Chapter 7 - CHAPTER SEVEN Recordkeeping and Control 7 7.1...

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CHAPTER SEVEN 7 Chapter Introduction: Recordkeeping and Control Recordkeeping and Control 7.1 NEL Episode 42 in the Adventures of …drum roll. .. Forensic Man! The caper. It was a dark night in the city. In an alley behind the jewellery store, the famous cat burglar strug- gled into her tight Mauve Menace costume with “If You’ve Got It, Flaunt It” stencilled on the back. “Oof,” she muttered, “gotta lay off the ice cream bars.” But then it was an easy climb up to the store’s roof and in through a heating duct. The insider. It was also easy to find the safe. “Canoodling with that doofus Meek Mike from the store’s office was no fun, but at least I got the store layout and part of the safe combination out of the jerk for my trouble.” She evaded the security system with her usual agility, then after only five hours of fiddling with the safe’s lock, got it open. The loot. The safe was full of just what she was looking for: very expensive custom-made jewellery. She scooped it out into her special loot bag and closed the safe. The getaway. She returned to the roof through the heat- ing duct, the way she had come, and jumped down to the alley, spraining only one ankle. She tossed the loot to her sidekick, Freddie the Fence (who had fallen asleep waiting), struggled back out of her costume, and limped nonchalantly away. Another perfect crime!
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424 P ART T HREE D OING F INANCIAL A CCOUNTING NEL The superhero. Next day, at her day job, her way to the water cooler was suddenly blocked by the massive frame of Forensic Man. (Forensic Man liked to block people’s way because if he had to chase anyone, he was sure he’d get a hernia or have a heart attack, or muss his hair.) “We’ve got you now, Mauve,” he said. “You got nothing on me, Forensic Man,” she laughed, knowing that she had left nothing behind at the store and that Freddie the Fence would be careful when selling the jewellery. The crooks are foiled. “You picked the wrong store, Mauve,” said Forensic Man. “This store has an internal control system that can identify every item you took and can specify the value of all your loot. We can trace everything back to Freddie the Fence, and we know he couldn’t get into that store through the roof in a thousand years. And colluding with Meek Mike didn’t help you much—he had access to the jewellery, but not to the inventory records, so he couldn’t cover up the theft. We caught him in the store trying to trash the computer, but the internal control system did an automatic back-up of the records every evening, so all he did was draw attention to his guilt. And to top it off, the store has a new tiny video camera that caught you climbing back up to the heating duct— you really should lay off the ice cream bars!” This silly little story introduces internal control , an important feature of accounting that is in the background, not as obvious as the financial statements, but absolutely essential to good business management. This chapter illustrates that producing
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This note was uploaded on 10/22/2009 for the course ACCOUNTING 30516 taught by Professor Whoever during the Spring '09 term at American Academy of Art.

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Chapter 7 - CHAPTER SEVEN Recordkeeping and Control 7 7.1...

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