six strengths in HARDA’s system | Analysing an accounting Information System

Introduction

Managing the accounting process and keeping proper accounts of each and every financial transaction and event is a very complex process and requires a proper system or framework that helps the firm in making sure that the following is done in an effective manner. In the current assessment, there will be discussion over the strengths and issues in HARDA’S accounting process that the following maintains in its operational activities. It will help in identifying the possible areas of improvement which would be beneficial for the safety of the accounting process to make sure that the following is done in an evident manner. 

Identify six strengths in HARDA’s system for controlling sales transactions

Now the six strengths in HARDA’S system for maintaining and controlling the sales transaction is as follows:

  1. Control: Now it should be understood that Harda has 20 stories in the region and there are a number of employees opening the stores of the firm and this does not affect the company sales transaction recording because there are accounting DOJ on different levels of the company's operations. As it can be seen that the sales assistant records the sales transaction which is then forwarded to the cashier who the checks and validates the accounts and further develops and adds more information forwarding the sales transaction that have taken place which then is forwarded to the assistant manager that validates and checks the sales transaction and further makes adjustment, additions and reports the information to manager which at atlas checks the sales transaction validates them and reporters them to higher management on the weekly basis. This shows that the monitoring and controlling for the accounting process sales transaction on a Continuous basis which makes sure there are no unintentional errors in the accounting and reporting of sales transactions conducted in the store of Harda (Nobes, 2014). 
  2. Continuous accounting: As stated above in the sales operations of the firm in different stores there is sales and accounting for sales transaction in an simultaneous way this helps in identifying the sales done simultaneously when they are done which means the upgradation of accounts in done in an fast manner and this is only possible only with the step by step accounting process followed by the different employees of the firm in different level. The accounting is done on a day to day basis and this helps the firm in keeping upgraded records of sales transactions that have happened in the operational activities of the firm. 
  3. Systematic management of funds: Now the cash and funds that have been gained from the sales transaction are also managed in an evident way within the operations of the firm. This is because in this process the firm is able to effectively manage the funds by matching them to the total sales transactions that are done and the following is submitted to the higher management of the firm (Leuz and Wysocki, 2016). This helps in effective monitoring and managing of the funds that are there in the operations of the firm.  By Such systematic processes of managing transactions at every level the company ensures the funds related to the transaction are effectively procured and managed within the sales operations of the firm. 
  4. Fast reporting: Now it is seen that the sales transactions that have been performed in the operations of the firm are recorded by every employee of the firm in different levels and then is reported to a higher authority in a timely manner. This makes sure that the information and data in relation to the transaction are reported continually for validation and monitoring of the following (Jung et al. 2014). This helps the firm in getting informed based on the sales performed by the firm in a specific period of time. It is seen that the Sales assistant submits the report to the cashier which then submits the report to the assistant manager and the following submits the report to the manager on a daily basis whereas the manager submits the sales transaction reports to the  higher management on a weekly basis. This helps in proper communication of the store management with the higher management of the firm to make sure that the sales operations of the store is reported in a timely manner. 
  5. Detailed development of accounts and sales transaction data: From the analysis of the case it could be seen that every one of the business sales that happens in the shop of the said organization are noted in a systematic design driving from sales subtleties including cloth number, depiction, amount, and the unit value, Totals the business receipt just as the figuring of the limits physically any place proper. Along these lines  every sale is recorded in a similar standard which accordingly improves the information with respect to any sort of data needed in regard to the sales transaction information (Frias?Aceituno et al. 2014). This specific quality gives the organization confidence that all is well with the sales transactions in regards to the financial activities that lie within business operations of Harda. Details regarding the person and executive that has recorded and reported the following data is also given authenticity to the overall data submitted or reported to the higher management. 
  6. Auditing: One of the strength in the Harda’s controlling sales transaction is that the information provided by the company is audited on the different levels of management which ensure that sales transactions recorded and reported are fair, unbiased and are true in nature. This helps the firm in maintaining fair and true records of the sales transaction that have happened to remove the risks of altercation and manipulation done in the sales transaction recording and reporting process.

Explain what problem(s) HARDA Fashion has avoided by incorporating the strengths in the system for controlling sales transactions

In this section a detailed discussion if the strengths is to be conducted in order to identify the risks and problems that the strengths has minimized or avoided fp rth epeiric. There are total six strengths that was identified and in the previous section, each strengths has its own impacts and benefits in the organization operations and thus each of the strengths are to be evaluated in order to identify the problems and issues that it has avoided for the frm in the years. In this context it is also to be added that inclusion of the strengths are mainly done in order to increase the efficacy and smoothness of the firm's marketing and financial operations and dealing with the enhancement of their decision-making capabilities and marketing assignment strategies. Each of the strengths that the firm’s current possess regarding the financial management and cash management procedures are as follows:

  1. Control

As it is observed that with the use of their current financial and cash management operations it can be stated that the firms have better control; over the financial sounding and cash rotations. This is crucial for the firm in order to maintain a stable balance of the cash funds and liquidity management. This has enabled the frm in minimising the overspending of the cash along with making shuttle decision making. This has avoided the fmr for getting short of cash funds or inability to manage liquidity debts and obligation management for the year. Most of the short term financial losses regarding liquidity has been avoided by the firm with such procedures and methods (Cohen, 2014).  

  1. Continuous accounting 

Continuous accounting often provides stability and enrichment of data synchronization, tis the data chain and information set that is required for the actualisation and accuracy of the cash management are available for the firm to conduct for the year. As  it is observed from the provided information it is observed that in sales operations of the firm in different stores there is sales and accounting for sales transactions in a simultaneous way this helps in identifying the sales done simultaneously. Hence from the procedure the firm has avoided the risk of fata loss and also they have avoided the rock accents alteration and miscalculation of the sales records and cash balances for the pride. This will help them in developing better and effective financial statements.   

  1. Systematic management of funds

Managing finds through an accurate system is crucial for any firm as the finds at the primary vase for the fis marketing and financial operation and future expansion. Thus the management of funds is essential to create suitable provisions and cash balances. With the implication of such a systematic chain of management, the firm is able to effectively manage the funds by matching them to the total sales transactions that are done and the following is submitted to the higher management of the firm. This helps in effective monitoring and managing of the funds that are there in the operations of the fir. Thus they are able to avoid the risk of inappropriate financial records, mismatch of capital funds and capital decision making errors for the periods (Martínez Ferrero,  2015).  

  1. Fast reporting

Fas reporting often daves the crucial time that the management can use in making effective decision making and financial strategies based on the current market scenarios. The availability of time helps them to avoid the risk of wrong decision making that is mostly observed in the short fall of time (La Torre, 2018).   

  1. Detailed development of accounts and sales transaction data

When the form has detailed account and sales data the firm is able to identify and actualize each  of the data in making crucial decision making and accounting for the financial statements. This avoids the risk of misleading financial statements and accounting practices. 

  1. Auditing

Auditing often identifies the crucial errors that the firm needs to ratify before publishing the accounting statements and financial reports. This is essential in avoiding the misrepresentation of the firm’s financial strengths and saving the firm from losing marketing values (Francis, 2015).

Identify two situational pressures in a company like HARDA Fashion that would increase the likelihood of fraud

Now the two situations pressure that could cause situation pressures in a company like Harda is as follows;

  1. Manipulation: Now one of the biggest situational processes in the company that may lead to likelihood of fraud is data manipulation in which manipulated sales data and value will be recorded and reported for conducting forgery and gain financial benefits in an unethical manner. There can be a situation where executives in store combinedly record and report manipulated sales transaction data which is lower than the actual sales that has been done for personal benefits causing damage to the financial operations of the firm in an evident manner. This is a very high risk situational pressure which will prominently increase the likelihood of fraud in the operation of the firm (Acharya and Ryan, 2016). 
  2. Manual analysis of data and information: Now it is seen that the data and information in relation to sales transactions is analyzed on an manual basis which may increase the likelihood of forgery and fraud in the financial operation of Harda in different stores. The higher level management may analyze the data in a wrong way creating a situation where conducting fraud against the firm will become easy for the ones that want to conduct fraud causing financial damage to the firm in their operations. 

Explain why some companies would choose to install a distributed computer 

The distributed computer system is more detailed and secure compared to the centralized ones. This is mainly because the centralized system includes several departments of manual accounting and then the values are recorded through the computerised accounting practices. This takes a certain amount of time as the data and information are manually included in the system and thus the memorizing process takes time. In this context it's also to be added that the distributed computer system is far more efficient in saving the account as the accounting and recording process is completely digital and automated thus no manual entries and records are done. Hence all the data information is out,atomically updated and recorded in their respective accounts for the suitable input of data in respective sections (Wahlen, 2014).  

Conclusion and recommendation


According to yet conducted research, it is concluded that the insulin if the accounting and financial practices of the firm is quite efficient in aging suitable chains of data information that they used to create accurate financial reports for the year. 

Also they can have a digitized accounting system that they can use to improve their consumed time and include it into better and effective marketing decision making for the year.

References

Acharya, V.V. and Ryan, S.G., 2016. Banks’ financial reporting and financial system stability. Journal of Accounting Research, 54(2), pp.277-340.

Cohen, J.R., Hoitash, U., Krishnamoorthy, G. and Wright, A.M., 2014. The effect of audit committee industry expertise on monitoring the financial reporting process. The Accounting Review, 89(1), pp.243-273.

Francis, B., Hasan, I., Park, J.C. and Wu, Q., 2015. Gender differences in financial reporting decision making: Evidence from accounting conservatism. Contemporary Accounting Research, 32(3), pp.1285-1318.

Frias?Aceituno, J.V., Rodríguez?Ariza, L. and Garcia?Sánchez, I.M., 2014. Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), pp.56-72.

Jung, B., Lee, W.J. and Weber, D.P., 2014. Financial reporting quality and labor investment efficiency. Contemporary Accounting Research, 31(4), pp.1047-1076.

La Torre, M., Sabelfeld, S., Blomkvist, M., Tarquinio, L. and Dumay, J., 2018. Harmonising non-financial reporting regulation in Europe. Meditari Accountancy Research.

Leuz, C. and Wysocki, P.D., 2016. The economics of disclosure and financial reporting regulation: Evidence and suggestions for future research. Journal of accounting research, 54(2), pp.525-622.

Martínez?Ferrero, J., Garcia?Sanchez, I.M. and Cuadrado?Ballesteros, B., 2015. Effect of financial reporting quality on sustainability information disclosure. Corporate Social Responsibility and Environmental Management, 22(1), pp.45-64.

Nobes, C., 2014. International classification of financial reporting. Routledge.

Wahlen, J.M., Baginski, S.P. and Bradshaw, M., 2014. Financial reporting, financial statement analysis and valuation. Nelson Education.

 

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