Choose one of the ERP modules listed below and identify two potential risks and needed controls and explain them.
- Financial Management
- Human Capital Management
- Manufacturing Management
- Project Management
- Supply Chain Management
- Customer Relationship Management
- Supplier Relationship Management
- Product Lifecycle Management
ERP module:
The ERP (Enterprise Resource Planning) is one the emerging system or software that helps to manage business activities of the company. There are many ERP modules, such as financial management, human capital management, manufacturing management, and so on. An individual selects financial management to illustrate two potential risks involved and needed controls.
The financial management module is the core of any ERP system. This is found to be useful in collecting financial information from various departments and produces multiple financial statements, including general ledger, trial balance, income statement, and balance sheet as well. Two potential risks of financial management are undetected errors and material mismanagement.
An undetected error is an unneeded financial transaction or transactions which cannot be traced from the ERP system. Material mismanagement is also not traceable because the module will not show how the material is used in the business operation. This can be further controlled by evaluating the ERP system, reviewing critical system parameters, verifying different key user accounts settings, and so on. Therefore, these are the two most potential risks of the financial management module and their control measures.