Auditing essay 3000 words

Coursework- 30%

This assignment requires each student to respond to a scenario :

Rakkar Department Stores are a renowned name in women’s clothing in US, UK and Australia. In order to reduce inventory and order time, and to better anticipate market trends, Rakkar Stores has established a sole sourcing contract with Harike Industries of Egypt. Rakkar has signed a long-term purchase contract with Harike regarding the quality of clothing, prices, shipping requirements and inventory levels.

 

Harike downloads information on sales from all Rakkar Stores each evening. Harike has a responsibility to predict market demand and to increase the sales of its clothing in each Rakkar store. They have the advantage of analysing diverse trends across the UK. They have been known to rush-order the manufacturing of new clothes in specific styles and air-freight them directly to some stores- not at Rakkar’s request but because of their own market analysis.

 

In a sense, Rakkar stores does not know the exact quantities of clothing items that will be shipped to each store. Nor does Rakkar’s have a formal receiving function at each store that logs in the items received. However, they do have a receiving function if the shirts go to one of their 12 distribution centres. But if Harike labels and prices all the goods, ships directly to the stores, it saves time and effort for Rakkar.

 

Harike bills Rakkar’s electronically every week. Rakkar transfers the authorised amount electronically to Harike’s bank account on the 14th and 28th of each month.