Exam 2 (Chapter 6-10Marcia RinkolQuestions 1.Recovery strategies and procedures: A company’s recovery plan should detail the procedures to be considered in case of a disaster. The company should know immediately after a disaster what to be done, who are the responsible people and how much time is going to take to set the system back to normal. For that, the below points are to be considered:Emergency Response Center Escalation Procedures Alternate processing arrangements Personal relocation plan Personal replacement planSalvage plan Plan for Testing and maintaining the systemsEmergency Response Center: When a disaster hits, all the individuals responsible for the data/computer operations are transferred to a team, emergency response team which will be headed by an emergency operations director. They direct the execution of the recovery plan as to what to do next, how to go about working from a pre-designated site. Escalation Procedures: It states the conditions under which a disaster should be declared, who should have declared it, and who that person should notify when executing the declaration. Alternate processing arrangements: When a disaster occurs, you should have a backup site from where the operators can start working so that the operation is not halted. So, a plan should state the details of the alternate arrangement.
Personal relocation plan: It is required to have a plan to sudden relocate the employees to the backup site. Care should be taken here as employees might have difficulty in relocating on short notice. Personal replacement plan: In case of disaster, there will be a possibility of losing highly skilled professionals. Replacing these employees would require extensive training. Salvage plan: In some disaster, it may be possible to recover the critical resources and records on quick action. Loses in such cases may be minimized if the salvage effort is taken immediately.
Plan for testing and maintaining the systems: A disaster recovery plan should be tested regularly say in every six months. An outdated or un-tested plan might not work in case of crisis. 2. Batch Processing Advantages: Batch processing is ideal for processing large volumes of data/transactions.
It also increases efficiency rather than processing each individually. Here, we can do processing independently. Even during less-busy times or at a desired designated time. For the organization by carrying out the process, it also offers cost efficiency. Also, allows good audit trail.
Disadvantages: The time delay between the collection of data and getting the result after the batch process. In the batch processing master file is not always kept up to date. Here, a one-time process can be very slow. Direct Processing Advantages: While performing real-time processing, there is no significant delay in response. In real-time processing, information is always up to date. Hence, it makes organization able to take immediate action.
Also, when responding to an event, issue or scenario in the shortest possible span of time. It also makes organization able to gain insights from the updated data. Even helps to detect patterns of possible identification or either opportunities or threats. Disadvantages: Real-time processing is very complex as well as expensive processing. Also turns out to be very difficult for auditing.
Real-time processing is a bit tedious processing. (data-flair-training)3.After data items have been edited at the character level, they can be checked for reasonableness. One way to edit for reasonableness is to establish a table file that contains a list of acceptable values for each field. The edit program compares the actual value of each field with acceptable values of the table. Numeric data values, as opposed to numeric codes, have many possible valid values but in general, these values should be within certain range. Verifying that the numeric data is within these ranges requires a check only against the extreme values of the range — specifically, the upper and lower limit of acceptable values. The check digit is computed when a code is initially assigned to a data element.
Check digits is computed by applying mathematical calculations to individual digits in a code number in such a way as to generate a result that is a single digit.4. Step 1: 6*3 + 2*1 + 2*3 + 1*1 = 18 + 2 + 6 + 1 = 27Step 2: Subtract the sum from nearest equal or higher multiple of ten 30 – 27 = 3Hence, the complete account number is 622136.The waterfall approach, because of the sequential steps of analysis, design, and implementation flow only in a single “downward” direction like water in a waterfall. Analysis: in the survey current system has four objectives which are gain a fundamental understanding of the operational aspects of the system, establish a working relationship with the users of the system, collect important data that are useful in developing the systems design, and identify specific problems that require focus in terms of subsequent design efforts. The human element is a key factor in conducting the system survey. The second phase involves identifying information requirements for managerial decision making.
In identifying information needs, the analyst studies specific decisions made by managers in term of the information inputs. The third phase involves specifying system requirements. Such requirements can be specified in terms of input and outputs.
The final output of the system analysis project is the report. Design: The requirement specifications from the first phase is studied in this phase and the system design is prepared. System design helps in specifying hardware, system requirements and helps in defining the overall system architecture. Implementation: With inputs from the system designs, the system is first developed into small programs called units, which are integrated into the next phase. Each unit is developed and tested for its functionality, which is referred to as unit testing. 7.Requirement Determination: In this step, an internal document called purchase requisition is created, detailing the request for the procurement of something. Purchase requisitions can be prepared manually or it may be issued automatically by the material requirements planning (MRP) system.
Selection of Sources(s): The next step in the procurement business process is to assign a vendor or supplier to the purchase requisition. If there is an existing contract with a vendor for the item that is present in the purchase requisition, then SAP Enterprise Resource Planning (ERP) system automatically processes it else a request for the quotation document has to be prepared. Request for quotation: If there is no contract corresponding to an item in the purchase requisition, then a request for quotation document is created and sent to the various vendors to confirm a price and payments terms for the required product or services. Selection of a Vendor: The vendors’ quotes from the quotation documents are assessed and the most suitable quotation for the requisition is identified. Issuing of a Purchase Order: After the vendor is selected, the purchase order document, also called as receiving the report is issued. Invoice Verification: In this step, the receiving report is compared with that of purchase orders so as to ensure that the cost and quantity requirement is met as per the contract. Vendor payment: After the invoice is verified, payment to the vendor is made in accordance with the terms and condition specified in the purchase orders.
Purchasing does not control the actual goods: nor does purchasing have complete control over the documentation that is required for payment. Receiving is separate from the final custody of the delivery, which is the requisitioning function. Acknowledgment from both receiving and final custody should be a requirement before payment is authorized. Accounts payable handles only documents and is not able to obtain merchandise or cash independently. Purchase requisitions should be reviewed independently outside purchasing. This is often done by accounts payable. This review could verify the accounting charges shown on the requisition and also ensures that requisitions do not originate in purchasing.
Invoices should be routed to Purchasing for review and approval prior to being sent to account payable. This is particularly important if purchasing expertise is necessary to evaluate the property of the invoice. Purchase terms should be reviewed for property outside the purchasing department. This review is often done by accounts payable. Inventory records should be updated to reflect the receipt of goods. 8.Analytical Flow diagram of cash disbursement process: Flowchart is an outline which illustrates the structure of a procedure. It is used to depict the organization of a process, what elements it consists of and how the components or elements are linked to each other.
Flowcharts are used to show the flow or sequence of the data in a program. It illustrates the flow of information. It uses a rectangular block to represent an individual process and lines to represent the hyperlink leading from one procedure to another. It helps to show the flow of input data to processing and finally to output. It includes various symbols which are as follows: For processing, the rectangle is used For input/output parallelograms is used For decision making, the diamond box is usedFor connecting the flowchart connector is used.
It is represented with the help of circle. For starting and ending the flowchart terminal box is used. It is represented with the oval symbolIn the mentioned cash disbursement process, the accounting clerk receives the invoice from the mail room and stamps it with a voucher stamp and then forward it to the purchasing department (A), where the invoice is matched with the corresponding purchase order and receiving the report and a combined voucher set is created (B).The combined voucher set is then forwarded to the controller, who reviews and approves it (C) and then forward it to the account payable clerk.
In accounts payable department, the clerk records the invoice onto account payable vendor card and purchases journal using a one-write system (D).He or she also prepares an aging report at month’s end which is used by the controller to prepare monthly journal voucher (E).On the time of payment, the account payable clerk prepares check and posts the amount to vendor card and journal (F) and forwards it to the controller, who signs the checks (G)and then forwards it to the office manager for second signature (H), sometimes the checks were pre-signed by the office manager and the controller signs the check second. After the second signature, the controller returns the checks to the account payable clerk, who then mails the checks and remittance advice to the vendor (I).Every month the accounts payable department receives bank statement along with canceled checks and prepares bank reconciliation (J), which is then forward to the controller for further review and action (K).(See the charts document that I have provided)System’s weaknesses: In the above process, the check signers are not provided with any of the voucher’s supporting documents, thus making it impossible for them to verify the authenticity of the checks. Also, since none of the document is provided to them and the documents are not canceled or stamped even after the checks are signed, the cash disbursement process is prone to errors and fraudulent activities. It is like the case of duplicate payment against the same invoice, or payment for goods that are not yet received.
9.A quick-response manufacturing system is a CIM system that is integrated with advanced integration technologies. Its two components are computer-aided design and drafting (CADD) and Computer-aided manufacturing. Computer-aided design and drafting (CADD) use computer software to perform engineering functions. Designers can store product designs on the computer. These designs can be recalled and manipulated as needed. Solids modeling is the mathematical representation of a part as a solid object in computer memory.
Finite element analysis is a mathematical model used to determine mechanical characteristics, such as stresses of structures under load. The productivity increase, in turn, allows the organization to be more responsive to market demand for new and improved product offerings. In addition, CADD systems allow the automation of repetitive design tasks, further increasing productivity, as well as accuracy.
The Computer-aided manufacturing (CAM) systems are useful in planning and obtaining feedback from the manufacturing process. Statistical process control considers whether process outputs are within acceptable variations from engineering specifications. A type of CAM known as a flexible manufacturing system is a programmable production process that can be quickly reconfigured to produce different products. 10.
Activity-based costing is traditional cost accounting techniques may be adequate in the CIM environment. Three major elements enter into the cost of manufacturing a product. These are direct materials, direct labor, and overhead.
Overhead is best described as the portion of manufacturing cost that is either direct materials nor direct labor. Activity-based costing calculates several overhead rates, one for each manufacturing activity, and uses these rates to build product costs from the costs of the specific activities undertaken during production. The cost to the activity, a clear relationship can be established between sources of activity demand ; the related costs. Activity-based costing identifies opportunities to improve business process effectiveness ; efficiency by determining the “true” cost of a product or service.
References: https://data-flair.training/blogs/batch-processing-vs-real-time-processingBodnar, G. H., ; Hopwood, W. S. (2013).
Accounting information systems. Boston: Prentice Hall.