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QUESTIONS #3
What should Vince Patton do in respect of Carter Mario, George Pavlov, and Joe Roberts? Should each individual be handled the same way?
PARTNERS IN CRIME
Joe Robert. Bachelor in Management LSU (36) No:3 in company. VP Administration Offence. Had removed a neon sign from inventory. Handed them to Mr.Moon so as he would not be a whistle blower for the 100 cases that he had been induced to buy. Carlos Mario.MBA West Coast University (39) Driver. Offence. Had given $100 to Mr.Moon.Induced $30 to buy Rising Sun.Recovered $30 by submitting false luncheon receipt in his monthly expense report. Once caught leaving warehouse with products, not signed out. George Pavlov(33) GM Sales Offence. Contributed $70 to Mr.Moon.Recovered $70 by submitting fake lunch receipts and broken bottle claim.
What should Vince Patton do in respect of Carter Mario, George Pavlov, and Joe Roberts? Should each individual be handled the same way?
Vince is more worried of the repercussions of being reprimanded by ABC within closed door rather than to deal with the three guys. They now become secondary issue. Vince should handle these three guys the same way, as they are all in a collusion. If Vince Patton could have his own way, the three would definitely be fired. But he had second thoughts about it. What if Vince is to fire Mario? Again Vince is afraid that Mario might jeopardise WDI by going right to ABC and tell lies and Vince is convinced that the way ABC regulatory works, WDI would be close down for 45 days. The company cannot afford to pay its employees salaries for the shutdown perioded, 60 in numbers (Exhibit 1) and breadwinner to 128 dependants and looking at the scenario, even Mario have a chance to escape scott-free with ABC.
What should Vince Patton do in respect of Carter Mario, George Pavlov, and Joe Roberts? Should each individual be handled the same way?
Whats right for WDI? It is a personal decision that Vince have to make based on the facts of the case, the side effect and taking into account future provisions as to an improved Internal Control. After all It is the responsibility of WDI to develop and implement a sound system of internal controls. What Vince should do is to reprimand these guys. Suspend them for a while, or put them on leave. paid or unpaid if he must. But Vince should give them a second chance since the implimentation of Internal Control was not really intact, an open arms for fraudsters.Vince and Elizabeth will be seeking advice to tighten up the organisations internal control. All employees are to observe Exhibit 5 strictly. No two ways about it this time.
INTERNAL CONTROLS
Introduction Internal Controls are to be an integral part of any organizations financial andnbusiness policies and procedures. Some of the Objectives of internal controls are:
Protecting resources against waste, fraud, and inefficiency;
Ensuring accuracy and reliability in accounting and operating data; Securing compliance with organization policies; Ensuring compliance with laws and regulations; Evaluating the level of performance in all organizational units of the organization; Internal controls are simply good business practices.
Responsibility
It is the responsibility of WDI to develop and implement a system of internal controls. However, everyone within the WDI has some role in internal controls. The roles vary depending upon the level of responsibility and the nature of involvement by the individual. Vince Patton and senior executives should establish the presence of integrity, ethics, competence and a positive control environment. The department heads and managers of WDI have responsibility for internal controls within their units. Each individual within a unit has to be aware of the proper internal control procedures and need to comply within their specific job.
Documentation
Transactions should be clearly and thoroughly documented and available for review. Why? Documents provide a record of each event or activity.
Appropriate documentation helps to ensure assets are properly controlled. Documents provide evidence of what really happened. Appropriate documentation ensures the accuracy and completeness of transactions.
Whether department is centralized or decentralized. Complexity of employee schedules. Level of managements monitoring and oversight.
Reference
INTERNAL CONTROLS 101: A Primer Dept of Finance & Management. Vermont INTERNAL CONTROLS