Assignment 2

Page 1 of 15 CODeL ASSIGNMENT LETTER (Programme(s) BAcc. & Dipl. Acc. Academic Year 201 8 S emester (1) [Computerized Accounting Systems ] [AIS3659 ] Page 2 of 15 ASSIGNMENT ADMINISTRATION Faculty/ School Assignment Module Offering Due Date Semester 1 and Double/Year Modules Assignment 1 Faculty of Economics Modules 15 March 2018 Vacation S chool: All programmes, Tests are written during the Vacation School and made part of the timetable (compulsory) 26 – 29 March 2018 Semester 1 Modules only Assignment 2 Faculty of Economics Modules 11 April 201 8 Deadline of resubmissions for all Assignments and tests for student s who missed during the vacation school 27 April 2018 Remember the practical session during vacation school !! The module has 2 assignments and 1 Practical that replaces examinations. If you don’t do the practical task it means you will not have an exam mark. T hat is an automatic fail. Page 3 of 15 201 8 Assignments [AIS3659 – Computerized Accounting Systems ] Dear Student , Welcome to the University of Namibia and to the Centre for Open, Distance and e -Learning (CODeL) in particular. We are confident that your studies and hard work will be rewarded with success. We kindly advise that you obtain all the relevant information an d booklets available for distance students from your nearest UNAM Centre ( including the 201 8 CODeL Student Information Letter , Online Assignment Submission Guide and other documents ). These documents will provide guidance on how to approach your studies and will guide you through your study materials as well as providing useful administrative information in submitting assignments . Study materials Your study guide is essentially your “teacher/lecturer”. However, in addition , you are required to visit the library to consult prescribed books and recommended readings that are indicated in the study guide as well as browse the Internet in general . You are also responsible to purchase any prescribed textbooks required for your respective course s/modules . Furth ermore, you are strongly advised to follow the guidelines in the Online Assignment Submission Guide available on Moodle . Collaborative Learning CODeL avails all your modules through Moodle, enabling you to interact with your fellow students online through forum discussions and chats. You can use the same platform to engage with your lecturers and tutors regarding academic support. Please take advantage of Moodle to avoid isolation and strengthen your interaction with colleagues, ask for help, and share/receive resources to aid your learning process. See below how to access forum discussions on Moodle: Page 4 of 15 Submission of assignments It is very important to complete and submit a clean, clear and well -argued assignment for marking. Make sure that you have understood the questions in order to answer the m correctly. It is your responsibility to make sure that every page of the completed a ssignment is correctly numbered before submitting your assignment. As f rom 2017, ALL assignments are submitted through the Moodle Learning Management System . This is an online platform where you will access all your modules and related information such as course outline s, course notes and other learning materials that your lecturer/ tutor may choose to share with you . Moodle is accessible here: http://elearning.unam.edu.na . You should complete and submit all assig nments on or before the given due date in the assignment letter if you wish to obtain your CA marks and qualify for examination s. CODeL always updates its assignment covers on an annual and semester basis. Please ensure that you have used the latest assignment cover. The latest assignment cover is availed on each course on Moodle. Due Dates All assignment due dates for 201 8 are published on second and third page s of this assignment letter. With the shift from manual to online assignment submission, due dates are automated and non -negotiable . This means that you would be required to submit your assignments ON or BEFORE the due date set on your assignment (before 11h59 PM ). After the date has passed (i.e. 12h00AM of the next day) the assignment submission will be disabled and you would no longer be able to submit your assignment . Please note that as from 2018, assignment due dates will vary depending on the Faculty in which you are studying. So take note of the varying due dates of the different modules you are studying, depending on the Faculty from which such module is offered. To keep pace with due dates, you are advise d to regularly visit your Timeline on your Course Overview on Moodle (see below), to get reminders of due assignments and tasks. Also download the Moodle mobile app to access Moodle on your mobile phone or tablet and have access to notifications about due dates at your fingertips. You can download the app here: https://download.moodle.org/mobile/ Page 5 of 15 Due to challenges with Internet connectivity and speed, large files may take too long to upload, which is a big risk if you wait until the last minute to submit your assignments . You are therefore strongly advised NOT to wait until the due dates to submit your assignments so that you will have time to report potential challenges and avoid disappointments. You are also advised to ensure that you are in an area with good Internet connectivity when submitting your assignments . Timely submission of all assignments on or before the given due date is crucial for the timely calculation of your CA mark and determining admission to exams. Take note that assignments should never be submitted directly by email or hard copy to individual tutors or any other staff members of the University of Namibia. Plagiarism Control It has been observed that some students copy inform ation from the Internet and paste into their assignments without acknowledging the sources of the information. This is called plagiarism. A copy of the Policy on Plagiarism and Cheating has been provided to you through the UNAM website . Please note that pl agiarism and copying and pasting would not be tolerated and shall result in your assignments declared null and void. All assignments submitted through Moodle would be checked for plagiarism using a plagiarism detection software. You will receive a report on the overall overlapping of your assignment with the sources you have used. You are therefore strongly urged to acknowledge EVERY source that you use for your assignment by using the appropriate referencing style prescribed by your lecturers (APA Referenc ing guides are available freely online ). Find one here: http://www.uofa.edu/docs/apa -documentation.pdf Any assignment found with high overlapping scores or with evidence of clear attempts to cheat such as submitting an assignment that is not your own would result in serious consequences (please refer to the Policy on Plagiarism and Cheating provided). LATE SUBMISSION OF ASSIGNMENTS or WRITING OF TESTS Late assignment will not be accepted nor marked. If there is a reason why you cannot meet the due date, please consider cancelling the module within the cancellation deadlines or contact your Student Support Coordinator for advice. Vacation schools Attending vacation school is COMPULSORY and the vacation school t imetable will be made available at your nearest UNAM centre and through the UNAM portal . My UNAM Portal /Moodle We recommend that you regularly (at least twice a week) access My UNAM Portal (for administrative information) and Moodle (for learning and assessment information) on the UNAM website for further information at the following URLs: http://my.unam.edu.na and http://elearning.unam.edu.na Page 6 of 15 Closing remarks If you study conscientiously, your efforts will be rewarded. Should you need any assistance or clarification on the module content s, you can reach the relevant staff members at the contact details as given below : Tutor: Tulonga Shaalukeni 061 -2063720 [email protected] Student Support Coordinator: Charlene Kaereho 061 -2063729 [email protected] Distance Education Officer: Lizzy Xoagus 061 -2063608 [email protected] it is l(L) not (i) please Examination Officer Mr Moyyo Jussi Ms Tussy Fillemon 061 -2063715 061 -2064881 [email protected] [email protected] NOTE : For additional information consult the CODeL Prospectus and UNAM General Information and Regulations Prospectus. Page 7 of 15 AIS3659 - Computerized Accounting Systems DEGREE and DIPLOMA This course comprises of two components, the theoretical component and practical component, the assignment that you received is based on the theoretical component and that will also form as your Continuous assessment and the examination marks will come fr om the practical component, and that will your Lab work. Course expectations: Students are expected to attend vacation school which is compulsory and if the student missed to attend vacation school, he/she will fail to do the practical components of whic h the examination is assessed from. During vacation school, the students will be using the Accounting LAB, located in XBLOCK, room X239, Students will be practicing computerized accounting in the Accounting LAB, where pastel V.12 software is installed. Stu dents will cover the following topics in the Accounting LAB: Course outline for practical component The department of Accounting, Auditing and Income Tax has acquired Pastel V.12 for the students. Pastel V.12 is an accounting software solution that is u sed by businesses and by individuals to streamline their accounting and management processes . During the course of your studies, you will gain knowledge of Pastel accounting computing. Sage Pastel Partner is the perfect accounting software widely used by most companies and organizations and the software is known to comprise of efficient bookkeeping packages which is in demand in the international market. Wh at will be covered in this practical course:  Lesson 1: Creating A New Company  Lesson 2: The Edit Menu – Customers  Lesson 3: The Edit Menu – Suppliers  Lesson 4: The Edit Menu – Inventory  Lesson 5: The Edit Menu – General ledger  Lesson 6: Processing  Lesson 7: Cashbook – capturing Bank Payments and Receipts  Lesson 8: Bank Reconciliation Page 8 of 15 Assignment 1 Question 1 (15 Marks) Discuss why the Systems Development Life Cycle is of interest to accountants. What is the accountant’s role in the Systems Development Life Cycle? Question 2 (20 Marks) Discuss the five feasibility measures that should be considered during project analysis and give an example of each. Question 3 (40 Marks) List 1 below sho ws the coding schemes, while List 2 contains eight coding examples. List 1 - Coding Schemes A. Sequential (serial) B. Block C. Significant digit D. Hierarchical E. Mnemonic F. Check digit G. Color List 2 - Coding Examples 1. Maggy is taking three college courses this semester --AC 340, FI 101, and EN 280. When you check with the Regist rar's Office at the University of Johannesburg, you learn that Maggy is enrolled in Accounting Information Systems, Principles of Finance, and English Literature. 2. Penda’s ZIP code is 29902. The first digit shows that Pat resides in Zambia . The last two digits (02) indicate that he lives in the town of Cop perbelt , which is located in Ndola District --designated by the digits 99. 3. Joseph is the 151s t employee hired by Namibian Police . His force number is 151. 4. The product c ode for an 18 -ounce jar of Mama G Choice peanut butter is 45300 00227, while the 28 -ounce size of the same product has a code of 45300 00220. Both are manufactured by Mahima Pty , Inc., as indicated by the firs t five digits (45300) of the product code . 5. Ndahafa’s medical Practice charge account number is 923456 -7. The 7 on the end of the number was generated by a computer algorithm in order to verify the accuracy Page 9 of 15 with which the first six digits (923456) are keyed into the computer. 6. Part of BABA , Inc.'s gener al ledger chart of accounts reveals the following: Acc. # Account Title 1111 Petty Cash 1112 Change Fund 1113 Cash in Bank 1121 Trade Account Receivables You learn from the company's controller that the account numbers mean the following: First digit - 1XXX Assets Second digit - 1XX Current Assets Third digit - 1X Current Asset Type (1X = Cash; 2X = Receivables) Fourth digit - 1 Specific account 7. An examp le of a customer number at Frexible 's Hardware is 1 0 3 548, where: 1 = Retail or wholesale customer 0 = Sales tax or not (1 = tax; 0 = no tax) 3 = Sales tax code (used to look up the tax rate) 548 = Unique identifier of a specific customer 8. Gabriel 's em ployee number is AFP -293. Gabriel works in the Toyota Assembly Department (A) in Japan , Gabriel is a full -time employee (F), and is paid on a pie cework basis (P). The 293 is his unique identifier. Required : 1. Define the coding schemes as listed in List 1, above. 2. From List 2, describe the coding type which is appropriate for the scenarios presented from number 1 to 8 from List 2. Question 4 (10 Marks) Contrast management fraud with employee fraud. Question 5 (15 Marks) All fraud involves some form of financial misstatement, Define Financial misstatement and discuss how Fraudulent Statement fraud is different? Page 10 of 15 ASSIGNMENT 2 (100 Marks) Refer to case study presented below and answer the questions in case requirements outlined at the end of the case study. THE P OLY C ORPORATION THE INDUSTRY AND COM PANY BACKGROUND The Poly Corporation is a manufacturer of packaging materials for several food, medical, and industrial applications. The company buys raw materials from large plastics manufacturers in the United States, converts and prints the materials, and sells the finished products to large and small customers throughout the United States, Canada, and Mexico. Most customers order custom -printed items displaying their name. In many cases, they have from 3 to 20 different types of items to be custom -printed. Companies that co -pack may also have several private labels for any number of their c ustomers. Furthermore, with over 20 different raw material products to work with, the number of unique items supplied to even one customer can be in the hundreds. Because of the nature of the business, sales tend to be seasonal, with the Thanksgiving, Ch ristmas, and New Year’s holidays being the busiest. The holiday season creates the biggest potential for capacity problems. Conversely, summer is the slowest period for Poly. Poly competes with other packaging material manufacturers — some very similar to Poly and some that are vertically integrated in the industry to some extent. The local and regional players in the field tend to be the most competitive on price, while those that are in the national arena do not compete on price. Without a concerted effor t, Poly has established a reputation of very high -quality products. This is due, in part, to the quality of materials it uses. Another reason is that Poly, being a young company, has had the benefit of acquiring state -of-the -art machinery, while others in the industry are getting by with antiquated and inefficient technology. In the area of packaging materials where Poly competes, customers have traditionally looked for a high -quality product that performs well. In addition, many food companies rely on p rompt delivery. Late deliveries of food packaging materials would cause the company’s operations to shut down due to the inability to procure packaging materials elsewhere in a reasonable time.

The industry is notorious for long lead times, less than adequ ate delivery, and being anything but customer -focused. While Poly does better than most in these areas, its general manager, Mr. Pine, believes that much improvement is possible. Because Poly is unable to compete on price, the issues of lead times, deliver y, and customer focus will become increasingly important if Poly is to Page 11 of 15 stay competitive. Customers are looking for the best value in terms of quality, delivery, and service for the price. In the past four years, Poly has experienced a period of rapid gr owth, with sales in excess of $60 million and a workforce of 150 people. While profit margins in the industry tend to be less than 10 percent, Poly has been able to command margins averaging 15 percent. While the financial rewards have been welcome, Poly h as found it difficult to keep up with the expansion and the problems associated with it — disorder, lack of communication, overlooked orders, late shipments, and customer complaints. Poly chose eastern Pennsylvania for its sole manufacturing plant and ope ration. The national sales force, while traveling throughout the Americas, is based out of the Pennsylvania location. All other departments and functions operate from this location. THE MANAGEMENT ORGAN IZATION Pine has a substantial financial interest in t he company. He runs the company with little or no input from his top managers. With the exception of the controller’s financial consultations, Pine is solely at the helm of the organization. Also answering to the general manager are the heads of the produc tion, sales, and research and development (R&D) departments. Beyond the top staff managers, the organization is devoid of structure and has worked this way since its inception 12 years ago. The finance department is responsible for all accounting document ation (billing, purchasing, and so on). The controller tends to take on all departmental responsibilities, leaving him little time to do much more than ensure that day -to-day responsibilities are discharged. Production is the largest department in the comp any and is responsible for scheduling jobs, purchasing raw materials, shipping and receiving all goods, developing and applying graphics, and overseeing a small quality control area. The department manager’s primary focus has always been getting the produc t out the door. The sales department functions as a marketing, sales, and customer service group.

This department tends to concentrate much of its efforts in sales and customer service while neglecting the marketing function, which is vital to the existenc e of the organization. Of all the departments, R&D has the most freedom and control of its destiny. The leader of this group is laid -back and has the reputation of being the first to develop creative new packaging when it is needed. For the most part, each department functions on its own, and disputes between departments are not unusual as each acts in its own best interest. With the implementation of a new system, Pine knows that the structure needs change, but is unsure what changes need to be made. Page 12 of 15 CURRENT PROCEDURES SALES AND CUSTOMER SERVICE . When the sales department gets a customer order, a great deal of documentation must be completed. Because of the complexity of the orders, a sales or customer service representative typically goes back and fort h with the customer several times to finalize structure, colours, copy, quantity changes, and so on. When most of the information is gathered, customer service enters the order into the department’s only computer. Often, squabbles arise over use of the com puter, and delays in entering orders frequently result in orders not being entered and deemed lost in the system. After a sales order is entered in the computer, order acknowledgments are prepared for customers upon request. The software package used by customer service is nothing more than a word processing program that provides a “neat” order for production to follow. The prepared order functions as both the sales and the production order. For items previously manufactured, an old order is pulled out fo r retyping under the new sales order number. A copy of the order is printed and hand -carried to the production office. A second copy is printed and attached to the original customer order, if it exists, and then filed in the sales order file. Occasionally, the production copy of an order may be “misplaced” and never reach the production department. Production orders that do reach the department head’s open work order file are often missing information needed to complete the job, causing delays. PRODUCTION. At this point, the production manager sits down with an assistant to place the job in the production schedule. The placement of the job depends on several factors — the due date requested, the customer, and the salesperson. Production likes to do jobs for t he large customers because these orders usually run several days with few changeovers. This helps the production department improve its production statistics for the month.

Salespeople who are out of favour with production, for however trivial a reason, ma y see their jobs develop extraordinarily long lead times. For an old item, the production department will look at the work in process and finished goods inventory sheets to see if there are any items left over from the last time the job was run. Over - and underruns are neither unusual nor publicized. Customer service doesn’t like underruns because that means an under shipment. Meanwhile, accounting scorns overruns because of the unnecessary inventory generated. However, where enough of the completed prod uct exists to fill the new order, customer service is notified. Customer service then drafts a ship order on the word processing software, delivers a copy to the production department for shipping, and retains a copy for the sales order file. Problems aris e here from the inaccurate inventory records kept on the overruns. Failure to confirm the overrun inventory figures with a physical count sometimes causes Poly to falsely tell customers that their order is ready.

Customers, in anticipation of their order, schedule their plants accordingly, Page 13 of 15 only to find out that Poly has not sufficiently prepared their order. This situation has occurred several times, and it is not uncommon for customer service to physically count the overrun inventory as a guard against thi s happening. INVENTORY CONTROL . If insufficient overruns exist or if the job is new, the job is scheduled for production. A few days to a week before the job is scheduled to run, the production department checks to make sure an adequate supply of raw mate rials is on hand for that order. Typically, a high level of inventory is kept on hand to facilitate production. Inventory is monitored through physical counts done weekly by the production department. Each month, an accounting representative accompanies th e production department on the count. Accounting adjusts its records for any discrepancies found. Times arise when raw material inventory may be the wrong size, damaged, or even obsolete. In these cases, production must either incur the high cost of immedi ate procurement of the right materials; use oversized material, resulting in a large scrap rate; or move the order back in the production schedule.

Delaying the order does not sit well with the customers. Large orders are handled differently because of the preferential treatment they receive and the large amounts of raw materials needed. The production department manager spends time planning these jobs. PURCHASING . While a clerk keeps a running tabulation of the major raw materials on a word processor, the system is prone to human error because it relies heavily on the clerk’s memory. In addition, system error occurs because no hard copy of the inventory record is retained. Production takes on the responsibility of purchasing the raw materials it uses an d does so on the basis of sales orders received. (There is no system for sales forecasting.) Production selects vendors carefully and purchases on a volume discount basis, even in the slow summer months. Production phones in the order to the supplier and t hen notifies accounting to prepare a physical purchase order. RECEIVING . When materials arrive at the warehouse, the quality control function inspects the goods. Occasionally, if a material is desperately needed, the production manager instructs quality c ontrol to accept goods it might otherwise reject. At this point, the receiving clerk fills out a receiving ticket based on the supplier’s attached packing slip or on Poly’s purchase order. One copy of the receiving ticket is sent to the main production off ice, a second copy is sent to accounting, and a third copy remains in the shipping and receiving department. Production records the inventory increase in the inventory record, accounting attaches the receiving ticket to the purchase order for accounts paya ble to process, and the receiving function keeps a copy in case the other is misplaced. Page 14 of 15 SHIPPING . When finished goods are shipped out of the warehouse, a ship order from customer service is sent to the production department. The production office then cre ates a packing slip and bill of lading for the shipping area. The shipping clerk gets a copy of the packing slip and bill of lading and attaches these two forms to the goods. Shipping then sends a copy of the ship order, the packing slip, and the bill of l ading to accounting for accounts receivable processing. COST ACCOUNTING . After a job is completed, the production department accumulates all the paper documentation on materials, machinery, and labor time used for a particular job. This packet of informat ion is given to accounting for job order costing. Inaccurate inventory information and human error in raw material usage reporting require the cost accountant to use some degree of guesswork in compiling variance reports. THE CURRENT INFORMAT ION SYSTEM Wit h its recent rapid growth, Poly is no longer able to provide its customers with the service level they have grown to expect. Lead times are growing longer, order status requests are slow and inaccurate, and product quality is diminishing. Management is bec oming frustrated with the lack of performance and status reports available. The current system is primarily manual, with some computer technology. With the exception of the accounting area, computers are used primarily for word processing. The accountin g area uses a small computer system to process the payroll, job costing, accounts payable, accounts receivable, and financial reporting and documentation. This system is not interactive with any other department, leaving accounting clerks with a great deal of hard -copy data entry. For the most part, performance and status reports are done only in the accounting area and are primarily used for internal review and external audits.

Other than the scheduled system -generated accounting reports, management reports are prepared only upon request. Management reports are manually prepared on a word processor. Page 15 of 15 REQUIRED: 1. Identify Poly’s critical success factors and the company’s primary objectives. What types of information might be helpful in evalua ting these objectives? Create a mission statement that would be appropriate for Poly. (20 Marks) 2. Develop a formal organizational chart based on the information given. (10 Marks) 3. Analyze the current system and identify specific control weaknesses that must be addressed by a new, improved system. As part of your analysis, prepare a document flowchart and a data flow diagram of the current system. (20 Marks) 4. Develop a proposal for a new information system for Poly. Describe the primary features of this new system and explain why this is the best solution for Poly to pursue. Discuss the relevance of such advanced technologies as MRP, MRPII, and EDI as information system options. (15 Marks ) 5. Design the new system in detail. The design should contain the following items: a. Data flow diagrams describing the system at the context level, intermediate levels, and detailed levels. (20 Marks) b. A systems flowchart of the new information syste m, showing automated and manual procedures. (15 Marks)