Rosemary Worth was talking about the consequences of a theft that had recently occurred at the business she owned, Private Fitness, LLC. Private Fitness is a small health club located in Rancho Palos Verdes, California, an upscale community located in the Los Angeles Area. As manager of the business, Rosemary hired Kate Hoffman, one of the instructors and a long-time friend. Kate’s primary tasks included marketing, facility upkeep, scheduling of appointments, and record keeping.
What should be the procedures or controls that Rosemary could use to protect her business’s assets?
There is an existing employee fraud in the company done by Kate, who is a long-time friend and at the same time, valuable instructor and marketer.
Since this is a serious offense made by Kate, a better control is needed to avoid incidents like these. Another thing is the company is not yet stable when it comes to policies/regulations.
Proper segregation or delegation of duties must be done. Only one person is designed to do the recording of revenues and receiving of cash which is Kate. That’s the reason why Kate can have the opportunity to conceal fraud.
Specifically, the objectives of the study are the following:
We, the consultants, recommend the second course of action. Rosemary must retain Kate as her manager. To be able to prevent the employee fraud from happening again, Rosemary must implement a new system for protecting the organization’s assets. The best armour in money stealing or any other fraud any employee can commit is effective internal control. Since the second course of action focuses on implementing better internal control, therefore it can be the appropriate one.
Case Analysis on Private Fitness LLC. (2016, Nov 21). Retrieved from http://studymoose.com/case-analysis-on-private-fitness-llc-essay