Kennedy Wilke
ACC 361 A
Internal Controls Assignment

Having worked at a Kohl’s department store for two years, I have encountered and been around many internal controls that Kohl’s has put into place. The first internal control that I encountered on a daily basis while working at Kohl’s was the use of an employee ID number that each cashier logins into the register with and also enters before each new transaction. This would be considered a preventive control because it deters employees from engaging in illegal/unethical activities such as stealing from the register or giving major discounts to friends and family. Each ID is linked to each transaction, which allows management to see which employee completed which transaction. This could also possibly be labeled a physical control because it relates to human activities and focuses on people, in this case being the employees. Along with the employee id which shows who is at the register for each transaction, cameras monitor each register and employee from above, also deterring employees from engaging in activities that hurt the business. Overall, I feel that the employee ID login for each transaction is a wise and effective control to have. Though I could argue that it is a hassle for employees to enter their employee ID number before each transaction especially since they already login to the register to begin with, it is a necessity due to the fact that throughout the day different people are ringing customers out possibly under another employee’s ID who forgot to logout of the register. With this internal control in place, employees are less likely to manipulate transactions that cause losses for the company. The second internal control, or lack thereof, that I encountered while working at Kohl’s was the lack of fitting room attendants. While clothing stores such as American Eagle have fitting room attendants that assign you to a fitting room and count the number of items you bring in, Kohl’s does not have anyone stationed in their fitting rooms and anyone is welcome to enter with as many clothing items as they want. Because Kohl’s is so large with multiple fitting rooms for each department (men, women, teens, and children), it may seem unreasonable to hire extra people just to be in the fitting rooms. However, during my time at Kohl’s I witnessed large amounts of theft, almost all of which were clothing. A lot of this theft could be deterred/caught if employees were stationed in the fitting rooms. In argument of this though, speaking from personal experience at my local Kohl’s store, a fitting room attendant in each fitting room may not be a possibility. Kohl’s would have to hire more employees to man the fitting rooms, which would cost them more money in payroll. Additionally, my local Kohl’s had a strict amount of money in payroll and I recall many times being called off from working on particular days because the store was cutting it close on payroll and needed to save money. Therefore, hiring more people to supervise fitting rooms might not be an option. But on the other hand, spending more money on payroll and hiring fitting room attendants could potentially save Kohl’s money in the long run because it would prevent and catch more theft. Adding fitting room attendants would be a good preventive and potentially detective control because the items brought into each fitting room would be closely monitored and many attempts at theft could be stopped. By adding this preventive control, the company’s assets would be better accounted for as well. However, a level of supervision may have to be added to ensure that employees are not colluding with shoppers and allowing them to steal. Overall, Kohl’s should focus on its preventive controls because they help prevent fraud and theft, which is ultimately more cost-effective than finding and correcting problems after they occur.