E4 Clothing Pty Ltd (E4), is a clothing retailer company in Australia, it sales woman’s stylish cloth both on retail store and online. Moreover, there are 5 stores in sate of NSW.E4’s transaction mainly contains credit or cash sales to customers on a daily base, purchasing inventories as well as other business transaction (i.e. advertising expenses, discount sales, store maintenance expense, customer dispute refund etc.). E4 is a medium business company in Australia; in order to improve the efficiency and accuracy of business operation performance, they adopted the MYOB computer based Accounting System to record and monitor of the detailed business operation. In this report, the strengths and beneficial of using the MYOB will be illustrated from the perspective of internal control and potential risks involved. In addition, the weaknesses of MYOB and the experience of our group from using the E4 MYOB system will be demonstrated in the following part of the report. Furthermore, all the E4’s financial reports are showed in the appendix.
2.0 Advantages of internal control of MYOB
In the aspect of internal control and risk prevent, the MYOB system is of great help to the XXX Company. The MYOB system prevents the potential risk to happen from the beginning of input, the data process and also the outcomes. We will give the further illustration in detailed as bellowed.
Most importantly, the MYOB is not as easy to access without the unique username and the password. It is the authorized system required the person who uses MYOB must have the authority to login in and practice within the system. Otherwise, people for example salesperson can insert，edit or delete data as ones’ wishes will cause the frauds cases. The login system restricts user’s function by the idea of segregation of duty. So the functions or information can only be practice or can view or edit by users who set to have certain authority.
Data Input Procedure
Besides the access prevention, the MYOB system also prevent fault in the input procedure. Firstly, instantly giving the feedback to the users so as to check the accuracy of data input. Secondly, ensure the completeness of input data by checking the required field data. Thirdly, checking the data by basing on the accounting theory and regulations. For example the amount of asset must equal to the deduction amount of liability and equity in the balance sheet. Last but not least, the MYOB also provide the function of inventory check in for the XXX clothing company. Where the finished goods can be counted accurately. In the business circle it is important to make sure the order number is within the inventory amount. If MYOB system checks the inventory amount is quiet low to meet the order it will not provide the further sale and send the remind.
Real-time data process
MYOB can sure the accuracy by preventing the outdated data. MYOB system requires all real-time process. As we had mentioned above, the inventory counted system. According to the perpetual inventory rule, the system automatically checking the stock amount is the real-time one. In case of making the incorrect order or sales invoice to the customers.
Reliable and Sufficient Output Summary
The accurate input and data procedure also ensure the accurate data output in MYOB. MYOB provides various kinds of financial report of the XXX Company. Rather than preparing the financial report manually, the automatically generated report based on the presetting rules can reduce the report error when there is a large sum of data. For example, the reconciliation summary report give the sufficient information checking the consistence of the report and the bank statement of XXX Company, in order to prevent the error at the very time.
MYOB contains the valued information of XXX Company. Since the company started the system, all the data are stored. Therefore, the back-up function in MYOB is of significance. Users…