Riordan Manufacturing is a company that sells plastic bottles, fans, heart values, medical stents, and custom plastic parts. Their corporate office is located in San Jose. The company's clientele includes automotive parts manufacturers, the Department of Defense, and appliance manufacturers. The paper will address the company's revenue cycle focusing on direct cost of goods sold. The paper will cover the strengths and weaknesses of the internal controls as they pertain to the revenue cycle. The paper will outline how to integrate the cycle into an enterprise wide accounting information system, identify between other types of information systems to arrive at integration, and show how the accounting information flows through Riordan Manufacturing.
Accounting CyclesRiordan Manufacturing is a Fortune 1000 company owned by Riordan with annual revenue in excess of 1 billion dollars. The research conducted for the company is located at the corporate head quarters. Riordan's major customers are automotive parts manufactures, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.
Riordan has three operating entities, California, Georgia, and Michigan, each having its own Finance and Accounting department. Each department provides input to the corporate head quarters in San Jose and as a result, Riordan has been able to maintain good customer relations due to its rigorous quality controls, innovative solutions, a responsive business attitude and reasonable pricing.
The primary purpose of the Income statement is to report a company's earnings to investors over two or more years (Income statement analysis, 2007). By no means is Riordan Manufacturing any different, the income statement that it has provided shows two years of income and expenditure. The income statement shows how effectively management is controlling expenses, the amount of taxed paid and the amount of interest income.
Although Riordan increased sales for 2005 the operating expenses (in all categories)...