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.. John C. Maxwell says in his book, Ethics 101, "There's nosuch thing as business ethics; there's only ethics" Please give meyour opinion on this statement. Are business ethics different thanethics? If so, give me an example of what you think each of themare. If you think that they are the same thing, tell me why. Thengive me an example to emphasize your point

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Reid Wolff
Reid WolffLv2
28 Sep 2019

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small business management class:

Please answer the three question from the article below:

Q1)In setting up an accounting system, which one of theaccounting functions is best illustrated in the article? Explainhow you know. ?

Q2)Which one of the five common financial statements is bestillustrated in the article? Provide facts to support youranswer?

Q3)Which one of the uses of financial accounting is bestillustrated in the article? Explain how you know. ?

The article:

HUGH MCHUGH, owner of Overhill Flowers Inc. in the Philadelphianeighborhood of Overbrook, made a declaration a few years ago. "Nomore house accounts," he told his staff.

These accounts offering credit were a business staple for theflorist for years, covering about 85% of his business. Hospitals,corporations and other customers would order flowers, and he'd billthem at the end of the month, dutifully printing out statements,mailing them, processing the checks. Sixty days would often elapsebetween the time flowers were delivered and when the bill was paid.Customers often paid late, and about 2% didn't pay at all. "That'sa significant blow to a small business with profit margins of 12%,"he says.

Now, if anyone asks to open a house account, he requests acredit- card number, so he can collect immediately; for thosealready with house accounts, he got their approval to switch themto credit-card accounts. The simple change has not only ensuredthat he'll be paid, but it also has smoothed out the bumps of cashflow, as well, so that now in January, he isn't nervous aboutmaking payroll while he awaits payment for holiday bouquets.

Collecting debts efficiently, Mr. McHugh realized, is one of thebest ways for small businesses to manage the ebb and flow of cashand hang on to precious capital. It's not unusual for businesses toborrow, often at high interest rates, or sell chunks of equity thatthey'd rather keep, because they've managed collections poorly. Butmost entrepreneurs would rather focus on their product, theirservice, their marketing, their lease, their health insurance --anything -- before dealing with the gritty work of collections.

"One thing business owners always tell me is that they neverthought about this when they started their own business," saysMichelle Dunn, who owned her own collections agency, M.A.D.Collections, for years, and has written several books on thetopic.

The time for an entrepreneur to think about collecting fromcustomers is when he or she is writing the business plan, says Ms.Dunn of Plymouth, N.H. She advises businesses to establish a"credit policy" mandating that before they hand over a product to acustomer who says "bill me," they will run a credit check on thebuyer. She also advises small businesses to join Equifax or someother credit bureau to be able to pull credit reports for anyoneapplying for credit, and also to report late payers.

Small start-ups, she says, are often so happy to have customersthat they are slow to take action for nonpayment. That's a mistake,she says. It's best to promptly make a phone call, and follow upwith a letter, so the nonpayer understands that it's a seriousmatter. Any payment at all on the account -- even $5 -- isworthwhile, she says, because it establishes a legal recordacknowledging the debt. "Once you get any kind of payment towardtheir balance, they have to pay the rest if you wind up in court,"she says.

Her years spent tracking debtors have honed unusual instincts.She has found, for instance, that when she would call a young manabout a debt and a woman answered the phone, she'd ask for thecreditor by just his first name. "So many times it would be themother of the guy," Ms. Dunn says, "and just think it was a girlcalling. I'd say, 'Do you have his work number or his cell number?'and she'd give it to me," she says.

She also advises anyone who deals with college kids to not giveup on the slow payers. "It's not pay, not pay for years," she says."Then they are about to get married and need a loan. Suddenly,they'll pay to clear the debt." It also helps to remind nonpayersthat the unpaid debt shows up on their credit report, making itdifficult for them to obtain additional credit.

Entrepreneurs who take a laissez-faire attitude on collectionstend to have sad tales to share -- particularly solo operators,such as consultants. David Leopold of Cincinnati puts networkstogether for small business, making money by brokering thoserelationships. When a client was late paying him, he was stuck andstill had to pay his own vendors. "I had to borrow money at a veryhigh interest rate," he says. "That hurt." Another time he took aclient to court for nonpayment of $1,500, but because the clientwas "a friend," he had no written contract. The judge threw out hiscase. "To a small-business proprietor, that check is our paycheck,"he says.

Even with a contract, collections can require great stamina. Aclient owed Julie Phillippi, a Cincinnati marketing consultant,more than $3,000 for months. She could have turned it over to acollections agency or written it off, but the principle mattered toher. "I did good work for him," she says.

After months, she took her contract to small-claims court, andfollowing many delays, won a judgment against him. He ignored it.She put a lien on his house. She tried to garnish his wages. Shefinally took a step called a "personal body attachment," in which acouple of bailiffs were going to arrest him for contempt of court.At that point he paid, in cash. One bright spot amid the six monthsof aggravation: The lawyer representing her adversary was soimpressed by her resolve that he hired her for a marketingproject.

The nasty episode made her review how she handles collections.Now she invoices twice a month, rather than once. "It's a pain, butI get money in the door more often," she says. And she has begun totack on a 10% interest payment for bills more than 30 days late,which she highlights with a marker. That has speeded up payment,too.

Big corporate customers are a different sort of challenge, saysBrenda Cusick, a founder of ClickWare Inc., a Moorpark, Calif.,database company. She makes it a point to become chummy with theaccounts-payable clerks who work for her big clients, calling tocheck on an invoice, but always chatting about the clerk's childrenor recent vacation -- details that she meticulously tracks in herown database. Those relationships tend to speed an invoice througha big corporation's otherwise slow bureaucracy, and have helpedClickWare and its sister company grow to about $3 million inrevenue without outside investors, she says, even as the foundershave poured money into developing new software products.

Her rapport with the accounts clerks came in quite handyrecently. Ms. Cusick got word from a very big corporate client thatit was undergoing a financial audit. The auditor concluded that thebig corporation was indeed paying Ms. Cusick promptly -- but itwasn't taking a 2% discount to which it was entitled for earlypayment. Many companies offer such a discount, but typically theonus is on the customer to subtract the discount from the payment.For Ms. Cusick's client, the 2% over many months piled up to morethan $10,000. The company wanted it back from ClickWare.

Panicked, Ms. Cusick called the accounts-payable clerk at thebig company. "Don't do anything yet," the clerk advised. Soon Ms.Cusick got a second notice demanding reimbursement. "Sit tight,"the accounts-payable clerk told her, adding that other vendors gotthe notice and were resisting. Ms. Cusick did nothing, and nofurther correspondence arrived. "I made two friendly phone callsand saved thousands of dollars," she says.

Similarly, Ms. Dunn of M.A.D. Collections says her bestcollection "trick" is simply being nice and straightforward. Sherecognizes that many debtors have been beset by medical crises orother tragedies. In those cases, she'd often intercede on theirbehalf, making a case to settle the debt for a smaller lump sum,say, when an income-tax refund arrived. "Some people have actuallysent me thank-you letters for being so nice," she says, telling herthat they paid her before other creditors because she took the timeto listen to them. "I've saved those letters," she says

Robatelli's Pizzeria Case StudyIntroduction On the morning of October 31st, Elaine Black, Chief Information Officer at Robatelli's Pizzeria, was waiting for both Jim Saxton, database administrator, and Peter Greyton, operations manager, to come to her office for a meeting. While waiting, Elaine was thinking about the surge of telephone and Internet orders expected to be received through the company's customer order center within the next 12 hours. Halloween had always been the most popular day of the year for people in the greater Pittsburgh area to order pizza from Robatelli's. There were 53 restaurant locations to serve these customers, but only one location to receive all of the orders and forward them to the right restaurant. Elaine's thoughts were interrupted as Jim and Peter entered her office. The following conversation took place: ELAINE Well, guys, it's here again, our biggest day of the year. Not only is Halloween a busy day, but we have the upcoming day after Thanksgiving, the week before Christmas, and Super Bowl Sunday. Can our current computer system's infrastructure and people keep pace with the orders we expect? JIM I think our systems are all running at peak performance. We shouldn't have any computer concerns for today or those other busy days. PETER Everyone in the customer order center is focused on making sure that our customers get their pizzas as ordered. We have plenty of people scheduled to work tonight, so we're good to go. ELAINE Terrific. But every time we face one of these peak sales days, I start wondering about the long-term capacity and effectiveness of our computer systems. Jim, we need to think long term about our computer system. I was just reading an article that I'd like you to take a look at. It's about Anheuser-Busch Companies and their use of data mining. JIM I do agree with you, Elaine; we should always be thinking about how newer IT systems can help us. Could you e-mail me the link to the article? ELAINE Sure, and I would like you to think about how we might use the same approach in our business. Peter, your order center people are doing a great job, but again there's something I'd like us to think about in the long run. As you know, we now have to manually enter all customer order center sales and store sales into our general ledger (GL). I think we could improve a lot of things if those sales are automatically fed into our GL software. Why don't you think about any advantages you see for an automatic interface, and we'll look at the costs compared to those advantages. How's that sound? PETER I'll do that. I'll give it some thought and work on a report about an automatic interface between our GL software and the point of sale systems in our restaurants as well as the phone and Internet sales. How soon do you want to meet again to look at these issues? ELAINE Let's say, in two weeks at the same time. As Jim and Peter left her office, Elaine continued to think about the features of the company's accounting information systems and whether or not data extracted from these systems could facilitate the multiple needs of the company. The focus had always been on providing accurate financial accounting information from the various locations; however, the company's aggressive growth strategies meant increased emphasis on the system's ability to analyze detailed customer information that could be translated into increased sales opportunities. Elaine knew the challenges they faced could very well affect the company's ability to maintain its competitive advantage. She realized that her department must continually improve the company's information systems to help it achieve growth strategies. Operating state-of-the-art systems was imperative to position the company to execute those growth plans. However, she was concerned about the possibility that restrictions of the current information systems could actually prevent the company from doing what it wanted to do. Allowing restrictive systems to prevent them from achieving business strategies was a risk that Elaine would not tolerate!

Review the Robatelli's Pizzeria Case Study.

Develop an internal controls system in Robatelli's Pizzeria sales and cash business areas.

Prepare a 12- to 16-slide presentation describing the typical activities and outlining an effective system of internal controls for the Sales, Sales Returns, and Cash Collections business areas. Include any associated risks in these areas.

Describe specific internal controls that include authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation for each business area.

Robatelli's Pizzeria Case StudyIntroduction

On the morning of October 31st, Elaine Black, Chief InformationOfficer at Robatelli's Pizzeria, was waiting for both Jim Saxton,database administrator, and Peter Greyton, operations manager, tocome to her office for a meeting. While waiting, Elaine wasthinking about the surge of telephone and Internet orders expectedto be received through the company's customer order center withinthe next 12 hours. Halloween had always been the most popular dayof the year for people in the greater Pittsburgh area to orderpizza from Robatelli's. There were 53 restaurant locations to servethese customers, but only one location to receive all of the ordersand forward them to the right restaurant. Elaine's thoughts wereinterrupted as Jim and Peter entered her office. The followingconversation took place: ELAINE Well, guys, it's here again, ourbiggest day of the year. Not only is Halloween a busy day, but wehave the upcoming day after Thanksgiving, the week beforeChristmas, and Super Bowl Sunday. Can our current computer system'sinfrastructure and people keep pace with the orders we expect? JIMI think our systems are all running at peak performance. Weshouldn't have any computer concerns for today or those other busydays. PETER Everyone in the customer order center is focused onmaking sure that our customers get their pizzas as ordered. We haveplenty of people scheduled to work tonight, so we're good to go.ELAINE Terrific. But every time we face one of these peak salesdays, I start wondering about the long-term capacity andeffectiveness of our computer systems. Jim, we need to think longterm about our computer system. I was just reading an article thatI'd like you to take a look at. It's about Anheuser-Busch Companiesand their use of data mining. JIM I do agree with you, Elaine; weshould always be thinking about how newer IT systems can help us.Could you e-mail me the link to the article? ELAINE Sure, and Iwould like you to think about how we might use the same approach inour business. Peter, your order center people are doing a greatjob, but again there's something I'd like us to think about in thelong run. As you know, we now have to manually enter all customerorder center sales and store sales into our general ledger (GL). Ithink we could improve a lot of things if those sales areautomatically fed into our GL software. Why don't you think aboutany advantages you see for an automatic interface, and we'll lookat the costs compared to those advantages. How's that sound? PETERI'll do that. I'll give it some thought and work on a report aboutan automatic interface between our GL software and the point ofsale systems in our restaurants as well as the phone and Internetsales. How soon do you want to meet again to look at these issues?ELAINE Let's say, in two weeks at the same time. As Jim and Peterleft her office, Elaine continued to think about the features ofthe company's accounting information systems and whether or notdata extracted from these systems could facilitate the multipleneeds of the company. The focus had always been on providingaccurate financial accounting information from the variouslocations; however, the company's aggressive growth strategiesmeant increased emphasis on the system's ability to analyzedetailed customer information that could be translated intoincreased sales opportunities. Elaine knew the challenges theyfaced could very well affect the company's ability to maintain itscompetitive advantage. She realized that her department mustcontinually improve the company's information systems to help itachieve growth strategies. Operating state-of-the-art systems wasimperative to position the company to execute those growth plans.However, she was concerned about the possibility that restrictionsof the current information systems could actually prevent thecompany from doing what it wanted to do. Allowing restrictivesystems to prevent them from achieving business strategies was arisk that Elaine would not tolerate! Background Robatelli'sPizzeria is a great American success story. Started by DinoRobatelli in the 1960s, the business impetus was a family pizzarecipe. Introduced to the public at a church festival inPittsburgh's Little Italy, Robatelli's pizzas are now a recognizedtradition in the Greater Pittsburgh area. A full menu and localexpansion have led to its growing popularity over the years andhave helped it achieve nearly 50 percent of the area market share.Annual sales now exceed $100 million. Following is a timeline ofmilestones in the company's history: 1962 Dino and Gloria Robatellicontributed $500 and the family pizza recipe to a partnership thatopened the first Robatelli's Pizzeria. 1965 The Robatellis boughtout their business partners. 1967 The first Robatelli's franchiseopened. 1971–77 Dozens of new Robatelli's franchises openedthroughout the surrounding region. 1983 Home delivery servicebegan. 1992 A central, one-number calling system for allrestaurants was launched. 2003 Internet ordering began. The first“prototype pizzeria” opened. Today A total of 53 locations are inoperation.

Review the Robatelli's Pizzeria Case Study. Considering thenature of the relationship between Robatelli's Pizzeria home officeand its franchise owners, the company may be quite vulnerable totheft or fraudulent financial reporting committed by thesefranchise owners. I

n 700 to 1,050 words, discuss the following: Describe threecomponents of the fraud triangle and how each would relate to afranchise owner's likelihood to defraud Robatelli's Pizzeria.Identify three types of fraud to which Robatelli's Pizzeria may besusceptible.

Indicate whether the fraud is classified as management fraud,employee fraud, vendor fraud, customer fraud, or computer fraud foreach.

Suggest an internal control that could be implemented to preventor detect the potential fraud for each. Design a 5- to 6-bulleteditem code of ethics for Robatelli's Pizzeria. You may find guidanceby searching the Internet for examples.

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