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Executive Summary

The purpose of the report is to examine different attributes of financial reporting, transactional cycle and management report to triggered potential risks. It has been witnessed that the supervisor analysed the time cards of each employee's for any rectification and submit to the payroll department. Management plays a significant role in managing inventory and subsidiary ledger for maximum result. Through critical analysis of systematic flow of cash disbursement system, it is easy to manage the cash by forecasting all cash receipts for an adequate cash balance.

Introduction

A transactional cycle is elucidated as an interlocking set with in business transactional that look into cash flow within organisation such as payment to supplier, employees and leaders. The purpose of the report is to examine different attributes of financial reporting, transactional cycle and management report to triggered potential risks. A Bell Studio case study has been selected to understand accounting systems and terminal in a different location. The report shed light on different issues and risks in transactional cycle procedure to make a positive change within organisation. Apart from issues and risks within expenditure cycle, a data flow and system flow of different expenditure cycle have been critically evaluated for maximum result.

Data Flow diagram of cash disbursement systems

A cash disbursement system is an effective way in securing and efficiently handles all company’s payment to ensure that maximum benefit can be gathered positively. Under this system, it is essential to record all requisite documents along with different function of cash disbursement. In regard to Bell studio, it has been observed that the receipt of the documents are recorded by the cash disbursements clerk until their payment due date (Haruna et al. 2015). Through critical analysis of cash disbursements, the validation of each document has been performed in a sequential manner to ensure that the payment of vendors and supplier are positively completed positively. The internal control of Bell Studio in cash disbursement system helps in ensuring that illegitimates process has been followed for any payment. The wide functions of cash disbursement system has been categorised into different parts in updating cheque register, ledger and accounts payable from computer terminal. It has been observed that the expenditure cycle bring liabilities to Bell Studio to fulfil the need of all associate stakeholders vigilantly.

Figure 1: Data Flow diagram of cash disbursement systems

The process of updating each payments process has been done by the clerk once they involve for cheque is successfully received in a treasures that mail and sign the cheque to the vendor. Through critical analysis of this process, it has been found that there is a possibility of corruption as well as failure of transaction that increase the vulnerability of business operation (Cohen et al. 2017). The general ledger department of Bell studio is one of the important and essential elements of expenditure cycle that facilitates in creating a summary for account payable summary.

On another hand, it has been identified that accounts payable function support organisation approving all the payment such as company’ creditor transaction and vendor to ensure that maximum benefit can be gathered positively that reduce the chance of invalid transaction by does not records the actual payment to the vendor. By comparing accounts payable function to expenditure cycle positively (Naik et al. 2016). The final transaction process has been done by clerk in which all legitimate documents including purchase order copy, cheque copy and purchase order are validates that help forecasts cash flow within organization. On the contrary, the purchase cycle is required to consider within system that begin with inventory control departments to develop purchase and sending copy of purchasing payable and accounts payable.

Data flow diagram of payroll system

The payroll system is one of the essential elements of the business operation that embraces all functions which are related to filing unemployment taxes and payment of employees. With the help of this system, it is easy to keeping track of calculation wages, withholding taxes and other deduction to the government. In regard to Bell Studio, these systems help employees to record their worked per hours to get exact value of their efforts. It has been witnessed that the supervisor analysed the time cards of each employee's for any rectification and submit to the payroll department (Park and Kim, 2018). Under this process of payroll system, computer terminal connected has been used for data a processing with the help of central payroll systems in regard to print hard copies of cheques.

Figure 2: Data flow diagram of payroll system

Through critical analysis of current payroll system of an organisation, it has been found that this system is complicated due to number of validation process. After validation and completion of employees times card, the accountable payable clerk validate respective payroll register to develop a disbursement voucher positively (Burda and Weder, 2016). The validation process of accountable payable clerk signifies that the complex process of payroll reduce the chance of fraud or invalid data significantly. In respect to ledger accounts, the accounts payable clerk writes a cheque for the payroll register with respect deposit and entire payroll. The is process of the payroll systems create difficulties in understanding and prepare a disbursement voucher to ensure that maximum information can be gathered without compensating with quality and standard of business operation positively (Lu et al. 2015). By evaluation each and every process of payroll system, it has been found that the pay check has been generated after validating time cards and documentation to ensure. On the contrary, the deduction can cause error in generating pay checks for utilisation of correct deduction amount positively.

System flowchart of purchases system

The purchasing systems can be elucidates as process of buying any services or product through requisitions and purchase order by payment and receipt for maximum benefit. It has been evident that a digital purchase order is prepared by selecting any vendor files. Under this process, two copies are printed to record all the documents and validation, which have been sent one to the vendor and other to purchasing department (Wakabala et al. 2017). With the help of this process, it is easy to reduce the chances of invalid invoice that help in monitor each task or activities within purchase system in a systematic manner. Further, once the products or goods are successfully received by clerk that inspection of order are mandatory in which all details and information related to products are performed to prepare a legitimate packing slip. Through this process, Bell Studio monitor review ongoing process of purchase system that minimise the chance of risk positively.

Figure 3: System flowchart of purchases system

The manual receiving report helps in accompanies the goods to the inventory warehouse and updating of subsidiary ledger to ensure that maximum information can be gathered positively. on another hand, the reconciler of all the documents are needed to record by receiving the invoice through fetching documents from temporary file (Herrera and Ibeas, 2015). In this process, the inventory controls and accountability payable control are generated from computer terminal. Hence, it can be stated that these process of purchase support organisation in generating a legitimate cash flow within organisation for sustainable development positively. In addition, the final stage of purchase system supports organisation in recording all the documented. Under this process, the clerk sends the receiving report, invoice along with copy of purchase order to= the cash disbursement department. Through critical analysis of Bells Studio, purchase system, there is a chance of error and brought problems during selection of supplier that influence the decision making process of an organisation (Hamza et al. 2015). It can clearly asserted that constructive and comprehensive approaches are required to apply that help in prevent from adverse effect of unexpected bankruptcy and inability for meeting quality requirements positively (Eclkc.ohs.acf.hhs.gov, 2019). On the contrary, a sequential approach may help in enhancing progressive developments of the company without compensate with qualities and standard of business operation successfully. Through critical analysis of business operation, it can be asserted that a positive change within organisation is required to amend to enhance sustainable growth of business.

System flowchart of cash disbursements system

The cash disbursements system is one of the effective and reliable ways to monitor the cash flow within organisation in which all the payments are included such as lender and vendors payment. The systematic flowchart helps in accessing the issues with respect to organisation positively to ensure that a proper designed cab be developed without any error and invalid invoice positively. In regard to Bells Studio, it has been identified that the clerk prepares a cheque for the cheque to the vendors that help in record all necessary document related to payment such as subsidiary ledger, accounts payable and account payable. In order to prepare systematic flow charts of cash disbursement, it is essential to consider all respective business transaction along with checks to ensure that maximum information can be gathered positively. Through critical analysis of systematic flow of cash disbursement system, it is easy to manage the cash by forecasting all cash receipts for an adequate cash balance (Ambler et al. 2018). On another hand, the system records all the requisite data and information related to purchase and vendor payment that help in control cash flow with the help of opens accounts and following expenditure cycle positively.

Figure 4 : System flowchart of cash disbursements system

Under this process, it is essential to include estimate revenue that is essential to run the business positively. A systems flowchart of cash disbursement system required all payment associated with Bell Studio such as vendor payment and employees wages. In this process, management plays a significant role in managing inventory and subsidiary ledger for maximum result. Through critical analysis of business operation of an organisation, it can be asserted that each element of accounting is required to formulate vigilantly to ensure that a firm payment information to employees and vendors are need to validate a systematic manner to ensure that business operation of Bell Studio can be gradually upsurge.

System flowchart of payroll system

This systematic cash flow of payrolls system is require full infoemation off selling and purchasing of products or services for progressive development of an organisation. Under the process, the validation of services and products are required to validate each management process by validation time cards and payroll department.

Figure 5: System flowchart of payroll system

Through critical analysis of Payroll system of Bell Studio, it has been found that there is lack of proper inventory control and cash flow management to ensure that respective stress and probability of stress can be minimised positively. One of the major advantages of payroll system is consistency accuracy that increased the reliability of forecast cash flow within organisation for maximum result. Through critical analysis of payroll system, it has been evident that a digital invoice is required to produce positively without compensate with feasibility and business operation of cash flow for sustainable development. Under this process, several software and equipments are used to ensure that each activity within organisation can easily be effectively monitored positively. Through development of a firm flowchart of payroll, it is easy to make crucial decisions that helps in enhance and validation of cash flow positively. Hence, it can be stated that the systematic and comprehensive are needed to amend during formulation of effective flow chart that assist in driving business into sustainable development positively. In addition, it has also been evident that an effective payroll system help in enhancing sustainability of business by compliance with relevant tax law and regulation to ensure that maximum benefit can be gathered. Through critical implementation of payroll system, it is easy to monitor time and attendance of all associate employees that eventually increased the productivity by reducing estimate cash flow within organisation.

Description of internal control weakness in each system and risks associated with the identified weakness

Purchases system

This is considered as one of the reliable and effective system in producing effective result by compliance with firm product detail both selling and purchasing. Through a critical analysis of system, it has been witnessed that there is a lack of list of suppliers and vendors that creates difficulties in producing cash flow within organisation. The present system and software is not effective in monitoring or tracking valid information and\ detail related to products or services that reduce the sustainability of business operation positively.

By evaluating significance and reliability of purchase system, the major risk of current purchase system is purchasing of quality and standard material significantly (Businessecon.org, 2019). The current purchase system is not reliable in determining potential risks and valid supplier that reduce feasibility of business operation.

Cash disbursements system:

The cash disbursement system is effective in producing valid payment system to ensure that the cash flow within organisation can be controlled positively. By evaluating different attributes of cash disbursement system, it has been identified that the major weakness of this system is ineffective controls of decision making through appropriate funding. Due to= theses weakness of an organisation, the relationship with supplier and vendor get slowly reduced that also reflect on fiscal performance (Usmf.org, 2019). On another hand, it has been found that there is a lack of proper accountability a within respective management that increase the potential of Bell Studio.

Payroll system:

The purchase system is one of the important aspects of an organisation that help understand cash flow related to purchasing and rendering of products or services. Through critical analysis purchase system of bell studio, it has been found there is a lack of proper management of activities within organisation in which cash flow manual updating of products and service have been critically examined. This is one of the major weaknesses of business operation m that reduce the validation and reliability of business due to lack of digital invoice. Due to lack of proper implementation of digital updating in terms of validation and purchasing cash flow that reduce the efficiency of business positively. Similarly, it has also been we identified that there is a lack of proper implementation of law and regulation that increase the reliability and sustainability.

On another hand, it has been witnessed that there is a major risk of purchase system is incorrect record and invalid data to ensure that reduce the progressive development of an organisation. On another hand, the present’s payroll system is not reliable and effective in producing accurate data and firm forecast of cash flow within organisation. Through this payroll system, the probability of risk related to business operation gets increased that influence the sustainable development of Bell Studio.

Conclusion

The expenditure cycle of Bell Studio signifies that there is lack of proper management of financial and cash flow with organisation that reduce the reliablility of business operation. It has been witnessed that the present financial system such as payroll, purchase and cash Disbursments System is not reliable and enhansing the business operation.