Janice Reid’s case shows several internal control weaknesses within Zoto’s Family Restaurant. Such as, the accounting and financial documentation are not adequate in establishing who is responsible for the cash discrepancies the restaurant has recently seen within the drawers. Also, there is a deficiency in reporting to management. The deficiency could be caused by the tone at the top. The control environment does not make reporting to management desirable. Also, training needs to be conducted with all employees, so that all employees fulfill their assigned functions with integrity. The restaurant has an incompetent design of monitoring the controls. Sarbanes-Oxley (SOX) requires companies to evaluate their internal control policies and procedures …show more content…
If James is a friend of the district manager, then the assistant manager should go above Norm Peters. It is her responsibility to report financial fraud and discrepancies. The company should advance to an improved financial documentation and reporting system. The improvement can show individual transactions and who opens the drawer and for what reasons the drawer was opened. The tone at the top would need to change significantly to make a substantial difference to the company, especially this particular restaurant. The close friendship between the district manager and the general manager is not a preferred setting for reporting either of the manager’s misbehaviors or wrong doings. The general manager should lose his job for his unethical behavior and not doing his job as manager. He does not have the restaurants best interest at heart. The assistant manager should also be fired because she does not protect the restaurants finances at any cost. Janice understands ethical behavior, but all employees should be trained on their assigned functions and how to handle situations, such as in this case. Management should be monitoring the controls annually. One way to monitor the controls is to talk to all employees and get their feedback on management and how they feel the company is