Wright Salon (WS) is a beauty salon owned by Marc. WS rents chairs to eight hair stylists.
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Question:
• Sales — Each stylist manages their own bookings on the company computer at the front desk, which is at the front of the store. They also process and collect payment for each service, as there is no receptionist, and complete their bank deposits for Marc at the end of their shifts. Bi-weekly, Marc pays the stylists their earnings less the 20% owed to him.
• Purchases — Purchases for styling products (inventory) are done by each stylist without approval and invoices are given to Marc for payment. All staff can receive inventory deliveries and no inventory logs are kept.
• Inventory — Inventory is kept in a cabinet by the front desk without any locks.
Required: Draft points for inclusion in a letter to Marc explaining the implications of each weakness and a recommendation for controls that should be put in place to address each weakness. •Use the weakness-implication-recommendation (WIR) approach in developing your response.
Related Book For
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
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