Question
Your small company produces and sells holsters for cell phones. During the past year, monthly inventory counts have shown about 100 holsters missing. Furthermore, a
Your small company produces and sells holsters for cell phones. During the past year, monthly inventory counts have shown about 100 holsters missing. Furthermore, a customer report gives you reason to believe that one of your employees, Jackson McKnight, might be stealing the missing holsters and selling them on eBay. Because the holsters are manufactured by a separate supplier (i.e., they are not custom holsters), you cannot know whether holsters being posted to eBay are from your company or from one of your competitors. However, because eBays selling etiquette requires that sellers respond promptly to customer questions, you think that McKnight may be accessing the account periodically from his work computer. 1) Imagine that you are the independent auditor of Midisoft. The audit plan outlines specific testing procedures to assess the fair presentation of the Sales Returns and Allowances and Accounts Receivable accounts. In terms of strategic reasoning and the details provided in the case, what would be your actions in the following situations? a. You only employ zero-order reasoning. b. You only employ first-order reasoning. c. You only employ higher-order reasoning?
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