As a staff accountant at ABC Tax & Accounting Service, you have a number of clients that have requested consultation services on a variety of different topics.
Marabelle Hernandez, owner of Marabelle’s Craft ‘n Shop has requested consulting work on the following issues that have recently arisen in her business. Over the past three weeks, a few situations have caused Marabelle to take pause and consider whether there is possibly something questionable happening on the sales floor and in other areas of the business:
Scenario #1: Marabelle has noticed a group of three employees becoming very close and taking turns coming in late. At first it wasn’t very noticeable, but in reviewing timecards and hours paid for last week, she discovered that Betty Gamble’s timecard states she punched in at 8am every day last week when Marabelle saw her come in at 8:15 one morning, 8:20 another, citing her commute in bad weather being the issue.
Scenario #2: Gladdie McMulligan, one of the top sales staff, was scheduled to begin a 12-week maternity leave in 6 weeks; however, she had the baby early and has now begun her leave of absence, leaving her sales shifts to be covered over the next 6 weeks. Marabelle’s Craft ‘n Shop is open from 8am to 8pm, every day of the week. Gladdie’s shifts were Thursday-Monday, 10am-7pm. There are 4 sales team members including Gladdie. Marabelle prefers not to pay overtime, so scheduling any one employee for more than 40 hours per week is not desired.
The sales staff includes the following individuals:
- Robert Jones: Single father of 3 children, relies on daycare and works only while the daycare provider can care for his children, which is Monday-Friday, 7am-6pm. Robert currently does not work weekends. Robert DOES do much of the shelf stocking and heavy lifting on the team, and keeps store displays running smoothly due to his experience with technology.
- Amelia Rashad: Does not work weekends as her faith requires her to observe the Sabbath. Amelia often works evenings throughout the week, and also holds demonstration workshops when necessary, as long as they are not on the Sabbath.
- Miranda Michaels: Prefers to work daytime hours, but is willing to work one day each weekend through Gladdie’s maternity leave. However, Miranda commutes 50 miles to work one way; therefore, she prefers to have full day schedules as opposed to half-days or split shifts.
Scenario #3: Marabelle’s office manager spends most of her day managing paperwork, recording daily sales, deposits and purchases, as well as counting all coin and currency from the prior day’s tills, making the deposit slip out, depositing the funds, and recording the deposit in the computerized accounting system. She is also responsible for paying bills and running payroll, as well as the recording and payments of sales tax, payroll taxes, and reporting financial information to Marabelle. Because of increased pressure to make sales quotas, the sales team manager has requested more frequent reporting of sales from the office manager. With her current required duties, this additional requirement on her time may not be appropriate.
With these situations having arisen, and the pressures present to make poor or uninformed decisions, prepare a memo to Marabelle Hernandes, owner of Marabelle’s Craft ‘n Shop, relaying your concerns, ensuring your tone is appropriate and professional for the audience in this situation. Specifically, address the following:
- Address the following for Scenario #1:
- What are the legal and ethical issues regarding the situation explained in Scenario #1?
- What would you recommend Marabelle say to the three employees to explain, in a professional and courteous yet firm way, the legal and ethical issues presented by their actions?
- What should Marabelle say to the three employees about how their actions could affect their personal integrity?
- Address the following for Scenario #2:
- Prepare a proposal for covering Gladdie McMulligan’s sales shifts during her absence as described in Scenario #2. In your plan, explain how you considered the individual team member’s personal situations and limitations and how you would suggest covering any vacant shifts. Be creative and think out of the box if necessary!
- How would you explain to the remaining team members the importance of working together to come up with a schedule that works for all involved?
- Many teams are made up of individuals like these, with diverse perspectives, beliefs, and backgrounds. Why is it important to be respectful and inclusive of differences?
- How do diverse individuals contribute to the success of the team? How does diversity contribute to the success of the organization?
- Address the following for Scenario #3:
- Additional reporting creates more workload for the office manager. Is the request for this additional reporting appropriate? Explain.
- What is the office manager’s responsibility to the organization in accurate and mindful reporting of sales information more frequently than has been previously prescribed?
- How appropriate is the level of control the office manager currently has over information and funds throughout all scenarios?
- What, if any, internal control concerns should Marabelle be made aware of?
- Use supporting evidence from at least 2 professional resources such as magazines, case studies, and other trade publications to justify and explain the need for a company code of ethics, using the situations above in support of your justification for the need for a company code of ethics. Remember you can find these types of resources in library databases such as Business Source Complete and Business via ProQuest.
Remember to be factual and to leave emotions out of your statements. Also, your statements should be solution-driven, meaning proposing any policy changes, intercompany communications, internal audit checks, internal control reviews, or other areas you feel could be helpful in maintaining the highest of ethics for the company. You may also wish to consider any conflicts of interest or crossing of ethical boundaries in your own position as Marabelle’s tax accountant.
Provide APA in-text citations and a reference page to indicate sources selected and used.