Ahmed an entrepreneur started a small business (TE -Travel with Ease) of tour operations. He started with a shop in a big shopping mall. He planned his business with some hired tourism industry professional. He teamed up with the suppliers (rental cars, airlines, money changes, govt. agencies etc.) but has not given much thought about accounting records. Mr. Ahmed hired a full-time accountant, Mr. Rashid. Ahmed gave him a folder containing information on rental payments, utilities, and other expenses. He explained Rashid that the sales staff is paid a fixed salary and commissions and that all other employees are paid hourly rates. Employees are paid every two weeks, with their first pay checks due next week. Based on the brief description Rashid realized that he needs to organize company’s books and is unsure how to go about it. A million questions run through his head. With the help of an AIS system Rashid managed to develop a system of processing all transactions. The company has outgrown from the initial rudimentary stage of accounting information system (AIS) and now they are planning for a website. He lacks time and expertise on how to manage a web-based database, thus, he engaged Oman Computer Applications (OCA), a system consulting firm, to help and install a new and more powerful AIS.

Rashid made an appointment with Fatima, OCA’s manager, she asked about S&S’s system requirements and management’s expectations. Rashid had yet to think through these issues, so he could not answer her specifically. When she asked how OCA’s system worked, Rashid explained about the use of various company documents and transactions. Fatima an IT expert was unable to absorb his detailed explanations as she is not familiar with accounting practices. Because of lack of proficiency in accounting Fatima asked Mr. Rashid to prepare DFDs. Whereas, Fatima prepared a detailed flowchart based on documentation and transactions detailed by Mr. Rashid. DFDs and Flowcharts were presented to Mr Ahmed, these documentations gave him ideas, like how to expand his business and ensure all government obligations. Mr. Ahmed asked them to design a system that will make way to develop a system that will incorporate online business in nearby future.

1. How and what data TE must collect and organize? How should TE organize the accounting records so that financial statements can be easily produced?
2. How should Mr. Rashid ensure that the information provided is reliable and accurate?
3. How should Rashid design procedures to ensure that they meet all government obligations, such as remitting sales tax etc.?
4. What is the purpose of drawing DFD and Flowcharts by Rashid and Fatima?
5. How documentation helps in evaluating the system in an organization?

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1 The transaction which the company do is always recorded in the financial records of the company It ... View the full answer