IntroSystemsandControl

IntroSystemsandControl - Magal and Word ! Essentials of...

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Unformatted text preview: Magal and Word ! Essentials of Business Processes and Information Systems | 2009 1 Enterprise Systems and Internal Control 3-2 REA Value Chain Modeling cash equipment cash labor cash materials cash cash finished goods Labor Acquisition Cash disbursement Finance acquisition Finance repayment duality WIP Job Labor Operation Material Issue Purchase of fixed assets Cash disbursement Machine Operation Sale of inventory Cash receipt Materials Acquisition Cash disbursement duality duality duality duality duality Shows the interconnection of the transaction cycles in an enterprise and the resource flows between them 3-3 Value Chain Level Duality relationships consist of paired increment economic events and decrement economic events Increment economic events increase resources (stock in- flows) Decrement economic events decrease resources (stock out-flows) 3-4 Value Chain Level Each economic event in each cycle in the value chain corresponds to a resource in or out flow. If there is a resource flowing into the cycle, there must be an event in the cycle that uses that resource If there is a resource flowing out of the cycle, there must be an event in the cycle that provides that resource 3-5 Example RSWS gets cash from investors and creditors RSWS engages in value-adding activities uses cash to buy instruments, raw materials, and overhead from vendors uses cash to acquire labor from employees uses materials, equipment, and overhead to manufacture accessories and to provide repair services sells instruments, accessories, and repair services to customers for cash RSWS pays cash to investors and creditors 3-6 Resource flows Financing Process Payroll Process Conversion (Manufacturing) Process Acquisition/Payment Process Revenue (Sales/Collection) Process 3-7 Resource flows Financing Process Payroll Process Conversion (Manufacturing) Process Acquisition/Payment Process Revenue (Sales/Collection) Process cash cash 3-8 Resource flows Financing Process Payroll Process Conversion (Manufacturing) Process Acquisition/Payment Process Revenue (Sales/Collection) Process cash labor cash 3-9...
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This note was uploaded on 09/27/2011 for the course 6K 180 taught by Professor Staff during the Spring '11 term at University of Iowa.

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IntroSystemsandControl - Magal and Word ! Essentials of...

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