MAA3013: J.D.Orbit opened a cell phone accessory manufacturing plant, named Orbit Corporation (Orbit) in 1997: Accounting Information System Assignment, USIM, Malaysia

• INTRODUCTION

J.D.Orbit opened a cell phone accessory manufacturing plant, named Orbit Corporation (Orbit) in 1997. Orbit supplies the products to the outlet stores of distributors such as Verizon, MCI, Cingular, and AT&T cellular phones in the tri-state area.

In the year 2010, gross sales were tripled. The company then expanded its customers, vendor, and employee base and it now serves major cell phone manufacturers. Currently, Orbit employs more than 120 individuals, including executives, directors, sales representatives, office personnel, and production workers.

Manufacturing hands-free cell phone devices require a number of different materials, none of which is made in–house. Most parts are purchased from 25 vendors. The more complex components used in the manufacturing process are purchased through contacts with vendors. Raw materials are purchased from vendors according to price without formal contact.

• Required:

1. Identify the weaknesses of internal control for each of the major subsystems which are: purchasing, payroll, and sales systems.
2. For each weakness, explain the potential problem that might occur due to that weakness.
3. Recommend to J.D.Orbit as how to overcome each weakness identified in(i)

Answer

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