Audit Accounting Red Bluff Case Essay

1. The two medium-largegest concerns relating to possible fraud for the motel part of the melody atomic number 18 a) The join failing to record hotel guest diaphragms in gear up to steal the cash paid. By not record the hotel stay their cash reconciliations would be clear. b) The couple has no incentive service of process the motel f be at a profit since they are paid at salary. Since on that point is a high demand for their motel, service and quality could take a signifi burnt slip without losing too much specie. The first fake that could be set in place is through the intake process. Mr. Fernandez can easily set in place controls that would automatically create a operation either time a new strike was created.This is assuming the doors are operated with electronic keys. The whole way this key system would work is if the keypad reset once the client was checked out of the system. Meaning the key would no longer work on that room and would need to be reprogramed i.e. create a new charge in the system. Another control that Mr. Fernandez could set in place would be to give the couple incentivized requital. It could be made up of both a base salary and bon examples ground on the motels performance. Separation of duties- Might be limited because in that respect are a small number of ppl.Have the cleaning cater report directly to Mr. Fernandez to let him know how m either rooms they cleaned. entourage cleaned should meet revenue. Tip line- If you dont receive a communicate call this number. 2. The two biggest concerns relating to possible fraud for the caf part of the business are a) Cash Receipts- Again the couple has too much control every(prenominal)where transactions being recorded and the handling of money. b) Inventory- The caf inventory is a big concern because it is probably one of the more or less vulnerable assets behind cash. Mr. Fernandez can set up cameras in the caf and the motel that he can access remotely. This would be one way to deter the couple as well as employees. One of the best ways to make sure the couple and their staff is recording all meals sold is to have an touch screen order taking device.The customers can order the meals themselves or have their waitress/ waiter record their order on a hand held mobile device. This recording system would also be able to keep track of any discounts or compensated meals the couple gives out. Another control that would need to be put in place is a monthly inventory check. This would help keep track of what items are being used in similitude to what revenue is being produced. High inventory turnover with lower than public revenue would probably prompt Mr. Fernandez to check the cameras for stolen inventory. Preload the calling card with set meals/price. Everything should match revenue and inventory. The Caf should be separate from the motel.All goods should be sent through Mr. Fernandez so that he can see what the couple is buying. 3. If the system automa tically created a charge in the system, this would not only keep track of what rooms are available, scarcely it would also come on the employees to accurately check-in and out each guest to avoid discrepancies with money collected and money due from a customers stay. By paying the couple an incentive based salary they will most likely perform better for the benefit of the motel and caf. They will be actuate to hire the most qualified staff that would help create a profitable business. Having the cameras installed in the motel and caf wouldnt cause any issues with productivity.By having the customers and employees use an electronic device to record meal orders would increase efficiency because orders could be instantly sent to the kitchen to be made. Performing an inventory for the kitchens assets every month might not be too efficient but it would be effective. Depending on how large the caf is, having staff perform inventory every month might be too much of an arduous task. 4. I believe the proposed controls would help boost productivity and benefit the motel/cafs daylight to day operations. However, if Mr. Fernandez were to change the salary of the couple they might feel as if Mr. Fernandez is backing out on what he originally agreed to pay the couple. Mr. Fernandez could alleviate any animosity and tension by ensuring the couple that a good performance on their part could potentially bring in more money than their original base salary.