Chapter 14 Homework Recommended Control Plans Ensure Efficient Employment Resources

Accounting Information Systems, 9e 21

FIGURE SM-14.6 Problem 2, Part c Solution—Annotated Systems Flowchart for Oxford Supplies

22 Solutions for Chapter 14

FIGURE SM-14.6 Problem 2, Part c Solution—Annotated Systems Flowchart for Oxford Supplies (continued)

Accounting Information Systems, 9e 23

•

Nerd Brigade Solutions

P 14-1 ANS. a. Table of Entities and Activities for Nerd Brigade

Entities

Para

Activities

Computer

2

1. Print time sheets.

Department supervisors

2

7. Review and sign time sheets.

2

8. Return time sheets to the payroll department.

Payroll department

2

9. Key time sheets.

2

10. File time sheets alphabetically by department.

Computer

3

Computer operator

3

13. Obtain a check signing machine.

3

14. Sign checks.

3

16. Give payroll reports to the payroll department.

Cashier

4

17. Check total and number of checks against the payroll register.

4

18. Send checks and stubs to the department supervisors

Department supervisors

4

20. Give paychecks and stubs to employees.

Banks

4

Payroll department

2

2. Receive time sheets from IT.

2

3. Distribute time sheets.

Employees

2

5. Fill in time sheets (each day).

2

6. Give time sheets to the supervisor (at end of week).

24 Solutions for Chapter 14

Payroll

department

Payroll

reports

Payments and

payment advice

FIGURE SM-14.7 Problem 1, Part b Solution—Context Diagram for Nerd Brigade

Accounting Information Systems, 9e 25

Employee/payroll

master data

Curre nt

week‘s pay file

Completed

time shee ts

Blank

time shee ts

4.0

Employee

3.0

Department

supervisors

Blank

time shee ts

Blank

time shee ts

Completed

time shee ts

Completed

time shee ts

5.0

Computer

operator

Payroll

output

Payroll

department

Payroll

reports

NOTE: Payroll output include s:

—Checks with stubs

—Stubs for dire ct deposit (DD) checks

—Deposit slips

—Checks for banks

—Check register

—Payroll reports

Curre nt week’s

payroll activity data

FIGURE SM-14.8 Problem 1, Part c Solution—Physical DFD for Nerd Brigade

26 Solutions for Chapter 14

P 14-1 d. Table of Entities and Activities (Annotated) for Nerd Brigade

Entities

Para

Activities

Process

Computer

2

1. Print time sheets.

Payroll department

2

9. Key time sheets.

2.0 Prepare payroll.

2

10. File time sheets alphabetically.

Computer

3

11. Create current week’s pay file.

3

12. Print payroll output.

Computer operator

3

14. Sign checks.

Employees

2

5. Fill in time sheets.

Department supervisors

2

7. Review and sign time sheets.

Accounting Information Systems, 9e 27

1.0

Record

hours

Approved

time re cord

Time record

history file

3.0

Distribute

payroll

Payments,

payment advice ,

payroll reports,

payroll summary,

deposit and payment

data

Payroll

department

Payroll

reports

Payments and

payment advice

Current we ek‘s

payroll activity

data

FIGURE SM-14.9 Problem 1, Part e Solution—Logical DFD for Nerd Brigade

28 Solutions for Chapter 14

Payroll

department

Department

supe rvisor

Computer

operations

Start

Pre pare time

she e ts

Time shee ts Time shee ts Time shee ts P. 2,

A

Revie w and

sign

Completed and

approv ed

time she ets

Create current

wee k‘s payroll

activity data

Curre nt

wee k‘s

payroll

activity data

Create current

wee k‘s pay data

Curre nt

wee k‘s pay

Accepte d

input

Completed and

approv ed

time she ets

P. 2,

B

Employee

FIGURE SM-14.10 Problem 2, Part a Solution—Systems Flowchart for Nerd Brigade

Accounting Information Systems, 9e 29

Cashier

Employee

P. 1,

AP. 1,

B

P. 1,

A

Complete d

time she et

Payroll

reports

Computer

operator

Payroll

department

Check–signing

machine obtained

from cashier

Check registe r

Banks

Signed employee

checks with stubs,

stubs for DD checks

P. 1,

B

DD de posit slips

and bank che cks

FIGURE SM-14.10 Problem 2, Part a Solution—Systems Flowchart for Nerd Brigade (continued)

30 Solutions for Chapter 14

Control Goals of the Nerd Brigade Payroll Business Process

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

(cash, employee/

payroll master

data)

For time sheet data

inputs, ensure:

For

employee/payr

oll master

data, ensure:

Recommended control plans

A

B

C

IV

IC

IA

UC

UA

Present controls

P-1: Automatic generation of turnaround

documents (time sheets)

P-1

P-4: Prepare miscellaneous reports

P-4

P-5: Checks are signed with a check-signing

machine

P-5

P-6: Manual agreement of batch totals

P-6

Missing controls

P-2: Approve time attendance sheets

P-2

P-3: Enter turnaround documents (time sheets)

P-3

Accounting Information Systems, 9e 31

Control Goals of the Nerd Brigade Payroll Business Process

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

(cash, employee/

payroll master

data)

For time sheet data

inputs, ensure:

For

employee/payr

oll master

data, ensure:

Recommended control plans

A

B

C

IV

IC

IA

UC

UA

M-2: Populate input screens with master data

M-2

Legend:

Possible effectiveness goals include the following:

A – Provide employees with timely paychecks

IV = input validity

IC = input completeness

IA = input accuracy

FIGURE SM-14.11 Problem 2, Part b Solution (Partial)—Control Matrix for Nerd Brigade

32 Solutions for Chapter 14

Exhibit SM-14.2 Problem 2, Part b Solution (Partial)—Explanation of Cell Entries for

Control Matrix in Figure SM-14.11

P-1: Automatic generation of turnaround documents (time sheets).

Effectiveness goal A, efficient employment of resources: The turnaround

documents (time sheets) are printed by the computer. Therefore, only valid

employees receive a time sheet.

P-2: Approve attendance time sheets.

Input validity: Before they are forwarded to the payroll department for processing,

time sheets are approved by department supervisors. These written approvals help

P-3: Enter turnaround documents (time sheets).

P-4: Prepare miscellaneous reports.

Effectiveness goals B and C: Various reports are prepared to comply in a timely

manner with tax and other government regulations.

Employee/payroll master data, update completeness, update accuracy: The

reports contain data from the employee/payroll master data. Review of these

reports should detect any incomplete or inaccurate data.

Accounting Information Systems, 9e 33

control goals of input completeness (all source documents are processed once and

only once), input validity and resource security (only valid source documents

comprise the batch that is processed), and input accuracy (data elements

appearing on the source documents are processed correctly).

Update completeness, update accuracy: Because totals are reconciled after the

master file update, we have made entries in the columns for UC and UA.

M-2: Populate input screens with master data.

Effectiveness goal A, efficient employment of resources: Automatic population of

inputs from the employee/payroll master data would result in fewer keystrokes,

M-3: Reconcile attendance time cards and job time tickets.

Effectiveness goal A, efficient employment of resources, input validity, input

completeness, input accuracy: Job time tickets are not mentioned. If they are

reconciled with the time sheets, we would determine that the time sheets

accurately reflect hours actually worked (validity). By determining that we have a

34 Solutions for Chapter 14

• Where paper documents are employed, we might find document design,

written approvals, and turnaround documents.