Sharon Hall, the owner of Sharon’s Party Picks, has delegated management of the business to Lola Oster, a friend. Hall drops by to meet customers and check up on cash receipts, but Oster buys the merchandise and handles cash payments. Business has been very good lately, and cash receipts have kept pace with the apparent level of sales. However, for a year or so, the amount of cash on hand has been too low. When asked about this, Oster explains that suppliers are charging more for goods than in the past. During the past year, Oster has taken two expensive vacations, and Hall wonders how Oster can afford these trips on her $52,000 annual salary and commissions.

List at least three ways Oster could be defrauding Hall of cash. In each instance, also identify how Hall can determine whether Oster’s actions are ethical. Limit your answers to the store’s cash payments. The business pays all suppliers by check (no EFTs).