Audit Accounting Red Bluff Case
1. The two biggest concerns relating to possible fraud for the motel part of the business are: a) The couple failing to record hotel guest stays in order to steal the cash paid. By not recording the hotel stay their cash reconciliations would be clear.
b) The couple has no incentive help the motel perform at a profit since they are paid at salary. Since there is a high demand for their motel, service and quality could take a significant slip without losing too much money. The first control that could be set in place is through the intake process. Mr. Fernandez can easily set in place controls that would automatically create a transaction every time a new key was created. This is assuming the doors are operated with electronic keys. The only 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 pay. It could be made up of both a base salary and bonuses based on the motel’s performance.
Separation of duties- Might be limited because there are a small number of ppl.
Have the cleaning staff report directly to Mr. Fernandez to let him know how many rooms they cleaned. Rooms cleaned should meet revenue.
Tip line- If you don’t receive a receipt call this number. 2. The two biggest concerns relating to possible fraud for the café part of the business are: a) Cash Receipts- Again the couple has too much control over transactions being recorded and the handling of money. b) Inventory- The café inventory is a big concern because it is probably one of the most vulnerable assets behind cash.
Mr. Fernandez can set up cameras in the café 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
b) The couple has no incentive help the motel perform at a profit since they are paid at salary. Since there is a high demand for their motel, service and quality could take a significant slip without losing too much money. The first control that could be set in place is through the intake process. Mr. Fernandez can easily set in place controls that would automatically create a transaction every time a new key was created. This is assuming the doors are operated with electronic keys. The only 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 pay. It could be made up of both a base salary and bonuses based on the motel’s performance.
Separation of duties- Might be limited because there are a small number of ppl.
Have the cleaning staff report directly to Mr. Fernandez to let him know how many rooms they cleaned. Rooms cleaned should meet revenue.
Tip line- If you don’t receive a receipt call this number. 2. The two biggest concerns relating to possible fraud for the café part of the business are: a) Cash Receipts- Again the couple has too much control over transactions being recorded and the handling of money. b) Inventory- The café inventory is a big concern because it is probably one of the most vulnerable assets behind cash.
Mr. Fernandez can set up cameras in the café 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