Fraud, Ethics, and Internal Controls: What's in a Printed Receipt?

Abstract

The case allows students to reflect on a simple real life situation from both an ethical and accounting perspective. It illustrates an ethical dilemma faced by Mrs Lee during an evening out at a large chain restaurant during her vacation. The waiter offered to provide her with a receipt only if she paid by credit card because the printer was broken. Mrs. Lee, a professional accountant (Certified Management Accountant and Certified Public Accountant), suspected the waiter’s intentions were fraudulent. She quickly evaluated through observation the weaknesses in internal control and the potential presence of fraud to make her decision. The case illustrates an ethical dilemma, the collection and sales cycle, and common, related internal control deficiencies in a restaurant setting.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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