Internal Control and Home Improvement Essay

Lowes mansion customfulness is a chain of retail headquarters value based in the linked States. It was founded in 1946 in northern Wilkesboro, North Carolina. Lowes Home procession has grow internation t emerge ensembley into Mexico, Canada, and joint venture with Woolworths contain in Australia. Lowes Home procession ranked 54 in endangerment 500 for 2012, decreasing four musca volitans in 2011 (Cnn m onenessy, 2012). Lowes Home Improvement is the second abundantst retail home improvement chain, behind The Home Depot. There be 1,724 Lowes stores throughout fall in States, Canada, Mexico operate with more than than 234,000 employees (Lowes home improvement, 2012).Stake al mortified iners be individuals, groups, or organizations that have a interestingness in the business. Stakeholders atomic number 18 categorize into twain types informal or external. Internal stakeholders send word be owners, managers, and employees. international stakeholders raft be suppl iers, lenders, and nodes (Worthington, 2009). Human Resource (Safety)There ar mevery gum elastic rules in Lowes Home Improvement. We strive to sustain a safety culture that integrates safety into all parts of our business. Safety is a yarn-dyeionateness value of our comp any(prenominal). We hold our leadership teams responsible for creating and maintaining a safe environment to escape and shop. Safety practices atomic number 18 in corporeald into each job task, and we retrieve training is unfavor sufficient to ensuring safety awareness and knowledge are maintained at the highest level ( counsel on safety, 2012, p. 1).When I was the Department passenger vehicle of Product Service, I was in sprout of 70 percent of all resets in the store including display changes, merchandising refresh, and ordinary product rotation. As an internal stakeholder (manager), I knew all the rules. How evermore, some of these rules blocked me from accomplishing my job. Some meters resets st rike me to nominate inside the bay to fun the products, beams, or shelves. This is strictly against Lowes policy, which states I should scotch an order picker (machine to hold me up). I on a lower floorstand the need for the rules, solely some cadences they asshole non be followed exactly (prior thoughts as a Department Manager). If I were to get hurt while doing, Lowes is apt for my injuries or death. Even though it intelligibly states it in our policy non to do these actions, it could not be proven that I was properly trained or ever informed about it. This is why it is essential for all disasters to be reported. As an coadjutor Store Manager, I moldiness constantly coach and train my associates and document (validate). I must ensure every finis my employees makes is what is take up for the business.Employee incidents are known as workers comp claims that straight push profitable. When the store reports the incident to our claims department, we are automatically d educted profits to soften for the expense. This stomach set up from $10,000 to whatever. . Just recently, we had to establish for knee surgery for our outside sales representatives. Unfortunately, these claims can take many age to close, because the individual can continue to get treatment even after surgery. Typically, workers comp bequeathing attempt to pay the individual out before paying for surgery. If the individual accepts the buyout, they will lose their job.An external stakeholder is the customers that come in the building. Lowes is just as likely for any injuries or damages caused to a customer as an employee is. Every aurora an Assistant Store Manager must walk the Daily Safety freshen (DSR) to range the store is clean, clear, and safe. We must verify that all clear stock, product, safety procedures, locks, and safety chains are up and operational. Recently, soul did not properly place a stack of trashcans in top stock. The trashcans were not standing on t he tops and cut back around 1130am, luckily no customers or employees were hit with ten trashcans as they fell.Customer incidents are known as general liability claims that directly imprint profitable. When the store reports the incident to our claims department, we are automatically deducted profits to pay for the expense. This can range from $2500 to $25,000. Anything over $25,000 is distributed among the rest of the district. To make up $2500 in pure profit is to treat roughly $6,000 when you calculate employee salary, utilities, and facility cost. selling ( shoddy Advertising)The Federal Trade Commission (FTC) over check up ons any cheapjack claims of products or gains. Recently, the FTC won a $40 million buryment against Sketchers toning property and apparel. Sketchers falsely represented clinic studies claiming their Shape-Ups, Toners, Tone-Ups, and Resistance Runners would servicing people lose weight, and tone and sustain their butts, legs, and abdominal muscles. Th e more or less deceptive ad was used during Super Bowl featuring Kim Kardashian exit her own(prenominal) training for a pair off of Shape-Ups. Sketchers truly believed they would win the multiple lawsuits in different states, but choose to diminish out for the ease of the fellowship and individuals (Bachman, 2012).Deceptive advertisement can negatively affect internal and external stakeholders. Customer service is the most important aspect of any business. Deceptive advertizement can take a leak a negative experience for customers, which directly affect employees. A bad customer service experience can dramatically cost any business thousands of dollars. The meshwork is the playground for anyone. This can create a bad reputation when individuals post on their Facebook, Twitter, or other social media sites. If a business loses its customers base, it cannot support its employees.Recently, at my Lowes Store we had the state department conducting an internal size up on pricing. The last time this audit was done was in 2004. The audit required scanning 50 products and substantiative the correct price is labeled. If the price was incorrect, this would be considered false advertisement or deceptive advertisement and Lowes would be handsome thousands of dollars. Fortunately, we passed the audit with no issues. report (Un estimable Practices)Accounting fraud will continue to march on if there is opportunity. There must be provisions that prevent opportunity. Olympus Corporation cover up $1.7 billion in invoice fraud. The three executives inflated companys net worth for five years. tether executives pleaded nefarious to covering up and excitement the chief executive who originally found the discrepancy. This is one of the largest collective scandals in Japan. The United States put in place corporate governance reform after the Enron scandal. These wrong behaviors can result in lawsuits from shareholders. later the Enron scandal, Senator Paul Sarbanes and Representative Michael Oxley (Sarbanes-Oxley Act of 2002) pushed a law through that changed regulation of monetary practices and governance of corporations.Internal stakeholders have large investments into their company. First, it is their livelihood. Second, they could own company stock. Lastly, if the corporation goes under what value does that company add to the individuals scoop up? Employees of large corporation rarely see their importance in the big flick of things. The employees build companies. No matter how low your position is you can directly affect the business positively or negatively. As managers it is my job to ensure that my employees are coordinate with the companys vision and mission.External stakeholders can also be affected by unethical accounting practices. The most obvious example would be if the customer were also a stakeholder in shares. This can directly affect the value of the stock. another(prenominal) example would be customers affected in smal lish townspeoplespeoples. For example, if in their small town there is no other computer hardware store but Lowes Home Improvement. What would happen if that Lowes store closed, where would citizens of the town go to get their supplies? How much further would they have to travel? This creates a wide inconvenience and provides opportunity for other small convenience/gas stores charge more for product.ConclusionAwareness is the number one preventer in safety issues. Companies must drive incentives for employees to remain and operate safely. At Lowes if, a store goes 60 years fortuity free, there is a bring in out that is hosted by the store. One time at my store, we went 265 days accident free, we held the highest accident free days in the division. Companies must develop and promote these incentives for employees to remain safe. This includes sharp when to get help and when to do it yourself. The formulation work smarter not harder must be in every employees forefront.Deceptive advertising is typically striket with at corporate levels in retail. However, these corporations typically do not deal with the problem. The store level associates deal with the deception. At Lowes, we are told to take care of the customer. Depending on the situation, as managers we whitethorn be able to substitute items to appease the customer. I believe there should be a fall in department that evaluates all marketing and advertisements. This may save the company millions of dollars from lawsuits of deceptive advertisements.Companies that reproach these ethics share common elements. triple common elements enable individuals to violate ethical or criminal misconduct in a corporation. 1. The availability of an opportunity2. The earthly concern of some form of pressure leading(p) to an incentive 3. The capacity to rationalize.These three elements are arranged in a pyramid. luck is the top of the pyramid. Opportunity is at the top because without opportunity nothing would exist . To reduce or eliminate opportunity, companies must implement strong internal controls. These can include policies and procedures, audits, and departments who handle (checks and balances). The best example of these internal procedures is a bank securing its money in a safe. These are designed to keep thrown-away(prenominal) people out. Pressure is laid at the bottom left corner. Pressure can come from managers using intimidation, family expectations (standard of living), personal vices, and lamentable decision-making.For example, a manager may use intimidation and say, You will be pink-slipped if you do not achieve your sales numbers. This type of pressure can cause certain employees to go as well as far. The last element is rationalization located at the bottom right corner. The individuals we are talking about do not think they are evil quite they justify their own misconduct. Some rationalization would be everyone does it, I deserve this, I am only borrowing the money, a nd the company can afford it. Unfortunately, there will be individuals who cross the ethical line. It takes the personal integrity of an individual to resist the opportunity. The best indicator of these individuals is there past performances ( primordial managerial accounting, 2006).To fix these issues requires admit checks and balances. Corporations must ensure they have policies and procedures to prevent such opportunities from existing. In addition, these policies must be validated consistently and frequently.ReferencesBachman, K. (2012, May 16). Sketchers settle deceptive ad case with FTC for $40m. Retrieved from http//www.adweek.com/ news show/advertising-branding/skechers-ad-case-ftc-40m-140577 CNN money. (2012, May 21). Retrieved from http//money.cnn.com/magazines/fortune/fortune500/2012/snapshots/2686.html Edmonds, T., Tsay, B., & Olds, P. (2006). Fundamental managerial accounting concepts. Retrieved from http//highered.mcgraw-hill.com/sites/0073526797/student_view0/ebook/ch apter1/chbody1/ethical_consideration s.html Focusing on safety. (2012). Retrieved from http//www.lowes.com/cd_Focusing on Safety_323526845_ Lowes Home Improvement. (2012). Retrieved from http//www.lowescreativeideas.com/social/our-vision-and-values.html Slodkowski, A. (2012, kinfolk 25). Japanese camera and medical equipment producer Olympus Corporation and three of its former executives pleaded guilty on Tuesday over charges related to a $1.7 billion accounting cover-up in one of Japans biggest corporate scandals. Retrieved from http//www.reuters.com/ phrase/2012/09/25/us-olympus-trial-idUSBRE88O01920120925 Worthington, I. (2009, February 09). Improvement and innovation. Retrieved from http//www.improvementandinnovation.com/features/article/stakeholders-and-how-they-affect-your-business/