In 1997, J. D. Orbits opened a cell phone accessory manufacturing plant named Orbits.

Although the company began its operations at the local level with only 40 employees, 3 vendors

and 5 main customers, it experienced rapid success. By 2001, gross sales tripled, and the

enterprise expanded its customer, vendor and employee base. It now serves all major cell phone

manufacturers. Currently, Orbits employs more than 120 individuals, including executives,

directors, sales representatives, office personnel, and production workers. Customers: Orbits

sells to the outlets stores of distributors such as Verizon, MCI, Cingular and AT&T cellular

phone in the tri-state area.

Materials and Suppliers: Manufacturing hands-free cell phone devices requires several

different materials, none of which is made in-house. Most parts are purchased from 25 vendors.

The more complex components used in the manufacturing process are purchased through

contracts with vendors. Raw materials are purchased from vendors according to price without

a formal contract.

(i) Accounting System

(ii) Purchases System

(iii) Cash Disbursement Process

(iv) Payroll System

(v) Fixed Asset System

(vi) Sales Order System

Question:

a) Analyse the physical internal control weaknesses in the system. Model your response

according to the six categories of physical control activities. (18 marks)

b) Describe the IT controls should be place in this system. (12 marks)