Business Case Essay

517 WordsMar 9, 20123 Pages
Ethics case BYP 11.7 Johnny Fuller owns and manages Johnny’s restaurant, a 24 hour restaurant near the city’s medical complex. Johnny employs nine full time employees and 16 part time employees. He pays all of the full-time employees by cheque, the amounts of which are determined by Johnny’s public accountant, Mary Lake. Johnny pays all his part-time employees in cash. He calculates their wages and withdraws the cash directly from his cash register. Mary has repeatedly urged Johnny to pay all employees by cheque. But, as Johnny has told his competitor and friend, Steve Hill, who owns the Greasy Diner, ‘First of all, my part-time employees prefer the cash over a cheque, and secondly I don’t withhold or pay any taxes or superannuation on those wages because they go totally unrecorded and unnoticed.’ Instructions: a) Who are the stakeholder in this situation? b) What are the legal and ethical considerations regarding Johnny’s handling of his payroll? c) Mary Lake is aware of Johnny’s payment of the part-time payroll in cash. What are her ethical responsibilities in this case? d) What internal control principle is violated in this payroll process? Submit on Tuesday February 21, 2012. Use short bondpaper (minimum of two pages excluding the cover page) please see the previous email for the format of the cover page. Discussion in ACTBAS 1 No. 1 class this afternoon. - Stakeholders are persons who has an interest in the business either as employee or investor or even creditor - Legal means law, regulations and policies. Applying this in the case at hand, you should think of the laws that may have been violated by Johnny Fuller, particularly in the area of the payment of salaries, non withholding of taxes and proper treatment of workers in accordance with the labor laws. - Ethical means acts that may be a deviation

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