January 21, Question 1 Physical controls: The Levis family should have taken the initiative of enacting periodic counting and comparison on the amounts that were on cash, layaways, inventory records and sales.
Internal control concepts that the Levis overlooked or ignored: Through the information in the case, we know that Betty had access to all cash receipts and was in charge of recording all layaway sales, and daily sales. She was in a position to perpetrate and conceal her embezzlement.
She should not have been responsible for all those duties.
The management should have taken an active role in making sure they had established segregation of duties instead of trusting employees blindly. The Levis should have done periodic counting and comparison with the amounts shown on cash, sales, layaways, and inventory records.
Betty should get authorization on transactions such as layaways so management is aware of the current and in-process transactions. The documentation of records should be accessible to management and key employees who deal directly with customers. Alvin had no idea where the layaway sales tickets were and was unable to help the customer.
This could negatively affect the sales of the store. The store should have security cameras, locks, and physical barriers to protect property.
For instance, by having security cameras, management would have caught Betty stealing from the store and would have known about a mistrusted employee before losing a lot of money. The CPA mainly offered tax services for the Levis, he did not have any responsibility to pursue the suspicions regarding Betty because he was not auditing Howard Street Jewelers.
However, since he did notice occasional shortages in the cash receipt records that seemed larger than normal for a small retail business; he should have mentioned it to the management. The CPA must display due diligence. If in addition to providing tax services to the Levis the CPA audited, reviewed, and compiled the annual financial statements for Howard Street Jewelers, then the auditor would be responsible for pursuing the matter.
Since the CPA had noticed occasional shortages in the cash receipts records that were larger than normal for a small business he would have had to gather evidence to make sure that a fraud was occurring. Segregate the authorization of transactions, recording of transactions, and custody of the related assets.
Even though this is a small jewelry store, you still need to separate duties because it is easier for individuals to hide any fraudulent activities.Howard Street Jewelers Inc | A Case Study Page 2 3. As a CPA, I do believe that it is not proper to present any of your opinion Documents Similar To Howard Street Jewelers ashio-midori.com Study.
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ESSAYS, term and research papers available for UNLIMITED access. Case Howard Street Jewelers, Inc Notes 1. Betty was a longtime employee in Howard Street Jewelers and she was trusted by her employer, Lore Levi and Julius Levi.
2. Betty’s position was that took cash from the business and protected money from theft by altering the business’s accounting records. However, the theft scheme was discovered, Lore Levi suspected that Betty was the theft. Case 3 2 Howard Street Jewelers Inc documents and records In the case, Alvin could not find the sales tickets for the layaways and respond to customer’s request in time, which will have negative impact on the sales of the business.
Case Howard Street Jewelers, Inc. Admin; ; January 21, The responsibilities that the CPA would have had in this case were dependent on the role he was undertaking in the business. If he was only offering tax services, he did not have a responsibility to pursue the matter.
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Case 3 2 Howard Street Jewelers Inc documents and records In the case, Alvin could not find the sales tickets for the layaways and respond to customer’s request in time, which will have negative impact on the sales of the business. CASE HOWARD STREET JEWELERS, INC Essays: Over , CASE HOWARD STREET JEWELERS, INC Essays, CASE HOWARD STREET JEWELERS, INC Term Papers, CASE HOWARD STREET JEWELERS, INC Research Paper, Book Reports. ESSAYS, term and research papers available for UNLIMITED access. Howard Street Jewelers ashio-midori.com Study. Uploaded by Patricia Joie Clamonte. Related Interests. Accounting And Audit; Business; Business (General) Howard Street Jewelers Inc | A Case Study Page 2 3. As a CPA, I do believe that it 5/5(2).
HI . Howard Street Jewelers, Inc. A. Synopsis Howard Street Jewelers Inc. is a small retail business owned by Mr.
& Mrs. Julius Levi for more than 40 ashio-midori.comtedly, the company had its ups and downs.
It survived its previous sales slack by cutting costs.