Non-Cash Compensation
The effects of non-cash compensation abuse by the company managers may not have immediate effects on the company’s profits, but it will gradually affect the company’s reputation. Nevertheless, appraisals are an important part of motivating the staff, which means that non-cash compensation must be used as a basic tool (Zechman & Zechman, 2010, p. 7).
Therefore, it can be suggested that employees should be rewarded with benefit plans and congratulated via messages on their success. For managers not to abuse their power, a different principle of information management must be used. With the help of a shared knowledge strategy, complete clarity can be attained (Lam, & Lambermont-Ford, 2009, p. 54).
Accounting Methods
As a rule, several types of risk are traditionally identified when talking about merchandising. First and most obvious, the risk of incurring a major loss should be mentioned. However, this is a very general type of risk. To be more specific, one must mention the risk of defining the target audience in the wrong way. Indeed, it is crucial that the product should be marketed to the people, who will be willing to buy it. Finally, the breach of the “five Ps” principle is fraught with serious consequences. Even positioning, which is often overlooked even by major companies, plays an important role in tricking the customers into paying attention and buying the product or the services (Well, Shipper & Francis, 2012).
To reduce the risks of inventory shrinkage, loss of clients, shipping errors, logistics errors, etc., it is crucial for the company to get its priorities straight. In other words, the mission and vision of the firm must be redefined. As long as stellar performance and customer satisfaction are at the top of the firm’s priority list, impressive changes can be expected (Smith, 2011).
Inventories
When it comes to avoiding shrinkages, one must give credit to the principle of inventory costing known as the average cost method. Seeing how the entrepreneurship in question (a fast food restaurant) usually requires a traditional set of resources (e.g., the standard equipment, the traditional fast food products, etc.), it will be relatively easy to calculate the average sum required to facilitate the key production processes of the company (Bragg, 2005), as well as the costs for the related operations, e.g., financial transactions, internal and external logistics, promotion and marketing strategies.
To execute efficient monitoring of several different types of businesses, it is necessary to employ the tools that allow for creating a defense strategy (Davis & Davis, 2012). For example, for a shoe retailer, audits will be required to check the quality of the services provided. For a physician, it is important to carry out monthly maintenance checks for the equipment. Finally, the driver of a food vending truck must monitor the amount of food transported and check-in for weekly truck maintenance.
Internal Controls
Over the past few weeks, it has been noticed that the quality of the services provided by Company X, a local traveling agency, has dropped significantly. Supposedly, because of the laissez-faire management style adopted by the company leader, the human resource managers abuse their power and promote their friends as the HR staff, though the latter has extremely poor skills and are very slow learners. As a result, the company’s customer base has shrunk by 45% and is decreasing at a very fast pace. Over the last month, the company has lost $ 400,000. It is suggested that a range of audits should be carried out. In addition, it is necessary that the leadership style should be changed to transformational. Finally, it will be required to re-establish corporate values and the company’s mission and vision.
The three elements of the triangle factor can be traced easily here. The managers have a chance to benefit, and they use it, They are under considerable pressure of the financial opportunities. To prevent the problem from recurring restrains that will reduce the financial pressure will have to be introduced.
Reference List
Bragg, S. M. (2005). Inventory accounting: A comprehensive guide. New York, NY: John Wiley & Sons.
Davis, C. E. & Davis, E. (2012). Managerial accounting. New York, NY: John Wiley & Sons.
Lam, A. & Lambermont-Ford, J. P. (2009). Knowledge sharing in organizational contexts: a motivation-based perspective. Journal of Knowledge Management, 14(1), pp. 51–58.
Smith, M. (2011). Research methods in accounting. Thousand Oaks, CA: SAGE.
Well, R., Shipper, K. & Francis, J. (2012). Financial accounting: An introduction. Stamford, CT: Cengage Learning.
Zechman, K. M. & Zechman, S.. L. C. (2010). Executive overconfidence and the slippery slope to fraud. Web.