CONFIDENTIAL

SET 1

UNIVERSITI KUALA LUMPUR

BUSINESS SCHOOL

FINAL EXAMINATION

SEPTEMBER 2018 SEMESTER

COURSE CODE : EAB41103

COURSE NAME : ACCOUNTING INFORMATION SYSTEM 2

PROGRAMME NAME : BACHELOR OF ACCOUNTING (HONS)

TIME / DURATION : / 3 HOURS

DATE :

INSTRUCTIONS TO CANDIDATES

1. Please CAREFULLY read the instructions given in the question paper.

2. This question paper has information printed on both sides of the paper.

3. This question paper consists of FOUR (4) questions. Answer ALL questions.

4. Please write your answers on the answer booklet provided.

5. All questions must be answered in English (any other language is not allowed).

6. This question paper must not be removed from the examination hall.

THERE ARE EIGHT (8) PAGES OF QUESTIONS, INCLUDING THIS PAGE.

SEPTEMBER 2018 CONFIDENTIAL

(Total: 100 marks)

INSTRUCTION: Answer ALL questions.

Please use the answer booklet provided.

Question 1

Assets acquisition begins when the department manager recognizes the need to obtain or
replace an existing fixed asset. The manager prepares two copies of a purchase requisition;
one is filed in the department, and one is sent to the purchasing department. The purchasing
department uses the purchase requisition to prepare three copies of a purchase order. One
copy of the purchase order is sent to the supplier, another copy is sent to the accounts
payable department and the third copy is filed in the purchasing department. The receiving
department receives the assets and packing slip from the vendor and prepares a receiving
report. One copy of the receiving report is sent to accounts payable, one is sent to the
department manager, and one is sent to the inventory department clerk who uses it to update
the inventory records.

The accounts payable clerk receives the invoice, which she compares to the purchase order
and receiving report. The accounts payable clerk inputs the information into the computer
terminal, post the liability, updates the purchase journal and prints out the hardcopy of a
journal voucher and cash disbursement voucher and also the supplier’s invoice is sent to the
general ledger department. The cash disbursement voucher and the supplier’s invoice are
then sent to the cash disbursement department.

The purchase order and the receiving report are filed in accounts payable. The cash
disbursement clerk prepares and posts a check to the check register using the information
from the supplier’s invoice and cash disbursement, prints a hard copy of the check, which
later be sent to the vendor. The cash disbursement voucher is sent on to the general ledger
department.

The department manager also handles asset maintenance and asset disposal. The manager
adjusts the fixed asset inventory subsidiary account balances as the assets depreciate over
time. When an asset has reached the end of its useful life, a disposal report is prepared. The
department manager sends an asset status summary to the general ledger. The general
ledger department clerk reconciles the cash disbursements voucher, the journal voucher and
the asset status summary and finally post it to the general ledger accounts.

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Required:

(a) Prepare the Resource, Events and Agents (REA) model of the fixed asset
procedures. Show the cardinalities for all the associations.
(12 marks)

(b) Define and provide example for each components of REA.

(3 marks)

(c) Your organization is planning to implement an Enterprise Resource Planning (ERP)

system. Some managers in the organization favour the big bang approach. Others
are advocating a phased in approach. The President has asked you, as a project
leader to summarize advantages and disadvantages of each approach.
(6 marks)

(d) You are an independent auditor attending an engagement interview with the client.
The client has implemented the new ERP system. They asked your opinion on
implications for internal control and auditing. Highlight the key concern on auditing
through ERP.
(4 marks)
[Total 25 marks]

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Question 2

(a) Firewall is a system used to insulate an organization’s intranet from the internet.
Differentiate between the TWO (2) types of firewall.
(4 marks)

(b) Cloud computing is a model for enabling convenient, on demand network access to a
shared pool of configurable computing resources. Define THREE (3) key features of
cloud computing by service provider.
(6 marks)

(c) Electronic partnering of business enterprises forms a dynamic virtual organization that
benefits all parties involved. With the aid of diagram and example, briefly explain the
concept of dynamic virtual organization.
(6 marks)

(d) Define THREE (3) participants who are directly involved in developing new system.
Pages: 546
1. Systems professionals
2. End users
3. Stakeholders

(3 marks)

(e) Your company, Trustie Sdn. Bhd., is employing the System Development Life Cycle
(SDLC) for its new information systems. You have been chosen as a member of the
development team because of your strong accounting background. However, you do
not fully understand exactly what are the internal auditors will need from the system.
Discuss THREE (3) fact gathering techniques you might employ to increase your
understanding about the new system.
Pages: 554

1. Observation
Involves passively watching the physical procedures of the system to alloww the
analyst to determine what get done, who performs the task, when they do them,
how they do them, why they do them, and how long they take

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2. Task participation
An extension of onservation, whereby the analyst takes an active role in
performing the user’s work. This allows the analyst to experience first-hand the
problems involved in the operation of the current system.

3. Personal interview
A method to experience facts about the current system and user perceptions
about the requirements for the new system

4. Reviewing key documents

Organizational charts, job descriptions, accounting records, charts of account,
and policy statements are the examples of another source of facts about the
system being surveyed from the organization’s document.

(6 marks)
[Total: 25 marks]

Question 3

(a) Classify each of the following as problem or symptom for reactive and proactive
management. If it is a symptom, give an example of a possible underlying problem. If
it is a problem, give an example of a possible symptom that may be detected.

1. Inadequate trained workers

2. Decreasing customer satisfaction
3. Low quality raw materials
4. Shortage of raw materials due to a drought season
5. Declining profits

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SEPTEMBER 2018 CONFIDENTIAL

(5 marks)

(b) Accountants are concern with the integrity of the new system in process of System
Development Life Cycle (SDLC). Discuss THREE (3) roles of accountants in
managing SDLC.
(6 marks)

(c) Commercial packages is a pre coded software that user purchase from software
vendor. Discuss TWO (2) advantages and TWO (2) disadvantages of choosing
commercial packages rather than in house system development.
(8 marks)

(d) Commercial packages can be divided into a number of general groups. Briefly explain
the THREE (3) systems introduced in commercial packages.
(6 marks)
[Total: 25 marks]

Question 4

(a) During the past year, Couvert Sdn. Bhd. Has experienced excessive employee
turnover in their Information Technology (IT) function. Exit interviews revealed that
they were dissatisfied with the working environment. Couvert employed the services
of a management consulting firm that had expertise in employee relationship
management. The consulting firm made recommendation to restructure IT operations
to create a greater sense of ‘ownership’ among the IT staff. After three months, under
the new operation a survey indicated a marked increase in the level of job satisfaction
among the IT group.

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During the conduct of the audit planning phase of the annual financial audit,
the auditor observed the following pratices: Individual IT professional are assigned
exclusively to support specific business functions such as sales processing, billing,
customer account maintenance and more. Each professional provides a range of IT
services for their respective users including computer oeprations, program changes
and documenting the system through record layouts, systems flowcharts and
program listings. They also reconcile computer output reports and logs of transaction
errors.

Required:

1. Identify and explain any control concerns with the new operations.
(4 marks)

2. Identify potential computer fraud might this operational approach permit.

(4 marks)

(b) Malicious acts from external hackers, disgruntled employees, disk failure, program
errors, fires, floods, and earthquakes can corrupt and destroy data. To recover from
such disasters, the organization needs to reconstruct the database to pre failure
status. This can be done only if the database was properly backed up in the first
place.

Required:

Briefly explain the FOUR (4) basic backup and recovery features in a database
management system.
(8 marks)

(c) The systems development and maintenance controls and the test of controls was
apply both to management’s SOX-compliance objectives and the auditor’s attest
responsibility. To test specific application controls, auditor (internal and external) use
several types of CAATT, including the date test method, the integrated test facility,
and parallel simulation.

Required:

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1. Define THREE (3) the through-the-computer technique

(3 marks)

2. Compare and contrast the following techniques based on costs and benefits:

i. Tracing
ii. Integrated facility
iii. Parallel simulation
(6 marks)
[Total: 25 marks]

END OF QUESTION PAPER

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