Read the Leo's Four-Plex Theater case on page 19 in the textbook and answer the

following questions. Be sure to offer an adequate answer in terms of length and content.

1. Where is the theaters control system lacking? Are the controls themselves weak or
incomplete, or are the theaters problems caused primarily because of lack of discipline
in using the existing controls?
2. What control improvements would you suggest for Leos Four-Plex?

The company is lacking at the control environment system-- the overall

governance of the company which has been developed by the top level of
the organization.
It comprises of
1) Corporate culture
2) Ethics
3) Quality of people to be hired
4) And how the company is controlled

The controls in the theater is weak or incomplete:

1) Taking their jobs for granted
2) Failed to collect cash from the known customers
3) Lead to conflict of interest
4) Fail to identify the tickets carefully
5) Either wrong dates or colors

Misuse the power and authority given:

Give free tickets to customers that he likes by signing on the tickets

Did not conduct ant supervision on his employees

No proper segregation of duties

The one who records the sales is also the one who collects the cash

Establish the Code of conduct:

Set of basic principles for employees to understand what is expected and
follow the rules.
Manager should take responsibility to set up the code of conduct

Monitoring employees work

Hire someone to supervise the employees work
Checking the cash register twice per day
At the refreshment stand to avoid to failure of the stand attendants to collect
cash.

Segregation of Duties
Segregate the cashier duties and the one who will collect the cash
Probability that fraud to happen will be reduced

Authority and responsibility

The manager should be more responsible towards the company
Bill Reily shows the unethical behaviors by giving free theater passes with his
signature on them
He should display a manner that will lead the employees to act in proper way
and increase their integrity in doing the work

Hire Qualified staff/employees

Overcome the issue of lack of control and discipline problem faced by the
theater
Individuals who have the ability to perform specific role or task, committed to
behave ethically towards the company and also knowledgeable are very
much needed to be part of the company
Proper training should be provided and conducted as it is a great opportunity
to introduce employees to the companys culture and policies