Explain why some companies would choose to install a distributed computer system rather than a centralised one.

ASSIGNMENT DETAILS

Analysing the Accounting Information System of HARDA Fashion.

HARDA Fashion sells ready-to-wear fashion clothes to teenagers. The company has a 20-store chain concentrated in the north-eastern part of the United States of America. Each store has the experienced full-time staff consist of a manager and an assistant manager. The full-time staff is paid a fixed salary. The full-time staff is assisted with a cashier and a sales assistant who have comparatively less experience. The cashier and sales assistant are paid hourly wages plus the commission based on the volume of sales. HARDA Fashion uses unsophisticated cash registered with four-parts sales invoice to record each financial transaction. These sales invoices for the sales transaction irrespective of the payment type. The record-keeping starts with the sales assistant on the sales floor.

The sales assistant fills the sales invoices manually by providing the following information:

  1. Records his or her employee number.
  2. Enters the transaction details including clothes item number, description, quantity, and the unit price.
  3. Totals the sales invoice.
  4. Calculates the discounts manually when appropriate.
  5. Calculates the sales tax.
  6. Finalise the sales invoice after calculating the grand total.

The sales assistant then forwards the sale invoice to the cashier and keeps one copy in the sales book.

The cashier reviews this sales invoice and enters in the cash register. The cash register mechanically validates the invoice, automatically assigning a consecutive number to the transaction. The cashier is also responsible for getting credit approval on charge sales and approving sales paid by cheque. The cashier gives (1) one copy of the invoice to the customer, (2) retains the second copy as a store copy, and (3) the third for a bankcard, if a deposit is needed. Returns are handled in exactly the reverse manner, with the cashier issuing a return slip.

At the end of each day, the cashier sequentially orders the sales invoices and takes cash register totals for cash, bankcard, cheque sales, and cash and credit card return. These totals are reconciled by the assistant manager to the cash register tapes, the total of the consecutively numbered sales invoices, and the return slips. The assistant manager prepares a daily reconciliation report for the store manager’s review.

The manager reviews cash, cheque, and credit card sales and then prepares the daily bank deposit (credit card sales invoices are included in the deposit). The manager makes the deposit at the bank and files the validated deposit slip.

The cash register tapes, sales invoices, and return slips are forwarded daily to the central data processing department at corporate headquarters for processing. The data processing department returns a weekly sales and commission activity report to the manager for review.

Required:

Prepare a report to Chief Executive Officer of HARDA Fashion to evaluate its processes, risks, and internal controls for its revenue cycle. In your report, you need to include the following items:.

  1. Identify two situational pressures in a company like HARDA Fashion that would increase the likelihood of fraud.
  2. Explain why some companies would choose to install a distributed computer system rather than a centralised one.

(Reference sources must be cited in the text of the report and listed appropriately at the end in a reference list using Harvard referencing style.)

800 words.

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