Accounting Information Systems, 10e 21
FIGURE SM-12.6 Problem 2, Part c Solution—Annotated Systems Flowchart for PureProducts Company (Purchasing and
Receiving)
22 Solutions for Chapter 12
Internet Payment Platform (Purchasing and Receiving Processes) Solutions (see the Note
on page 8)
P 12-1 ANS. a. Table of Entities and Activities for Internet Payment Platform (Purchasing and
Receiving Processes)
Entities
Para
Activities
Various departments
2
1. Send request for purchase (assumed).
Contracting officer (CO)
2
2. Enter purchase order.
BEPMIS
2
3. Store PO in database.
2
8. Send formatted POs to enterprise adapter.
Enterprise adapter
2
9. Convert PO into XML.
2
10. Encrypt POs.
2
11. Send POs to IPP.
IPP server
2
12. Store POs on IPP appreciating database.
2
13. Notify supplier via e-mail.
Supplier employee
3
14. Log on to IPP and read PO.
3
15. Decide if can respond to electronic PO (or wait for paper PO).
3
16. Send goods and packing slip to BEP.
3
18. Record receipt.
Warehouse
3
2
5. Sign PO.
2
6. Mail PO to supplier.
2
7. Extract and format POs.
Accounting Information Systems, 10e 23
Purchase
request
FIGURE SM-12.7 Problem 1, Part b Solution—Context Diagram for Internet Payment
Platform (Purchasing and Receiving Processes)
24 Solutions for Chapter 12
FIGURE SM-12.8 Problem 1, Part c Solution—Physical DFD for Internet Payment Platform
(Purchasing and Receiving Processes)
Accounting Information Systems, 10e 25
P12-1 ANS. d. Table of Entities and Activities (Annotated) for Internet Payment
Platform (Purchasing and Receiving Processes)
Para
Activities
Process
2
2. Enter purchase order.
1.0 Prepare and record
PO in BEPMIS.
2
3. Store PO in database.
2
4. Print PO.
2
5. Sign PO.
BEPMIS
2
7. Extract and format POs.
2
10. Encrypt POs.
3
14. Log on to IPP and read PO.
BEP Receiving
3
17. Enter receipt data.
BEPMIS
3
18. Record receipt.
19. Print stock notice.
26 Solutions for Chapter 12
FIGURE SM-12.9 Problem 1, Part e Solution—Logical DFD for Internet Payment Platform
(Purchasing and Receiving Processes)
Accounting Information Systems, 10e 27
FIGURE SM-12.10 Problem 2, Part a Solution—Systems Flowchart for Internet Payment Platform (Purchasing and Receiving
Processes)
28 Solutions for Chapter 12
Control Goals of the IPP Purchasing and Receiving Processes
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness
of operations
Ensure
efficient
employment
of resources
(people and
computers)
Ensure
security of
resources
(inventory,
PO master
data)
For purchase
order inputs,
ensure:
For PO
master
data,
ensure:
For vendor
packing slip
inputs, ensure:
For PO
master
data,
ensure:
Recommended
control plans
A
B
C
IV
IC
IA
UC
UA
IV
IC
IA
UC
UA
Present controls
P-1: Research and
approve POs
P-1
P-1
P-5: Count and inspect
goods
P-5
P-5
P-5
P-5
P-5
P-5
P-5
P-6: Enter receipt data
in receiving
P-6
P-6
P-6
P-6
P-6
P-6
P-6
receipt data to PO
data
P-2: Print PO with
FAR text
P-2
P-2
P-4
Accounting Information Systems, 10e 29
Control Goals of the IPP Purchasing and Receiving Processes
Control Goals of the Operations Process
Control Goals of the Information Process
Ensure effectiveness
of operations
Ensure
efficient
employment
of resources
(people and
computers)
Ensure
security of
resources
(inventory,
PO master
data)
For purchase
order inputs,
ensure:
For PO
master
data,
ensure:
For vendor
packing slip
inputs, ensure:
For PO
master
data,
ensure:
Recommended
control plans
A
B
C
IV
IC
IA
UC
UA
IV
IC
IA
UC
UA
Missing controls
M-1: Reconcile batch
totals for
extracted POs
M-1
M-1
M-1
M-1
M-1
M-1
M-1
Possible effectiveness goals include the following:
A – Select a vendor that will provide the best quality at the lowest price by the required delivery date
B – Ensure that the right goods in the correct amount are received in acceptable condition in a timely manner
C –Comply with Federal Acquisition Regulation (FAR)
IV = input validity
IC = input completeness
IA = input accuracy
UC = update completeness
UA = update accuracy
FIGURE SM-12.11 Problem 2, Part b (Partial)—Control Matrix for Internet Payment Platform (Purchasing and Receiving
Processes)
data
30 Solutions for Chapter 12
Exhibit SM-12.2 Problem 2, Part b Solution (Partial)—Explanation of Cell Entries for
Control Matrix in Figure SM-12.11
P-1: Research and approve POs.
Effectiveness goal A: The PO is researched by buyers, contract specialists, and
P-2: Print PO with FAR text.
Effectiveness goal C: POs with the required FAR text are printed and sent to the
suppliers.
Purchase order input validity: POs are not valid, for purposes of FAR, unless they
include the required FAR text.
P-3: Sign PO.
Effectiveness goals A and C, and purchase order input validity: The contracting
P-4: Send e-mail to supplier.
Effectiveness goal A: By sending an e-mail to the supplier to alert them that a PO
has been posted to the IPP, we improve the possibility that goods will be provided
in a timely manner.
P-5: Count and inspect goods. Note: We assume that this is present.
Effectiveness goals A, B, and C: By counting and inspecting the goods, receiving
personnel can determine the quality of the goods (goal A), that we have received
the right goods in the correct amount and in acceptable condition (goal B), and
Accounting Information Systems, 10e 31
(input accuracy). We assume that the PO master data is updated simultaneously
with the input of the receipt data.
P-6: Enter receipt data in receiving.
Efficient employment of resources: Receiving personnel are familiar with the
entry of goods receipts, have the goods and shipping documents at their disposal
to quickly resolve any discrepancies, and should, therefore, be able to input more
data and process more receipts in a given period of time.
P-7: Compare input receipt data to PO data. Note: We assume that this is present.
Effectiveness goal B and vendor packing slip input validity: By comparing the
open purchase order data to received goods, we can ensure that we have received
the goods that were ordered.
Vendor packing slip input accuracy and PO master data update accuracy: The
comparison identifies erroneous or suspect data and reduces input errors. We
assume that the PO master data is updated simultaneously with the input of the
receipt data.
32 Solutions for Chapter 12
M-1: Reconcile batch totals for extracted POs.
Effectiveness goals A and C: By ensuring that POs are recorded on IPP, we can
ensure timely receipt of the goods in compliance with FAR.
M-2: Programmed edit checks for formatted and translated PO data.
Purchase order input accuracy and purchase order master data update accuracy:
Edits at BEPMIS and the Enterprise Adapter would identify erroneous or suspect
data and reduce input errors at the IPP server. We assume that the PO master data
is updated simultaneously with the input of the receipt data.
M-3: Match PO and receipt.
Effectiveness goal B and vendor packing slip input validity: By comparing the
M-4: Monitor open POs.
Effectiveness goals A and C, vendor packing slip input completeness, and PO
master data update completeness: By monitoring and following up on open POs
in IPP, we could ensure that goods are received in a timely manner (goal A), are in
compliance with FAR (goal C), and are input in a timely manner (input
completeness). We assume that the PO master data is updated simultaneously with
the input of the receipt data.
Accounting Information Systems, 10e 33
• When there are programmed edit checks, manual comparisons, and
reconciliation of batch totals, we might find procedures for rejected inputs.
34 Solutions for Chapter 12
FIGURE SM-12.12 Problem 2, Part c Solution—Annotated Systems Flowchart for Internet Payment Platform (Purchasing and
Receiving Processes)
Accounting Information Systems, 10e 35
P 12-3 a. ANS. Comments on the efficiency and effectiveness of the purchasing process
at Ludlow might include the following:
• Paper requisitions are not efficient and are prone to error. Automated
processes would get POs to the purchasing office in a timelier manner.
b. ANS. Automation of the purchasing and receiving processes at Ludlow to
solve the problems noted in the preceding list might include the following
features (see the systems flowchart in Figure SM-12.13):
• Ludlow uses an enterprise system for these purchasing and receiving
processes.
• The maintenance manager enters purchase requisitions online.
36 Solutions for Chapter 12
• When goods are received, they are immediately entered into the enterprise
system. Goods that require QC are designated as such and are
automatically assigned a status as “awaiting QC.” These goods are moved
to the QC area.
Accounting Information Systems, 10e 37
FIGURE SM-12.13 Problem 3, Part b Solution (Partial)—Systems Flowchart for the Purchasing Process at
Ludlow