Required Information

CT $6-6$: $($Static$)$ I need just a little extra money

$[$The following informatlon applles to the questions displayed below.$]$

John Riley, a certified public accountant, has worked for the past elght years as a payroll clerk for Southeast Industries, a

small furniture manufacturing firm in the northeast. John recently experienced unfortunate circumstances. His teenage son

required minor surgery and the medical bills not covered by John's insurance have financlally strained John's family.

John works hard and is a model employee. Although he recelved regular performance ralses during his first few years

with Southeast, John's wages have not Increased In three years. John asked his supervisor, Bill Jameson, for a ralse. Bill

agreed that John deserved a ralse, but told him he could not currently approve one because of sluggish sales.

A disappointed John returned to his dutles while the financlal pressures in his iffe continued. Two weeks later, Larry Tyler,

an assembly worker at Southeast, quit over a dispute with management. John concelved an Idea. John's dutles included

not only processing employee terminations but also approving time cards before paychecks were issued and then

distributing the paychecks to firm personnel. John decided to delay processing Larry's termination, to forge timecards for

Larry for the next few weeks, and to cash the checks himself. Because he distributed paychecks, no one would find out,

and John reasoned that he was really entitled to the extra money anyway. In fact, no one did discover his maneuver and

John stopped the practice after three weeks.

CT $6-6$: $($Static$)$ Part A

Required

Does John's scheme affect Southeast's balance sheet?

Does John's scheme affect Southeast's balance sheet?