ACC 315 Milestone Two Guidelines and Rubric

Overview: The final project for this course is the creation of a client recommendation that includes flowcharts, diagrams, tables, narrative, and an executive summary presentation. The final product represents an authentic demonstration of competency because you will analyze a real-world scenario with the goal of making recommendations for an accounting information system.

In this milestone, you will create a table that identifies weaknesses, potential threats, and potential internal controls, along with a brief paper describing the required data elements and the resulting relational database tables.

Prompt: For this project, you will assume the role of a consultant responsible for assessing a client’s business operations and making recommendations for an accounting information system. To complete this project, review the Final Project Scenario document.

Specifically, you must address the following critical elements:

I. Client Recommendation: Prepare a written recommendation for the automation of a client’s accounting system. Address the following elements in detail:

d) Create a table that identifies weaknesses and potential threats to a business and potential internal controls to address the weaknesses and threats found in the chosen cycle.

e) For the chosen cycle, describe the data elements that need to be captured in the accounting information system (AIS), and organize that data into multiple relational database tables. Include the data type, structures, and whether the data element is a primary or foreign key.

Rubric

Guidelines for Submission: The completed milestone should be submitted as a 2- to 4-page document (excluding title and reference pages). Use double-spacing and 12-point Times New Roman font. Use APA formatting to cite any sources you use.

Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

Weaknesses, Threats, and Internal Controls

Accurately creates a table that identifies weaknesses and potential threats to a business and potential internal controls to address the weaknesses and threats found in the chosen cycle

Creates a table that identifies weaknesses and potential threats to a business and potential internal controls, but table lacks detail or contains inaccuracies

Doesn’t create a table that identifies weaknesses and potential threats to a business and any potential internal controls

45

Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value

Data Elements in Relational Database

Tables

Accurately describes the data elements that need to be captured in the AIS and organizes that data into relational database tables, including the data type, structures, and whether the data element is a primary or foreign key

Describes the data elements that need to be captured in the AIS and organizes that data into relational database tables, but description or tables lack required detail or contain inaccuracies

Doesn’t describe the data elements that need to be captured in the AIS or organize that data into relational database tables

45

Articulation of Response

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

10

Total 100%

ACC 315 Final Project Scenario Background You met Jill, the owner of Peyton Approved Bakery, a couple of years ago when she first started her business. You recall how much help she needed with starting her business, organizing her financial transactions, preparing financial statements for potential stakeholders, and making decisions related to growth and expansion. Jill has now approached you regarding her desire to expand the business. Since you have kept Peyton’s books since its inception, you are familiar with her business transactions; however, you realize that for Jill to grow her business, she must transition from her current manual way of doing business into a more automated mode of operations. The first step, you believe, is to automate her accounting information system. Although you are familiar with Jill’s numbers, you have no idea how her day-to-day operations occur. After looking over her financial transactions, you understand the business activities that Peyton Approved Bakery is primarily involved in: sales, accounts receivable, purchasing, inventory, and payroll. To get a better feel for how Jill actually operates the business, you schedule a meeting with her to discuss how these transactions occur. Initial Meeting During the meeting, you ask Jill to tell you more about her goals for the business. She indicates that she wants to provide quality treats for pets all over the country at a reasonable price. Jill states that since her business has grown so quickly, she thinks it is time to expand. She’s sure she can sell her products online and maybe even open another store in a different location, perhaps another state. You ask Jill to detail her current processes, and she tells you the following: BUSINESS ENVIRONMENT I pride myself in making delicious, freshly baked treats for pets of all kinds. We make everything from cakes and donuts to cookies and candy! We are truly unique. As you know, I hired two part-time employees to keep up with the orders. One employee, Pierre, bakes most of the items, and the other employee, Renee, is my “go-to ga”’! She does everything from taking orders, collecting payments, ordering supplies, and delivering products to keeping up with the inventory. With your help, I was able to secure a loan from my bank to help really establish the business; I would like to go back to them for additional financing. My parents also think that I should expand the business and are willing to invest in the expansion! SALES CYCLE A small percentage or our sales are purchased off the shelf; most of our business is special order. We sell half of our products through phone orders; the rest of our products are sold to customers who walk into our shop. Besides pastries, we also sell other related merchandise such as pet party accessories, pet dishware, pet toys and gifts, and so on. Both Renee and I handle the sales that occur in the shop.

When a customer places an order, we write the order by hand. We jot down the customer’s name and address, phone number, and the details of the order, including:

 The type of pastries

 The quantity of each pastry desired

 The date of the order

 The date the customer wants to pick up the order We immediately calculate the cost of the order by using a price sheet, and we include the price of the order on the customer order sheet. If it’s a walk-in order, we give the customer a copy of the customer order. The financial information from the customer order is then copied to a duplicate sales order form; one copy goes with the customer order, and the other is placed in a folder of outstanding orders. The customer order is picked out of the folder by Pierre or me to process. After we bake the items, we sign the customer order as complete. When the customer receives the product, a copy of the sales order is given to the customer with a receipt of purchase. If the sale was a credit sale, Renee creates an invoice by hand and gives it to the customer; the second sales order is signed as complete and forwarded to you for accounting.

ACCOUNTS RECEIVABLE CYCLE We do both cash and credit sales; I give the OK to customers who purchase on credit. Since I have known most of our credit customers for a long time, I don’t have many problems with collecting from them. We also do cash sales in the shop. Sales that are generated in the shop are cash only; I don’t extend credit to walk-ins. All credit sales customers receive a copy of the sales order when they pick up the order with a copy of the invoice. We give customers 15 days to pay the account in full; we do not give sales discounts for early payment. We can only receive payments in person in the shop; customers can pay with cash, check, or credit card. Either Renee or I will collect the payment and issue the customer a receipt of payment. We use a cash register and credit card reader to record payment. Cash is deposited daily. I review the register tape and credit card receipts at the end of each day. We staple the receipt of payment to the invoice and send all invoices to you, paid or unpaid, at the end of the week. Customers that do not pay within 15 days are sent a reminder letter. We have very few issues with non-payment. INVENTORY CYCLE We only bake items after we receive a customer order and sales order. We price our baking inventory by the job; we charge an overhead fee of 25% of the materials and labor costs. Pastry inventory does not last long in our shop. We do our best to bake only what is needed, so there is very little waste in our shop. When we need baking supplies to make our pastries, we simply get what we need from the inventory room; we don’t fill out a form when we get or use baking supplies. We make a certain amount of pastries for walk-ins; these pastries cannot stay on our shelves for more than 24 hours. Pastries older than 24 hours are thrown out. Renee reviews the merchandise and supply inventory weekly and keeps track of the supplies that need to be purchased. I sometimes tell Renee what to order; however, she is good with keeping adequate baking and merchandise supplies on hand. When we need supplies, Renee can just pick up the phone and place an order for what we need. To speed up the process and keep costs down, Renee picks up the supplies on a weekly basis. If we run out of something, she may do another pickup during the week. Merchandise and baking supply inventory is kept in a room in the back, which we all have access to.

ACCOUNTS PAYABLE CYCLE In the middle of the month, we request an “open” purchase order of baking supplies on account. We have good relationships with several vendors, so they let us buy our supplies on revolving credit. Since

we don’t have much space to store supplies, our vendors let us keep an “open tab” and pick up items as needed. Each vendor hands Renee an invoice for the supplies she picks up. We can get a 1% discount if we pay the invoice in 10 days; otherwise, we have 30 days to pay the bill. Renee pays most of the items over the phone or on the computer. Our vendors email us receipts of payment. Renee staples the proof of payment to the vendor invoices. We send all invoices, paid or unpaid, to you at the end of the week.

PAYROLL CYCLE Renee and Pierre work various hours throughout the week and do not have a set schedule. Neither punch a time card; however, they write down the number of hours they work each day. I review the hours they write down at the end of each week to make sure they are reasonable. Since Renee uses her own car to deliver orders and pick up supplies, I reimburse her for mileage on her car. Renee gives me a mileage report each week. I use the rates you gave me to calculate the reimbursement for mileage, and I add the reimbursement to her weekly pay. I pay both Renee and Pierre weekly by company check that I personally write out and sign. I forward the time sheets, reimbursement calculation, and check register to you weekly.

“So, that’s the story of my business,” Jill says. You thank Jill for her time and all the information she gave you. You tell her that you will go through the information and come back to her in a week or two with thoughts about potential next steps. After considering Jill’s goals and hearing her processes, you are convinced that you need to do a thorough analysis of Peyton Approved Bakery to assess the feasibility of an automated AIS, how it would impact Jill’s current processes, and how it could enhance her ability to reach her goal of expansion.