Explain how independent performance evaluation procedures are either violated or effectively applied in each of the following situations. Identify the problem and suggest the check required (or applied) to prevent the identified problem from occurring. a. The manager who oversees the corporate fleet vehicles signed off on the purchase of 15 luxury SUVs to expand the company s fleet of cars. As soon as this was done, he instructed that the payment be made. b. At a newly opened local restaurant, waiters work six-hour shifts. There are three sixhour shifts per day, with each shift overlapping the next. The restaurant currently has two cash registers and these can be operated by any one of the waiters during a shift without them requiring any form of identification. The new manager has decided that the cash in the cash register box will be checked once every 24 hours, i.e., in the mornings before the new shift for the day begins. c. A company s financial clerk does a spot check of the account books and finds that there is a discrepancy between the balances of the checking account and the bank statement.
Explain how independent performance evaluation procedures are either violated or effectively applied in each of the following situations. Identify the problem and suggest the check required (or applied) to prevent the identified problem from occurring.
a. The manager who oversees the corporate fleet vehicles signed off on the purchase of 15 luxury SUVs to expand the company s fleet of cars. As soon as this was done, he instructed that the payment be made.
b. At a newly opened local restaurant, waiters work six-hour shifts. There are three sixhour shifts per day, with each shift overlapping the next. The restaurant currently has two cash registers and these can be operated by any one of the waiters during a shift without them requiring any form of identification. The new manager has decided that the cash in the cash register box will be checked once every 24 hours, i.e., in the mornings before the new shift for the day begins.
c. A company s financial clerk does a spot check of the account books and finds that there is a discrepancy between the balances of the checking account and the bank statement.
d. In July of the previous year, the inventory clerk suspects that the warehouse inventory level is not being reflected accurately. When the year-end inventory was reviewed at the end of February of this year, his suspicions were confirmed.
e. There was a spike in credit sales that was not picked up by the credit sales controller. When he was confronted by his line manager about it, he blamed the accounts receivable department for not identifying the issue earlier. The accounts receivable department denies that there was a spike in credit sales as their records do not indicate such a change.
f. A new employee at a company identifies a discrepancy between the total debits and total credits after payroll entries were finalized.
g. A client calls up a store to check the availability of a specific product at the store. The client is informed by the sales manager that he has checked their inventory system and the stock is available for the specific product. The customer visits the store, only to find that the product is no longer in stock. Upon querying the cashier, the client is again informed that the inventory system shows a relatively large quantity of the product stock being available. However, no one at the store is able to locate this stock.
h. Over a period of five years, one of the managers in a company realizes that the company does not seem to be performing as well as it forecasts and budgets for. However, he optimistically goes on believing that things will turn for the better.
i. In order to speed up the processing of sales transactions, one person was made responsible both for the sales journal as well as the accounts receivable master file.
j. The supervisor at a local hypermarket verifies the accuracy of the cash in the cash register box assigned to a retail clerk. Every so often an internal auditor verifies if the supervisor actually performed this check.
k. The payroll clerk realizes that the time sheets and absence records of a specific department in the organization were not in line with company policy. The supervisor of this specific department has been on sick leave for the last three months.
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