Summary:
This article talks about how a retail business owner named Eric was having a large sales event for him deciding to relocate his business. Large sales events in retailing usually are very hectic therefore causing a problem to keep track of everything. It was said that “There was lots of cash coming in, and so many cash transactions that we couldn't run them all through the computer system." Having that occur resulted in having the bookkeeper count the cash daily, reconciling sales, and going to the bank to deposit the money himself. Eric suddenly noticed that certain transactions did not match up to the statements he continued to keep an eye on the transactions and realized there were other glitches that were found. An outside CPA was asked to come in to proceed in an audit which allowed Eric to discover that his bookkeeper had stolen an amount of $60.000 within 6 months!
Connection:
The connection I was able to make between this article and chapter 3 was that they both talk business transactions. Chapter 3 demonstrated how transactions are recorded, deciding weather each item affected is to be increased or decreased, and the proper way of doing so. It was stated in the textbook that accounting must be accurate, for accounting to be accurate there shouldn’t be any problems with your recorded transactions. This article shows that business transactions are important and that if you don’t keep a close eye on what is going on in your business it could easily be taken advantage of.
Personal Reflection:
I am not surprised that businesses have bookkeepers that try to pocket some money for themselves because sometimes when people are put with certain responsibility that is somehow related to money it always seems like a bad idea. In my opinion I think it is because people are always trying to be better than others when you see that your salary is not that "good" compared to others it’s not because it’s unfair its simply just because maybe they are better then you at doing their job. Also certain people if they are put at a place where they have easy access to statements have such it would just act as a boost for them to commit a crime. Everyone has a different way of looking at things and you never really know who you hire. When dealing with money anything can happen.
http://biznik.com/articles/bookkeeping-fraud-true-story-let-his-pain-be-your-gain
Subscribe to:
Post Comments (Atom)
I totally agree with your reflection. Throughout the history, people have broken their promises because of their greed for money. A bookkeeper is hired to journalize daily transaction. Instead, he decided to "rob" the money that did not belong to him. Honesty is once again proven to be an important element in accounting system. With these false journal entries, the owner, Eric won't have a clear picture of his business and may result in an under-valuation of his business' performances and ultimately leads to bankruptcy or transfer of ownership. Having a reliable and honest accountants are essential to success in all businesses.
ReplyDelete