ACT B304 Accounting Information SystemsSolution.pdf
You must use word processing software (such as Microsoft Word) to prepare the assignments, and submit the assignments via the Online Learning Environment (OLE). All assignments must be uploaded to the OLE by the due date.
Failure to upload an assignment to the OLE in the required format may result in the score for the assignment being adjusted to zero.
Question 1 (25 marks)
Assume the CEO of PARKnSHOP.com has appointed you to review its online shop.
Visit the website of PARKnSHOP.com (https://www.parknshop.com/en/) and assess it in terms of the eight unique features of e-commerce as described in this course. In your opinion, which features do this company implement well, and which features are not satisfactory?
Write a report to the CEO (in around 1,000 words) detailing your findings and make recommendations for improvements.
Question 2 (25 marks)
Jimmy Ltd is a small shop selling toys in Ho Man Tin. Recently it has created an online shop, and the online shop has exposed the company to a whole new nature of risks within its real-time revenue cycle. Customers settle payments by credit card. When the credit card information is entered, it becomes part of the customer record. Once an order is placed, the system automatically verifies customer credit and enters the transaction into Jimmy Ltd’s database.
Recently Jimmy Ltd has discovered severe problems in its online shop. Many customers have denied the orders that they submitted. They claim that they are parents and that their children have placed the orders without their knowledge. The children were able to gain access to their parents’ accounts after the system recognised ‘cookies’ in the hard disks. When the children went to Jimmy Ltd’s website, the system recognised them as authenticated users and gave them authorised access to purchase.
Another problem is that hackers gained access to the database of Jimmy Ltd and obtained the customer information.
a. (10 marks) Explain what a ‘cookie’ is and what security threats are associated with cookies. b. Regarding COSO’s Enterprise Risk Management Model, identify TWO internal control
problems in Jimmy Ltd’s online shop. For each internal control problem, recommend TWO (15 marks) suitable internal controls.
Question 3 (25 marks)
The following independent situations have control issues. For each situation, explain in detail the controls that can prevent system failure.
Assignment File 9
a. To keep track of the passwords used to access various computer systems, Jane creates a text
file (‘password.txt’) to record her passwords. b. David is the company cashier. He is a workaholic who never takes annual leave. One day,
David suddenly suffered a heart attack and was confined to hospital for a month. While he was in hospital, the accounting manager assumed David’s duties and discovered that David had misappropriated $500,000 from the company since he was hired. c. A group of demonstrators broke into a data centre and destroyed computer equipment and
data worth several thousand dollars. d. At Zeon Ltd, the inventory management system is highly automated. When an inventory item
reaches the reorder point, the computer automatically prints a purchase order for the economic order quantity (EOQ). A programmer, in collusion with a supplier, alters the computer program and the inventory master file. He reduces the EOQ of some inventory and causes the computer system to place orders directly with that supplier. e. The human resources manager’s laptop computer was stolen from his car. The laptop
computer contained the names and HKID card numbers and bank account numbers of all current and former employees.
Question 4 (25 marks)
The following procedures describe the cash disbursement activities of Handly Ltd.
When Peter (the accounts payable clerk) receives the supplier’s invoice, he uses the accounting information system to record the purchase in the purchases journal, records the liability in the AP module and sets a due date based on the terms specified on the invoice. Peter then updates the inventory control and accounts payable control accounts in the general ledger module. The invoice is then filed in the department.
Each day, Peter visually searches the AP system for invoices that are due to be paid. From the computer terminal, Peter prepares the cheque and records it in the cheque register. The negotiable portion of the cheque is mailed to the supplier, and a cheque copy is filed. Peter then closes the liability in the AP module and then updates the accounts payable control account and cash account in the general ledger module.
a. With reference to COSO’s Enterprise Risk Management Model, identify THREE internal
(15 marks) control weaknesses and describe the associated risks. b. (10 marks) For each control weakness, recommend a suitable control activity.
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