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Howard Street Jewelers Inc Essay

Essay by   •  May 8, 2011  •  Essay  •  363 Words (2 Pages)  •  2,508 Views

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Howard Street Jewelers, Inc

Julius and her husband had been noticing their business profits were decreasing and could not determine a reason as to why this was happening. Their business Howard Street Jewelers had been depending on an old employee who had been employed with them for 20 years to handle all deposits. Eventually Julius began to suspect her employee was stealing store profits however; her husband and son ignored her appeals and looked elsewhere for the problem, due to their well established relationship with the employee. After talking to their accountant about the missing funds; he revealed that he had noticed some shortages in the cash receipts. The accountant also suggested that they should monitor the employee closely to pinpoint the issue.

Betty, the company's trusted employee had been registering the sales inproperly in the sales record thus allowing her to steal money without alerting anyone. Julius and her husband were careless about what was happening inside the store and only cared about the final sales numbers; that gave the Betty open opportunity to hide her theft.

Julius and her husband seem to have some major problems with running the business. Their trusting nature was the main reason for the stealing of profits. We can see an obvious example of there gullible nature by noticing that they have had a single employee working for them for the past 20 years and the same accountant for 40 years. This kind of trusting relationship has its pros and cons. On one side their employee knew all their business habits, thus allowing her to steal store profits, however, on the other hand their accountant helped them to recover loss because he knew about their business practices and was honest.

Another thing that could have prevented this from happening would have been regular monthly inventory audits. With regular inventory audits they would have been able to notice that the sales receipts were not adding up and that someone had been stealing. Howard Street Jewelers should adopt a random inventory schedule, and from time to time do internal audits. Even though embezzlement are often discovered by luck we should take precautions that help to promote our luck.

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