Accounting

1. From the situation at hand, one can contend that this company does not have appropriate accounting and internal controls against the prevention and detection of fraud.  It is true that the store has an excellent surveillance system but important accounting and internal controls are lacking.  As one can notice, at the beginning of this case the company does not have any cash control since several reports on falsified checks and stolen credit cards have been reported and also via the surveillance system the cashier was caught taking money from the cash till.  Not to mention the false UPC labels that the cashier was scanning through the system listing the wrong price items.  This was another defect present in the operations of the company, which outlines the absence of inventory controls.  Further more, security on the UPC labels is also absent.  The case further illustrates that for the recruitment of new staff in the organization there are no policies and procedures to investigate on the employees history if heshe is reliable and holds no criminal records.  Appropriate accounting and internal controls will be illustrated in the proceeding paragraphs. 

2. Large stores tend to encounter greater risks of being defrauded by any of the staff or the clients. So before a company begins to operate it has to adopt the necessary internal controls for the business in order to diminish the risk of forgery.  Such internal controls have to be around the day-to-day operations of the company.

Accounting wise, first of all the company should adopt appropriate control measures on the cash and inventory.  Such controls will mitigate the risk of fraud and prevent any unnecessarily losses that may hinder the financial performance of the company.  Such controls on cash encompass daily reconciliations of cash balances with sales receipts.  Such exercise entails comparing all the issued receipts with the remaining cash balance in the cash register.  Ideally the cashier should be held responsible for any differences arising from such reconciliation.  For example if in his cash box heshe is given an amount of 200 and heshe effected cash sales worth 1,000. At the end of the day the final amount in the cash till should be of 1,200.  If it is lower, for example 1,180, the cashier should compensate for such a discrepancy.

With respect to inventory, periodic spot checks should be carried out by the accounts department, to ensure that the sold items during that particular day or month will be equivalent to the remaining items on the shelves.  This will further enhance the controls and accurate accounting records with respect to inventory.

Together with this the company must ensure that every item in the store must have attached properly the UPC labels and ensure that it will not be easily removed from the item.  The person in charge must also make periodical spot checks on such facet to ensure that nobody is removing or changing the UPC labels to enable stealing.  Job rotation among staff should also be undertaken in order to diminish the risk of fraud.

Appropriate procedures and policies should also be enacted as regards the recruitment of new staff.   The interviewers, who are responsible for the recruitment of the new staff must request a police conduct note accompanied with the resume, which highlights the history of any criminal records.  Further more, references of such employees should be requested from past employers.  This will help to employ the right persons, which will further diminish the risk of fraud.