Plan and the content for execution
Do a risk assessment to identify potential threats to the firm, including operational, financial, reputational, and strategic concerns. This could involve gathering information from various sources, such as internal audits, external audits, industry benchmarks, and regulatory requirements. Assess the company’s current technology infrastructure and systems to identify potential vulnerabilities, gaps, or areas for improvement. This could involve reviewing the company’s IT policies and procedures, conducting vulnerability assessments, and testing the effectiveness of IT controls. Conduct a financial analysis to evaluate the company’s financial performance and position. This could involve reviewing financial statements, assessing liquidity and solvency, and analyzing key financial ratios and metrics. Develop recommendations: Based on the results of the risk assessment, technology assessment, and financial analysis, develop recommendations for addressing identified risks and improving the company’s overall risk management framework (Gallati, 2022). This could involve developing policies and procedures, implementing IT controls, and identifying opportunities to optimize financial performance.
Suggest a comprehensive set of recommendations to address any identified risks and vulnerabilities. Provide a detailed plan of action to mitigate risks and strategies to protect the company’s technology and financial assets. The recommendation will be based on the theory of Double-entry bookkeeping, a system of accounting that requires each financial transaction to be recorded in at least two accounts (Grasselli, 2023). This system ensures that all financial transactions are accurately recorded and that a business’s financial position is accurately tracked. It is a method for recording financial transactions in a way that allows for the preparation of financial statements and other reports that accurately reflect the business’s financial position. Double-entry bookkeeping requires that all transactions have a debit entry and a credit entry, which must be equal in value. This system provides a balanced view of the business’s finances and allows businesses to track their profits and losses.
Summary
Best Retail Inc. is a leading global retail business providing customers with quality products. Best Retail Inc. deals with numerous products in the market, providing electronics, furniture, and home goods (Best Products Co Inc, 2020). Best Retail Inc. offers various deals and markdowns to incentivize repeat business. The business at Best Retail Inc. is an innovative and reliable retail business that continues to exceed customer expectations. Best Retail Inc. invests heavily in innovation and technology to ensure its continued growth and success. With a strong focus on customer satisfaction, innovation, and efficiency, Best Retail Inc. is well-positioned to remain a leading player in the retail industry (Sila, 2022). Best Retail Inc. has a robust online presence and manages an electronic commerce website that enables customers to shop from the convenience of their homes. The website offers a vast array of merchandise and practical delivery and pick-up alternatives. Best Retail Inc. also offers a loyalty program that rewards customers with exclusive discounts and offers, further enhancing the shopping experience.
Internal control systems
Best Retail Inc. has an extensive internal control system established to guarantee its financial statements’ reliability and accuracy, protect business resources, and thwart fraud. Creating regulations and processes that direct business activities is one internal control system component (Alabdullah et al., 2022). These guidelines and practices are made to guarantee that transactions are approved, noted, and processed correctly and promptly. Best Retail Inc. has policies that require approvals for large purchases or transactions, and financial transactions must be recorded in the accounting system promptly. Another essential component of the internal control system is the segregation of duties. Best Retail Inc. separates the duties of employees responsible for processing transactions and those responsible for authorizing them. This separation of duties reduces the risk of errors and fraudulent activities.
The internal control system at Best Retail Inc. is set up to guarantee that business activities are carried out accurately, reliably, and effectively. The system is regularly reviewed and updated to address any weaknesses or emerging risks to the company. Best Retail Inc.’s internal control system includes risk management, which entails determining, evaluating, monitoring, and managing risks related to its company activities (Gallati, 2022). The business knows risks can come from many different places, including operational, financial, legal, and brand threats.
Best Retail Inc. regularly conducts internal and external audits to verify the veracity and correctness of its financial records (Best Products Co Inc, 2020). These evaluations assess the efficiency of the internal controls, pinpoint areas for development, and give management and outside stakeholders confidence in the accuracy of the financial reporting. They ensure its financial records’ high accuracy, timeliness, and reliability (Alabdullah et al., 2022). By following established accounting policies and procedures, authorizing transactions properly, using automated systems, and conducting regular audits, the company ensures the integrity of its financial reporting and strengthens its overall control environment.
Areas of improvement
Best Retail Inc. should improve its segregation of duties by ensuring that different individuals are responsible for authorizing, recording, and processing financial transactions. This separation of duties helps to prevent errors and fraud by creating a system of checks and balances. Access controls: Best Retail Inc. should enhance its access controls to restrict access to sensitive financial information to authorized personnel only. This would prevent unauthorized access and protect the confidentiality of financial information. Training and awareness: Best Retail Inc. might enhance its training and awareness initiatives to guarantee that all staff members are informed of and trained in compliance with the company’s rules and procedures. This would lessen the possibility of mistakes and fraud brought on by human error or a lack of understanding. Monitoring and testing; Best Retail Inc. should enhance its monitoring and testing of internal controls to identify any weaknesses or deficiencies (Best Products Co Inc, 2020). Testing controls regularly can help confirm that they are working as intended and can give early notice of any possible problems.
The company should strengthen its IT controls to protect against cyber threats and data breaches. This should include implementing access controls, encryption, and regular backups to ensure the availability and integrity of data. Best Retail Inc. has implemented various internal control systems to ensure the integrity of its operations by continuously improving its internal control systems.
Recommendations
Best Retail Inc. should monitor risks on an ongoing basis. The company regularly reviews its risk; it tracks key risk indicators, such as sales trends and financial metrics, to detect changes in risk exposure and take corrective actions if necessary. Best Retail Inc. should manage risks by implementing strategies to mitigate them. The company may purchase insurance policies to transfer the risk of loss due to natural disasters or litigation (Gallati, 2022).
Best Retail Inc. should emphasize maintaining accurate, timely, and reliable financial records as part of its internal control systems. It recognizes that financial records are a critical source of information for management decision-making, regulatory compliance, and external stakeholders’ reporting requirements. Risk management is to identify potential risks. Best Retail Inc. carefully examines its internal processes to identify any risks that could impact the company’s resources, standing, or ability (Gallati, 2022). The evaluation of both internal and external variables, such as shifts within the marketplace environment, competitor activity, and regulatory changes, is part of this analysis.
Best Retail Inc. ought to maintain a comprehensive chart of accounts and accounting policies that govern the recording and reporting of financial transactions. The company follows generally accepted accounting principles (GAAP) (Beerbaum, 2023), ensuring that financial records meet the standards and regulations. The company should ensure that financial transactions are properly authorized. Best Retail Inc. has established procedures that require approvals for significant transactions, segregation of duties, and regular reconciliations of accounts to detect and correct errors and discrepancies promptly.
Rationale
A reliable financial recordkeeping system is critical for Best Retail Inc. to guarantee precision and adherence to relevant rules and regulations. This system should provide an accurate and comprehensive record of financial transactions, enabling the timely and effective management of the organization’s financial resources. Financial recordkeeping also provides a basis for accurate financial reporting and decision-making (Alabdullah et al., 2022).
The theories underpinning the need for reliable financial records include the theory of double-entry bookkeeping, which is the basis for most modern accounting systems. Guarantees that the two entries’ sum always equals one. According to the accruing accounting foundation, all transactions must be recorded in the period they occur instead of after money is received or paid out. This ensures that the financial statements represent a true and accurate representation of the company’s financial position. The matching principle states that all expenses must match the corresponding revenue to measure the company’s profitability accurately. By implementing a reliable financial recordkeeping system (Grasselli, 2023), Best Retail Inc. can give a complete and accurate record while ensuring correctness and compliance with applicable laws and regulations.
References
Alabdullah, T. T. Y., Ahmed, E. R., & Kanaan-Jebna, A. (2022). Corporate governance system and firm financial performance. Acta Scientific COMPUTER SCIENCES Volume, 4(6).
Beerbaum, D. O. (2023). Underlying philosophical underpinnings of Normative and Positivist accounting. Available at SSRN 4390093.
Best Products Co Inc – Company Profile and News. (2020.). Bloomberg.com. Retrieved March 30, 2023, from https://www.bloomberg.com/profile/company/BESOQ:US
Gallati, R. R. (2022). Risk management and capital adequacy. McGraw-Hill.
Grasselli, M. (2023). Double-entry bookkeeping. In Elgar Encyclopedia of Post-Keynesian Economics (pp. 119-120). Edward Elgar Publishing Limited.
Sila, N. A. (2022). THE SIGNIFICANT IMPACT OF INFORMATION TECHNOLOGY IN BUSINESS AND GLOBALIZATION. Journal of Positive School Psychology, 6(2), 4690-4695
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