Cbu Installed a Computer System Tracking Calculating

¶ … CBU installed a computer system tracking calculating inventory costs. On December 31, ye In my opinion, it would be relatively easy to explain the diverse opinions regarding the efficacy of the new computer system for tracking and calculating inventory costs at CBU. There is actually a degree of rectitude found in the opinions of both accountants A and B.

There certainly is validity to accountant A's viewpoint: that the auditing team was able to find a discrepancy between the amount of the physical inventory and that which was recorded on the new system for this organization (the difference was a million dollars). It certainly would not have been prudent to be unaware of such a discrepancy, and to have the books erroneously balanced due to such an error. Therefore, from this basic perspective accountant A actually has a good point.

However, it largely appears as though this accountant has taken the results of this particular audit too far. At a basic level it is good that his team was able to catch this discrepancy before the final inventory costs were tallied for the year. Although catching this error does demonstrate an effective internal control, the mistake was actually found out far too late in the year.

Moreover, the way that account A's team was able to fix this discrepancy -- by processing an entry to reduce the inventory -- was somewhat fictitious. In fact, this method of correction is somewhat akin to telling a lie. Instead of having the numbers reflect the actual physical inventory (which is what accountants are supposed to do in such a situation), these accountants made the physical inventory reflect the numbers. There is a parallel between such an activity and deliberately telling mistruths, or lying.

The Bible is a document that puts a fair amount of emphasis on telling the truth -- if not among men than certainly between men and God. It is unlikely that one could find evidence in the Bible to support the perspective of accountant A. Thus, there is probably more validity to the thoughts and considerations of accountant B. On this particular subject. Due to the timing in which the inventory error was received, CBU made a host of faulty decisions based on erroneous data through the year. Accountant B.

realized this fact, in addition to the considerable implications of it. The vast majority of business that CPU conducted based on the tallies of its inventories was likely flawed, meaning the company was likely incurring higher costs than it needed to. During these crucial time periods with uncertain currencies and economic climates, such mistakes are not feasible -- especially not realizing them 12 months later. Therefore, it is quite true that accountant B.

is right when she stated that the controls that are in place at CBU need to be more timely; the company simply cannot afford to let so much time go by with such an influential error. The policies or procedures that this particular organization should implement in order to avoid future situations like.