Ans 1. First condition mentioned in the case is that Employees believe that commission structure is below par than Industry Average, this belief needed to be discussed and clarified with the group of employees by the supervisor which could not be done in this case. The working environment would have a negative impact as a result of this low level of interaction and pay structure. The supervisors are not maintaining the spreadsheets or a controlled data for Contract Renewal and are solely relying on the data provided by the retention agents. The monthly data provided by the retention agents are also not cross checked due to paucity of time with the supervisors. This is also an area where frauds can take place easily.
Ans 2. The symptoms than an Auditor should look for in determining whether fraud is occurring is to compare the revenue growth vis a vis growth with commission payments to the retention department. If new contracts are renewed with the same data as being provided by the retention agents than the revenue should have a direct impact. If the impact is not there or could not be established then a fraud has been committed by the retention department.
Ans 3. The two procedures according to me which will improve the control system of the retention department are as under :- a) There should be an immediate orientation meeting of the supervisor with his department employees discussing all the pressing issues related to the commission payment structure and improving the control mechanism of the department as a whole.
b) The supervisor should take renewal data from the agents on the daily basis and the compilation should be done by him personally or an exclusive person who will only do this particular job, not the retention agents. The supervisor should also analyse how the revenues are shaping up given the renewals done by his department.
ABC satellite, a satellite television company, sells satellite television service contracts to customers, usually for a...
Chapter 3 Case Study #3 ABC satellite, a satellite television company, sells satellite television service contracts to customers, usually for a 24-month period. ABC satellite is a fast-growing, high-paced company created by aggressive salesmen. The company’s success has made its owners very wealthy, many of them live a lavish lifestyle and drive luxury cars to work. The retention division of this company is responsible for contacting customers nearing the end of their contract and convincing the customer to renew their...
NEED SOLUTION TO THI SCASE STUDY ABC satellite, a satellite television company, sells satellite television service contracts to customers, usually for a 24-month period. ABC satellite is a fast-growing, high-paced company created by aggressive salesmen. The company's success has made its owners very wealthy, many of them live a lavish life style and drive luxury cars to work. The retention division of this company is responsible for contacting customers nearing the end of his/her contract and convincing the customer to...
The ABC Company has two divisions, the sales and manufacturing divisions. The president (Randy Savage) manages the sales division. Savage delegated responsibility for management of the manufacturing division to Jane Thomas. The company has a competent accounting staff and an internal audit department. Unlike Savage’s procedures, however, Thomas and her assistant: Supervise construction, Maintain the physical inventory, Receive manufacturing job bids, Approve all bid updates, Purchase materials, Contract shipping needs, Bill the customer, and Collect payments. With Savage’s approval, Thomas...
The ABC Company has two divisions, the sales and manufacturing divisions. The president (Randy Savage) manages the sales division. Savage delegated responsibility for management of the manufacturing division to Jane Thomas. The company has a competent accounting staff and an internal audit department. Unlike Savage's procedures, however, Thomas and her assistant: Supervise construction, Maintain the physical inventory Receive manufacturing job bids, Approve all bid updates, Purchase materials, Contract shipping needs, Bill the customer, and Collect payments. With Savage's approval, Thomas...
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for review questions, I would appreciate if you could assit with answering 9-5 & 9-7 and 9-1 & 9-6 for discussion board respectfully. REVIEW QUESTIONS biective 9-1) What are the five categories o misappropriate noncash tangible assets 9.2 (Learning objective Fraud Survey, how do with cash misappropriations i misappropriated? (Learning objective 9-1) What are of schemes used to misappropriate All of ABC's lumber and other building materials are stored in identified in this chapter? a central warehouse and are relased...
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50. The Green Natural Wellness Company, aka GNWC, sells select, high-end nutritional and health and beauty products to small health food stores throughout the United States. Its headquarters and warehouses are located in Clear Lake, Texas, only a couple of miles from the NASA Space Center. GNWC’s key success factor is its ability to quickly bring to market new products before other suppliers do. The company has two full-time buyers who spend all their time traveling around the world in...
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