Question

1- What are the production cycle activities? 2- Explain three of the HRM and payroll general threats and suggest the possible controls for those threats? 3- What are primary functions of general ledger and reporting? 4- What are REA Diagram rules?

Answer 1

Production cycle activities are

1. Product design- The purpose of this activity is to design a product so that it meets the customer expectations in terms of durability, functionality and quality. At the same time reduce the production costs.
2. Planning and scheduling- This activity involves planning of the production process in two methods namely, Manufacturing Resource Planning (MRP-II) and lean manufacturing.
3. Production operations- This activity involves the actual manufacture of the products. The use of robots and computer controlled machineries are referred to as computer-integrated manufacturing.
4. Cost accounting- This activity involves the costs incurred for the raw materials, labor hours, machine operations performed and other inputs for the production process.

Explain three of the HRM and payroll general threats and suggest the possible controls for those threats?

1. Hiring unqualified employees- can be controlled through sound hiring procedures and background verification by third party agency.

2. Inaccurate master data- Verification checks at different points can be implemented.

3. Unauthorized disclosure of employee data- Offsite backup of sites with high security can be implemented to control.

Primary functions of general ledger and reporting

1. Helps in making financial decision as it provides a review of the financial statements.
2. Auditing of the financial transactions. Collect and organize data
3. Helps the treasurer in performing strategic decisions.

   REA Diagram rules

   Resource, Events, Activity is the REA diagram. This diagram depicts how every activity is linked to the activity. Every activity must be linked with atleast two participant agents. This is a model of how an accounting system can be re-engineered.