Leo’s Four-Plex Theater To address the issue of cash receipts, the owner would be well advised to create a control making the cashiers more responsible for any shortages by either having to pay for their shortfalls or linking their salary to the shortage that occurs. Furthermore, additional data should be printed on the tickets to address from which ticket booth each sale took places and have a designated schedule to cross reference which employee was responsible for selling the tickets associated
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Leo’s Four-Plex Theater Summary & Issues Leo Antonelli runs a theater out of a small town in west Texas called “Leo’s Four-Plex Theater’ which he has found to be less profitable than first expected. He hired his nephew, Bill Reilly, to manage the theatre in his absence which has proven unsuccessful. Cash is missing, theater employees are incompetent and ticket counts don’t match the supposed sales numbers. Park Cockerill, professional accountant, was brought in to assess the complications
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Accounting, Organizations and Society 28 (2003) 127–168 www.elsevier.com/locate/aos Management control systems design within its organizational context: findings from contingency-based research and directions for the future Robert H. Chenhall Department of Accounting and Finance, Monash University, Clayton, Victoria 3168, Australia Abstract Contingency-based research has a long tradition in the study of management control systems (MCS). Researchers have attempted to explain the effectiveness
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can be better to avoid control problems instead of implementing a management control system (MCS). Kenneth A. Merchant & Wim A. Van der Stede [11] describes four strategies for control problem avoidance; Activity elimination, Automation, Centralization and Risk sharing. Under are examples given on how Leo, from the case Leo´s Four-Plex Theater [12], could apply these strategies for existing control problems in the organization. Activity elimination means that a control problem caused of a certain
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What is the problem? Leo Antonelli owns a single theater with four screens in West Texas. While Mr. Antonelli owns the theater, he does not manage it. Mr. Antonelli, who was concerned about the profitability of the theater, engaged the services of a local accounting professor to observe the processes at the theater and report on the effectiveness of the internal controls in place. The analysis and recommendations presented below are based on the internal control report. Question 1. Where is the
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Leo’s Four-Plex Theater Elaine Sanders ACC 6003 Spring 2016 What is the problem? Leo Antonelli owns a single theater with four screens in West Texas. While Mr. Antonelli owns the theater, he does not manage it. Mr. Antonelli, who was concerned about the profitability of the theater, engaged the services of a local accounting professor to observe the processes at the theater and report on the effectiveness of the internal controls in place. The analysis and recommendations presented below are
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Marshall School of Business University of Southern California Leo’s Four-Plex Theater Teaching Note Purpose of Case This case is intended as an in-class, “warm-up” case. It is particularly useful on the first day of class where students cannot be made to prepare a longer case prior to class. The case motivates the students (1) to think about the meaning of good control; (2) to consider a number of different forms of controls; (3) to think about the design vs. the implementation of the various
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Marshall School of Business University of Southern California Leo’s Four-Plex Theater Teaching Note Purpose of Case This case is intended as an in-class, “warm-up” case. It is particularly useful on the first day of class where students cannot be made to prepare a longer case prior to class. The case motivates the students (1) to think about the meaning of good control; (2) to consider a number of different forms of controls; (3) to think about the design vs. the implementation of the various
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activity 1: Identifying control problems and MCS Source case / paper: Wong’s Pharmacy (textbook p. 20) AND Leo’s Four-Plex Theater (textbook p. 19) In-class activity questions / objectives: Wong’s Pharmacy: 1. What is the main problem facing Wong’s pharmacy? 2. What options are available to Thomas Wong? Leo’s Four-Plex Theater: 3. What are the key controls problems at Leo’s Four-Plex Theater? 4. State the control measures implemented in the theatre and the purpose and limitations of each
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Leo’s Four Plex Theater Problems: 1. Lack of motivation: * Discrepancies in the cash counts of the ticket booths – the cause behind this situation is the lack of motivation that leads to employee theft and neglecting of duties. * Failure of the cash collection from known customers – Employees are not motivated enough to perform their jobs sincerely and also do not know why they should collect cash, though there is no reason for personal limitation. * Unethical practice at ticket
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