Case 1: Physical inventory counts varied from inventory book amounts by more than 6% at two of the stores. In both cases, physical inventory was lower.
The variations resulted due to poor documentation. In this case, the employee might have forgotten to take into account the number of damaged items, stolen, taken to the store or even returned by the customer. The issue can be addressed by purchasing a scanning system to allow the employees to monitor the movement of items, plus its condition as to whether it is damaged or not. There is the need for the employees to embrace technology to avoid cases of theft and confusions.
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Case 2: Two of the stores seem to have an unusually high amount of sales returns for cash.
The unusualness might have arisen due to the failure of the employee to return the item according to the way in which the customer paid for it. In this regards, there is the need for the employee to establish a return policy that would give the customer a chance to look at it prior to leaving the stalls. If need be, the policy can be printed at the back of the customer’s receipt. The employee would be required to understand and abide by the set regulations.
Case 3: In 9 of the stores, gross profit has dropped significantly from the same time last year.
This issue might be caused by lack of properly trained staff. Chances are the employee might have failed to take note of the dates carefully to set a clear distinction between the duties. The problem can be resolved if the employee is properly trained to effectively exhibit professionalism in their partaking.
Case 4: At 4 of the stores, bank deposit slips did not match cash receipts.
There is the need for the employee to know the activities taking place in its account routinely. The accountant, in this case, needs to countercheck between the cash receipts and the deposit slips. There will be the need to ensure that cash is deposited on a daily basis and the deposits slips are cross-examined (SBDC, 2015). A journal sheet can be created to ensure that this purpose is implemented on a routine basis.
Case 5: One of the stores had an unusual number of bounced cheques. It appeared that the same employee was responsible for approving each of the bounced cheques.
The primary mistake in this perspective is having the same employee being mandated to authorize and approve cheques. Secondly, it is apparent that the employee does not check the financial status of the company prior to issuance of cheques. Essentially, there would be the need to segregate duties within the company. There will also be the need to come up with the online banking system to help the employee monitor closely the activities of her account (SBDC, 2015) .
Case 6: In 7 of the stores, the amount of petty cash on hand did not correspond to the amount in the petty cash account.
A couple of factors might have contributed to this situation. First, there is an element of poor training on matters relating to how and when account replenishment ought to be done. Secondly, there is the issue of failure to secure the petty cash box hence creating a channel for theft. For West End Boutiques, there would be the need to have one person to be in charge of the petty cash in each of the 7 stores. Proper training is also imperative. The persons in charge of petty cash need rigorous training on how to utilize the petty cash. Issuance of receipts prior to giving out of money can be considered as a precautionary measure.
Reference
Small Business Development Corporation (SBDC). (2015). Business Skills. The government of Western Australia . Retrieved from https://www.smallbusiness.wa.gov.au/business-topics/starting-a-business/business-management-skills/
