Upon successful completion of this assignment you will be able to:
Illustrate and explain use of controls in the payroll sub-cycle of the AIS;
Identify and analyse risks (and opportunities) associated with the payroll sub-cycle of the AIS;
Analyse and produce usable information for a specified business;
Work in groups to address AIS-related problems ;
Present views through formal, written communication.
The case study below illustrates a real life example of a large-scale theft within Australia that arose from weak AIS controls.
In 2006, the Australian whitegoods and electrical retailer, Clive Peeters, employed Sonya Causer as an accountant and payroll manager on an annual salary of $125 000. As a senior member of the finance team, Causer was a signatory to the company’s account from 2007.
In 2010, the Victorian Supreme Court sentenced Ms Causer to eight years in prison after she pleaded guilty to misappropriating 19.3 million dollars from Clive Peeters. Causer bought 44 properties in Victoria, Brisbane and Tasmania, three cars, motor bikes, jewellery and Clive Peeters’ shares with the funds over an 18-month period.
Causer admitted to using Clive Peeters’ online systems to transfer money to eight of her personal bank accounts after falsifying payroll records. Another Clive Peeters’ accountant first noted a two million dollar difference between two of the company’s ledgers. Causer did not have access to the backup ledgers, which revealed the discrepancy. Deloitte, the company’s auditor, then identified the full extent of the missing funds. Clive Peeters was able to recover all the missing funds, apart from around three million dollars.
The company’s internal controls were weak, as shown by the business not detecting the 20 million dollar theft for some time, when it had struggled to account for its decline in cash flow. Clive Peeters’ shares ceased trading on the Australian Securities Exchange on 19th May, 2010, after the company went into voluntary administration.
The Task
Prepare a formal business report addressed to your employer, Sarah Hardy, owner of Hardy and Wong MYOB Consulting. Your employer is concerned at the apparent ease with which Causer had committed payroll fraud, using accounting information systems software. Hardy has asked you, a small team of trained accountants who work at her MYOB consultation services business, to:
Investigate the range of possible ways to commit payroll fraud, and
Investigate the adequacy of controls within MYOB to prevent payroll fraud.
Your report will have a maximum of 2500 words, including ALL parts of the business report, but excluding the group contribution summary and the group TSBE cover sheet.
The MYOB software installed in the laboratory and used for the workshop does not contain a payroll module. However, your experience using MYOB during the workshop has provided you with some familiarity with MYOB, which is transferable. Use any version of MYOB PLUS that is a). available to you at your workplace, b). accessible at the following site as a trial student version, or c). available to you elsewhere:
https://store.myob.com.au/buy/trial?productId=1-3FZIC82&productLine=plus&xpSensis=true&_ga=2.10512176.520690053.1505864966-751120403.1505461590&_gac=1.237885618.1505865009.
COrb6ZG4stYCFQsnvQod6MQNFw&ajs_aid=1f2b10df-0151-4cbe-b8c0-2590029f638c. You will need to register to gain access to the trial version.
Requirements for Your Consultant Team
Important: You must access and enter payroll data into MYOB PLUS software version to support the views you write in the report.
Your manager insists that her consultants use professional business report structure and presentation. The report structure to be used is accessed at: Required Business Report Structure.docx. Hardy and Wong MYOB Consulting requires that all consultant reports undergo a spelling and grammar check just before submission. It also requires that all reports use Harvard citation and referencing style, with appropriate paraphrasing.
As Hardy and Wong MYOB Consulting wants to employ effective team members only, it monitors team functioning for all its consultants. Therefore, each member must complete an individual contribution table available at: Contribution Record Table.docx. A completed table will submitted by each group member to an individual dropbox. Complete the table as you work through the assignment, to record and evaluate your own contribution, and that of your group members. The evaluations will contribute to your assignment mark.
Additional Information
Read these instructions in conjunction with information in the BFA221 Unit outline about the assignment, and TSBE policies, including for late submission, application for extension, and plagiarism. To enhance the professionalism of your business report, use 12-point Times New Roman font, single-line spaced. Leave a blank line after each paragraph. Label every table, figure or screen print you include, and refer to each within the text of your report, eg “In Figure 1, …”. Start each section on a new page. Ask a native English speaker to review your assignment before submission to ensure the language is professional. Over-length assignments will be penalised.
Submission date and time: 2pm Friday 6th October, in Word or pdf format only, to the relevant MYLO assignment drop box. The file will be analysed by TurnItIn before marking. This assignment contributes 20% to your total assessment for BFA221.
