University of Adelaide Adelaide Business School

ACCOUNTING SYSTEMS and PROCESSES (M)

TUTORIAL 4 Answers Guide

BEFORE TUTORIAL 4


1 Read the material indicated below and attempt answers to the questions that
follow.

Material to read:
MyUni>
Data Analytics – Microsoft Power BI Material>
Topic 3 – From Excel workbook to a report in the Power BI
Service.pdf

The key aim of Topic 3 is to improve understanding of importing of MS Excel
data and constructing a basic report by manipulating visuals such as column
charts and maps.

Students are expected to learn basic hands-on skills to carry out these tasks.

Students are expected to attempt tasks in this document before the tute and
raise any questions they may have encountered.

2 Prepare the answers to the following questions:


Question 1
Why does an organisation need to prepare systems documentation? Explain two
reasons accountants need to be familiar with systems documentation techniques.

Suggested answer to first part of the question:
Systems documentation plays a vital role in the development, operation and
maintenance of information systems within the organisations. During the systems
development role the documentation plays a role as the plan for the new system. The
documentation provides the blueprint for how the system will operate once
implemented. Once implemented, the documentation provides those within the
organisation with a representation of how the system works. This is important since
the staff who designed the system will not always be with the organisation. The
documentation is a way of preserving their ideas and designs for others to refer to. As
systems develop faults or need updating, the first point of reference is to understand
the workings of the current system before considering new design alternatives and
system options. This understanding is gained through systems documentation.

For the external auditor, systems documentation may also play a very important role,
especially as new auditing standards require the auditor to have a thorough
understanding of the system if they wish to rely on it and perform a control based
audit, in preference to the traditional substantive based audit process.
Accountants need to be familiar with systems documentation for several reasons,
including:

Suggested answer to second part of the question
Accounting Systems and Processes (M) Tutorial 4 Page 2
- Being familiar with the operation and design of internal controls – the system
documentation will provide a map of how the system operates, with this
including a representation the major processing activities and controls. The
accountant needs to be aware of the process that data moves through, since it
has implications for the preparation of the financial reports.
- Knowing the audit trail – for the accountant, a key concern is the audit trail –
the path through which data and documents flow within the organisation. It is
a key tool for internal control and is represented through systems
documentation.
- Auditing responsibilities – Auditors need to gain an understanding of the
design and operation of business processes and internal control procedures
within their client firms. One of the ways they can gain this understanding is
by referring to the systems documentation.


Question 2

The following data elements comprise the conceptual level schema for a database:

billing address
cost
credit limit
customer name
customer number
description
invoice number
item number
price
quantity on hand
quantity sold
shipping address
terms

You are required to create the schema tables. Specify the primary key(s), foreign
key(s), and other data for each table.


Table Name Primary Key Foreign Keys Other Attributes
Inventory Item Number Cost (standard or list)
Description
Quantity on Hand
Price (standard or list)
Sales Invoice number Customer number

Date of sale
Terms
Sales-Inventory (Invoice number
+Item number)

Invoice number
Item number

Quantity sold
Price (actual sales price)
Customer Customer number Customer name
Shipping address
Billing address
Credit Limit
Account Balance


Accounting Systems and Processes (M) Tutorial 4 Page 3

Question 3
Describe the information that can be obtained from each of these forms of systems
documentation:
(a) Business process diagram
(b) Context diagram
(c) Physical data flow diagram
(d) Logical data flow diagram
(e) Systems flowchart


The BUSINESS PROCESS DIAGRAM is a simple graphical representation of a
system, detailing the activities that occur, the entities that perform the activities, the
relationship between different activities and entities, and any decisions that occur as
part of the process.

The CONTEXT DIAGRAM provides a representation of the system of interest and
the external entities that interact with it, by either providing inputs or receiving
outputs. It is an overview of the system of interest’s interaction with the external
entities.

The LOGICAL DATA FLOW DIAGRAM takes the context diagram and expands it,
to tell us what sequence of activities or processes occur within the system of interest
and the data flows between these activities / processes. It is concerned with the
logical perspective – the tasks that get performed – and not the people, places and
things that are required in order to perform them.

The PHYSICAL DATA FLOW DIAGRAM takes the context diagram and expands it,
to tell us the people, places and things that are involved in the system of interest, as
well as the data flows that occur between these physical entities.

The SYSTEMS FLOWCHART provides us with both a logical and physical
perspective of the system, depicting the entities involved and the processes they
perform. In addition, we get details about how the processes are performed (for
example a computer process versus a manual process). To this extent it represents a
combination of the physical and logical data flow diagrams, but with more detail
added.

Question 4
(1) Provide an example (in terms of companies with which you are familiar) for
each of the business situations described by the following relationship
cardinalities:


a.

Receive
Inventory
Disburse
Cash


In this scenario, inventory purchases are made on credit and are to be paid
for with a single payment. For example, a vendor sends a monthly bill for
merchandise delivered to a customer. The supplier does not accept or
allow installment payments. This is typical for many business to business
transactions that involve low-priced items.
.

Accounting Systems and Processes (M) Tutorial 4 Page 4

b.

Sales
Take
Customer
Order


In this scenario, each sale must be preceded by one and only one order.
The fact that both the order and sales events are recorded implies that there
is probably a time lag between taking the customer’s order and filling that
order, so that the selling organization needs to be able to track the status of
orders. An internet sale is an example of this type of scenario. When a
customer places an order with Amazon.com, there is a time lag between
the time the order is sent by the customer and the time Amazon fills the
order.




(2) Model the cardinalities of the following business policies:


a. The relationship between the Sale and Receive Cash events at a convenience
store.


Sales Receive Cash


b. The relationship between the Receive Inventory and Disburse Cash events in
the case where suppliers require payment in advance, in full.

Receive Inventory
Disburse
Cash




DURING TUTORIAL 4

• Contribute to the class discussion of the above questions.

Please remember that you’ll enhance your learning by ACTIVELY
PARTICIPATING in the discussions.