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Requirement D is all about preparing a system flowchart of a redesigned computer-based system that
resolves the control weaknesses identified. By the way, these numbers are the specific control
weaknesses identified but now they are resolved.
The first figure illustrates an automated sales order system that employs batch processing. These
previously manual bookkeeping tasks have been automated. The two principal advantages of this are
cost savings and error reduction. Through this redesigned computer-based system, we can now try to
resolve the control issues or weaknesses identified in the manual system.
As we can see, there is now a computer department which will help in improving the efficiency and
effectiveness of the tasks. Under the sales department, the sales process begins with a customer
contacting the sales department and placing an order. Once the customer places the order, the sales
clerk records the essential details and prepares multiple copies of a sales order, which are held pending
credit approval. Actually, the sales department process is almost the same with the manual system
except that in the redesigned system, we now have a credit check which was not present in the manual
system before.
Before, the accounting department performs multiple tasks such as the billing of customers, updates the
A/R account and records sale which was identified as a control weakness since this will reduce the
opportunity in detecting discrepancies. Now since we have the computer department, it is now
responsible with these tasks as it can directly access update of the A/R file, Inventory, General ledger,
management report, customer invoice, and sales journal. This can really help the accounting
department as it can now focus on its tasks.
In the warehouse, there seems to be a noticeable change since the inventory control is not being
performed here anymore. The warehouse now is really focused on receiving the stock release copy of
the sales order and uses this to pick the goods. The inventory and stock release are then sent to the
shipping department.
Another control weakness in the manual system was that the customers are being billed before the
order is actually shipped. However, in the redesigned system, this is not the case anymore. The shipping
clerk reconciles the products received from the warehouse with the shipping notice. Assuming no
discrepancies exist, a bill of lading is prepared, and the products are packaged and shipped via common
carrier to the customer. The clerk then sends the shipping notice to the computer department.
This is now the automated cash receipts system. Again, we redesigned the system to incorporate the
use of the computers so that the control weaknesses identified will be resolved.
Let us start with the mailroom. The mail room clerk separates the checks and remittance advices. Before
in the manual system, the accounting department prepares the remittance list when it’s supposed to be
the mailroom that is why in the redesigned system, after the mail room clerk reconciles the checks with
the remittance advice, the remittance list is being prepared afterwards. These checks and a copy of the
remittance list are sent to the cash receipts department. The remittance advices and a copy of the
remittance list are sent to the AR department.
The cash receipts clerk reconciles the checks and the remittance list and prepares the deposit slips. This
resolves one of the control issues before as the cash receipts clerk now prepares a deposit slip. Via
terminal, the clerk creates a journal voucher record of total cash received. This again resolves the no
journal voucher prepared by cash receipts clerk issue. The clerk files the remittance list and one copy of
the deposit slip. At the end of the day, the clerk deposits the cash in the bank.
Those are the changes in adapting the computer based-system from a manual system. Actually, some of
the functions are still the same as before but because of the use of technology, tasks are now less prone
to errors and it is less time consuming. This will result to a more efficient and effective system.
that would mark as the end of our presentation
The AR clerk receives and reconciles the remittance advices and remittance list. Via terminal, the clerk
creates the cash receipts transaction file based on the individual remittance advices. The clerk then files
the remittance advices and the remittance list.
At the end of the day, the batch program reconciles the journal voucher with the transaction file of cash
receipts and updates the AR subsidiary and the general ledger control accounts (AR—Control and Cash).
This process employs the direct access method described earlier. Finally, the system produces a
transaction listing that the AR clerk will reconcile against the remittance list.

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Requirement D is all about preparing a system flowchart of a redesigned computer-based system that

that would mark as the end of our presentation

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