CONFIDENTIAL

AC/JAN 20121AIS5101480

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

ACCOUNTING INFORMATION SYSTEM

JANUARY 2012 3 HOURS

INSTRUCTIONS TO CANDIDATES
1. This question paper consists of two (2) parts: PART A (5 Questions) PART B (1 Question)

2.

Answer ALL questions in PART A and PART B in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) the Question Paper an Answer Booklet - provided by the Faculty

3.

4.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

CONFIDENTIAL

CONFIDENTIAL PART A Answer ALL questions.

AC/JAN 2012!AIS5I01480

QUESTION I
a) Explain the two (2) basic business strategies as suggested by Michael Porter that can be adopted by companies. (4 marks) Discuss two (2) ways on how Accounting Information System (AIS) can add value to the organisation. (4 marks) Briefly explain two (2) types of basic activities in data processing. (4 marks) (Total: 12 marks)

b)

C)

QUESTION 2
a) The establishment of a Computer Emergency Response Team (CERT) should lead the organisation to respond to security incidents promptly and effectively. Briefly explain the four (4) steps involved in response to these incidents. (8 marks) Discuss four (4) important factors to be considered in safeguarding both the companies' information and assets, from unauthorised parties. (8 marks) (Total: 16 marks)

b)

QUESTION 3
a) Explain the purpose of each of the following control activities: i. ii. iii. iv. Cancellation of the voucher package by the cashier after signing the cheque. Periodic physical count of inventory. Requiring two signatures on cheques for large amounts. Requiring a regular reconciliation of the bank account by someone other than the person responsible for writing cheques. Requiring that a copy of the receiving report be routed through the inventory stores department prior to going to accounts payable. (10 marks)

V.

Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL

CONFIDENTIAL

AC/JAN 20121AIS5101480

b) In AIS, files used to store cumulative information are called ledgers. Apart from assets, the general ledger contains other summary-level of data or information. Briefly discuss the information available in the general ledger and the subsidiary ledgers. (4 marks) (Total: 14 marks)

QUESTION 4 a) b) Explain any three (3) basic activities under the production cycle. (6 marks) Briefly explain any three (3) of the control procedures to ensure that data entry under production activity is accurate. (6 marks) (Total: 12 marks)

QUESTION 5 a) Describe two (2) possible threats and the relevant control procedures for each of the following activities: i. ii. Ordering goods Receive and store goods (8 marks) b) Amy works in the payroll department. She receives the time cards from the production department and uses them to update the employee payroll records in the magnetic disk. She then reconciles, prepares employee paychecks and creates a payroll register. The payroll register shows gross pay, overtime pay, net pay and commission. A copy of the payroll register is sent to the accounts payable department and the paycheques are signed and distributed to the employees. The copy of the paycheque, time card and payroll register are then filed in the payroll department. Draw a document flowchart of the existing system. (8 marks) (Total: 16 marks)

Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL

CONFIDENTIAL PART B QUESTION I

AC/JAN 20121A1S5101480

The following procedures relate to the sales-order system of the Meyer Manufacturing Company. All sales orders are received in the sales department. Customers deal directly with salespeople who write up specifications for custom-manufactured boats. Once an order is complete, it is sent to the production supervisor, who makes three additional copies of the sales order on the company's copying machine. The supervisor then numbers all four copies. Copy 1 is retained in an open file. Copy 2 is sent to the accountant. Copy 3 is returned to the sales department and is filed according to the customers' name. Copy 4 is attached to a job cost sheet for reference. The accountant, on receiving the copy of sales order, immediately checks the numerical sequence written in by the supervisor to ensure that it conforms to the company's scheme of pre-numbering. The job cost sheet is used to collect labour, material and overhead costs. Materials are obtained from the stores supervisor, who reviews the specifications on the job cost sheet and estimates the material required. He then pulls the appropriate materials and personally delivers them to appropriate workers. He likes to do this personally as he feels that it minimizes errors and ensures that the workers do not enter the storeroom. The company bills are based on the stage-of-completion method. When the supervisor feels that a job is half complete, he notifies the accountant, who then bills the customer for 50% of the agreed-upon price. When the job is complete, the same procedure is followed. The Chairman's secretary opens the mail and separates cheques and their accompanying invoices. The cheques are rubber-stamped for deposit only. They are immediately forwarded to the cashier, who deposits them first thing the following workday. A copy of the deposit receipt is then forwarded to the accountant as a remittance advice. The invoices are sent to the accountant, who enters the amount received in the special journal for accounts receivable. Once a month, she posts the journal entries to the accounts receivable subsidiary ledger and cash account. After posting to the control accounts, she prepares the financial statements. These procedures are comprehensive and describe everything she does relating to sales and receipts.

Required:
a) What is the difference between the billing and accounts receivable functions in a sales order procedure? (2 marks) Identify the basic objective in a cash receipt business process. (2 marks)

b)

Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL

CONFIDENTIAL
C)

AC/JAN 20121AIS5101480

What is a remittance advice? What functions do remittance advices play in a cash receipts business process? (2 marks) Identify the major features of control in a cash receipts business process. (4 marks) Using a two-column approach, list any five (5) internal control weaknesses and make suggestions for improvements. (20 marks) (Total: 30 marks)

d)

e)

END OF QUESTION PAPER

Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL