furnishing the products should provide a bar code to every product and then through EDI data can be shared between the two parties. Once the order is received, then through the bar code scanner company can check whether the right products and all the products have been received or not. This will provide better control. After this is done a receipt for receiving the order should be generated online and then sent to the buyer as well as seller and the accounts payable department.

Accounts payable department than can use EFT electronic fund transfer method and pay it to the seller. In this manner a payment receipt will be automatically generated. This whole process will be proofed with documents and a better control can be kept at every stage. Also, if there is any payment that will be made than a receipt will be generated and it can always be seen in the statements. So chances or fraud can be avoided. In this manner a proper system of IT can help in providing better control.

Accounting Information Systems - Part-B

Overview of Old Business Process

AirBnb is arental online company that provides homes all over the globe mainly for the purpose of vacation, homestays or tourisms experiences. The company serves as a broker between the host and the travel and in turn charges commission from both. It serves as a middle man between the parties. Before the company’s engineers and designers were working at silos which in turn was counterproductive and because of this the engineers were not able to meet the deadlines and mediocre ides for the product were given (Moormann&Bogodistov, 2019). Recently the company went for business re-engineering. The company was trying to get their internal functioning as one and create a process that is quick to deliver and is also sustainable.

Bottle Neck Identified

The main functions that contributed to the development of AirBnb products includes designers, researchers and engineers. These were working in silos and were only jumping into the process at defined times. Due to this the end goal wasn’t being delivered. At times, designers were waiting for the engineers to write a code before they could mock up or can visualize the idea on the screen (Tham, 2016). Due to this after the code had been written, engineers have to wait for the validation of the idea of product and if it happened then at times it was realized that the assumptions which were made have now become off-base. This became a process failure for the company.

Re-Engineered Process

The company took the process of re-engineering and various steps were taken by the company to resolve the issue:

Step 1: Treating the resources that are geographically dispersed as centralized

The development process was reengineered. For the purpose of creating a centralized environment a digital environment was created for the company. The company connected all the systems and rather one team working on different or separate systems, meant round and round of abstraction layers or quasi-prototypes, the single platform of digital environment enabled files to depict real time updates and reflect the real data (Pokrovskaoa, Gildingersh&Gornykh, 2018). This helped the team in getting real time updates and the work of different persons can be seen at the same time.

Step 2: Outcomes were organized around and not the tasks

The product development process of Airbnb’s reengineered towards the design of the product outcomes and not on the features of the product. This change baked a step that was unfamiliar into a process of development of the product emotions. The teams were then made to talk about the outcomes from a lofty aspirational perspective and also as a code for nitty gritty perspective. When the features were in focus, the company was looking at short term goals while outcomes of the product broaden the horizon for them.

Step 3: Activities were linked parallel instead of integrating the results

The product development process of Airbnb’s reengineered towards the design of the product outcomes and not on the features of the product. Every stage of the product development was then included with all the people and engineers, designers and researchers worked parallel through the process (Schallmo& Williams, 2018). This helped in removing the hindrance of coming at the end and then disqualifying all the work that has been done till now. Thus in this manner reengineering in the company was carried out for making the company’s functioning better.

Outcomes of The Reengineering Process for The Business

The outcomes for the business reengineering process were positive. For the first step of reengineering where geographically dispersed resources were centralized in turn led to the centralization of internal development tools. Even at the times when co-workers were not able to sit in the very same room, they all were connected in a way that they were looking at the same product in the real time. This centralization which is virtual supported the team in developing a product quickly back and forth (Schallmo, Williams & Boardman, 2017). This also removed the hindrance of waiting till the design is finished or for the engineers to write the code.

The second step or the change helped in the orders that were meant for procure to pay and the cash to order. Also it helped in the development of the product. When the company was focusing on the features than the outcomes which were huge were shelved as per the immediate task need. This hindered the forward looking activity of the company. After re-engineering the company’s future goals were also considered and focus was shifted in the right direction providing better result to the company overall.

The third step of linking the activities in a manner that is parallel helped in creating a process that is embedded into the development stages along the way. By this process the trying of massage in the outcomes of research to a product that is already existing, the company linked the activities of the research with the engineering and designer activities. This helped in generating results in a better and efficient way helping the company in saving the whole process going to vain. This produced better results for the company.

Conclusion on Accounting Information Systems

Prior to the business re-engineering process of the Airbnb companyit was not able to achieve results that were required. Instead the company was facing various issues. After the process of re-engineering the company was able to function in a more efficient wat. This is turn helped in the growth of company. The process were aligned and a digital platform was created so as to share the recent progress of the work. This reduced the time lapse of the company and also the wastage of efforts were reduced giving a better results overall and hence making the system more efficient for the working by connecting everyone digitally while sitting apart and developing products became easier.

References for Accounting Information Systems

Moormann, J., &Bogodistov, Y. (2019). Process innovation in information systems research: a missing exploration. International Journal of Business Process Integration and Management9(4), 258-266.

Pokrovskaia, N. N., Gildingersh, M. G., &Gornykh, E. V. (2018, July). Reengineering of Corporate Management in the Innovative Context and Professional Competencies of a Reengineer. In 2018 Third International Conference on Human Factors in Complex Technical Systems and Environments (ERGO) s and Environments (ERGO) (pp. 32-35).

Schallmo, D. R., & Williams, C. A. (2018). History of digital transformation. In Digital Transformation Now! (pp. 3-8).

Schallmo, D., Williams, C. A., & Boardman, L. (2017). Digital transformation of business models—best practice, enablers, and roadmap. International Journal of Innovation Management21(08).

Tham, A. (2016). When Harry met Sally: different approaches towards Uber and AirBnB—an Australian and Singapore perspective. Information Technology & Tourism16(4), 393-412.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Accounting and Finance Assignment Help

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