Issue:$$Robert Eberle owns and manages Robert$$s Restaurant, a $24-$hour restaurant near the city$$s medical complex. Robert employs $9$ full$-$time employees and $16$ part$-$time employees. He pays all of the full$-$time employees by check, the amounts of which are determined by Robert$$s public accountant, Anne Farr. Robert pays all of his part$-$time employees in currency. He computes their wages and withdraws the cash directly from his cash register.

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Anne has repeatedly urged Robert to pay all employees by check. But as Robert has told his competitor and friend, Danny Gall, who owns the Greasy Diner, $$My part$-$time employees prefer the currency over a check. Also, I don$$t withhold or pay any taxes or worker$$s compensation insurance on those cash wages because they go totally unrecorded and unnoticed.$$

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Questions to be Answered:$$

Who are the stakeholders in this situation?

What are the legal and ethical considerations regarding Robert$$s handling of his payroll?

Anne Farr is aware of Robert$$s payment of the part$-$time payroll in currency. What are her ethical responsibilities in this case?

What internal control principle is violated in this payroll process?