Stan Stuart from Stuart and Steigler LLP has been assigned to audit the local college bookstore. One of the first things he does to plan the evaluation of the company’s internal control is to tour the bookstore.
The store has three main areas with items available for sale: one for clothing and one for office supplies and computer accessories on the first floor, and one on the second floor for textbooks and reference books. Customers can enter the book-store through three doors, two on the first floor and one on the second floor. Stu-dents can pay for their purchases on either floor. The first floor has two places to pay for purchases, one in the middle of the clothing area and the other in the office supply area. The third place to pay for purchases is on the second floor in the book section. All cash registers are conveniently located in the middle of the sales area.
After completing the tour, Stan asked Jean Harris, the bookstore manager, several questions. Explain why he asks each.
a. What is the dollar amount of inventory lost to theft each year? How does the book-store attempt to control this loss? Are the items stolen books, supplies, or clothing?
b. How do you stop customers from leaving the store without paying?
c. Do you use sensor codes on the inventory items that beep if someone leaves the store without paying?
d. How do you prevent the salesclerks from stealing cash?
e. How do you prevent the salesclerks from recording only a portion of a purchase for their friends?
f. Stan made a purchase in the bookstore the week before the tour and paid for it at the cash register in the back of the first floor. He waited for the receipt, but the salesclerk had thrown it in the trash. When he asked for the receipt (because he planned to exit at the front door and wanted proof that he had paid), the salesclerk refused to give it to him, indicating that he wouldn’t need it. This practice disturbed Stan, and he wondered if it was common practice for the clerks to refuse to provide purchase receipts to customers.

  • CreatedJanuary 22, 2015
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