PROJECT REPORT

ACCOUNTING INFORMATION SYSTEM

GLOWIES BEAUTY

BY:

GROUP 5

1. SHABRINA ATIKAH SARI (2110533026)

2. YULIA ANNISA (2110531023)
3. ZAKYA (2110531034)

Lecturer:
Assoc. Prof. Dr. Asniati Bahari, S.E., M.B.A., Ak., CA., CSRA.

INTERNATIONAL OF ACCOUNTING PROGRAM

FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS ANDALAS
2022
 PREFACE

Thank for the presence of Allah SWT who has given us grace and guidance, so that thanks
to Allah grace, the Author was able to complete the Transfer Funds paper in the State and
Regional Finance course. The Author hopes that with this paper, readers can broaden their
horizons about Transfer Funds in Indonesia. The author expresses his deepest gratitude to:

1. Mrs. Assoc. Prof. Dr. Asniati Bahari, S.E., M.B.A., Ak., CA., CSRA. as a
Accounting Information System lecturer who has provided guidance in completing
this task.

2. To the Glowies Beauty Team who have been willing to work together to complete
this final project.

3. Group members who have worked together in carrying out this Accounting
Information System final project, so that it can be completed properly.

Finally, the author would like to thank all parties who played a role in the completion of this
paper. The Author realizes that in writing this paper there are still many shortcomings.
Therefore, criticism and suggestions are highly expected by the Author for the perfection of
this paper. Hopefully this paper can provide benefits for readers and especially for students
as an addition to knowledge. Truth and perfection belong only to Allah.

Padang, November 10, 2022

Authors

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 LIST OF CONTENT

PREFACE....................................................................................................................................1
LIST OF CONTENT...................................................................................................................2
I. GENERAL PART....................................................................................................................4
1.1. The purpose of the study of Accounting Information System in companies.....4
1.2. Company Background.................................................................................................5
1.3. Organizational charts and job descriptions within the organization....................5
1.4. Accounting information system implementation.....................................................7
1.5. Current Generated report...........................................................................................8
II. ACCOUNTING INFORMATION SYSTEM IMPLEMENTATION AND ANALYSIS............9
2.1. Revenue Processing Cycle..........................................................................................9
a) Revenue processing narration...................................................................................9
b) DFD for Revenue Processing...................................................................................11
c) Document/System Flowchart for Revenue cycle..................................................12
d) Business process diagram Revenue cycle.............................................................14
e) Weaknesses of Internal Revenue Control (6 elements of physical control)....14
f) Suggestions to improve the weakness of Internal Control revenue (6 elements
physical control)...................................................................................................15
g) Design of revenue accounting system in accordance with internal control
adequate (Document/System Flowchart for Revenue cycle)........................16
2.2 Expenditure Processing Cycle................................................................................17
a) Expenditure processing narration...........................................................................17
b) DFD for Expenditure Processing.............................................................................19
c) Document/System Flowchart for Expenditure cycle............................................20
d) Business process diagram Expenditure cycle.......................................................21
e) Weaknesses of Internal Expenditure Control (6 elements of physical control)
................................................................................................................................21
f) Suggestions to improve the weakness of Internal Control Expenditure (6
elements physical control)..................................................................................22
g) Design of Expenditure accounting system in accordance with internal control
adequate (Document/System Flowchart for Expenditure cycle)..................23

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 2.3 Payroll Process Cycle..............................................................................................23
a) Payroll processing narration....................................................................................23
b) DFD for Payroll Processing......................................................................................24
c) Document / System Flowchart for Payroll Processing.........................................25
d) Business process diagram for Payroll Processing................................................25
e) Weaknesses of Internal Payroll Control (6 elements of physical control)........26
f) Suggestions to improve the weaknesses of Internal Control Payroll
Recommendation.................................................................................................26
g) Design of payroll accounting system in accordance with the adequate internal
control....................................................................................................................27
III. Conclusion........................................................................................................................29
Reference................................................................................................................................29
Attachment.............................................................................................................................29

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I. GENERAL PART

1.1. The purpose of the study of Accounting Information System in

companies

The accounting information system is an information system that handles everything

related to accounting. The accounting information system in the company is used to
collect and store data related to the activities that occur within a company. The data is
then processed into information so that the company's management can take it into
account when making decisions.

An accounting information system consists of several components that work together to

collect, manage, store, and disseminate certain information to support an organization's
activities, such as decision making, coordination, control, and problem analysis within
the organization. In other words, an accounting information system can be considered
as a structured system that can help the users of a company to carry out economic
transactions.

Accounting information systems can be used in various types of businesses, including

those classified as SMEs (Small and Medium Enterprises). UKM is a type of small
business developed by the community and started on the initiative of the community.
Due to the labor-intensive nature of the production process of small and medium-sized
enterprises, SMEs are one of the "fields" that are adequate in overcoming labor
constraints.

According to the author's observations, the Glowies Beauty has problems registering
economic activities. The registration of the economic activity of these companies is done
by computer but it is not well organized. This makes the business very vulnerable to
registry errors. Furthermore, the profits made by the business cannot be truly proven,
because there is no complete financial report.

For this reason, this paper is carried out to discuss how to apply an accounting
information system to Glowies Beauty. In order to obtain the information needed by the
author in carrying out the discussion process, the author conducted interviews with the
aim of obtaining information related to financial information on the Glowies Beauty.

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1.2. Company Background

Glowies Beauty is a startup business that was founded in 2020 by Abel De Osmon and
Nazifa Farzanah. This company was first established in Batusangkar, West Sumatra
which at that time was still on a small scale. The Glowies company is currently located
in Bandung, West Java because the owner is studying in Bandung. Glowies Beauty
consists of 1 president, 1 vice president, and 20 employees (10 operational team, 5
marketing team, and 5 finance team). This company is a merchandising company that
sells eyebrow serum products that have been produced by the maklon factory.

The beginning of this business started from a trial of combining several beauty products
to make eyebrow serum and eyelashes on YouTube by the owner and it turned out that
the video had millions of views. In 2020 there was the Covid-19 Pandemic, the owners
were confused about carrying out any activities during the pandemic. So there was an
idea to create an online business namely Eyebrow Serum and Eyelashes named
Glowies. This product is liked by teenagers and adults, especially women who have
problems with eyebrows and eyelashes. In addition, Eyebrow Serum and Eyelash
Glowies products have sold 10k++ in e-Commerce.

1.3. Organizational charts and job descriptions within the organization.

Organizational structure is a description of the division of tasks and responsibilities to

individuals and certain parts of the organization and has a very important role in
determining and facilitating the running of the company. The distribution of tasks,
authorities and responsibilities as well as their relationship to each other can be
described in the company's organizational structure, so that employees and employees
will clearly know what their duties are from where they get orders and to whom they
must be responsible. 

The form of organizational structure that exists in Glowies Beauty is functional, namely
the form of organizational structure indicated by the clear division of tasks and authority
in each work section. The following is a chart of the organizational structure found at
Glowies Beauty.

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 President

Vice President

Marketing Operational Finance

Team Team Team

Job description:

1. The President 

President also doubles as one of the owners at Glowies Beauty which has the duty to
directly supervise all activities that occur in Glowies Beauty. The president and vice
president also act as parties that transfer funds to vendors. In addition, the owner
also provides direction to all existing employees. The owner himself conducts a sales
evaluation carried out by the sales force in the Store section.

2. Vice President

Vice President is in charge of supervising the production sector. In addition, the Vice
President is also tasked with assisting all responsibilities that are carried out by the
president in his absence.

3. Marketing Team

In the Marketing Team there are several more sections consisting of KOL, Manager,
and Content Creator. Each section has its own duties. KOL is in charge of Manage
communications and build relationships with media. The manager is tasked with
finding people who will do the endorsement as well as taking care of everything
related to the endorsement. And finally, the content creator is in charge of producing
marketing copy to advertise our products and promoting our content on social
media. 

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4. Operational Team

Broadly speaking, all of Glowies Beauty's business activities are centered on the
Operational Team. Here there are several sections consisting of warehouse, packing,
and shipping employees.

5. Finance Team

The Finance Team has the task of recording all transactions that occur at Glowies
Beauty. Besides that, they also prepares monthly financial reports.

1.4. Accounting information system implementation

At first the accounting information system used by Glowies Beauty is a manual system
(traditional). In line with technological developments and the demands of the times, the
information system used has changed to a computer-based automated system but has
not yet been reengineered. The information system model used is a computer-based
model with a flat file model and use the system e-Commerce. Where the process of
recording information using a computer but the data files are not interconnected in an
information system. Each department uses simple applications such as Microsoft Excel,
Microsoft Word, and system e-Commerce in processing their respective data. Although
computer-based, not entirely data processing activities are carried out by computers.
The data is processed manually by humans but utilizes existing applications on the
computer so as to facilitate the recording of data processing that is needed by the
company.

Computer Facilities Available and Usage:

There are 8 laptop's Employees use to operation:

2 Finance team

 To record the financial statements

 To adjust inventory data

3 Operational team

 To handle and record the sales order

 To handle the customers complain

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  To handle inventory in warehouse

3 Marketing Team

 To edit the file promotion in social media

 To handle social media
 To reminder and post file promotion in e-Commerce

1.5. Current Generated report

Daily Report Daily reports consist of sales of goods that occur in one day which are
recorded in cash receipts in the form of daily reports made by finance employees.

Monthly Report Employees of the company's finance department record every cash
flow transaction that occurs in the company. Employees do a monthly financial report
recap. This document is used to reconcile the company's finances at the bank or in the
company's account.

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II. ACCOUNTING INFORMATION SYSTEM IMPLEMENTATION AND ANALYSIS.

2.1. Revenue Processing Cycle

a) Revenue processing narration

The company's revenue cycle starts from buyers ordering goods through market
places (Shopee, TikTok shop, Tokopedia). Payment for goods is made when the
buyer has determined the goods to be purchased, then orders for goods can be
made and confirmed also in the company's market place. The sales process begins
with receiving customer orders which are automatically connected directly to the e-
Commerce system. Customer orders are updated directly in the market place system
and the operations department will record customer orders. Sales orders capture
important information such as customer name, address, account number, item
name. After the customer makes an order, a bill of payment will appear in the e-
Commerce system. E-Commerce sellers will immediately be updated with order
notifications if the customer has made a payment through the e-Commerce system.

After creating a sales order, a copy is placed in the customer's open order file for
future reference. The task of filling orders and delivering products to customers
takes 3 days. The operational staff confirms to the buyer that the ordered goods are
being packed and shipped. Customer records in the open order file are updated
whenever the order status changes such as approvals and the stage of the goods
delivery process. Next, the operations department prints the packing slip and
shipping notice. For checking and picking up goods in the warehouse is carried out
by the operational staff. Shipping clerk operational staff packs the goods, attaches
the packing slip, completes the delivery notice, and prepares the Bill of Lading.
Operations staff prints packing slips and shipping notices. This document identifies
inventory items that must be placed on and removed from the warehouse shelves. It
also provides formal authorization for warehouse personnel to release certain items.
Inventory records are not formal accounting records for controlling inventory assets.
They are used for warehouse management purposes only. Checking and retrieving
goods in the warehouse is carried out by operational staff. Finally, warehouse
employees adjust stock records to reflect physical inventory reductions and
automatic updates from marketplace applications. These inventory records are for
controlling inventory assets used for warehouse management reports to the finance

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department. The amount of inventory in the market place will be updated
automatically if there is a reduction in goods due to the sale of goods.

After packing the goods, the operational staff sends the goods by expedition. The
expedition will provide documents to operational staff regarding the number of
goods sent and the expedition will update information regarding the delivery of
goods to customers through the market place for ordering goods. Prior to the arrival
of goods and documents verified stock release, the shipping department receives the
packing slip and shipping notice from receipt of the order. Notification of delivery will
be confirmed again at the market place regarding changes in the status of goods
that have been sent. This document conveys new relevant facts such as delivery
date, item and quantity actually shipped, carrier name and shipping cost. After
dispatching the goods from the warehouse, operational staff reconciles the physical
goods with stock releases, packing slips, and shipping notices to verify that the
orders are correct. The warehouse department will update the latest inventory after
the delivery of ordered goods is complete in the Inventory Subsidiary Ledger file.
After that, this file will be sent to the finance department and then the finance
department will update the stock inventory report and give it to the operations
department to update the latest stock quantities in the market place. The finance
department updates the sales journal and general ledger after sending orders to
buyers. The finance department will also reconcile cash receipts at the market place
with the goods ordered by the customer that have been sent.

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b) DFD for Revenue Processing

11
c) Document/System Flowchart for Revenue cycle

12
13
d) Business process diagram Revenue cycle

e) Weaknesses of Internal Revenue Control (6 elements of physical

control)

 Transaction Authorization
Agreement all kinds of transactions that exist in the glowies beauty company
carried out by the owner, especially on company expenses. However, the
receipt of customer orders in e-Commerce is carried out by the operational
clerk. Thus, transaction authorization can be monitored properly by the
owner. However, the owner as the authority holder, do not have sufficient
customer data to retrieve decisions on all transaction approval either
expenditure or income.
 The Segregation of Duties
Operational team performs all activities related to processing orders for
buyers. This can lead to fraud committed by the operational staff. In addition,
Asset custody should be separate from the task of asset record keeping.
 Accounting Records
There are still several steps in the accounting transaction cycle that are not
recorded by the finance department.

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  Access Control
Based on the current system applied by Glowies Beauty, there is still very
little access control that can be done. Each department does not have one
person who can get access control between departments.
 Independent Verification
In the current system, some functions that do not exist cause Independent
Verification to be unable to run.
 Supervision
Supervision is carried out using CCTV cameras at the Glowies Office.
However, no all rooms use CCTV only in the main room only.

f) Suggestions to improve the weakness of Internal Control revenue (6

elements physical control)

 Transaction Authorization
The owner of Glowies Beauty should have customer data to make it easier to
make decisions on transactions that occur. Customer data can be stored
using an accounting application or use Access software. Meanwhile, all
Glowies Company data is only stored in word and excel formats. With that in
mind, all transaction approval can be done better by owner.
 Segregation of Duties
The operational section should be separated into the receiving section of the
order, the packing section of the goods, the shipping section, and the
inventory recording section, so that the risk of fraud through fraudulent
transactions and errors in recording can be minimized.
 Accounting Records
Glowing Beauty should apply the best accounting principles in its accounting
records. Starting from Sales orders, sales journals, AR subsidiary ledger, AR
control (general ledger), inventory subsidiary ledger, inventory control, sales
account (GL) everything is recorded according to existing regulations.
 Access Control
We recommend that Glowies Beauty have one person who can be trusted to
control all departments, so that the possibility of fraud can be reduced.

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  Independent Verification
To prevent loss of company cash, records of orders from customers can be
matched with the amount of cash receipts received by the finance
department. In addition, to prevent the theft of goods in the warehouse,
information records of the number of goods sold can be matched with the
number of goods recorded in the inventory records. 
 Supervision
For internal control monitoring at Glowies Beauty, it is better to install CCTV
in all rooms in order to reduce fraud that occurs in the company.

g) Design of revenue accounting system in accordance with internal

control adequate (Document/System Flowchart for Revenue cycle)

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2.2 Expenditure Processing Cycle

a) Expenditure processing narration

Purchasing system  

The purchasing system from a trading company starts from purchasing finished
goods for resale from suppliers. There 3 suppliers (Finished good, Package good, Gift
items). The inventory control function provides purchase authorization for this type
of company. Monitor and record inventory control completed inventory level. When
inventory drops to a predetermined reorder point, a purchase request prepared and
sent to the purchase order preparation function to begin the purchasing process. The
procedure for purchasing raw materials will vary from one company to another for
sending to suppliers/factories, usually separate purchase requisitions will be prepared
for each inventory item as needed. This can result in multiple purchase requests for
certain vendors. These purchase requisitions need to be combined into one purchase
order which is then sent to the vendor.

The purchase order preparation function accepts purchase requisitions, sorted by

vendor if needed. Next, a purchase order (PO) is prepared for each vendor. PO
copies sent to respective vendors. Additionally, copies were sent for preparation
accounts payable (AP) function for temporary filing in AP pending files, and blind
copies sent to Goods receiving function, where the goods are stored until the
inventory arrives. Last copy archived in open/closed purchase order file. the
inventory control function will supply much of the routine ordering information that
the purchasing department needs directly from the inventory and valid vendor files.

When the accounts payable department receives the purchase order, it is temporarily
filed until the respective invoice arrives from the vendor. Upon receipt of the invoice,
the accounts payable clerk removes the purchase order from the temporary file and
reconciles the two documents. The clerk then manually records the liability in the
hard copy accounts payable subsidiary ledger. Finally, the clerk files the purchase
order and invoice in the open accounts payable file in the department. At the end of
the day, the clerk prepares a hardcopy journal voucher and sends it to the general
ledger department. Once the general ledger department receives the journal
voucher, the clerk examines it for any obvious errors and then enters the relevant

17
data into the department PC to update the appropriate digital general ledger
accounts.

Cash Disbursement System

The cash disbursements process begins in the AP department by identifying items

that have come due. After finding open accounts payable files that require payment,
clerk manually prepares checks for amounts due per invoice. Hard copy of the
accounts payable ledger also updated by the accounts payable clerk. Check number,
amount of money, and other related data recorded manually in a hard copy
checklist. The check is then sent to the cash disbursement department. However,
there are several inventory items that are purchased manually by the operations
department without an invoice. The invoice is discarded because it is no longer valid
have relevant information that never existed recorded elsewhere.

When the cash disbursement clerk receives unsigned check, he checked it to make
sure it wasn't there been tampered with information and that there is no an error
has been made. Because of this, the finance department (cash disbursement officer)
made fake checks to match the amount of incoming goods. He can identify fake
vendors or any amount of payment that is overly impressed. Assuming everything
appears in order, he signs checks using his own signature block. The cash
disbursement clerk then photocopies check for audit trail purposes. After the check is
signed, it is sent directly to the supplier. Photocopies of checks marked as paid and
then submitted to the cash disbursement department. It the clerk then created a
journal voucher, which was sent to ledger department. After the ledger department
receives the journal voucher, the clerk checks for obvious errors and then enters the
relevant ones data to departmental PCs to update accordingly digital ledger account

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b) DFD for Expenditure Processing

19
c) Document/System Flowchart for Expenditure cycle

20
d) Business process diagram Expenditure cycle

e) Weaknesses of Internal Expenditure Control (6 elements of physical

control)

 Transaction Authorization
Transaction authorization is to ensure that all transactions processed by the
information system are valid and in accordance with the objectives of the
management. In Glowies Beauty there are no weaknesses related to
transaction authorization, because in purchasing raw materials, employees in
the production department report first to the owner, then the owner who
places an order with the supplier.
 Accounting Records
In ordering raw materials, the owner does not record anything. They only use
the notes provided by the supplier as their file storage, so they are vulnerable
to losing the evidence of the very large notes which will later result in fraud
when paying for goods and making it difficult to keep a record of the
purchase of goods.

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  Supervision
Supervision carried out by the owner of the operational division employees is
not carried out periodically. In addition, there is no adequate control tool to
monitor all employee performance.
 Access Control
At Glowies Beauty, there is no access control to the inventory of goods.
 Independent Verification
At Glowies Beauty there is no independent verification. The memorandum of
purchase of goods made by the supplier has not been submitted to the
owner/President to be signed and ensure that the order is in accordance with
what was ordered.

 Segregation of duties

Each department already have their own duties such as purchasing

department,general ledger department and other department.

f) Suggestions to improve the weakness of Internal Control Expenditure (6

elements physical control)

 Transaction Authorization
In Glowies Beauty there are no weaknesses related to transaction
authorization, because in purchasing goods, employees in the operational
department must report first to the owner, then the owner who places an
order with the supplier.
 Accounting Recording
Glowies Beauty is advised to apply an accounting system in making financial
reports or compiling financial reports related to the purchase of goods.
Recording using excel or accounting applications available on mobile devices
can be used to create neat financial data and minimize the possibility of data
loss related to the purchase of raw materials. So, all evidence related to the
purchase of goods can be typed into excel.
 Access control
At Glowies Beauty there should be access control to the inventory of goods,
where only employees in the warehouse can take raw material inventory in

22
 the warehouse and then report the inventory to the owner if the raw material
inventory runs out.

 Independent Verification
At Glowies Beauty, a memorandum of purchase of goods made by the
supplier will be submitted to the owner to be signed and ensure that the
order is in accordance with what was ordered.

 Supervision
There should carried out by the owner of the operational division employees
is not carried out periodically. In addition, there should adequate control tool
to monitor all employee performance.

g) Design of Expenditure accounting system in accordance with internal

control adequate (Document/System Flowchart for Expenditure cycle)

We use a different color for all flowchart redesigns because we overhaul everything
that was in the previous flowchart

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2.3 Payroll Process Cycle

a) Payroll processing narration

The finance department prepares employee payroll forms. These documents identify
employees who are authorized to receive salaries and are used to reflect changes
hourly wages, pay deductions, and job classification.

In the Glowies Beauty production departments, each worker records the number of
hours he or she has worked each day by clocking in and out on a time card machine.
The owner (President or Vice President) oversees this process and each week sends
the hard-copy time cards to the Finance department. The Finance department clerk
enters time card data and prepares hard-copy pay checks. This process automatically
updates the digital employee payroll records. The clerk files the time cards in the
payroll department and sends the employee pay checks to Owner to review and
distribute to the employees.

The owner also prepares three copies of a payroll register. Copies one and two are
sent to Finance department and the rest will be keep by the owner. The clerk files
copy three in the finance department. Upon receipt of the payroll register, the

24
 accounts payable clerk manually prepares a check for the entire payroll, which she
deposits in the payroll imprest account at the bank. A copy of the check is filed in the
department along with the payroll register. Using the payroll register and the
department PC, the general ledger department clerk posts to the appropriate general
ledger control accounts. The clerk then files the payroll register.

b) DFD for Payroll Processing

25
c) Document / System Flowchart for Payroll Processing

d) Business process diagram for Payroll Processing

26
e) Weaknesses of Internal Payroll Control (6 elements of physical control)

 Transaction Authorization
Employees authenticate their own time cards without the need for a
personnel action report.
 Segregation of duties
Payroll distribution and time card submission and evaluation should not be
done by the same supervisor. Supervisors are required to submit time sheets
and create personnel action documents that permit employee payment. The
Account payable division shouldn't be responsible for check writing. To
achieve this, they should approve cash disbursements.
 Accounting Records
The cash disbursement has no journal entry.
 Independent Verification
An account summary from the AP department and a journal voucher from
cash disbursements should be sent to the general ledger department. To
write the payroll check, the AP department should be in the process of
authorizing financial disbursements.
 Cash disbursements should prepare a single payroll check to cover all pay
checks, which is then deposited into an imprest account.

f) Suggestions to improve the weaknesses of Internal Control Payroll

Recommendation

 Supervision
Someone other than owner should supervise the employee's checking "in"
and "out".
 Transaction Authorization
A separated personnel function should be established to prepare personnel
action forms and manage the HR.
 Cash disbursement department maintains the AP ledger and approves and
write checks.
 Segregation of duties
The supervisor should not distribute the pay checks to employees. This
should be task and performed by an independent paymaster.

27
g) Design of payroll accounting system in accordance with the adequate
internal control

We use a different color for all flowchart redesigns because we overhaul everything
that was in the previous flowchart.

28
In the previous flowchart there were only 3 departments and there were still many
internal control elements that had not been implemented. so that the company can
implement all internal controls, the company must have 6 departments (production,
cost accounting, payroll, accounts payable, cash disbursement, and general ledger)

29
III. Conclusion

Based on the discussion on each of the previous points, it can be concluded that Glowies
Beauty, which was founded in 2020, has not implemented an Accounting Information
System properly. This can be seen in each cycle where there are weaknesses and some of
them are very fatal. For this reason, it is necessary to improve every existing weakness for
the sake of implementing the Accounting Information System properly so that fraud and
misstatement can be avoided in the company's operations.

Reference

Hall, A James. 2011. Accounting Information Systems, Seventh Edition. USA: Cengage
Learning.

Attachment

Because the owner of Glowies is a friend of a member of group 5 Shabrina Atikah Sari, data
requests are made online via telephone and WhatsApp chat. The following is evidence of
interviews for data collection:
These are the product:

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