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...

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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. HI5019 T2 2020 Assessment 1: Individual Assignment 3 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 six strengths in HARDA’s system for controlling sales transactions. 2. For each strength identified, explain what problem(s) HARDA Fashion has avoided by incorporating the strengths in the system for controlling sales transactions. 3. Identify two situational pressures in a company like HARDA Fashion that would increase the likelihood of fraud. 4. Explain why some companies would choose to install a distributed computer system rather than a centralised one. Assignment Structure The report should include the following components: • Assignment Cover Page clearly stating your name and student number. • A table of contents. • Executive summary. • The introduction. • Body of the report with sections to answer the above issues and with appropriate section headings. • Conclusion and recommendations. • List of references. The report should be grounded on relevant literature, and all references must be cited appropriately and included in the reference list. HI5019 T2 2020 Assessment 1: Individual Assignment 4 Marking criteria Marking criteria Weighting in Total Grades Strengths in HARDA’s system for controlling sales transactions 6% Problems that HARDA Fashion has avoided by incorporating the strength in the system for controlling sales transactions 6% Situational pressures that would increase the likelihood of fraud 2% Reasons for companies to install a distributed computer system rather than a centralised one 2% Research quality 4% TOTAL Weight 20
Answered Same DaySep 02, 2021HI5019

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Tanmoy answered on Sep 03 2021
62 Votes
Strategic Information Systems for Business and Enterprise
Assessment 1: Individual Assignment
Analysing an Accounting Information System
Table of Contents
Executive Summary…………………………………………………………Pg 1
Introduction………………………………………………………………….Pg 2
Analysis
(i) Strengths…………………………………………………………Pg 3 to 5
(ii) Problems………………………………………………………….Pg 5 to 6
(iii) Situational Pressure……………………………………………….Pg 6 to 8
(iv) Distributed Computer Network…………………………………..Pg 8 to 9
Recommendations…………………………………………………………….Pg 10
Conclusions……………………………………………………………………Pg 10 to 11
References……………………………………………………………………..Pg 12
Executive Summary
HARDA fashions sells ready to wear fashion cloths in United States. The company is facing some difficulties while handling its operations. In this report we will discuss on the various strengths of HARDA, the various problems that are been faced by the organization during its course of operation, the two situational pressures that increases the possibility of frauds within the system and design a well integrated distributed computer network system which can be better than a centralized network system.
Introduction
HARDA fashions is a ready to wear garment store located in north eastern parts of United States and conducts its operations with around 20 stores. The accounting process in HARDA fashions is manual in nature and is unsophisticated in nature. Each stores of HARDA has two senior member and two junior employees. The manual accounting system needs to be conducted carefully so as to avoid any e
or and discrepancies. HARDA is facing few difficulties while handling the huge rush of its customers due to the chances of e
or and omission increases and can directly impact the reconciliation system of HARDA. We will conduct an analysis of what could be a sound distributed network system that could enable HARDA to operate smoothly and efficiently.
Analysis
Identification of the six strengths in HARDA’s system for controlling sales transactions
The various strengths identified by the HARDA fashion for their controlling of sales transactions are as follows:
1. The employees’ identification numbers were recorded while filling the sales invoices. It helped HARDA for recording and preservation of the data related to the absence and attendances of each employee. This was also useful for maintaining the information in the payroll system. It also helped to calculate the overtime of each employee and make appropriate payments. It also helped to show exactly how much hours each employee worked in different departments of HARDA. This ultimately helped to boost the morale and confidence level of the employees and helped them to keep motivated towards attaining the objectives of the organization. The recording of employee ID helped the management to track the number of absenteeism of each employee and reduce the discrepancies arising out of it.
2. The total sales invoices were able to be easily calculated. These sales invoices were actually the proofs about the purchase and sales and the price and the quantity of goods. The total sales invoices are the perfect records which illustrate the amount which needs to be paid by the customers, Goh (2017). The sales invoices are the quantities of goods requested and ordered by the customers for purchase of HARDA fashion products. These will act as a receipt and evidence in case of any damages discovered in the products and can also be replaced. Finally, the sales invoices helped HARDA management to track on which date, which customer purchased what quantity of HARDA products, at what price.
3. Discounting rates calculated manually was also the strength of HARDA fashion. Discounting rates are very important factor for calculating the present value of the product. The discount rate helps to decrease the value of the product as there is a decrease in the discount rate and helps to enhance the value of the products of HARDA. Similarly, the calculation of discounting rate manually by the sales assistant helped HARDA to provide the benefit of observing the present value of the cash flows of the individual customers which meant the actual cash flow was easily evaluated.
4. The calculation of the sales tax by the sales assistant helped the retailers of HARDA to track when a particular purchase was made and the amount of sales tax charged on the purchase. It helped the customers as well as the small and medium retailers of HARDA to make prompt payment of the sales tax on each purchase made. There are instances when the adjustments of sales taxes are missed when calculating the tax invoice manually. Since the sales assistant recorded each sales transaction in a synchronised pattern, it helped to mitigate the risks of omission (Martinez, 2018). But, it is the duty of the retailers to apply the co
ect rules for calculation of the sales tax and avoid the misunderstanding within various departments.
5. Sales invoice finalization helped to track the type, quantity and amount of goods purchased by maintaining a record of all the sales transactions. It also helped to track which employee made what quantities of sales to which customers and retailers. The sales invoice also helps to trace the amount outstanding and the due date for recovery of the amount from the customers without any delay. This helps HARDA to control their entire sales system. The invoice also helps the small retailers to get protection from fraudulent...
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