Systems documentation, risks and internal controls (10 marks)

a. B & Rs cash reports system is illustrated in the diagram above. Using this diagram answer the following questions:

i. What sort of diagram is this? (1 mark)

ii. Identify four (4) errors in the systems documentation. (2 marks)

iii. What are the correct symbols that should be used in each of the four (4) instances identified in a(II)? (2 marks)

b. Egon Pty Ltds accounts payable department has undergone some changes in recent times. The manager of the department, Jane Watts, has gone on maternity leave and has not been replaced. Her duties were to authorise the accounts payable prior to payment. The cashier, Betty White, has taken extended leave from Egon Pty Ltd to travel around Australia, hence Layla Wyman, the accounts payable clerk, is ensuring all accounts are paid and up to date.

Consider this scenario when answering the following questions:

i. Identify the threat to Egon Pty Ltd and explain why it is a threat. (2 marks)

ii. What should be done to mitigate this threat? Discuss. (1 mark)

c.Alex and Patricia run a small business where separation of duties is not possible. Identify four (4) internal control elements they could implement to mitigate this threat. (2 marks)

B & R Cash Receipts System Treasurer Clerk Accounts Receivable Customer B Cash and Cheques Cash and Remittance slip cheques Remittance B Deposit slip Slip Update account Receivable ledger/file Accounts receivable ledger/file Endorse and To Bank prepare deposit slip for cash and cheques Remittance Slips Generate weekly reports Cash and Cheques file Deposit slip Cash receipts Report Aged trial balance To management To Credit and Collections B & R Cash Receipts System Treasurer Clerk Accounts Receivable Customer B Cash and Cheques Cash and Remittance slip cheques Remittance B Deposit slip Slip Update account Receivable ledger/file Accounts receivable ledger/file Endorse and To Bank prepare deposit slip for cash and cheques Remittance Slips Generate weekly reports Cash and Cheques file Deposit slip Cash receipts Report Aged trial balance To management To Credit and Collections