Preventing Employee Theft: Internal Controls and Impacts on

FOX VALLEY TECHNICAL COLLEGE BUSINESS & SERVICE DIVISION ACCOUNTING DEPARTMENT INTERNET RESEARCHPrinciples of Accounting Additional Assignment - Chapter 5 Requirements: Search "Employee Theft" on the internet and answer the following questions in paragraph form, typed, and in your own words. One sentence per question will not be adequate. Note: This assignment is worth 5 points. Copying and pasting information from the internet is plagiarism which is prohibited conduct according to the VI.A. Code of Conduct Students found on the FVTC website.You will receive a 0 if plagiarism is detected. Due Date: The report to be handed in at class on __________. Up to one point will be deducted for each day it is late. 1.Why do some employees steal from their employers? Many cases of employee theft occur because of poor management, bad work culture or angry employees. A CNN report showed that 66% of employee theft will happen if one employee sees others getting away with it. Employees may also steal because they are in a tough spot financially. Some employees feel like they don't get paid enough or are overworked and not appreciated so they many steal from their employer to get the funds to make up the difference. 2.What internal controls can employers use to prevent theft? There are many different ways an employer can prevent employee theft. Some internal controls that can help is mandatory vacations, using stamps for incoming checks and having different employees receive and disburse funds. If a company would mandate vacations, this is a way to prevent employees from covering up their tracks if they are stealing by making them have off and watching for changes. If a company would stamp all incoming checks with a stamp such as "deposit only", this would eliminate all odds of an employee personally signing and cashing the checks. The last reason of having different employees receive and disburse money is a good internal control because the incoming funds wouldn't have a chance to be hidden and cashed on the side with a different person having to take the received funds and disbursing them. 3.What are some of the effects on the economy from employee theft? Employee theft can effect the economy with a businesses cash flow, business operations, customer and investor confidence and public perception. If an employee steals from their employer, it could hurt the cash flow with the revenue and profits. It could hurt the employers business operations with the chance of business failure with lack of profits. It could hurt the confidence levels within the companies customers and investors once the theft is made publicly known. Once a theft is made public, it could draw attention to auditors for taxes and government contracts to ensure that the theft did not affect those things.