ACC 340 Week 2 Accounting Cycle Description Team B
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Accounting Cycle Description Paper
In today’s business society, the role of accounting is a vital part of just about every major retail business. This is definitely true of Riordan Manufacturing, Inc.; in fact some of companies’ success is a direct result of its conversion accounting cycle. Many people overlook the importance of the role of accounting in business. According to Loflin, the five cycles a business may use are the revenue cycle, the expenditure cycle, the financing cycle, the fixed asset cycle, and the conversion cycle (2008). The fact is a companies’ ability to perform all of the accounting cycles efficiently and effectively can make or break a business.
Strengths and Weaknesses of the Internal Controls
Since Riordan Manufacturing has several different plant sites, each site has its own accounting system. This asset can be considered a strength; but only for that particular site. The ability of each plant site to retrieve critical financial data is easily done at that site, but only for the one plant site. Integrating the relevant financial information from each site into one financial statement for Riordan Manufacturing is difficult to achieve. The programs used by
each plant site is not easily integrated into one system nor or the accounting systems compatible with each other. Internal controls are specific for each site but not company-wide. According to Bagranoff, Simkin, and Norman (2008), “internal controls are the policies, plans, and procedures implemented by a firm to protect its assets”. Riordan Manufacturing has yet to achieve the goal of having all of its plant sites using the same accounting...