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ABC Company Limited: Errors Consequences Essay

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Updated: Apr 30th, 2020


Around the world, businesses operate with the goal of making huge returns, which can sustain their daily expenditures. In fact, some firms realize their dreams, while others merely make a profit on a continuous basis. One of the common aspects that affect many companies around the world is associated with business errors. Overall, a business error is a misrepresentation of facts within a business establishment. In most cases, business errors are identified during the auditing of records (Kearns and Sabherwal 130).

However, they could cause negative impacts even long before they are identified. Thus, there is a need for management teams of businesses to focus on implementing approaches to eliminating business errors (Ramanujam and Goodman 820).

This paper discusses the consequences of three types of errors, i.e., data entry errors, data retrieval errors, and software bug, in ABC Company Limited that is located in Riyadh, Saudi Arabia. It is worth to note that ABC Company Limited is an imaginary firm that is viewed from the perspective of operating in Saudi Arabia.

Data entry errors

Last year, the management of ABC Limited that all was not well as a result of figures in financial records that were not supported by bank statements. The top management launched investigations to assess the causes of the discrepancies. After a two-month investigation, it was revealed that some personnel made some serious data entry errors, which could have long-term negative impacts on the performance outcomes of the firm. It was established that some workers did not proofread their spreadsheets after entering data.

Some were performing the tasks in a hurry due to the fact that they were trying to beat their deadlines. Thus, many financial calculations were performed using wrong figures. Sadly, the financial reports of the firm had already been reported to shareholders, who were very happy for the reason that they could receive better dividends, implying that the equity of the firm improved remarkably in the previous financial year.

Consequently, plans were underway to initiate more projects that could go a long way in realizing more profits in the future. However, two days after the shareholders’ meeting, one of the board members noted that there were inadequate funds in the bank to cater for the proposed dividends.

Practically, not even half of the dividends could be paid to investors, yet they were promised that they would be paid within ten days after the annual general meeting. The management was required to think quite fast and make critical decisions, but time was not on their side. Within a relatively short period, the news was in the media.

A significant number of shareholders learned that the firm had made serious errors in reporting its financial outcomes. Consequently, investors thought that the firm had actually made a net loss, which could be about $490 million. Thus, it was evident that shareholders could not receive any dividends. Within a few hours, the firm’s stock price decreased by about 20% due to the fact that investors were in a hurry to sell their stake in the company.

Although the top management of ABC Limited moved with speed to reassure shareholders that all could be well, it appeared that it was too late, and many investors were driven by sentiments to sell their shares. Things were worsening at very high speed for the company.

By good luck, the regulator of the stock exchange at Riyadh agreed with the management of ABC Limited to suspend trading its shares until the issue was resolved.

It is worth to note that prices of stocks are easily affected by either good or bad news of many business establishments around the world (Beason 40; Ucbasaran 180). As illustrated, the errors caused many negative impacts on the firm, which could be both long-term and short-term. However, the management sensitized its personnel to be more careful in the future to avoid such business mistakes.

Data retrieval errors

ABC Company Limited handles massive information that is stored on its computers and servers that are located far from the headquarters of the firm. For the execution of many projects, it is mandatory for workers to retrieve data that are computed to give valuable information that can be used to make inferences about the anticipated outcomes (Stoneburner, Goguen, and Feringa 830). Early this year, one of the directors of the company realized that some components of a project that was to be initiated were missing.

He contacted another director, who affirmed that he was also concerned with the authenticity of the report. The two directors convened an urgent meeting with the middle-level management to discuss the matter. During the meeting, it was noted that some middle-level managers had given the wrong instructions regarding data retrieval from the records. In addition, some personnel had retrieved some data that were not related to the project that was to be implemented.

Thus, the overall project was negatively impacted. The management noted that some records could not be retrieved as required. The managers who were not keen on implementing the project were demoted. Furthermore, workers who not keen on retrieving the right data were warned.

Software bug

There is no doubt that many business establishments across the world are using software to support their daily business operations. However, some programs could be typified by some faults or errors that make them produce unexpected results that would be misleading. However, software bugs are not made by users of the software but are made by persons who design and implement source codes (Leidner and Keyworth 370).

Early last year, the management of ABC Company Limited announced that the firm could acquire new accounting software to meet its increased financial accounting needs. The human resource management placed an advert in the local newspapers to source for a supplier of the new accounting software. Within a period of one week, the department received so many applications that it felt they were enough. Thus, it made a choice to select the bidder who quoted the lowest amount.

The winner of the tender installed the software within two weeks. However, the software could not produce accurate reports for the reason that many errors were noted in the software. In fact, it was noted that the program’s source code was faulty. The program negatively impacted the firm for a two-week period.

Within the time limit, no financial reports were being generated, and data entry tasks were postponed. There was a reduction in returns of the firm because manual transactions were associated with numerous errors. The news leaked to the media, and the company’s shareholders were not happy when they realized that the management had purchased a program that was typified by a faulty source code.


As illustrated in this paper, the three types of errors negatively impacted ABC Company Limited. In the future, the business establishment can avoid such consequences by making the right decisions and reacting fast by implementing critical decisions.

Works Cited

Beason, Larry. “Ethos and error: How business people react to errors.” College Composition and Communication 3.4 (2001): 33-64. Print.

Kearns, Grover, and Rajiv Sabherwal. “Strategic alignment between business and information technology: a knowledge-based view of behaviors, outcome, and consequences.” Journal of Management Information Systems 23.3 (2007): 129-162. Print.

Leidner, Dorothy, and Timothy Kayworth. “Review: a review of culture in information systems research: toward a theory of information technology culture conflict.” MIS quarterly 30.2 (2006): 357-399. Print.

Ramanujam, Rangaraj, and Paul Goodman. “Latent errors and adverse organizational consequences: A conceptualization.” Journal of Organizational Behavior 24.7 (2003): 815-836. Print.

Stoneburner, Gary, Alice Goguen, and Alexis Feringa. “Risk management guide for information technology systems.” Nist special publication 800.30 (2002): 800-830. Print.

Ucbasaran, Deniz, Dean Shepherd, Andy Lockett, and John Lyon.”Life After Business Failure The Process and Consequences of Business Failure for Entrepreneurs.” Journal of Management 39.1 (2013): 163-202. Print.

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