Posavek is a wholesale supplier of building suppliesto building contractors, hardware stores, and homeimprovementcenters in the Boston metropolitanarea. Over the years, Posavek has expanded itsoperations to serve customers across the nation andnow employs over 200 people as technical representatives,buyers, warehouse workers, and sales andoffice staff. Most recently, Posavek has experiencedfierce competition from the large online discountstores. In addition, the company is suffering fromoperational inefficiencies related to its archaic informationsystem. Posavek’s expenditure cycle proceduresare described in the following paragraphs.Expenditure CyclePosavek uses a centralized accounting system formanaging inventory purchases and recording transactions.The system is almost entirely paperless.Each department has a computer terminal that isnetworked to the purchases/AP system that is runfrom a small data processing department. Allaccounting records are maintained on centralizedcomputer files that are stored on a file server in thedata processing department.PurchasingThe process begins in the purchasing department.Each morning the purchasing agent reviews theinventory levels from his department terminal andsearches for items that have fallen to their reorderpoints and need to be replenished. The purchasingagent then selects the vendors and creates digital purchaseorders in the purchase order file. He thenprints two hard copies of each purchase order andsends them to the respective vendors.ReceivingWhen the items are received, the receiving departmentclerk reconciles the goods with the attachedpacking slip and the digital purchase order, whichhe accesses from his computer terminal. The clerkthen creates a digital receiving report, stating thecondition of the materials received. The system automaticallycloses the purchase order previously createdby the purchasing agent. In addition, thereceiving clerk prints a hard copy of the receivingreport, which he sends with the inventory to thewarehouse where the items are stored.WarehouseUpon receipt of the inventory, the warehouse clerkreconciles the items with the receiving report andupdates the inventory subsidiary ledger. The accountingsystem automatically and immediately updates theinventory control account in the general ledger.Accounts PayableOnce the AP clerk receives the vendor’s invoice, shereconciles it with the purchase order and receiving report from her terminal. The clerk then creates adigital vendor invoice record and sets a due datefor payment. The system automatically updates theAP control account in the general ledger. Daily, theAP clerk reviews the open vendor invoice recordsfrom her terminal, looking for items that need tobe paid. The clerk then records the payment in thedigital check register and closes the open vendorinvoice. Finally, the clerk prints a hard copy of thecheck and sends it to the vendor. The system automaticallyupdates the AP and cash GL accounts.Requireda. Create a data flow diagram of the current system.b. Create a system flowchart of the existing system.c. Analyze the physical internal control weaknessesin the system.d. (Optional) Prepare a system flowchart of a redesignedcomputer-based system that resolves thecontrol weaknesses that you identified. Explainyour solution.

Posavek is a wholesale supplier of building suppliesto building contractors, hardware stores, and homeimprovementcenters in the Boston metropolitanarea. Over the years, Posavek has expanded itsoperations to serve customers across the nation andnow employs over 200 people as technical representatives,buyers, warehouse workers, and sales andoffice staff. Most recently, Posavek has experiencedfierce competition from the large online discountstores. In addition, the company is suffering fromoperational inefficiencies related to its archaic informationsystem. Posavek’s expenditure cycle proceduresare described in the following paragraphs.Expenditure CyclePosavek uses a centralized accounting system formanaging inventory purchases and recording transactions.The system is almost entirely paperless.Each department has a computer terminal that isnetworked to the purchases/AP system that is runfrom a small data processing department. Allaccounting records are maintained on centralizedcomputer files that are stored on a file server in thedata processing department.PurchasingThe process begins in the purchasing department.Each morning the purchasing agent reviews theinventory levels from his department terminal andsearches for items that have fallen to their reorderpoints and need to be replenished. The purchasingagent then selects the vendors and creates digital purchaseorders in the purchase order file. He thenprints two hard copies of each purchase order andsends them to the respective vendors.ReceivingWhen the items are received, the receiving departmentclerk reconciles the goods with the attachedpacking slip and the digital purchase order, whichhe accesses from his computer terminal. The clerkthen creates a digital receiving report, stating thecondition of the materials received. The system automaticallycloses the purchase order previously createdby the purchasing agent. In addition, thereceiving clerk prints a hard copy of the receivingreport, which he sends with the inventory to thewarehouse where the items are stored.WarehouseUpon receipt of the inventory, the warehouse clerkreconciles the items with the receiving report andupdates the inventory subsidiary ledger. The accountingsystem automatically and immediately updates theinventory control account in the general ledger.Accounts PayableOnce the AP clerk receives the vendor’s invoice, shereconciles it with the purchase order and receiving report from her terminal. The clerk then creates adigital vendor invoice record and sets a due datefor payment. The system automatically updates theAP control account in the general ledger. Daily, theAP clerk reviews the open vendor invoice recordsfrom her terminal, looking for items that need tobe paid. The clerk then records the payment in thedigital check register and closes the open vendorinvoice. Finally, the clerk prints a hard copy of thecheck and sends it to the vendor. The system automaticallyupdates the AP and cash GL accounts.Requireda. Create a data flow diagram of the current system.b. Create a system flowchart of the existing system.c. Analyze the physical internal control weaknessesin the system.d. (Optional) Prepare a system flowchart of a redesignedcomputer-based system that resolves thecontrol weaknesses that you identified. Explainyour solution.

Database System Concepts

7th Edition

ISBN:9780078022159

Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Chapter1: Introduction

Section: Chapter Questions

Problem 1PE

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Question

Posavek is a wholesale supplier of building supplies
to building contractors, hardware stores, and homeimprovement
centers in the Boston metropolitan
area. Over the years, Posavek has expanded its
operations to serve customers across the nation and
now employs over 200 people as technical representatives,
buyers, warehouse workers, and sales and
office staff. Most recently, Posavek has experienced
fierce competition from the large online discount
stores. In addition, the company is suffering from
operational inefficiencies related to its archaic information
system. Posavek’s expenditure cycle procedures
are described in the following paragraphs.
Expenditure Cycle
Posavek uses a centralized accounting system for
managing inventory purchases and recording transactions.
The system is almost entirely paperless.
Each department has a computer terminal that is
networked to the purchases/AP system that is run
from a small data processing department. All
accounting records are maintained on centralized
computer files that are stored on a file server in the
data processing department.
Purchasing
The process begins in the purchasing department.
Each morning the purchasing agent reviews the
inventory levels from his department terminal and
searches for items that have fallen to their reorder
points and need to be replenished. The purchasing
agent then selects the vendors and creates digital purchase
orders in the purchase order file. He then
prints two hard copies of each purchase order and
sends them to the respective vendors.
Receiving
When the items are received, the receiving department
clerk reconciles the goods with the attached
packing slip and the digital purchase order, which
he accesses from his computer terminal. The clerk
then creates a digital receiving report, stating the
condition of the materials received. The system automatically
closes the purchase order previously created
by the purchasing agent. In addition, the
receiving clerk prints a hard copy of the receiving
report, which he sends with the inventory to the
warehouse where the items are stored.
Warehouse
Upon receipt of the inventory, the warehouse clerk
reconciles the items with the receiving report and
updates the inventory subsidiary ledger. The accounting
system automatically and immediately updates the
inventory control account in the general ledger.
Accounts Payable
Once the AP clerk receives the vendor’s invoice, she
reconciles it with the purchase order and receiving report from her terminal. The clerk then creates a
digital vendor invoice record and sets a due date
for payment. The system automatically updates the
AP control account in the general ledger. Daily, the
AP clerk reviews the open vendor invoice records
from her terminal, looking for items that need to
be paid. The clerk then records the payment in the
digital check register and closes the open vendor
invoice. Finally, the clerk prints a hard copy of the
check and sends it to the vendor. The system automatically
updates the AP and cash GL accounts.
Required
a. Create a data flow diagram of the current system.
b. Create a system flowchart of the existing system.
c. Analyze the physical internal control weaknesses
in the system.
d. (Optional) Prepare a system flowchart of a redesigned
computer-based system that resolves the
control weaknesses that you identified. Explain
your solution.

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