How does information flow between departments at your organization? Why do some organizations continue to use both manual and computerized systems? What are the problems associated with dependence on human information processing and paper documentation? Explain your response. What are the advantages and disadvantages of using real-time versus batch accounting information architecture?

You were asked to investigate extremely high, unexplained merchandise shortages at a department store chain. You found the following:

a. The receiving department supervisor owns and operates a boutique carrying many of the same labels as the chain store. The general manager is unaware of the ownership interest
b. The receiving supervisor signs receiving reports showing that the total quantity shipped by a supplier was received and then diverts 5% to 10% of each shipment to the boutique.
c. The store is unaware of the short shipments because the receiving report accompanying the merchandise to the sales areas shows that everything was received.
d. Accounts Payable paid vendors for the total quantity shown on the receiving report.
e. Based on the receiving department supervisor's instructions, quantities on the receiving reports were not counted by sales personnel.
REQUIRED Classify each of the five situations as a fraudulent act, a fraud symptom, an intern control weakness, or an event unrelated to the investigation. Justify your answers. Examination, adapted)

In our organization, information flows between departments through a combination of manual and computerized systems. This is quite common in many organizations, as each method has its own benefits and reasons for use.

The manual system involves physical documents, such as memos, reports, and forms, being passed between departments manually. This can be done through in-person meetings, internal mail systems, or email attachments. Manual systems are often used for quick communication, simple tasks, or when a formal record is not required.

On the other hand, computerized systems involve the use of technology and software to store, process, and communicate information electronically. This can include email, shared databases, project management tools, and enterprise resource planning (ERP) systems. Computerized systems are usually used for complex tasks, larger volumes of data, and when accurate and real-time information sharing is crucial.

Organizations may continue to use both manual and computerized systems due to various reasons. Some departments may prefer using a manual system for specific tasks or because they are accustomed to it. Additionally, certain tasks might be better suited for manual handling, especially when dealing with confidential information or when immediate face-to-face communication is required. Moreover, manual systems can act as a backup when computerized systems are unavailable due to technical issues or network outages.

However, relying on manual information processing and paper documentation does come with some challenges. Firstly, it is slower compared to computerized systems, as it involves physical movement of documents and manual data entry. This can lead to delays and errors in information transfer. Secondly, paper documentation can be easily lost, damaged, or misplaced, resulting in lost or inaccessible information. Thirdly, manual systems lack real-time updates and tracking, which can hinder efficient decision-making and coordination between departments.

Moving on to accounting information architecture, there are two main approaches: real-time and batch processing.

Real-time accounting information architecture refers to the continuous and immediate processing of accounting transactions. This means that transactions are recorded and updated in real-time as they occur. Real-time systems provide up-to-the-minute financial data and can facilitate timely decision-making. They are suitable for industries that require instant visibility into financial information, such as stock trading or online retail. However, real-time systems can be complex and resource-intensive to implement, and they may require significant investment in technology infrastructure and skilled personnel.

On the other hand, batch processing involves the accumulation and processing of accounting transactions in batches, usually at the end of a specific period (e.g., daily, weekly, monthly). Batch processing is less demanding in terms of resources and can handle large volumes of data efficiently. However, it is not as timely as real-time systems, as there might be a lag between the occurrence of a transaction and its processing. This can result in delayed reporting and decision-making.

To summarize, the flow of information between departments in our organization involves a combination of manual and computerized systems. The use of manual systems allows for quick communication and informal tasks, while computerized systems enable accurate and efficient processing of complex tasks and larger volumes of data. However, dependence on manual information processing and paper documentation can lead to delays, errors, and lack of real-time updates. Regarding accounting information architecture, real-time systems offer instant visibility but may be complex and resource-intensive, while batch processing is efficient for handling large volumes of data but is less timely. The choice between the two depends on the specific needs and requirements of each organization.