Modern Literature Essay

715 words - 3 pages

Kelly Chen
HTM 223
September 25, 2014
Online Project 2 – Internal Control
For the first annual report, I did an assessment of the widely known Darden Restaurant Group, which comprises of many different American cuisine restaurants, including Yardhouse and Red Lobster. This online project is a story of an incident that could’ve happened at one of one of their restaurant chains, Olive Garden. At Olive Garden restaurant, business is doing quite well. Their weekly sales are going up, which also means that the servers are receiving more than the usual amount of tips. The tips at the restaurant are pooled together, and at the end of each night, each of the waiters and waitresses get their share of the tips depending on how many hours they worked. However, one day, management notices that the tips are significantly lower than what it should be. It definitely cannot be because of the lack of service, as they are getting rave reviews from customers, and almost all of them ...view middle of the document...

At the end of each night, she takes the cash register, the box where all the cash and credit tips and pulled, and the daily sales report, and goes in to the back office in order to finalize all of the paperwork. During this private time in the office which has no cameras, she was able to take a good amount of the cash tips, and pocketed this. In the paperwork, she reported the total tips to be less than the amount that she stole. Because the managers were not responsible for double-checking the cash amounts or checking her while she worked at the end of each night, a very large total amount of tips were stolen by Kim until this was found out by management.
After the management became aware of this situation, they should first and foremost fire Kim and file charges against her. If this incident becomes aware to the other servers or the public, the management must set an example to show that this type of behavior will not be tolerated by the company. In addition, several internal controls must be put in place to avoid such a collusion in the future. The main concern in this situation is the handling of cash and the cash tips. There must be an established preventative procedure in order to avoid this type of stealing to occur. First and foremost, there must be adequate records maintained each and every day. All cash receipts must be recorded and deposited to the bank at the end of every night. This record of sales must be only accessible to the managers, and stored in a safe place. In addition, the responsibility of tips must be given to several departments, including the management, accountant, and head server. Although this might seem excessive, it is a preventative measure that will make sure that no one person has sole discretion in reporting the total sales and tips. More than one person must handle this responsibility so that the system can be supervised and reviewed at all times. In addition, an auditor can be hired to monitor and audit the sales and tips externally, so that any discrepancies will be noticed objectively and immediately. Cameras should also be placed in the office so that employees who are even thinking about colluding will be discouraged from attempting. Lastly, there must be surprise checks from the upper department from time to time to guarantee that nothing is going wrong.

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