Essay about Case 5.4 St. James Clothiers

944 Words Jun 4th, 2012 4 Pages
Memorandum

To: Betty Watergate CC: Sally St. James From: Kristen Kirby Date: 6/5/2012 Re: St. James Engagement

Confidential I HAVE REVIEWED THE NARRATIVES PREPARED BY JOE MCSWEENEY FOR THE NEW IT-BASED SALES APPLICATION PACKAGE FOR ST. JAMES CLOTHIERS. THE FOLLOWING ARE SOME CONCERNS, VALUES, AND RECOMMENDATIONS PER YOUR QUESTIONS.

Attached are a table of risks for the manual system and how the new IT system mitigates the manual system risks. The two biggest risks from my lists I felt were inventory miscalculations and fraud/theft from the cashier’s drawer. The inventory miscalculations are at a high risk because with the manual system they are only being counted once a
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I do believe the new system will be valuable to the company but I would recommend the following conversion processes. I would not completely remove all manual registers until the new system is in full working order to make sure it doesn’t hurt business. For example, have one manual register and then the new registers so you have a backup in case of computer glitches. I would also highly recommend periodically checking the inventory count weekly or every two weeks and making sure the system is accurately calculating inventory numbers. I look forward to hearing your comments on this information and believe these items will help to minimize the impact on the business during transition.

Worksheet for Answering Questions 1 and 2 Student Name: Kristen Kirby__________________

|Risks of Manual System |How Risks Impact Financial Statements |New IT System Features that Mitigate Manual Systems Risks |
|Fraud and Theft from cashier/salesclerk not ringing up |Sales amount will be understated |Limits the amount of access cashiers/sales clerks have to cash draw |
|all sales or stealing money from the drawer | | |
|Inventory miscalculations due to only being counted once

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