Recommendations

There are several internal control Deficiencies that the Maymai Cinema Franchise is
facing. In order for them to address these deficiencies they need to find the source and deal
with each problem one by one. There are multiple parties affected the stakeholders, managers
and employees. The first deficiency they need to address is the fact that Craig is the only one
who manages all the locations of the franchises wherein they have twenty five (25) of these
theatres. The management needs to find more managers who are suitable for the job, in order
for them to keep good tract of all these franchises and maintain its quality, productiveness and
insure that stakeholder’s interests are secured. The second problem they need to work on is the
investigation of each franchises for possible frauds from the employees and managers. This
strategy would give them sufficient evidence if frauds and corruption is happening before they
make decisions which can affect the overall operations of the business. Third is the lack of
employees of some or not all the franchises of the theatres which is evident because William is
doing different kinds of jobs that should be done by separate employees. Furthermore, the
MayMai Cinema should select employees who are competent and qualified for the jobs. They
should avoid signing unqualified employees like Maria who they employed even if she was not
yet a licensed CPA, and also William who work an assistant manager in the franchise even if
he’s distantly related to Craig, the manager, because he doesn’t have any background
qualifications that can help the franchise to operate effectively and efficiently. This is not good
for business because although Maria knows accounting, she lacks the authority of like a
licensed CPA has. After they have signed new employees, then they could segregate properly
the duties of each one and the business should always keep them motivated. The fourth
deficiency they need to address is the fact that William and Craig are relatives. We don't think
that it is a good idea to hire relatives except when you are involved on a family business. This is
not a good decision because there is that family relationship involved and it is harder to create
that business relationship with them because they are family. Especially in this case wherein the
manager Craig who is involved in decision making has an assistant manager William who is
being accused of fraud. If in fact this is true, Craig could treat William differently because they
are related or he could give him a warning instead of firing him right away. This family
relationship could also lead to biases to other workers. So to avoid these things from happening,
they should employ a policy that would prevent this.

The last problem that needs to be addressed is Maria suspecting that William is in fact
committing fraud. If management finds out about the lack of sales of the franchise even if more
people are buying the tickets, this could affect Jodi's job or worst she could lose it because she
is the one who is responsible of selling the tickets. What maria should do is to report it to Craig,
but before she could report it she should conduct and investigation by talking to other workers
on the franchise and through auditing. She could suggest to the higher management about
hiring an external auditor. It is important that an external auditor should be hired because of the
independence on the decisions. After she gathered sufficient evidence she should report it to
Craig, but if she finds out that Craig is either involved or is not doing anything because of his
relationship with William. She should report it to a hgiher authority and let them handle the
problem. What she should do now is to leave her job and focus on her CPA exam.