Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 2CP
To determine
Suggest appropriate control procedures for preventing / detecting the theft of cash.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following is an excerpt from a conversation between two sales clerks, Jean Moen and Sara Cheney. Jean and Sara are
employed by Turpin Meadows Electronics, a locally owned and operated electronics retail store
Jean: Did you hear the news?
Sara: What news?
Jean: Neal and Linda were both arrested this morning.
Sara: What? Arrested? You're putting me on!
Jean: No, really! The police arrested them first thing this morning. Put them in handcuffs, read them their rights-the
whole works. It was unreal!
Sara: What did they do?
Jean: Well, apparently they were filling out merchandise refund forms for fictitious customers and then taking the cash.
Sara: I guess I never thought of that. How did they catch them?
Jean: The store manager noticed that returns were twice that of last year and seemed to be increasing. When he
confronted Neal, he became flustered and admitted to taking the cash, apparently more than $9,000 in just three
months. They're going over the last six months' transactions to…
The following is an excerpt from a conversation between two sales clerk, Tracy Rawlin and Jeff Weimer. Both Tracy and Jeff employed by Magum electronics, a locally owned operated electronics retail store .
Tracy: did you hear the news?
Jeff: what news?
Tracy: Bridget and Ken were both arrested his morning.
Jeff: what arrested? You are putting me on!
Tracy:No, really ! The police arrested then first thing this morning. Put them in handcuffs , read them their right the whole works. It was unreal!
Jeff: what did they do?
Tracy : well apparently they were filling out merchandise refund form from fictitious customers and then taking the cash .
Jeff: I guess I never thought of that .How did they catch them?
Tracy: The store manager noticed that returns were twice that of last year and seemed to be increasing. When he confronted Bridget , she became flustered and admitted to taking the cash , apparently over $ 15000 in just three months. They are going over the last six months…
Alexia Jones is a worker at a local 24-hour pharmacy. Alexia works the night shift and is the only worker. Because management is cost-conscious and business is slow at night, Alexia has been given the responsibility to do the accounting from the previous day. Alexia has two children, and her husband does not work. Alexia has strong pressure to provide well for her family.
Is the pharmacy at risk for fraud? Why or why not?
Chapter 8 Solutions
Financial Accounting
Ch. 8 - Prob. 1DQCh. 8 - Why should the employee who handles cash receipts...Ch. 8 - Prob. 3DQCh. 8 - Why should the responsibility for maintaining the...Ch. 8 - Assume that Brooke Miles, accounts payable clerk...Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1PEACh. 8 - Prob. 1PEBCh. 8 - Prob. 2PEACh. 8 - Prob. 2PEBCh. 8 - Prob. 3PEACh. 8 - Prob. 3PEBCh. 8 - Prob. 4PEACh. 8 - Prob. 4PEBCh. 8 - Financial data for Otto Company follow: a....Ch. 8 - Prob. 5PEBCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Pacific Bank provides loans to businesses in the...Ch. 8 - Prob. 5ECh. 8 - An employee of JHT Holdings, Inc., a trucking...Ch. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Abbe Co. is a small merchandising company with a...Ch. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Prob. 24ECh. 8 - Mattel, Inc., designs, manufactures, and markets...Ch. 8 - El Dorado Inc. has monthly cash expenses of...Ch. 8 - Prob. 27ECh. 8 - Amicus Therapeutics, Inc., is a biopharmaceutical...Ch. 8 - Prob. 1PACh. 8 - Cactus Restoration Company completed the following...Ch. 8 - Prob. 3PACh. 8 - Prob. 4PACh. 8 - Prob. 5PACh. 8 - Prob. 1PBCh. 8 - Cedar Springs Company completed the following...Ch. 8 - Prob. 3PBCh. 8 - Prob. 4PBCh. 8 - Prob. 5PBCh. 8 - During the preparation of the bank reconciliation...Ch. 8 - Prob. 2CPCh. 8 - Prob. 3CPCh. 8 - Prob. 4CPCh. 8 - Prob. 5CPCh. 8 - TearLab Corp. is a health care company that...
Knowledge Booster
Similar questions
- CASE: You are a fraud expert and have been asked to investigate possible wrongdoing at a local nonprofit organization. You suspect that one of the workers, Stacey, has been embezzling money. After securing enough evidence to be very confident of Stacey's guilt, you speak with the president of the organization, Jamie. Jamie assures you that Stacey could be doing nothing wrong, that she has known Stacey for years, and Stacey is a good person. Further, she indicates that because of her relationship with Stacey, even if something were going wrong, no action would be taken with respect to the potential fraud. QUESTIONS: 1)How do you respond to Jamie? How do you explain to her what is at stake? 2) What monitoring and control systems should have been in place at Jamie's organization to prevent such a behavior? Explain. 3)Would you recommend an ethics audit to this company? Why?arrow_forwardHere is a scenario where you would have to deal with a customer who is being rude and abusive. You work for as a customer service representative at a call center for a company that makes exercise equipment. A customer calls in complaining that her treadmill motor is smoking. She has called in previously and was informed that her warranty has been voided because she did not follow the maintenance instructions in the handbook for her machine. She is upset because no one ever told her about maintenance when she bought the machine. She starts calling you a crook for robbing her, and continues to call you names (including some we can’t print). Explore what steps you would take in this situation to remain calm and relaxed. How would you go about de-escalating the situation? How do you avoid correcting the customer and putting her on the defensive? If it became absolutely necessary, how would you phrase a warning to refrain from personal attacks?arrow_forwardWhich of the following MOST likely indicates a clear violation of an NFPO’s code of conduct? John Adams, a volunteer for the local pet shelter, also owns a pet store and has offered a discount on pet food to the local shelter. Cecilia Lam used inappropriate language on her Facebook page when referring to the NFPO for which she worked. Mark Adams, an employee for a legal society, used the organization’s computer to research a new job. Hanpreet Kaur, the accountant for a sports rehabilitation society, offered the society’s services to his sister free of charge without her needing to qualify.arrow_forward
- A police officer pulls you over and asks to search your vehicle because he suspects you have illegal drugs inside your car. Since he doesn't have reasonable suspicion to search your car, legally he needs your permission to do so. Given this, the ranger telis you the following: "If you give me permission to search the car, I promise I will do a quick search that would just take 5 minutes. IfI don't find anything, you can go on your way. But, if you don't give me permission, I will hold you here until I get a K9 unit to bring some dogs and sniff around your car without having to go in. It takes half an hour for the K9 unit to get here." You are sure any search of your car will turn up nothing. But, you don't trust the officer's promise of a quick search if you give him a person. You are concerned the officer could be lying and once you give him the permission, he could do a thorough search that could take at least 2 hours of your time (much longer than the time it takes to wait for the…arrow_forwardPlease read the following and identify any internal control principles that may be violated in the Jane Hardware store.(identify what could go wrong and what controls Jane Hardware should put in place to prevent it) Jerry Finch has worked for Jane Hardware for many years, Jerry has been a model employee. He has not taken a vacation in over three years, always stating that work was too important. One of Jerry's primary jobs at the store is to open mail and list the checks received. He also collects cash from customers at the store's outdoor nursery area. There are times that things are so hectic that Jerry does not bother to use the register, simply making change from cash he carries with him. When things slow down at the store Jerry often offers to help Cindy(the Accounting Clerk) post payments to the customer's accounts receivable ledger. Cindy is always happy to receive help since she is also quite busy and because Jerry is such a careful worker.arrow_forwardMadam Lorraine’s daughter Maame Efua has just completed Senior High School and due to the Covid 19 pandemic that led to the closure of universities, she has been helping with record keeping at her mother’s convenient mini Mart. Maame Efua took responsibility of recording her mother’s purchases of goods from suppliers (both on credit and cash basis) and also issues receipts to customers when they buy goods. The policy of the shop is cash sales only. Prior to Maame Efua assisting her mom, Mr. Fred, an accountant used to visit the shop two days after the end of the month to check Madam Lorraine’s purchase invoices, bank deposits, cash at hand, etc in order to prepare the financial records for the month for a small fee. He also assists with records to be sent to the tax authorities and make the necessary payments. Having now been conversant with the amount of sales per day and the month, and also recording all the purchases, Efua believes she is able to determine how much profit her mother…arrow_forward
- When Nancy's aunt left for her annual holiday vacation, she left Nancy in charge of her coffee shop. During this time, there was a riot in the city and the door of the coffee shop was damaged. Under these circumstances, Nancy can make necessary repairs if she cannot successfully contact her aunt for further instructions because she has A)apparent agency authority B)power of attorney C)inherent agency power D)express agency authorityarrow_forwardJane has written out a check to Manny for $100. Unfortunately, the check was stolen by Stringer Bell who sold it to Freddy for $90. Stringer signed Manny's name even though he is not Manny. Freddy has no idea of the wrongdoing. Freddy presents the check to the bank but Jane and the bank say, "No way". Can Freddy get the $100? How?arrow_forwardHolly Hunter had been working as a nurse in Long Tong Hospital in Hong Kong when the outbreak of SARS (Severe Acute Respiratory Syndrome) became a real threat to her in her workplace. As a safety precaution, Holly decided to return home to South Africa. She shipped a container of various fashion items (clothes, handbags, and accessories) from Hong Kong to South Africa and on her return, set up shop in the Red Shed market at the Victoria and Alfred Waterfront in Cape Town. After three months of trading, it appeared to Holly that her business was performing well. However, when she read the financial statements, there were a number of things that Holly did not understand. She decided to have lunch with you, her accountant, in order to discuss the questions and concerns that she had about her business. Below is an extract of the conversation that Holly Hunter had with you. The extract out- lines her questions and concerns: 1. "I know that profit and the statement of financial position are…arrow_forward
- Holly Hunter had been working as a nurse in Long Tong Hospital in Hong Kong when the outbreak of SARS (Severe Acute Respiratory Syndrome) became a real threat to her in her workplace. As a safety precaution, Holly decided to return home to South Africa. She shipped a container of various fashion items (clothes, handbags, and accessories) from Hong Kong to South Africa and on her return, set up shop in the Red Shed market at the Victoria and Alfred Waterfront in Cape Town. After three months of trading, it appeared to Holly that her business was performing well. However, when she read the financial statements, there were a number of things that Holly did not understand. She decided to have lunch with you, her accountant, in order to discuss the questions and concerns that she had about her business. Below is an extract of the conversation that Holly Hunter had with you. The extract out- lines her questions and concerns: 1. There are a number of customers that have ordered and paid for…arrow_forwardDanielle purchased a new car with higher payments expecting a raise from her employer. When the raise didn't occur, Danielle started pocketing a bit of cash from the drawer each week to make up for the higher car payment since her employer didn't give her the raise that she deserved. What element of the fraud triangle is most closely related to Danielle's issue? A) Perceived pressure B) Opportunity C) Rationalization D) All of these answer choices are correct.arrow_forwardThe ethical reflection assignment required you to watch three videos about Barry Minkow. Which of the following is false with respect to Barry Minkow? Multiple Choice He is currently the CFO of Lennar Homebuilders After his first release from prison he started the Fraud Discovery Institute and worked with the FBI He eventually became an evangelical minister, but went back to prison again after embezzling money He was convicted at age 22 for the ZZZZ Best Fraudarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Business Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT