Week 1, DQ1 Consider how an organization must manage cash, receivables, and inventory. Which of the three variables is the most important to manage? Is one more susceptible to fraud and errors than the others? Explain your answer. How would a misstatement in each affect the organization? Cash, A/R, and inventory are all important to a business and must be effectively managed, if the company is to continue its operations with a profit. As for which is more important, it depends on what the organization does. For example, in the organization which I work for, we manufacture health and beauty products. Of the three, A/R and inventory are the most important. As the organization’s Director of Credit, A/R is the most important to me and I keep a tight grip on our receivables…so tight that our total percentage of delinquent accounts 60 days and over is less than 1%. Inventory is also an important mix, for we must manage adequate levels of inventory at all times, if we are to effectively service our customers. Using the organization which I work for as an example, since our receivables are paid
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