(The Retail Business)

The age old problem of retail stores not been able to account for mising inventory has exponential got worst over the years. It would appears inventory items sitting in the store has grown legs and are walking through the doors of business establishments. It has become an entrepreneur's worst nighmare, as their businesses are plague with shop lifting from customers, potential customers and professional shop litters. On the other some store owners are also faced with their own emplovees stealing store inventorv.

Harnoor is the owner of B's Street Wear a high end store located in the Toronto Eaton Center and Vaughan Mills Mall. He has decided to take matters in his own hands and try a new approach to

counteracting the level of theft his stores are experiencing. He has tried using security cameras, RFID security tags, anit-thief antenna, scanners, barcode and labels, however inventory and cash still goes missing. Once every now and then, he would visit his stores without prewarning the store managers he is coming to inspect the store to see if employees are following protocol.

He has decided to use a new technique "Under Cover Boss". There was a opening at the Vaughan Mills store. he applied did an interview over the phone and successful landing the iob. He has been working at the store for the bast 4 months. Harnoor is a carismatic verson and a team builder. because of this, he gets on well with the store manager as well as the other employees. No one realizes he is the owner of the business as his disguise is professionally done. He drives to work in a old VW stationwagon and alwavs ensures he turns up for work ten or fifteen minute before time.

One night the store manager asked Harnoor to work over time until closing because an employee called in sick. Alter cleaning up and in the interest of time he decided to take the initiative to through

out the 4 large garbage bags leaned against the exit door at the back of the store which lead to the dumpsters. While tossing the garbage bags into the dumpster one of the bags ripped and several inventory 1lems lell out, some with the security lags removed and others with the lags stil in place. He was shocked and quitely went back into the store without bringing it to the attention of the manager.

On another occasion while on lunch break, an employee asked him if he knows how to operate the cash register, he told the emplyoee no because ne has not received training on the cans register as yel.

The employee began to share with him that sometimes when he is working the cash register. he collects the cash trom customers. bockets the money and avoids recording the transaction in the point of sales system. The employee said *I just tell the customer the cash register is acting up and I am unable to print a receipt for them. Most time the customer is Ok with that explanation and rust take their purchase and go. I onlv do this with cash transaction. They would tind out if I did it for credit or debit card transactions. Harnoor head was exploding with what he had just heard, his response to the employee was "Ok you need to teach me the ropes". They both had a good laugh, finished their lunch and went back to work. The following day Harnoor arranged a meeting with you to discuss all that he has discovered over a period of 6 months. Your accounting firm Randhawa & Associates has provided B's Street Wear with accounting services for the past 8 years.

(It is important to point out that accounting firms not only prepare financial statements and audits for their clients they also provide other services.)

3. Base on your accounting knowledge, the facts of the case and the information you have researched state 5 polices and procedures you would recommend Harnoor institute for internal cash control. a. In detail clearly state and explain each policy and or procedure you would administer. b. Justify why you would institute each policy and or procedure. Resource CPA Ontario https://www.cpaontario.ca/ ICAO website https://www.icao.int/secretariat/SecretaryGeneral/Pages/ethics-office.aspx ICAO Standard of Conduct https://www.icao.int/secretariat/Documents/ICAO_Standards of Conduct.pdf IESBA website https://www.ethicsboard.org/ 2020 IESBA Handbook https://www.ifac.org/system/files/publications/files/IESBA-English-2020-IESBA- Handbook Web-LOCKED.pdf