Please write 280 original words on it
According to a recent article from Forbes, retail operations in
the United States are experiencing over $60 billion a year in
losses primarily due to employee theft. Imagine you have been hired
as a loss prevention specialist for a large retail chain and your
first assignment is to identify and address the current problems
with inventory shrinkage. Select and discuss the following internal
controls below you would implement to help prevent future employee
fraud/theft? Be sure to provide your rationale.
Tighter security controls (i.e. video surveillance, random
inventory/cash audits, computer system audits, segregation of
duties)
In retails business, the riskiest areas are cash and inventory. Cash is the area most prone to theft or fraud and inventory ranks near cash if evaluated on the same terms [imagine a large clothing retail store and you will relate to what I am trying to say].
I will pen down a real life example here. I was a part of the Internal Audit team of a large retail store. One day, I went unannounced to the store for physical verification of cash. I went at the time of store opening. Post counting, I found the figures were not tallying. There were no sales on that day yet, the physical cash should have been the same as per the cash register balance the previous day. But it was not. I (without telling anyone) wrote down the denominations of each currency note I counted during verification. The store manager came in a little late. When this discrepancy was discussed with him, he questioned my counting. There was a recount and to my surprise the cash balance was now matching. I demanded to check the video footage near the cash counter. It was evident that the manager had put in the differential amount.
What do we learn from this example?
Random and surprise inventory counts as well as cash counts go a long way in detecting any sort of discrepancies. Since these are the areas that have the highest chances of frauds, random inventory and cash audits must be done.
Also, there should be a rotation of employees. Segregation of duties is a must too. The person incharge of cash should not be incharge of reconciling the balances. The manager or any other person, must reconcile the balances every day or week.
Video surveillance can be helpful to keep an eye out. It can
also help in situations of theft other than employee theft. It can
help in shoplifting cases.
Please write 280 original words on it According to a recent article from Forbes, retail operations in the United States...
According to a recent article from Forbes, retail operations in the United States are experiencing over $60 billion a year in losses primarily due to employee theft. Imagine you have been hired as a loss prevention specialist for a large retail chain and your first assignment is to identify and address the current problems with inventory shrinkage. Select and discuss one of the following internal controls below you would implement to help prevent future employee fraud/theft? Be sure to provide...
According to a recent article from Forbes, retail operations in the United States are experiencing over $60 billion a year in losses primarily due to employee theft. Imagine you have been hired as a loss prevention specialist for a large retail chain and your first assignment is to identify and address the current problems with inventory shrinkage. Select and discuss one of the following internal controls below you would implement to help prevent future employee fraud/theft? Be sure to provide...