Drotos Theaters

Paper Summary:

This paper evaluate the manuals and computerized activities of Drotos Theaters, assesses the internal control limitations and risks, recommends procedures for detecting employee fraud and recommends controls to prevent and detect financial misstatements. It also addresses concerns regarding the fact that the previous auditing firm resigned and explains how the ticket taker might steal cash and appropriate controls that could be implemented to prevent this from happening. It concludes briefly with the actions the management at Drotos Theaters can take to avoid financial and internal control disasters from occurring.

Outline:
Introduction
Manual and Computerized Controls
Detecting Employee Fraud
Internal Controls
Recommended Procedures
Conclusion

From the Paper:

"At any corporation, both manual and computerized controls are necessary to ensure the proper flow of business and that adequate steps are taken that allow the business to continue to operate successfully. At Drotos Theatres, the manual controls in place involve the serial numbered tickets, the box that the other half of the ticket is placed in, and the ticket taker. The computerized controls involve the Controller depositing cash and recording transactions by posting journal entries into the computerized financial accounting system. The manual controls are not adequate in this case, because there is no system of checks and balances. To gain admittance to the theatre, cashiers receive payments from theatre customers and provide customers with a serially numbered, perforated ticket. "

Sample of Sources Used:

• Bottorff, D. (2004). Culture Management Essentials. Retrieved February 14, 2007, from http://www.ethicsquality.com/about.htm.
• Moral Ethics True Foundation. (2005). Moral Ethics: How do we make our Decisions? Retrieved February 17, 2007, from http://www.allabouttrueth.org/moral- ethics.htm.
• Haserot, P. (1992). Maintaining loyalty and productivity. The CPA Online Journal, July.
• Lord, R. & Maher, K. (1991). Leadership and Information Processing: Linking Perceptions and Performance. Boston: Unwin-Everyman.

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