Data refers to raw facts or forms that are collected whereas; information is a processed form of data in a way that is meaningful as per the needs of the given requirements (Boell, 2017). The system that processes this information and stores is known as an information system.
These three are linked with each other as information is derived from the data while the process through which raw data is converted into information or the system through which information is derived from the data is an information system. This depicts the relationship between the three. The three of them are interlinked with each other. If there is no data then no information can be derived. Also, information systems process the raw data to provide information (Boell, 2017). Even if data is available and no information systems are there, then processed information will not be attained by the user.
These 3 need to work in symmetry for providing the best results to the user. Data are raw facts that are collected through surveys, interviews, or questionnaires (Yeakley& Caballero, 2017). This collection of data cannot be presented to the user as they will not be able to derive any information from that. To understand the data, users need to get well-processed information for taking decisions. This can be done when raw data is processed appropriately. This function is carried out by the information system. It processes the raw data and then presents it in a meaningful way as per the requirement. The process data is known as information. Thus, this shows that these three are interconnected with each other and without the one, proper information or the results cannot be derived for the user.
Misrepresentation fraud is the fraud that has taken place. It refers to any type of fraudulent or false statement that can be used to defy the other person. If the inspector issues a fake violation statement then, he will be making a false statement and will trick a person in the wrong direction. Misrepresentation fraud represents the same where facts and figures are misrepresented according to the requirement of a person or to promote or defame a business (Home, Venter &Lochner, 2018). It can be represented in 3 manners that include fraudulent, innocent, and negligent. The fraud here will be conducted intentionally to manipulate the person in giving the bribe. Misrepresentation is done with the purpose of providing a false image to other people.
Usually, it is done to portray a false image of the financials of the company to attract investors. Here it is being done to force the other person to agree on something that is illegal. Thus, misrepresentation fraud is carried out.
Control activities that can be undertaken to manage the fraud include:
Authorization of activities and transactions: A channel should be formed by the management where employees are empowered with the help of policies. This enables the empowerment and gives employees the power to carry out the activities on their responsibility.
Division of duties: Duties should be divided between people. No one person should be authorized to carry all the activities that may result in fraud. For an accounting transaction, it should be authorized by one person, recording should be done by some other person while custody like handling the cash and other activities should be undertaken by some other person. This segregates the duties among the people.
Adequate documents and records: A company should follow a policy where adequate documents are to be maintained. It should be made mandatory that every activity is recorded and documented properly by a number provided to each document. This will help in providing a check and maintain records of every step.
These are certain control measure activities that can be undertaken to stop the fraud or control them in a manner that it does not impact the image or the value of money or company.
A credit check refers to the credit search. It is done when the financial viability of the firm is looked into so as to understand the financial behavior or the leverage of the company. A credit check is carried out at different times and by internal or external measures. The internal credit check can also be carried out by companies so as to understand their credit position.
In basic credit checks, a person from the credit department carries out the check by visiting every document in the department and this is done manually by the person. Debts of the company and the assets or the viability are measured through various ratios and other activities manually by the person. While through advanced technology systems the details are filled in the computer and according to the software, results are drawn for the credit check. In this, manual inspection is not required and no calculations are done. It is all done by the software that is installed in the system.
Thus, the main fundamental difference between the two is that the basic technology check is done manually while advanced technology uses software (Balance, Clifford &Shoag, 2020). It also fastens up the process of credit check as a person is not required to do the manual functions, the only thing that is required is to fill in the details and the results will be drawn easily. Advanced technology also provides an appropriate measure and reduces the chances of human error that could have been done in basic technology. Hence these are the major differences between these two methods of credit check.
There are certain weaknesses that are attached with the Two Symbols cash disbursement system:
No segregation of duties: In the Two Symbols Ltd., when the receipt is received then the clerk of cash disbursement files that document. Also on the due date, the clerk is the one who prepares the check for the amount. After that, the register, ledger and the control account are also done by the same clerk. The clerk also files the invoice and the copy for the purchase order, reports that are received and the cheques for the department. All the activities are undertaken by one person and there is no segregation. This is a weakness as any error that will be committed would not be easy to catch. Also, one person doing so many activities will increase the chances of fraud and error.
Review of activities: In Two Symbols Ltd., cash disbursement system, during the posting of entries there is no system for re-check or reconciliation. If the activities are done by a different person then it would give scope for the revaluation. Like if the check is prepared by one person while the entries are made by another, then it would help in keeping a track that the entries are made appropriately or not. This is a weakness that is there in the cash disbursement system of the company.
Risk Associated with The Weakness:
Chances of fraud: Since all the activities are in the hands of one person, it increases the chances of fraud. Numbers or the number of invoices can be manipulated. A single person handling all the activities can do so by generating fraudulent invoices. All the entries are being made by the same person, this gives them a benefit for mishandling the money.
Reliability risk: The risk of reliability of the statements decreases. Since a person is carrying out most of the functions and there is no measure of internal control and it increases the risk of misrepresentation of the statement. This increases the reliability risk of the statements.
Two control techniques that can be used so as to reduce the fraudulent distribution of the paychecks include:
Direct deposits: Direct deposits refers to submitting the amount directly in the account of the employee. In the case, once Leon Jones should be getting his salary directly into the account. This would have not allowed the supervisor to obtain an opportunity to cashing his cheques. This technique would have helped in controlling the fraud. When the amount is directly deposited into the employee's account for his pay, it will remove the role of the supervisor and also will help in managing the finances. The supervisor will not be able to do the fraud.
Cross totaling: Totaling of the employees and the checks that are being prepared should be done. At the end of every month, the count of employees should be checked so that it can be seen whether there are people who have left or not. This will help in knowing the workforce and as per that paychecks should be rolled out by the company. This technique will help in keeping the number of checks that have rolled out in synchronization. This will also help in reducing this fraud as no extra cheques will be rolled out that can be used by the supervisor or any other person for extra benefit.
Thus, in this manner, these techniques can be used for controlling the fraud that is prevailing in the company. These methods will help in providing a measure for check and reduce the fraud in the company.
Ballance, J., Clifford, R., &Shoag, D. (2020). “No more credit score”: Employer credit check bans and signal substitution. Labour Economics, 63, 101769.
Boell, S. K. (2017). Information: Fundamental positions and their implications for information systems research, education and practice. Information and Organization, 27(1), 1-16.
Horne, J., Venter, J., &Lochner, H. (2018). The red flag system as the gatekeeper in tender fraud prevention and detection of misrepresentation. International Journal of African Renaissance Studies-Multi-, Inter-and Transdisciplinarity, 13(1), 129-143.
Yeakley, D. D., & Caballero, A. M. (2017). U.S. Patent No. 9,740,905. Washington, DC: U.S. Patent and Trademark Office. Retrieved from:https://patents.google.com/patent/US9740905B2/en
Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Information Systems Assignment Help
Proofreading and Editing$9.00Per Page
Consultation with Expert$35.00Per Hour
Live Session 1-on-1$40.00Per 30 min.
Doing your Assignment with our resources is simple, take Expert assistance to ensure HD Grades. Here you Go....