Q14E_1 - Horngren'S Financial And Managerial Accounting

Question

Making ethical decisions 

Sue Peters is the controller at Vroom, a car dealership. Dale Miller recently has been hired as the bookkeeper. Dale wanted to attend a class in Excel spreadsheets, so Sue temporarily took over Dale’s duties, including overseeing a fund used for gas purchases before test drives. Sue found a shortage in the fund and confronted Dale when he returned to work. Dale admitted that he occasionally uses the fund to pay for his own gas. Sue estimated the shortage at $450. 

Requirements 1. What should Sue Peters do?

Step-by-Step Solution

Answer

Sue Peter, as the controller should supervise more carefully.

Step-by-Step Solution Step 1 Definition of Bookkeeper

A bookkeeper is defined as the individual who processes and records the larger volume of transactions of the business.

Step 2: Sue Peter Should do

The new employees who have been engaged in such type of behavior will not become valued and the trusted employee of the company as this behavior is unethical.

As the controller of the company, Peter may have hired Dale, then she must be responsible for the lack of controls which led to the theft by the new employee.

Sue will need to supervise the next bookkeeper more carefully and should also check the background of the bookkeeper before hiring.