Article Critique 1

Article Critique 1

Article Critique (Module 2): Improving Inventory Internal Controls
Dwayne Wade
Liberty University
Article Critique (Module 2): Improving Inventory Internal Controls
Over the past several decades, the significant advancement in technology has provided businesses with the opportunity to strengthen internal controls and enhance financial and operational decision making abilities. As discussed in the article Improving Internal Controls Over Inventory with Radio Frequency Identification Technology, written by Leavins and Ramaswamy (2013), companies that deal heavily in tangible assets, such as inventory, can benefit from technological developments in the area of radio frequency identification (RFID) tracking. This paper summarizes the concepts presented by Leavins and Ramaswamy and offers thoughts on the strengths and weaknesses of the concepts discussed.
Literature Review
The article by Leavins and Ramaswamy (2013) discusses how one of the most rapidly growing technologies in inventory management is the use of RFID tags. The primary focus is on the numerous advantages that the technology provides to companies, particularly in regards to a company’s reliability of financial reporting, effectiveness and efficiency of operations, and compliance with laws and regulations. These three areas that benefit from RFID technology are also the core objectives identified by the COSO (Committee of Sponsoring Organizations) internal control framework model (COSO, 2013).
Reliability of Financial Reporting
The preparation of financial information that is accurate and reliable is one of the key responsibilities of management. For this reason, it is also one of the objectives of a sound internal control system under the COSO framework. Leavins and Ramaswamy (2013) indicate that the use of RFID technology allows a company to track inventory on a specific identification basis, greatly improving the accuracy of the information reported by a perpetual inventory system. Inventory...

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