Appendix A
UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF BUSINESS AND FINANCE
UBAI 2023 ACCOUNTING INFORMATION SYSTEMS (JANUARY 2020)
INDIVIDUAL ASSIGNMENT REPORT MARKSHEET (100%)
Program:
BACHELOR OF COMMERCE (HONS)
ACCOUNTING
Name
NG KAY PHINE
Student ID
1906759
Please circle the marks awarded
No
1
2
3
Items
Identify the Luxuries Car Company’s
critical success factors and the
primary objectives. What types of
information might be helpful in
evaluating these objectives
(10%)
Create a mission statement that
would be appropriate for the Luxuries
Car Company.
(4%)
Develop a current organizational
chart based on the information.
Poor
0
1
2
3
(Improper or None)
Satisfactory
5
6
7
8
(Reasonably written with overview
included)
Excellent
9
10
(Exactly written with
concise overview
1
(Improper or None)
2
3
(Reasonably written with overview
included)
4
(Exactly written with
concise overview)
0
1
(Improper or None)
2
5
6
(Exactly written with
concise overview)
4
3
4
(Reasonably written with overview
included)
(6%)
4
Analyze the current system for
revenue and expense cycles and
discuss the specific weaknesses
identified for both systems. Discuss
the
recommendations
and
improvements for each weakness
identified.
(30%)
1
2
3
4
5
6
7
8
9
20
21 22 23
10
11
6
Based on the narratives given, draw
the document/system flowcharts for
revenue cycle.
(40%)
Proper citations and references
(5%)
7
Overall format (5%)
13
14
15
(Improper or none)
16
17
18
19
25 26 27 28 29
30
24
(Reasonable discussion on
weaknesses and
recommendations)
5
12
0
4
8
12
(Improper or None)
0
1
(None or little standard
used)
0
1
(Improper or None)
Comments:
(Critical discussion on
weaknesses and
recommendations)
16
20
24
(Reasonably drawing)
2
2
3
(Reasonable standard
compliance)
3
(Reasonably formatted)
4
4
Total Report Marks (100%)
1
28 32 36 40
(Exactly drawing with
concise analysis
done)
5
(Perfect standard
compliance)
5
(Properly formatted)
Marks
Lecturer / Tutor
Acknowledgement:
Name:
Signature:
CONTENTS
No.
Particulars
Pages
1
Identify the Luxuries Car Company’s critical success factors and the
3-9
primary objectives. What types of information might be helpful in
evaluating these objectives?
2
Create a mission statement that would be appropriate for the Luxuries Car
Company.
10
11
3
Develop a current organizational chart based on the information.
4
Analyze the current system for revenue and expense cycles and discuss
12-15
the specific weaknesses identified for both systems.
5
Based on the narratives given, draw the document/system flowcharts for
16-17
revenue cycle.
18
6
Reference
2
QUESTION 1
Luxuries Car Company’s critical success factors
The critical success factor is the concept that is often used when discussing the
relationship between industrial characteristics and corporate strategies. It is a
combination of its own special capabilities and corresponding important requirements
in the environment to obtain good performance.
Market demand and innovation
After the end of the war, California became popular with the trend of car worship, so
many British sports car fans appeared. Smith-Jones established Luxuries Car Company
in the early 1950s and soon had a large number of customers. This made him realize
that in California, the British auto parts market is a huge untapped market. In 1953,
Luxuries Car Company withdrew from the car repair business and became the only
distributor of sports car parts in the UK.
Personal network
Smith-Jones developed a strong personal network of acquaintance in the British sports
car industry while repairing cars at the Santa Barbara store. The acquaintance network
is mainly composed of parts dealers, car dealerships, and sales representatives of large
auto and parts manufacturing company’s composition. During his years as a mechanic
in London, he kept in touch with these acquaintances. When he converted the parts
business to the parts business, his contacts were happy to increase their export trade by
continuing to sell parts to him. As the only importer of British sports car parts and
accessories in the United States, Luxuries Car Company can not only sell its products
in Southern California, but can also sell its products to auto parts dealers nationwide,
regardless of the sports car enthusiasts in the UK.
Relationship with suppliers
3
Luxuries Car Company cooperates with suppliers in the UK to remain reliable, allowing
Luxuries Car Company's business to grow steadily and continuously. When the market
demand for new products increased, Smith-Jones immediately seized the opportunity
to establish contacts between Taiwan, the Philippines and Canada, as well as some
American manufacturers that produce customized items. This factor will make
Luxuries Car Company's supply line consistent and obtain regular sources of supply for
these new products. Therefore, the company will not face frequent shortages and can
immediately meet customer needs. In addition, although there are some other minor
problems between Luxuries Car Company and its suppliers, Luxuries Car Company
and its suppliers still maintain a strong cooperative relationship. The two depend on
each other in business. They expressed interest in expanding any new system that might
promote their relationship in the future.
Recruit and make good use of talent
Luxuries Car Company is very careful in hiring and select employees. They will choose
to hire enthusiastic, smart people who willing and like to work with customers. The age
and experience of employees vary, so the company assigns older and more experienced
employees to work in the technical support department. Because Luxuries Car company
believes that their knowledge is most useful in directly contacting customers.
Unite and cooperate for a win-win situation.
The work independence of employees and the mentality of "not buying each other's
bills" often make employees more independent, more jealous, and less united and
cooperative. This will seriously hinder the smooth development of work and the
improvement of product quality, and cause tension and conflict in interpersonal
relationships. Therefore, when Luxuries Car company is hiring employees, the
company will give them a few shares of Luxuries Car Company stock and generous
benefits. That's because if their employees are also shareholders, they will be interested
in the company's financial success. The management hopes to create an atmosphere
within Luxuries Car Company and let employees actively participate in improving the
business. Therefore, if sales are stagnant, all employees will look for ways to stimulate
4
the business. Employees can only be modest and prudent, help each other, learn from
each other, complement each other's strengths, establish a harmonious and united
interpersonal relationship, give full play to their respective talents, work together to
produce "resonance effect", "mutual excitation effect", and achieve mutual progress
and win-win. When management announced the introduction of a new information
system, the employees of Luxuries Car Company eagerly accepted these changes. No
hesitation or doubt about the new system.
Low raw material cost
After collecting information, Smith-Jones found that parts made in the United States
will make Luxuries Car Company three times the cost of parts made in Asia. The main
reason is that the price of labor in Asia is low, so the price has a significant discount.
Therefore, all components sold by Luxuries Car Company are manufactured outside
the United States, most of which come from Southeast Asia, especially South Korea
and Taiwan. This enables the company to have low costs, high profits and more
competitive advantages.
High quality products
Because the information system is imperfect, Luxuries Car Company cannot use the
information system to track the quality of each part provided by each supplier, so that
specific parts can be ordered from certain suppliers. So, if the quality of some parts
provided by the supplier is not good, even if the remaining product lines are acceptable,
Luxuries Car Company tends to cover the entire supplier's product line to ensure that
all parts in the company are of high quality. Because there are only a few suppliers, and
a few suppliers are considered to produce poor quality parts, Luxuries Car Company
mainly handles only one or two.
Market development
Luxuries Car Company found through market research that most of the parts sold by
the company are owned by individual car owners, and some of these parts are purchased
5
by mechanics and professional car mechanics. Luxuries Car Company's business comes
from customers with a history of sports cars, because Luxuries Car Company realizes
that only a small part of the market is customers who have recently set foot in British
sports cars. In order for Luxuries Car Company to attract new business, it must compete
for existing market share. At the same time, its main focus is to maintain its customer
base. Therefore, according to the company's market strategy, it actively promotes and
develops new customers. Luxuries Car Company launched an auto show to attract new
people into the sports car industry. Its advertisements are limited to monthly and car
magazines.
Primary objective and type of information
Primary
Type of information
objective
To hire
Index of Job Satisfaction, Job Turnover and Productivity
employees who
can benefit the
Index of Job Satisfaction, Job Turnover and Productivity is an
company and
important part of the human resource management work of
make good use of
many companies, and it is also an important performance
talent in right
indicator used by many companies to measure the performance
position.
of the human resources department. The satisfaction of
employees is crucial to the development of the company
(People in Need, 2019). As long as the satisfaction of
employees continues to improve, they will study harder, work
harder, and ultimately bring more contributions to the
sustainable development of Luxuries Car company. For
example, improving productivity and reducing turnover rate by
improving satisfaction. Employee satisfaction refers to
employees’ satisfaction with all aspects of Luxuries Car
Company and their sense of belonging, which is reflected in
their loyalty, cohesion and work attitude to the company.
Through the improvement measures after the satisfaction
survey, Luxuries Car Company allocates work according to
6
someone's attitude or ability. The proper distribution of
employees' work can motivate employees and inspire their
talents to lead Luxuries Car Company to a better future.
To provide
Customer Satisfaction Index
customers with
It is used to measure the extent to Luxuries Car Company meets
satisfactory
or exceeds the expectations of customers buying products. It is
quality and
a very effective indicator in the research of customer
reasonable
satisfaction to measure and recognize customers' recognition of
prices.
the company, their satisfaction with products and services, and
the tendency to purchase again (Neil Patel,2020). This indicator
measures customer expectations, quality perceptions, value
perceptions, and satisfaction with products or services,
measures related variables that determine satisfaction, and
ultimately forms loyalty, and provides products or services
from multiple perspectives. The overall quality is evaluated.
Therefore, Luxuries Car Company can grasp the status quo of
satisfaction and help customers focus their limited resources on
the areas that customers value most, so as to build and enhance
customer loyalty and retain customers.
7
To build a core
Competitive Analysis - Porter five forces analysis
competitive
The analysis of competitive strategy can help Luxury Car
advantage
Company effectively analyse the customer's competitive
though the
environment. Porter's Five Forces analysis belongs to the
positive
micro-environment analysis of the company's external
competition.
environment analysis, which is mainly used to analyse the
corporate competition pattern of this industry and the
relationship between this industry and other industries. The
competition in this industry is not only carried out among the
original competitors, but there are five basic competitive forces:
potential new entrants in the industry, competition of
substitutes, buyer's bargaining power, supplier's bargaining
power, and competitors within the current competitiveness
(Mind Tool Content Team, n.d.). The status and comprehensive
intensity of these five basic competitive forces determine the
fierce competition in the industry, thereby determining the
ultimate profit potential in the industry and the degree of capital
flow to the industry, all of which ultimately determine Luxury
Car Company's ability to maintain high returns.
8
Develop and
Marketing Analysis – 4 P’s of marketing mix
expand the
Luxuries Car Company launched an auto show and placed
current market
advertisements in monthly and auto magazines in order to
to attract new
attract new people into the sports car industry. Companies
business.
provide various information to the public through advertising
campaigns. Such as telling the target market that a new product
will be marketed, introducing a new use or usage of a certain
product, notifying the public that a certain product will change
prices, introducing various available services, correcting false
appearances, explaining how the product is used, and reducing
the concerns of the customers, to establishment of corporate
reputation, etc. Luxuries Car Company uses various
information dissemination methods to stimulate consumers'
desire to buy and promote product sales to achieve its marketing
goals. Luxuries Car Company establish their own brand
preferences through advertising activities, change customers’
attitudes towards their products, encourage customers to
abandon their competitors’ brands and buy their own brands,
persuade customers to accept sales visits, and induce customers
to buy immediately.
9
QUESTION 2
The Meaning of Mission Statement
Mission statement refers to the roles and responsibilities that enterprises should assume
in social and economic development. Refers to the fundamental nature of the enterprise
and the reasons for its existence, explains the enterprise's business areas and business
ideas, and provides a basis for the establishment of enterprise goals and the formulation
of strategies.
Mission Statement
Establish a world-class auto parts retail store business, provide a variety of auto parts
from top auto parts and manufacture brands with high quality and affordable prices.
10
QUESTION 3
President & CEO
Smith-Jones, Jr.
Organizational Chart
CFO
Controller
Billing
Treasurer
Cashier
Account
Receivable
Cash
Disbursement
Account
Payable
Cash Recepts
Inventory
Control
Vice
President of
IT services
Vice President
of Materials
Management
Vice President
of Marketing
Vice President
of Distribution
Vice President
of Personnel
Receiving
Dock
Promoting
Warehouse
Recruiting
Techinical
Assistance
Purchasing
Advertising
Shipping
Benefits
Data
Processing
Warehouse
Sales Order
Taking
Sales Office
Mail Room
Cost
Accounting
Payroll
11
Database
Adminstration
QUESTION 4
Analyse the current system for revenue and expense cycles and
the specific weaknesses and recommendations
Revenue cycles
Weaknesses
Recommendations
Credit Checking and
Approval
All sales of Luxuries Car Company are on credit, therefore, credit
checking and approval process is very significant in the revenue
cycle. Credit checking and approval process must be fulfilled
before processing sales order to check the creditworthiness of a
customer. As a matter of fact, this process is an authorization
control and credit department function. However, the task of
checking credit history of customers carry out by sales office. Thus,
it should separated from the sales office. The transaction should not
be processed unless credit is approved (Hall, 2013).
Lack of Stock
Luxuries Car Company does not prepare stock release document in
Release document,
the warehouse department and a shipping notice in shipping
Shipping notice and
department. Stock release document is also called a picking ticket.
Bill of lading
It is used for formal authorization to warehouse officer requestion
to release a given quantity of specific items. After picking goods,
the verified stock release documents will sent to the shipping
department. In other hand, the shipping notice form is a document
that informs the billing department that the customer’s order has
been filled and shipped. When shipping department receives the
goods, shipping employees has to use stock release, packing slip
and shipping notice to reconciles the physical items and verify that
the order is right. Therefore, Luxuries Car Company must ensure
that prepare these two documents to have a chance to detect errors
before shipment. Bill of lading is a formal contract between the
seller and the shipping company that transports the goods to the
customer. Shipment of goods means that the seller delivers the
goods to the buyer, so the time of shipment also means the delivery
time of the seller. Delivery on time is a necessary condition for
12
fulfilling the contract. Therefore, it is very important to use the bill
of lading for Luxuries Car Company to prove the shipment time of
the goods.
No update inventory
Luxuries Car Company must ensure that the inventory record must
record in warehouse
be accurate after the inward or outward of inventory transaction. A
department
company is advised to apply inventory control systems such as
inventory control apps, employ an experienced and responsible
warehouse manager. The inventory control apps can track and
manage the inventory properly by using barcode labels. The
barcode labels can apply in either laptop or smartphone, the
warehouse manager can detect any fraud through the apps. The
advantage of this system is to ensure record transaction history can
be determined easily and it will show the accurate records of all
inventory transactions. Moreover, company can apply perpetual
inventory system to update the inventory records from time to time.
This system helps company to deliver accurate results so that it can
avoid over and under record of inventory.
Lack of G/L
Luxuries Car Company must have a general department to track
department.
financial transaction and prepare financial reports. The general
department is to ensure all the sale and purchase transactions can
be properly recorded in the accounting systems. For example, the
sales order and receive payment from customers can be properly
recorded into the accounting record. General department can apply
information technology to provide accurate accounting and
transaction information by daily basis. At the end of the financial
year, this department will provide a complete financial statements
and report to indicate the overall performance of the company.
Shipping
The shipping information of Luxuries Car Company is maintained
information
in the locked UPS meter. In fact, the shipping information should
sent to billing department and not maintained in the locked UPS
meter. It is because billing department must compiles and
reconciles the relevent facts and issues an invoice to the customer
and updats the sales journal.
13
Expenditure Cycles
Weaknesses
Recommendations
Do not have inventory
Luxury Car Company lack an inventory control systems to
control system
determine what amount to order. Employees cannot predict how
much goods will be sufficient in the future, so they are not sure
how much goods should be ordered, resulting in too many or too
few orders. Therefore, Luxury Car Company should have a in
place system to determine what amount to order the inventory,
such as “EOQ” or “MRP”. These system can maintain enough
stock so that production doen’t get interrupted. EOQ is the
tradisional approarch to managing inventory. Using Economic
Order Quantity (EOQ) can help companies save costs and save
more than unnecessary expenses. It helps planners determine the
correct replenishment volume requirements. Other, more recent
approaches try to minimize or eliminat the amount of inventory
carried by Luxury Car Company.
Purchase Requisition
After the inventory control of Luxury Car Company submits the
do not approved by
purchase requisition form to the pucharse department, the
Purchasing Department manager of the pucharse department needs to evaluate and
review the request to ensure its completeness and necessity.
Each purchase requisition form template must be approved and
checked by the manager of pucharse department before a
purchase order (PO) can be generated. The route of the purchase
application approval workflow will vary according to the
Luxury Car Company hierarchy, purchasing strategy and
material value.
Purchasing does not
The purchasing manager of Luxury Car Company should check
check requisition for
the purcharse requisition and compliance with department
proper authorization
budgets. Purchasing manager understands the level of the
and compliance with
purchase strategy through the budget table to approve the
departmental budgets.
application. That's because the procurement budget will
determine what Luxury Car company can and cannot afford
according to the budget set. This can ensure that the company
14
will not exceed the company's budget when purchasing goods.
For example, it can identify when it will affect the overspending
of the procurement process, so as to manage procurement funds
more effectively. The budget allows Luxury Car Company to
allocate appropriate resources for the procurement project.
Question 5
Document/system flowcharts for revenue cycle.
15
Mail Room
Sale Office
Customer
Customer
Remittance
Advices
Checks
Warehouse
Order○,3
Phone Sale Order
Mail Order
Forms
Pick Goods
Recorded on Standardized
Order Forms
Mail Order
Form (Sorted)
Goods
Packing Slip
Standardized Order Forms
Reconcile Checks with the
Remittance Advice and
Prepare Remittance List
○,2
E
Z
B
Preprinted Price List Book
○,1
Verify that the Item Prices on
each Order Form are Correct
List
Endorsed
Checks
Sales Order○,3
Mail Order Forms (Sorted)
Remittance○,3
Endorsed
Checks with
a Hand
Stamp
○,4
Sales
Prepare a Packing Slip
for the Carton and Key
the Shipment
Information into the
UPS Shipping Meter
Check Credit
E
Credit Copy (Approach)
Remittance
Advice
Prepared Sale Order
D
Sales
Z
N
○,4
Sales
Order○,5
16
○,3
○,2
○,1
Order○,4
C
17
N
Shipping Department
C
Billing Department
Account Receivable
Sales Order ○,1
Phone Order
Form
Mail Order Form
Sales Order ○,2
Z
Invoice ○,2
Goods
Packing Slip
Sales Order ○,3
Sales Order ○,3
(Marked “Shipped”)
Post AR
Reconcile
Compare Copy 2 and
Copy 3 of the Sales
Order, which may
have been Altered by
the Warehouse and
Take Notes Any
Discrepancies
Sales Order ○,3
Endorsed Checks
Numerical
Sequence of the
Prenumbered Sales
invoice
(Sorted)
B
AR
Ledger
Remittance ○,3
List
Process
Cash
Receipt
○,2
Invoice
○,1
○,2
---- on due date
○,3
Deposit Slip
Remittance
Sale
Journal
D
Remittance Advice○,1 List
Customer
Compares the Prelist
to the remittance
advices
Calculated
Batch Total
Invoice ○,2
Sales Order
with Date Shipped)
E
Invoice
(Marked “Shipped”)
Sales Order ○,2 (Marked
Cashier
Update AR
Ledger
Sales Order ○,1
Tape of Batch Total
AR
Ledger
Remittance
Remittance Advice○,1 List
Phone Order Form
Mail Order Form
(Sorted)
18
Endorsed checks
Remittance
○,3List
Bank
N
19
References
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Murphy, K. (2019, October 10). Purchase Requisition Process Explained. Retrieved July 28,
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Published On January 2. (2020, June 30). Purchase Requisition Approval: Create an
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Stock Release Form (Dispatch Request). (n.d.). Retrieved July 26, 2020, from
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