BeGood Baking Supply is a small bakery supply company formed as a  closely held corporation. The company supplies raw baking materials,  paper goods, and equipment to restaurants and bakeries in three states  in the upper mid-west. Most of its business, however, is located in a  large metropolitan area. BeGood wants to increase its presence in the  region and serve five states. In fact, the owners of BeGood would like  75% of their business to come from throughout the region rather than the  current metropolitan area. In order to do this, the owners understand  they must diversify offerings and lines of business.

Currently, BeGood has a phone center where customer orders are taken;  these orders are then sent to shipping where the order is filled in its  large warehouse and shipped within four days. BeGood outsources its  shipping to a local trucking company. Once the order ships all paperwork  goes to the accounting department where it is entered into the  accounting system. BeGood still uses the same accounting system it has  used since the inception of the company. All aging of receivables and  other analysis is done using Excel spreadsheets. Purchasing and tracking  of inventory are done solely by the warehouse manager. Invoices for  inventory purchasing are sent to the accounting department when goods  are received.

The owners at BeGood are wondering how they can utilize an online  presence and further automate its systems in order to facilitate its  growth and diversify its business. The owners may also like to expand  into the retail business.

You have been hired as a full-time staff accountant at BeGood Baking  Supply and have been given the task of evaluating and recommending a  viable accounting information system for the accounting and financial  data of BeGood in order to facilitate expansion and diversification. As  you begin your research, you realize that many departments are involved  in the information system, and communication is key.

BeGood has grown over the years but the AIS has not kept up with that  growth, and you believe there may be some internal control issues.  Since cost of goods sold is the largest expense of the company, you  decide to take a look at inventory control, ordering and receiving  first. You have an “uneasy feeling” about the warehouse supervisor,  Harold. The Receiving department consists of three employees, including  Harold. The two receiving employees unload vendor trucks and stock the  goods received. If goods are shorted on an order or defective goods are  received, it is brought to light when filling customer orders or when  customers complain about product received. After receiving, employees  unload trucks and restock goods. The vendor invoice is held in a folder  on Harold’s desk. Once per week, Harold takes the invoices to accounting  for payment.

Requirements

As part of your analysis of the ordering and receiving process,  prepare documentation of the following items and the research you find  that would ultimately become part of a final presentation of a viable  AIS system for management. NOTE: You will not be creating this  presentation. These elements of research and documentation are part of  the process that would lead up to that final presentation of  information.

Documents Required:

1. A system flowchart of the ordering and receiving process described above
2. A chart listing the control weaknesses in the current system, along  with the fraud that could occur with the weakness, and a solution to the  weakness
3. A system flowchart of a new recommended system addressing each of the control weaknesses identified in the chart