Assignment 4-2 Week 4 Discussion Questions

Assignment 4-2 Week 4 Discussion Questions - ACCT341-E1WW...

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ACCT341-E1WW January 26, 2011 Week 4 Discussion Questions Assignment 4-2 CHAPTER 9 9-1. Jones is the manager of ABC Auto Repair. Unknown to his employer, Jones also does freelance auto repair work to earn extra cash. He sometimes uses ABC’s facilities and tools for these jobs. Discuss the costs and potential costs that ABC might suffer as a result of Jones’s actions. Jones is using his employer’s equipment to actually compete with his employer. So Jones may be taking away potential ABC customers. According to Wells, when an employee is operating a side business, the employee may not be performing his work- related duties, then the employer may suffer a loss in productivity. If the low productivity continues, the employer might have to hire additional employees to compensate, diverting more capital to wages. Also, unauthorized use of equipment can mean additional wear and tear, causing equipment to break down sooner than it would have under normal business conditions. And lastly, when an employee “borrows” company property, there is no guarantee he will bring it back. 9-4. Discuss the controls that an organization should have in place to effectively prevent and detect larceny of inventory. In order to prevent larceny of non cash assets, the duties of requisitioning, purchasing, and
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Assignment 4-2 Week 4 Discussion Questions - ACCT341-E1WW...

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