Case 4 Answer

1. Bebe Co's current system for accounting for sales receivable has a drawback in that it is not
proactive. Whether the business is big or small business, you must understand your operations.
Even on little issues, you must be engaged.
2. I believe the control they need to take to overcome the vulnerability I noted on number one is
to become PROACTIVE.
- Being proactive means distinguishing what is required and what is not. When you work,
everything you do has an impact on the future. According to the final phrase, "Miss Ines believes
that the modest amount of transactions (10-15 invoices each week) renders them unneeded."
In every transaction that they conducted, 10-15 invoices were superfluous, therefore if Miss Ines
habitually did this, how many transactions did they miss in a month or a year?
Being PROACTIVE about things that have an aftereffect is the proper move. Even in our daily
lives, tiny things can grow into large things, as in the case of Bebe Co.

Case 5

The following are the weaknesses in internal controls:

On Monday morning, time cards are sent to employees, who then note the hours spent at work. This
encourages employees to record more time on their time cards than they do in their real working hours.

The time cards are forwarded to the main office for review. This will take time, and there is a risk of
losing the time card while in transit.

The only individual who has access to the program is the controller. As a result, the controller will
commit fraud.

Salary employees' pay are processed using the same software that processes hourly wage employees'
salaries.

Because hourly wages are paid by check and salaries are paid by direct deposit, this creates uncertainty
and the danger of mismatching the compensation to the employees.

2. Instead than issuing time cards to employees, the manager or clerk should input the time cards. A
separate clerk can be designated to monitor the in and out time of hourly employees, and that clerk can
submit the time sheet on their behalf.

In each branch, a distinct approver can be designated, and that approver must approve all time cards. So
that the time cards are not misplaced.
The vice president should also have access to the payroll software and should review the controller's
work on a frequent basis. As a result, the controller will be afraid to perpetrate fraud. A separate
program can be created to handle the salaries of hourly and salaried staff separately.