Howard Street Jewelers, Inc.
1 . Recognize the internal control concepts which the Levis overlooked or ignored. In the Howard Street Jewelers case, I strongly assume that Levis didn't perform any kind of internal control. According to the internal control principle, internal settings to operate to achieve company objective of effectiveness and efficiency of operations, stability of financial reporting, and complying with suitable laws and regulations. In cases like this, Levis will need to manage better on who may have the right to carry out what, and perform a individual of deities for all ventures. However , Levis failed to do this. She enables the cashier Betty to work on every thing. According to the case, " Besides working like a part-time product sales clerk, Betty handled all the cash that came into the organization and maintained the cash receipts and product sales records. вЂќ Basically, this is certainly telling all of us that Betty can do whatever the girl want while using cash that she get from producing the sales.
In this case, Betty could leave out some of the methods or ventures. For example , once she built sales, she could rule out the recording treatment, and keep all the money through the sales in her individual pocket, and Levis did not have the approach to tracking deals, and not able to find out what, when, in which the errors are. Moreover, their particular system is nonetheless manually. If they try to find some thing, they have to seem all over the place. Yet this is not great for internal control, because Levis do not have the best or solution to know what Betty has done, and Betty is a only person knows what happen to the amount. If the system has automated tracking record, or cash receipts, consideration receivable and billing, after that Levis can look at the computer system to figure out the proceedings. Overall, if perhaps Levis acquired performed and apply internal control idea, she would understand the problem long ago.
2 . When Mrs. Levi informed the CERTIFIED PUBLIC ACCOUNTANT of her suspicions relating to Betty, what responsibilities, if perhaps any, do the...