1. Ariff was hired by IT Top, an IT company expanding internationally, to identify weaknesses in their accounting systems and suggest improvements. 2. During his first week, Ariff discovered issues with IT Top's centralized data processing and flat file data storage. He proposed a distributed data processing system and use of a database model to improve efficiency. 3. Ariff examined IT Top's existing accounting systems using diagrams and marked areas for improvement. He hopes to help IT Top overcome weaknesses in their accounting information systems and properly utilize batch and real-time systems to eliminate waste and meet their goal of global competition.

1. Faculty of Management and Economics
Accounting and Finance Department
ACC4501 Accounting Information Systems – Problem One
IT Top produces various types of IT gadgets. It has recently entered the first foreign
market in Oman as an effort to be internationally competitive. Having expanded its
business, the management thought it is high time to eliminate inefficiencies as well as
to apply lean six sigma to replace the existing management style. To achieve this aim,
ply
IT Top has decided to recruit right accounting related personnel as a way to identify
accounting-related
weaknesses in the current accounting systems and suggest improvements.
Ariff who has recently completed his contract in a development project in Oman wanted
s
to settle down in his local town rose up to the IT Top’s job advertisement and
town,
successfully impressed the management to hire him. During his interview, he managed
to convince the management that an accountant can play many roles to ensure an
organization’s accounting systems is in a proper order, even if he or she does not have
,
an IT expertise. He also suggested that the existing IS of the company should be split
into two; AIS and MIS, both play distinct functions but relying on each other with
oth
different subsytems.
The interview panel was also impressed with Ariff who had explained the differences
between data and information and that proper database managemmanagement systems can
generate valuable information Once produced, a decision maker can choose the most
information.
valuable information based on its quality including relevancy, timeliness, accuracy and
the like. He also asserted that although accountants are users of an IS, he has
experience in auditing IS in many organizations and that another accountant with extra
IT knowledge can also be hired to assist in the system development.
so
During his fist week at IT Top, He had discovered that the current organizational
structure is reasonable with departments are segmented based on their intended
with
functions. Nevertheless, he is not comfortable with centralized data processing used by
the IT department because the accounting department becomes less independent. As a
result, he has put forward to the management a proposal of having a DDP instead. He
had argued that cost reduction and improved operational efficiency are highly expected,
and that the anticipated disadvantages of resource mismanagement and task
redundancy can be mitigated with cocontinuous monitoring by the management.
Ariff has also noticed that not all IT Top IS follow modern management systems. In
Top’s systems
particular, the data storage, data updating and currency of human resource information
are poor due to data are kept in a flat file model. He has suggested using a database
flat-file
model via the concept of REA across all departments and IT Top will surely benefit if
they can adopt ERP systems.

2. The database management systems are expected to improve efficiency in all of the
three transaction cycles. Activities in these cycles are assisted with both manual and
computer-based systems of accounting records. Ariff’s main concern regarding the
cycles is to familiarize the head of every department with accounting documents,
journals and ledgers so that audit trail can be performed easily when every department
is happy to cooperate. Next, he intends to meet the head of IT department to check the
magnetic counterparts of computer-based systems to match them with the traditional
accounting records. To achieve this aim, he will need to ensure that all files are kept
accordingly, whether they belong to master file, transaction file, reference file or
archive file.
After a thorough examination of the existing accounting systems, Ariff had written a
description on each system using DFD and entity relationship diagrams. He also had
marked inappropriate cardinalities of several relationships with red so that he can
explain to the system designer to correct the mistakes. Further, he had prepared copy
of a diagram that describe symbol sets used in DFD, flowcharting manual procedures
and flowcharting computer processes as given in appendix 1. He hopes that the system
designer can understand and accurately visualize the flow of activities in designing and
improving a system.
Ultimately, what Ariff is doing is to overcome weaknesses and improve the current AIS
in IT Top with a proper utilization of both batch system and real-time system. Although
the two systems are different but when combined correctly, it will eliminate time waste;
hence assist in the LSS management philosophy. The systems can be better managed if
the coding used is suitable for IT Top’s operations. He had suggested that the existing
sequential coding scheme can be leveraged with the block and group codes, while
mnemonic codes may not be a good choice.
Ariff always hold the philosophy that no matter how good a system is, its success will
eventually depend on the people. Computer ethics is one of the critical ethical issues in
business. Even though IT Top has circulated its policy on ethics and fraud, there is no
guarantee that everyone will abide it. As an accountant, he may be able to detect
employee fraud but management fraud will be a more challenging to identify.
Fortunately, the Malaysian government has recently introduced the whistle blowing act
that can protect him should such cases occur. Among the common employee frauds he
had observed before include asset misappropriation, skimming and cheque tampering.
These frauds are very much related to the motives of individuals and opportunities
available to them. Therefore, he will need to spend a lot of time in identifying IT Top’s
internal control systems by measuring the associated risks, monitoring and devising
appropriate control activities. He hopes that he can contribute as maximum as possible
in helping the local company reach a world-class quality.
“Can Ariff help IT Top meet its global competition goal?”

3. Appendix 1
DFD symbol set
Manual procedure flowcharting symbols
Computer flowcharting symbols