MATRIC. NO. NAME

1 225000 FADILAH AINI

2 231688 SHUGASHINI A/P DORAIRAJOO

3 233046 TAN LI HOU

4 233093 AMIRUL HAFIDZUDDIN BIN ZAHARI

5 700545 NUR NADHIRAH BINTI RODZI

BackgroundO Company that specializes in

precision metal stamping and tooling fabrication services.

O Incorporated on the 26th of March 2013

O Located at Plot 155-B, Jalan PKNK Utama, Taman Perindustrian LPK, 08000 Sungai Petani, Kedah Darul Aman, Malaysia.

O Aspires to become a one-stop supply chain.

Orgnization Chart

Board of Directors

Operation

Mr S.J. Yew

Quality Assurance

Mr Bekri

Human Resource

Ms C.P. Lim

Finance & Accounting

Ms. C.P. Lim

Sales & Marketing

Mr M.W. Yap

Material Control

Mr Michael Tan

General Manager

Mr S.J. Yew

Context Diagram

Physical DFD

Physical Flow Chart

Physical Flow Chart (Cont’d)

Transaction Authorization

O Weakness:O Free to prepare the employee pay slips and

proceed straight away to distributing them to the respective employees.

O It only requires a signature to verify the checks it prepares from the Directors of the company.

O Risk Exposure:O FraudO Weaknesses not only increase in fraud but also

expose a business to fines, penalties and a diminished reputation.

Transaction Authorization (Cont’d)

O Internal Control:O Higher level of management introduced

for certain activities

Segregation of DutiesO Weakness:

O Human Resource Department is the one that reconciles the employee working hours as well as the one that keys in the data into the Computer System to compute each employee’s net salary.

O Accounting Department is the one that prepares checks for various payments and is also the one that is in charge of recording all these payments into the General Ledgers.

Segregation of Duties (Cont’d)

O Risk Exposure:O embezzlementO fraud.

O Internal Control:O Having different personnel handling

activities that are related to each other.O Reconciling working hours and keying in

dataO Cash disbursement function and the payroll

function

SupervisionO Weakness:

O Can key in the data of employee working hours into the system without anyone there to check and make sure the data keyed in is accurate

O Accounting Department is free to prepare checks without anyone else supervising the transaction.

O Risk Exposure:O fraud O chance that errors in give salaries to the

employees

Supervision (Cont’d)O Risk Exposure:

O Fictitious in fill the amount in check and issuing check

O Internal Control:O Have specified personnel supervise

crucial stages of certain activitiesO Create an internal audit department

within the companyO overseeing the entire operating cycle and

ensure all processes are done efficiently

Access ControlO Weakness:

O The Finger Tech Machine and Computer System can be accessed by anyone

O Accounting Department has total access to the preparing and issuing of checks

O Risk Exposure:O Misappropriated dataO Embezzle cash

Access Control (Cont’d)O Internal Control:

O Giving access to sensitive information only to trusted top management personnel.

O Robust access tracking can also be used to deter attempts.

Independent Verification

O Weakness:O Apparently no need for any sort of

verification for the accuracy of the pay slips prepared.

O Accounting Department is free to review the payroll report and consequently prepare the related checks by itself

O Risk Exposure:O Not accurateO Error

Independent Verification (Cont’d)

O Risk Exposure:O Not systematically also misuse dataO Fraud in creating a fictitious check.

O Internal Control:O Let different personnel do the preparing

and checking of certain documents