Contactless Cards, "The Wave of the Future"

http://kfcmenu.info/what-are-contactless-payments/

Summary:

Contactless cards will pave the way for greater profits with their higher efficiency. The cards emit a radio signal from a smart chip, which provides more secure encryption, are embedded in the card which sends out a radio signal for a wireless transaction for purchases under $25.00 with no chargeback to the merchant. The new cards have compatible accessories with present readers to accept them and eventually will replace cash because they’re faster, more convenient and cost less to receive due to a less shrinkage and labor involved. Studies done by Visa and MasterCard show that transactions using contactless payment were twice as fast as magnetic strip cards and three times faster than cash transaction. This decrease in time is crucial to merchants with a small time frame to serve customers, such as fast food restaurants, convenience stores and drive-thrus. Contactless cards are becoming more and more widespread with many new businesses adopting it and with commercials airing their Pay Pass cards nationally. 

Connection:

In relation to chapter 14, the new contactless cards will affect the consumers and merchants with their quick and cost effective capabilities. These cards are more time efficient than magnetic strip cards and cash, which makes businesses with a limited time frame to service customers able to process more transactions in the same time frame and ultimately earn greater profits. The improved security features also benefit businesses as the number of frauds will decrease and therefore they will retain more profits, because in the event of a credit fraud, the business will be held responsible and lose their revenue. The convenience these new cards bring could lure in consumers to businesses equipped with this technology if they are short on time and are in need of something that they can obtain quickly, the consumer could choose your store than a closer or cheaper store that does not have contactless technology equipped.

Reflections:

          Contactless payment will start to trend as more and more businesses and especially those that are convenience based are adopting the new technology in hopes of attracting more consumers. With more competitors offering the same technology, the cost of implementing these will decrease and become more affordable. Also with brand names such as 7-Eleven, McDonalds, KFC, and CVS equipping them with contactless card readers, as a result smaller brands will be pressured into upgrading too, which makes it even more convenient for us, the consumers. I think that this innovation will be effective in increasing the efficiency of transactions. Also the controversies concerning the radio signal emitting chip could be tapped by others and used to commit fraud are over exaggerated because to be able to receive the signal emitted, the receiver would be in close proximity to the card. I would think the card owner or clerk would notice such suspicious looking equipment right next to their checkout desks. I think that it’s only a matter of time before contactless payment becomes mainstream replace conventional magnetic strips and cash.

Detection of Inventory Fraud

http://findarticles.com/p/articles/mi_m4325/is_n12_v39/ai_n25022759/?tag=content;col1

Summary:

Based on media reports, the number of failures involving inventory fraud detection has increased over past years. A possible reason could be the current economic slump, which caused businesses' financial conditions to deteriorate. This article is to re-energize auditors and review previous cases of inventory fraud. McKensson and Robbins drug wholesale reported a prosperous financial period with sizable amounts of sales, but in reality their inventory was overstated by $10 million dollars.  Prior to 1940, auditors accepted written notifications from management instead of source documents in relation to the accounts receivable ledger and inventory amounts. During this time auditors claimed they were not qualified to measure their client's inventory. The Securities and Exchange Commission (SEC) concluded that auditors were negligent to notice the large discrepancies between the reported and actual gross amounts. The SEC later recommended that auditors refer to source documents independent to management to determine the accuracy of the accounts receivable and balance sheets. This practice of observing the inventory count seemed to have diminished the problem of inventory fraud over the past 50 years. Auditors can focus more on other concerns such as computer fraud, financial disclosure and auditors' legal liability.

Connections:

This article describes the importance of inventory as well as the accounts receivable ledger in merchandising business as well as how these figures can easily change the financial standpoint of merchandising businesses. The inventory mentioned in the article is directly connected with profits and with large reserves of inventory it usually demonstrates that the business is doing well and is able to sell off a profitable amount of merchandise within a reasonable amount of time to be able to afford to keep replenishing inventory reserves. The accounts receivable ledger is another thing that can determine whether or not the business is actually profitable. The more accounts and the value of each account within the accounts receivable ledger is usually a healthy sign of prosperous business.

Reflections:

Businesses usually engage in inventory fraud if they're trying to lure in potential investors by displaying that their business is healthy and profitable during this crucial time of recession as stated in the article. It's important for merchandising businesses to appear reliable to be able to obtain purchaser and investors to make profits and progress. Another reason is that businesses that are actually profitable want to evade taxes and embezzle a larger amount of profits. I can understand their need to appear reliable to obtain purchasers and investors, but in the end it's just a scam and I think that it's highly doubtful that a business that was doing poorly before can revive themselves with this scam. Also there are major consequences for engaging in this and the gamble not worth the risk.