Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem 7EIA
Case 7. Kelly Straton, a trusted employee of Simpson Supply Company, found himself in a difficult financial situation. His son’s college tuition had to be paid in full by the end of the month. The family had experienced some unexpected expenses, and the money to pay the tuition was just not there. Kelly knew his son could not register for classes until the tuition was paid and classes filled quickly, so this could cause his son not to get the classes that he needed to graduate on time.
Kelly considered himself a “true company man” who never missed work and was always willing to work until the job was finished. Although he had been with the company for 12 years and was entitled to two weeks’ vacation each year, Kelly never found time to take vacation. Because of his loyalty to the company over the years, he knew that his boss would probably lend him the money that he needed for his son’s tuition, but he just couldn’t bring himself to ask his boss for a loan. As Kelly thought about the situation, he realized how simple it would be for him to “borrow” some money from the company to help him through these rough times and pay it back before anyone noticed.
Kelly was responsible for all of the bookkeeping functions, plus opening the mail, counting the cash in the registers at the end of the day, and making the daily bank deposit. With these combined duties, Kelly found it fairly simple to give himself a “loan.” He removed $3,500 in cash from the cash register and replaced it with a $3,500 check from the incoming mail that day. The check was from a customer who was paying his or her account in full. Kelly made a
Requirements
- 1. What are the ethical considerations in this case?
- 2. Discuss the primary internal control weakness in this case that could have contributed to Kelly’s actions.
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Chapter 6 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 1SCCh. 6 - Prob. 2SCCh. 6 - Prob. 3SCCh. 6 - Prob. 4SCCh. 6 - Separation of duties refers to separating all of...Ch. 6 - Which of the following is not a control activity?...Ch. 6 - Prob. 7SCCh. 6 - Prob. 8SCCh. 6 - Internal auditors focus on _________ ; external...Ch. 6 - Prob. 10SCCh. 6 - Prob. 11SCCh. 6 - Prob. 12SCCh. 6 - Prob. 1SECh. 6 - Fraud triangle (Learning Objective 3) 5-10 min....Ch. 6 - Prob. 3SECh. 6 - Internal controls (Learning Objective 2) 5-10 min....Ch. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Prob. 9SECh. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Accounting terminology (Learning Objectives 1 4)...Ch. 6 - Prob. 13SECh. 6 - Prob. 14SECh. 6 - Prob. 1CFSAPCh. 6 - Prob. 1EIACh. 6 - Prob. 2EIACh. 6 - Prob. 3EIACh. 6 - Prob. 4EIACh. 6 - Prob. 5EIACh. 6 - Prob. 6EIACh. 6 - Case 7. Kelly Straton, a trusted employee of...Ch. 6 - Prob. 8EIACh. 6 - Prob. 1FACh. 6 - Industry Analysis Purpose: To help you understand...Ch. 6 - Prob. 1SBACh. 6 - Prob. 1WC
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