counts varied from inventory book amounts by more than 6% at two of the stores.
In both cases, physical inventory was lower.
A concern is Improper documentation occurs when
the responsible employees fail to record items that were shipped to the store
damaged, items that were returned by the customer damaged, theft, and items
that were miscounted and or have not been placed on the floor to be sold
What is needed to be done is invest in a system
that allows the employees to scan each item received before placing it on the
floor. This system should give the employee the options to state whether the
item received was damaged during shipment.
Two of the stores
seem to have an unusually high amount of sales returns for cash.
This could have happened from the employee not
returning the item in the manner that the customer paid. A return policy needs
to be established by management and each employee needs to sign off on the
policy recognizing that they understand.
A return policy need to be placed that indicates
that cash will be returned if the receipt is accompany the item verifying the
item was paid for by cash, In addition there needs to be a timeframe in which
the item can be returned.
In 9 of the stores,
gross profit has dropped significantly from the same period last year.
Joni has 20 stores with 2 internal auditors who
monitor internal controls. This is one concern that big. A concern is that Joni
does not have enough employees who are trained properly so that she can
separate duties. This could result in her employee’s not processing date
Joni needs to be done is make sure her employees are properly trained. Joni may want to take a hard look at her
internal control structure and ensure her employees understand how to process
the data correctly. Training employees to understand how to process data, each
employee involved with documented and recording entries should know how to
operate the accounting system.
At 4 of the stores, bank deposit slips did not match cash receipts.
A concern could have been due to cash receipts
not being deposited intact each day. This can cause errors to be made between
incoming and outgoing cash transactions
When it comes to deposit slips and cash
receipts, not matching could mean one of two things. One being a miscount of
the money. Or that someone is stealing the money during the transport to the
bank. The biggest could be that there is an internal theft so that when the
person responsible for taking the money to the bank they could be stealing and
keeping money for themselves
One of the stores had
an unusual number of bounced checks. It appeared that the same employee was
responsible for approving each of the bounced checks.
One concern is employees involved in approving
purchases should not have contact to creating check runs, signing checks and
performing bank reconciliations. Another concern is not verifying that enough
cash was in the bank account to cover the check disbursements to vendors.
If the same employee is approving the checks
from the same person knowing that the checks are no good, then the employee is
in on the scam or theft. That employee should be responsible for the funds lost
or getting merchandise back to the store.
In 7 of the stores,
the amount of petty cash on hand did not correspond to the amount in the petty
There could be a few reasons why this would take
place things like improper training as to how and when to replenish the
account, having more than one person given access to petty cash box, and not
securing the box giving rise to theft. If the petty cash fund does not obtain receipts
for all disbursements of cash, there is no way of knowing what cash outlays
were during the month. Not securing the petty cash allows any employee to steal
funds without the custodian knowing
Proper training as to the receipts that should
be taken in order for cash to be given. There should be they receipts log for employees to fill out and sign which shows
date, name, amount, and purpose of payment. The box should be locked at all
times without exception. Also to ensure there is no theft cameras should be
placed in the stores.