Week 3: Assignment
Your full name: Sidaine Jayden Peters
Your student ID number: R2301D1588963
Module Name: Accounting Information Systems
Module Code: UU-ACG-2310-ZM-82660
Date: 23rd March, 2025
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Table of Contents
Case Study 1............................................................................................................................................................... 3
Case Study 1 – Cont’d...............................................................................................................................................4
Case Study 2............................................................................................................................................................... 5
References...................................................................................................................................................................8
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Case Study 1
1. Identify the important business events that occur within the University’s
purchase/payment process.
The University of Atlantis's purchase/payment process involves several key business events that
ensures the procurement and payment cycle operates effectively. The creation of a purchase
requisition is the first step within the procurement cycle. Purchase requisition forms are manually
filled out by departments to start the process. This stage serves as the beginning point for
procurement and documents the department's need for supplies or equipment (Romney &
Steinbart, 2021). After that, these forms are sent to the purchasing department for additional
processing. Purchase requisitions are then reviewed and assigned after they arrive at the
purchasing department. Purchasing clerks assign purchase requisitions according to departmental
categories after reviewing them for authorization. This guarantees appropriate task distribution
and adherence to regulations of the university. Purchase Order creation and vendor selection are
the next steps. After selecting vendors from the Approved Vendor Listing, the clerks usually
draft purchase orders. According to Hall (2020), this phase is essential for preserving vendor
relationships and keeping orerational expenses under control. After the purchase order is created,
the receiving and inspection stage follows. Upon delivery, the Central Receiving Department
verifies the items against the purchase order and inspects them for damages. Any accepted
shipments are forwarded to the warehouse for distribution, while discrepancies may lead to
delays and communication issues. This step is essential to ensure that only authorized and
undamaged products enter the university's inventory.
Finally, the invoice matching and payment processing event occurs. The Accounts Payable team
matches invoices with purchase orders and receiving reports before entering them into the
system for payment. This three-way matching process ensures accurate payments and reduces
the risks of fraud and errors (Gelinas et al., 2018). Despite its effectiveness, this system still faces
issues such as frequent discrepancies among the three documents, leading to payment delays and
missed cash discounts.
What changes would you suggest to the current process to take advantage of information
technology?
The university's purchasing and payment procedures can be made far more efficient and error-
free by implementing cutting-edge solutions. Automating the requisition and approval process
would be among the best improvements. Departments could submit digital purchase requests by
putting in place an electronic procurement system. This automation guarantees a documented
audit trail, expedites approvals, and decreases paperwork (Laudon & Laudon, 2022). The
university can increase overall efficiency and lower human error by simplifying these
procedures. Another significant improvement would be adopting Enterprise Resource Planning
(ERP) systems. Integrating an ERP system can connect purchasing, receiving, and accounts
payable functions. This reduces manual data entry, improves real-time tracking, and minimizes
discrepancies (Monk & Wagner, 2019). In addition to this, these systems can offer extensive
reporting capabilities and allows management to track and analyze purchasing trends for better
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Case Study 1 – Cont’d
decision-making. Implementing Electronic Data Interchange (EDI) should be taken into
consideration despite the university's prior resistance. Larger vendors could improve order
accuracy and cut down on paperwork by implementing EDI. By cutting down on processing time
and guaranteeing that purchase orders are processed quickly, EDI can improve communication
between the institution and its suppliers (Romney & Steinbart, 2021). Additionally, the
university would be able to track orders and settle disputes more quickly as a result. This
enhanced communication and automation reduces human intervention and errors, leading to a
more streamlined and responsive purchasing process. Another crucial improvement is the
strengthening of vendor management systems. The effectiveness of vendor selection may be
increased with an automated vendor database that provides real-time access to pricing and
historical order data. This system could improve price negotiations and vendor performance
tracking, allowing the university to develop stronger, more cost-effective relationships with
suppliers. By flagging underperforming vendors, such a system may guarantee that procurement
practices meet the university's efficiency and quality criteria. The institution might take
advantage of financial discounts, cut down on administrative expenses, and increase operational
accuracy by utilizing cutting-edge IT technologies. These changes can improve the university's
financial viability by streamlining internal procedures and cultivating stronger ties with outside
suppliers.
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Case Study 2
1. Should Munchies Buy the Credit Card Software?
I believe Munchies should weigh the possible advantages and disadvantages of investing in the
new credit card software. According to the cost analysis, the software costs $400 and could result
in a 0.5% rise in credit card rates because it cannot swipe cards. This could result in an additional
$500 in expenses per year, assuming $100,000 in sales (Hall, 2020). Although this is a slight
increase in costs, the advantages in terms of operations and security might exceed it.
One of the main benefits of using the host computer to automate credit card processing is
operational efficiency. By doing away with manual entry and decreasing human mistakes, this
would save time (Laudon & Laudon, 2022). By automating repetitive data entry, employees may
concentrate on higher-value work, increasing productivity and optimizing company procedures.
Risk mitigation is another important factor. The danger of data breaches and non-compliance
with Payment Card Industry Data Security Standards (PCI DSS) is increased when sensitive
credit card information is handled manually. Security is improved via automated processing,
which reduces human interaction with sensitive data (Gelinas et al., 2018). In a time when data
security and privacy are critical, lowering exposure to these dangers is crucial for preserving
consumer confidence and adhering to legal requirements.
The experience of the customer is another crucial element. By guaranteeing a much quicker
transaction completion time and fewer errors, faster, automated processing may increase
customer satisfaction. This could build client loyalty and improve the company's reputation
(Kotler & Keller, 2016). Overtime, a smoother customer experience can result in more sales and
repeat business.
Despite the little increase in processing fees, it is still essential to invest in credit card software
considering these facts. The advantages of higher customer satisfaction, decreased human error,
increased data security, and operational efficiency exceed the software's expenses.
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2. Flowchart for Munchies Online Sales Process
Customer inputs
Customer selects Software veries
their credit card Manual Credit
and accesses the credit card
information and Card Processing
Munchies Website information
amount
Transaction is Accountant
Credit Card is
Updated in the Encryption of retrieves
charged and
computer's Transaction Data transaction from
amount deducted
database servier
A transction
receipt is
End of Process
generated and
stored
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3. Describe the business risks associated with this process.
The existing procedure used by Munchies presents a number of business risks that could
compromise both financial integrity and operational stability. The possibility of data breaches
is one significant concern. Managing credit card numbers by hand makes them more
vulnerable to loss or theft, which may result in legal repercussions under PCI DSS (Romney
& Steinbart, 2021). In addition to endangering consumer data, this exposure exposes the
business to legal and regulatory penalties. Another significant danger is operational
inefficiency. The company's capacity to expand operations may be constrained by the manual
method' high personnel time requirements and delays (Monk & Wagner, 2019). This
inefficiency may result in transaction processing bottlenecks, which would ultimately hinder
the company's growth and competitiveness.
The existing procedure also increases the possibility of human error. Manual data entry raises
the possibility of errors, which can lead to unsuccessful transactions and unhappy customers
(Hall, 2020). If such mistakes are not fixed right away, they may result in financial
irregularities and harm the company's reputation.
Another issue is the danger of noncompliance. If secure handling procedures are not
followed, industry rules may not be followed, which could result in penalties and harm to
one's reputation (Laudon & Laudon, 2022). For credit card data to be processed safely and
ethically, PCI DSS compliance is necessary.
Munchies might reduce these risks, increase transaction accuracy, and boost operational
efficiency by investing in automated credit card processing software. In addition to lowering
the possibility of human mistakes and data breaches, automation guarantees adherence to
industry standards, setting up the business for long-term success and sustainable growth.
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References
Gelinas, U. J., Dull, R. B., & Wheeler, P. R. (2018). Accounting Information Systems. Cengage
Learning.
Hall, J. A. (2020). Accounting Information Systems. Cengage Learning.
Romney, M. B., & Steinbart, P. J. (2021). Accounting Information Systems. Pearson.
Hall, J. A. (2020). Accounting information systems (11th ed.). Cengage Learning.
Laudon, K. C., & Laudon, J. P. (2022). Management information systems: Managing the digital
firm (16th ed.). Pearson.
Monk, E. F., & Wagner, B. J. (2019). Concepts in enterprise resource planning (5th ed.).
Cengage Learning.
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