The Australian National University | 1
INFS 2005 Group Assignment
Semester 1, 2018 25% of Overall Assessment
SUBJECT
Home Hygiene Goods (HHG)
REQUIREMENTS
You should form groups of four (4) to five (5) students. We will not adjust the
assignment marks according to the size of the group. We do not allow students
to form groups of less than four (4) or more than five (5).
You should attempt all tasks.
You must report using the word document template provided in Wattle, insert
answer in the space provided, not change any formatting such as the font, the
text spacing and the margin.
To successfully complete this assignment, having a holistic understanding of
the problems is critical. Therefore, we strongly advise students to complete
this assignment as a group i.e., you may allocate questions to different group
members but you must come together and discuss the results as the questions
are interrelated. Dysfunctional teams will suffer lower grades.
You should always use the university e-mail or other official platforms as a
group communication tools.
DUE DATE
PART 1 : Week 7 – Monday 16 April 2018 at 17:00 AEST
PART 2 : Week 10 – Monday 7 May 2018 at 23:00 AEST
SUBMISSION
METHOD
PART 1 : Soft copy (pdf) via Wattle and hard copy to the RSM Office.
PART 2 : Soft copy (pdf) via Wattle TurnItIn.
Soft copy should be submitted in pdf by converting the word document to pdf
via print to pdf option. Do not scan the hard copy word document to pdf.
Submission in word document may result in altered figures and you risk losing
marks. Time stamp is based on online submission.
PENALTY
Late submission: It will incur penalty of 5% per day and will only be accepted
at the latest 10 days since the due date.
Group conflict: An evaluation questionnaire will be used where all members in
the group will be asked to submit one confidential evaluation for each of the
other members. Using these evaluations, a weight will be assigned to each
individual grade. Non-participating group members will receive zero grades.
INFS 2005 Group Assignment – Semester 1, 2018
The Australian National University | 2
SUGGESTIONS
REGARDING
ELECTRONIC
DRAWING
FACILITIES
You will find installed in the computer laboratories drawing packages called
Microsoft Power Point or Visio. If you wish to complete the drawings at home,
Visio offers trial versions available free for a 30‐day period.
Alternatively, you may use a drawing package other than Powerpoint or Visio
listed below:
• yED Graph Editor. Free trial available. Particularly good for flowchart work.
• Lucidchart. It offers free education account for students. You must register
and send a request for a free upgrade using the university e-mail.
See: www.lucidchart.com and
www.lucidchart.com/pages/usecase/education-request
• EDGE Diagrammer by Pacestar. Free trial: 30 days.
See: www.pacestar.com/edge/)
• SmartDraw. Free trial: 7 days.
See: www.smartdraw.com)
Please note we do not mean in any way that by suggesting the use of these
packages, we are telling you that you must use them. You may use any
package you like as long as the output meets the requirements of the
assignment. However, you must use a computer tool to draw as handwritten
assignment is not accepted.
INFS 2005 Group Assignment – Semester 1, 2018
The Australian National University | 3
Introduction
You are a consultant in a business consulting firm. You are assigned to a client, Home Hygiene
Goods (HHG), a manufacturer of household cleaning products. In the first meeting with HHG you
find that HHG uses old in-house developed software to record transactions in its following functions:
Sales Department, Accounting Department, Purchasing Department, Warehouse and the Factory.
The software used in each function is not integrated, requiring manual processes to link one function
to another. HHG is a listed company that is run like a family business. It has a low employee turnover
and a company culture that highly trusts employees’ integrity. However, HHG realises that as a listed
company it needs to have better corporate governance especially as it is planning to expand to the
international market. One of HHG’s main problem is dealing with the document used in the manual
processes. HHG often loses the document, although each document type is properly stored in a
separate tray and in numerical order. In addition, HHG realises that the design of its system results
in document output that provides an insufficient audit trail. The latter is exacerbated by the fact that
the system does not have proper user profile management; it segregates users per roles but not per
person. Therefore, personnel with the same roles, for example, sales staff, must share the same
user ID.
HHG current system is being built in-house, one department at a time throughout many years, and
intended to be integrated. However, until now they have not yet integrated their system. Currently,
they need IT to help them integrate the end-of-month data from each department when they want to
compile the data and produce financial statement.
HHG realises that the current system suffers from some critical issues. In view of those deficiencies,
HHP wants to know whether they need to spend more time and money to integrate the current
departmental systems that they have OR to adopt an ERP available in the market.
Note: Before adopting an ERP, an organisation has to identify whether they really need an ERP or
not and if yes, which ERP is the best fit for them. Therefore, HHP needs consultants to assess their
business process and current system.
Business Process
The following is the narration that you received from HHG Internal Audit Department. This narration
is created by the HHG internal audit department after interviewing relevant employees.
Every day HHG receives purchase orders from its customers that are filed into a tray after
processing. HHG makes goods based on monthly production plan and thus keeps certain level of
stocks of finished goods (FG) in the Warehouse. For every customer order received via phone, a
sales staff in the Sales Department creates a sales order in the sales system. During this process,
a sales staff inputs the customer details based on the customer master data and item details based
on a product list database stored in the sales system. HHG customers are distributors/wholesalers
and large retailers only. Therefore, all customers have previously been verified and are listed in the
customer master data. The customer master data is maintained by a sales analyst and lists the
customer name, address for billing and delivery, credit limit and terms of payment as well as other
permanent details. Since HHG only deals with limited and largely long-time customers, credit check
is not done for every order. It is only reviewed every end of the month by the sales manager—who
remembers the credit limit of all customers—once the customer account balance report is received
INFS 2005 Group Assignment – Semester 1, 2018
The Australian National University | 4
from the Accounting Department. After all sales order data have been entered and saved in the sales
order database, the sales system prints three copies of the sales order to the printer at the sales
manager’s room. The printed sales order is then reviewed and signed by the sales manager. A sales
staff then puts sales order copy 1 in the sales order tray and then copy 2 and copy 3 are sent to,
respectively, the Warehouse and the Accounting Department. A sales staff then makes a phone call
to the customers’ purchasing staff to advise sales confirmation and estimated delivery date.
Upon receiving sales order copy 2, the warehouse manager on duty creates a picking list for that
order. Then two copies picking list is printed and given to warehouse staff. When picking list is
printed, the warehouse system updates the level of finished goods in stock. Since HHG
manufactures based on production plan, if there is no enough stock to fulfil an order, they will put
the unfulfilled order in backlog and will be fulfilled once the stock becomes available. Once all the
goods have been picked, a warehouse staff files away picking list copy 1 and then delivers the goods
and picking list copy 2 to the shipping dock. A shipping staff then packs the goods and arrange the
delivery via courier, a third-party logistic company. Shipping staff inputs shipping details in the
warehouse system based on the picking list copy 2 and prints packing slip and two copies shipping
slips. Then shipping supervisor reviews them, attaches packing slip on the packed goods and signs
the shipping slips. Once the courier reviews and signs shipping slips, the courier takes the second
copy and shipping supervisor sends the first copy to Accounting Department.
—
Every day, the factory manager on duty creates production notice in the production system based
on the monthly production plan and prints two copies and distribute copy 1 to relevant sections
producing different types of household cleaning products and copy 2 to the Warehouse. The
production notice lists the required raw materials.
Upon receiving the production notice copy 2, a warehouse staff picks all the required materials. The
warehouse manager on duty then reviews it and confirms picking. Upon confirmation, the warehouse
system updates the level of raw material in stock. The raw materials are sent to the Factory and the
production notice copy 2 is filed away into a tray.
Once the Factory receives the raw materials from the Warehouse, the production commences. The
production process is sequential. Accordingly, the production notice goes along the process until the
last section where a staff stamps “COMPLETED” on the production notice. Then the finished goods
are put away in the Warehouse1.
The production plan is designed based on seasonal trend derived from historical data and a minimum
level of finished goods is maintained. Therefore, HHG generally have sufficient level of finished
goods to meet customer orders. Typically, only in extraordinary cases HHG runs out of stock. For
example, unexpected anticipation of new products or natural disasters. However recently HHG
experiences production issues due to inefficiency in its purchase to payment processes and this
increases the risks of out of stock (i.e., not being able to meet customers demand).
In order to ensure that HHG production follows the plan, HHG must have the required raw materials
in stock. The warehouse system is designed to automatically create a purchase requisition (PR)
1 The Warehouse consists of two sections, the Raw Materials section and the Finished Goods section. For ease of
presenting the solution, Warehouse is considered as one entity.
INFS 2005 Group Assignment – Semester 1, 2018
The Australian National University | 5
when the level of raw material stock reaches the reorder point after picking confirmation. The
warehouse system then immediately prints PR to the printer at Purchasing Department.
—
Upon receiving printed PRs, the purchasing staff creates PO in the purchasing system for each PR.
When creating the PO, purchasing staff selects the relevant supplier from a list of approved
suppliers. The purchasing staff then saves and prints two copies purchase order for each PR. The
purchasing manager reviews, approves and sends PO copy 1 to the supplier and PO copy 2 to the
warehouse staff.
The supplier then sends the raw materials via a courier to the warehouse. A warehouse staff, who
is responsible for receiving the raw materials, retrieves the relevant PO copy 2 from Incoming PO
tray and uses it to ensure that the goods received is as ordered. This warehouse staff checks and
counts the physical goods and compared it to the PO. Then both warehouse staff and courier sign
off the two copies delivery slip from the courier. Any discrepancies, for example due to
damaged/missing, is noted in handwriting on the delivery slip before signing. Delivery slip copy 1 is
given to warehouse staff and copy 2 is taken by the Courier. The warehouse staff then inputs the
goods received details based on delivery notes into the warehouse system and creates two copies
of receiving report or goods receipt (GR) document, prints them, files away delivery slip copy 1
together with receiving report copy 1 into GR Tray and sends receiving report copy 2 to the accounts
payable clerk at the Accounting Department. The PO copy 2 is stamped ‘COMPLETED’ and filed in
the completed PO tray. Accounts payable clerk stores receiving report copy into temporary tray until
the relevant invoices are received from suppliers.
Every morning, accounts payable clerk creates an account payable (AP) in the accounting system
for every purchase based on invoices from suppliers and receiving report copy 2. Once each AP is
saved and printed, accounts payable clerk then sends printed APs along with invoices to the
accounting manager who then reviews and approves it. AP clerk then files away invoices together
with relevant receiving report copy 2 into processed AP tray, and files approved APs into outstanding
AP tray.
Every morning, a cashier in the accounting department reviews outstanding APs due in a week and
creates payment voucher for batch payment in the accounting system (i.e., to instruct bank for
making multiple payments to different suppliers). When the voucher is saved, the accounting system
updates the AP database. The cashier then prints and sends the voucher to the accounting manager
who then reviews and approves it. Cashier makes a copy of the approved payment voucher, files
away the copy and sends the original to the bank. Cashier sends remittance advice to suppliers via
e-mail to immediately update each supplier that payment has been processed. At the end of the day,
cashier changes the status of batch payment in the system from ‘awaiting payment’ to ‘paid’ and the
accounting system then updates the AP database. The bank sends receipts of transfer for each
supplier about two days after for both successful and unsuccessful transfers. At the end of the
month, cashier reconciles payment recorded to these receipts and bank statement and makes
necessary adjustments.
—
Finally, the IT department processes end of month closing based on relevant data from all
department and produces the trial balance.
INFS 2005 Group Assignment – Semester 1, 2018
The Australian National University | 6
Required Tasks
As an Accounting Information System specialist, you are asked to assess the HHG business
process. Due to limited time and the need to quickly address inefficiencies in HHG purchase to
payment processes, you are asked to review all processes within the expenditure cycle only.
You will review the current relevant business process (referred to below as the current HHG system)
and then assess existing internal controls to allow you to suggest improvements required. As a final
step, you will determine whether HHG needs to adopt an ERP or not. In doing so, you will have to
do the following:
PART 1
Task 1 (7 of 25 marks for this assessment item)
Create the Structured Narration Table (1 mark), Context Diagram (1 mark), Physical DFD (2 marks),
Annotated Structured Narration Table (1 mark) and Logical DFD (2 marks) of the current HHG
system that you are asked to review.
Task 2 (4 of 25 marks for this assessment)
Create the flowchart of the current HHG system you are asked to review.
If you need more information on systems documentation, please refer to the lecture recording
(Lectures 3 and 4) and the textbook Parkes et al. Chapter 7 (5th Ed.).
PART 2
Task 3 (4 of 25 marks for this assessment item)
Identify five present controls and five missing controls. List them in the table provided and annotate
on the flowchart you have created in Task 2.
Task 4 (4 of 25 marks for this assessment item)
Develop the control risk matrix, listing the five present and five recommended controls for addressing
missing controls in the annotated flowchart you have done for Task 3.
Task 5 (3 of 25 marks for this assessment item)
Suggest what are the critical improvements needed based on your answers in Task 4. In addition,
discuss what approach is better for HGG if it wants to achieve the suggested improvement (Total
Quality Management or Business Process Reengineering)?
Task 6 (3 of 25 marks for this assessment item)
Based on your answers in Task 1 to 5, determine whether HHG needs to adopt an ERP or not.
Explain why.
