Spring Water Spa Company is a 15-store chain in the Midwest that sells hot tubs, supplies, and accessories. Each store has a full-time, salaried manager and an assistant manager. The sales personnel are paid an hourly wage and a commission based on sales volume.<\/p>
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The company uses electronic cash registers to record each transaction. The salesperson enters his or her employee number at the beginning of his\/her shift. For each sale, the salesperson rings up the order by scanning the item's bar code, which then displays the item's description, unit price, and quantity (each item must be scanned). The cash register automatically assigns a consecutive number to each transaction. The cash register prints a sales receipt that shows the total, any discounts, the sales tax, and the grand total.<\/p>
<\/p>
The salesperson collects payment from the customer, gives the receipt to the customer, and either directs the customer to the warehouse to obtain the items purchased or makes arrangements with the shipping department for delivery. The salesperson is responsible for using the system to determine whether credit card sales are approved and for approving both credit sales and sales paid by check. Sales returns are handled in exactly the reverse manner, with the salesperson issuing a return slip when necessary.<\/p>
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At the end of each day, the cash registers print a sequentially ordered list of sales receipts and provide totals for cash, credit card, and check sales, as well as cash and credit card returns. The assistant manager reconciles these totals to the cash register tapes, cash in the cash register, the total of the consecutively numbered sales invoices, and the return slips. The assistant manager prepares a daily reconciled report for the store manager's review.<\/p>
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Cash sales, check sales, and credit card sales are reviewed by the manager, who prepares the daily bank deposit. The manager physically makes the deposit at the bank and files the validated deposit slip. At the end of the month, the manager performs the bank reconciliation. The cash register tapes, sales invoices, return slips, and reconciled report are mailed daily to corporate headquarters to be processed with files from all the other stores. Corporate headquarters returns a weekly Sales and Commission Activity Report to each store manager for review.<\/p>
<\/p>
A.What are the control strengths in the company's sales\/cash receipts system?<\/p>
<\/p>
B.Are these strengths aligned with the COSO ERM framework? Explain how and why.<\/p>
<\/p>
C.What critical risks does the company face? (Relate your answer to the COSO ERM framework.)<\/p>
<\/p>
D.What solutions and controls should be implemented to mitigate these risks and improve the quality of system control?<\/p>", "transcribed_text": "", "related_book": { "title": "Auditing Cases An Active Learning Approach", "isbn": "0130674842, 978-0130674845", "edition": "2nd Edition", "authors": "Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/64ed8a8041add_6938.jpg", "uri": "\/textbooks\/abnormal-psychology-clinical-perspectives-on-psychological-disorders-1st-edition-9781266566899", "see_more_uri": "" }, "free_related_book": { "isbn": "163832574X", "uri": "\/textbooks\/the-gps-paradigm-for-successful-mergers-acquisitions-and-joint-ventures-1st-edition-978-1638325741-280366", "name": "The Gps Paradigm For Successful Mergers Acquisitions And Joint Ventures", "edition": "1st Edition" }, "question_posted": "2024-06-28 06:51:15", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/1-if-zeidman-had-signaled-to-his-partners-that-all", "description": "1. If Zeidman had signaled to his partners that all was clear from the fairway and was then hit while returning in the cart, would Fisher be entitled to a summary judgment based on assumption of the...", "stars": 3 }, { "url": "\/study-help\/psychology\/where-do-your-students-find-employment-1980576", "description": "Where do your students find employment?", "stars": 3 }, { "url": "\/lucy-loiselle-and-abby-ready-formed-a-partnership-on-march", "description": "Lucy Loiselle and Abby Ready formed a partnership on March 15. The partners agreed to invest equal amounts of capital. Loiselle invests her proprietorships assets and liabilities (credit balances in...", "stars": 3 }, { "url": "\/study-help\/questions\/explain-the-cap-theorem-in-distributed-systems-9864178", "description": "Explain the CAP theorem in distributed systems.", "stars": 3 }, { "url": "\/study-help\/questions\/use-the-following-information-to-answer-this-question-what-were-6241702", "description": "Use the following information to answer this question: What were the total dividends paid for 2 0 2 1 ? Multiple Choice", "stars": 3 }, { "url": "\/study-help\/questions\/stillwater-stationery-has-two-business-segments-the-paper-segment-and-1363961", "description": "Stillwater Stationery has two business segments, the Paper Segment and the Writing Implement Segment. The contribution margin for the Paper Segment is $98,000 and the contribution margin for the...", "stars": 3 }, { "url": "\/study-help\/questions\/answer-these-questions-for-an-upvote-in-are-prison-diets-4875753", "description": "Answer these questions for an upvote! In \"Are prison diets punitive? A report from behind bars\" Lupa Grant and Zahara Green describe prison diets as a public health problem. For this your initial...", "stars": 3 }, { "url": "\/study-help\/questions\/how-do-you-say-at-945-in-spanish-a-a-1365205", "description": "How do you say \"At 9:45\" in Spanish? a.) A las diez menos cuarto. b.) Es las diez cuarenta y cinco. c.) A las nueve y quince. d.) Son las nueve y cuarto", "stars": 3 }, { "url": "\/study-help\/questions\/part-3-of-5-game-theory-battle-between-two-4875276", "description": "Part 3 of 5 - Game Theory Battle Between Two Chip Firms The following is a classic normal form game that depicts the pricing rivalry between Intel and AMD for their newest top-oftheline microchip....", "stars": 3 }, { "url": "\/study-help\/questions\/service-providers-airlines-hotels-restaurants-visitor-attractions-in-the-tourism-4868958", "description": "Service providers (airlines, hotels, restaurants, visitor attractions) in the tourism industry, need to maintain a high capacity, in order to meet their overheads. The term \"capacity\" refers to the...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/enterprise-plans-to-discontinue-a-department-with-48000-contribution-margin-4256752", "next": "\/study-help\/questions\/how-do-i-journalize-this-tanaka-company-for-june-2020-4256754" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Spring Water Spa Company is a 15-store chain in the Midwest that", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/spring-water-spa-company-is-a-15store-chain-in-the-4256753" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }t_id": "1" } }